Question 1

A theory is an abstraction used often by economists to

Accepted Answer

A)  describe a problem. 
B)  keep all assumptions in their proper places. 
C)  explain why things work the way they do. 
D)  describe a hierarchical ordering of facts. 
E)  arrange variables into a graphical format. 
A)  describe a problem. 
B)  keep all assumptions in their proper places. 
C)  explain why things work the way they do. 
D)  describe a hierarchical ordering of facts. 
E)  arrange variables into a graphical format.

Question 2

When interdiction efforts manage to stem the flow of illegal drugs into the United States,assuming no change in demand,the price of these substances rises.This price increase leads to more crime as addicts attempt to maintain their now more-expensive habits.Economists call this side-effect of the drug business

Accepted Answer

A)  the illusion of rationality. 
B)  an externality. 
C)  the cost disease of personal services. 
D)  inflation. 
E)  unemployment. 
A)  the illusion of rationality. 
B)  an externality. 
C)  the cost disease of personal services. 
D)  inflation. 
E)  unemployment.

Question 3

Explain why an airline may decide to sell an air ticket to a stand-by passenger at less than the full-fare if there are empty seats on the airplane?

Accepted Answer

The decision depends on the marginal,or

Question 4

How is a production indifference map helpful?

Accepted Answer

A production indifference map is a graph

Question 5

In contrast to the United States,the European Union has chosen

Accepted Answer

A)  greater wage inequality for lower unemployment. 
B)  less wage inequality and lower unemployment. 
C)  greater wage inequality and higher unemployment. 
D)  similar wage inequality but more unemployment. 
E)  less wage inequality for higher unemployment. 
A)  greater wage inequality for lower unemployment. 
B)  less wage inequality and lower unemployment. 
C)  greater wage inequality and higher unemployment. 
D)  similar wage inequality but more unemployment. 
E)  less wage inequality for higher unemployment.

Question 6

Because there is a trade-off between inflation and unemployment in the short run,

Accepted Answer

A)  lower unemployment will typically cause inflation to fall. 
B)  policies designed to reduce unemployment will typically set off a recession. 
C)  policies designed to reduce inflation will cause unemployment to fall as well. 
D)  higher inflation will generally be associated with higher unemployment. 
E)  lower inflation will generally be associated with higher unemployment. 
A)  lower unemployment will typically cause inflation to fall. 
B)  policies designed to reduce unemployment will typically set off a recession. 
C)  policies designed to reduce inflation will cause unemployment to fall as well. 
D)  higher inflation will generally be associated with higher unemployment. 
E)  lower inflation will generally be associated with higher unemployment.

Question 7

Models are used to describe cause-and-effect relationships.

Accepted Answer

A) True 
 B)False

Question 8

Figure 1-1  
-Which of the following mathematical expressions represents the equation of a straight line with a slope of zero at all points on a graph with Y on the vertical axis and X on the horizontal axis?

Accepted Answer

A)  Y = a + X 
B)  X = bY 
C)  X = a 
D)  Y = a 
A)  Y = a + X 
B)  X = bY 
C)  X = a 
D)  Y = a

Question 9

Graphs are valuable because they facilitate interpretation of data.

Accepted Answer

A) True 
 B)False

Question 10

Economic theory

Accepted Answer

A)  is a deliberate simplification of factual relationships. 
B)  seeks to disprove a hypothesis. 
C)  is based mainly on assumptions. 
D)  seeks to prove political ideals. 
A)  is a deliberate simplification of factual relationships. 
B)  seeks to disprove a hypothesis. 
C)  is based mainly on assumptions. 
D)  seeks to prove political ideals.

Question 11

A small increase in productivity growth can have a huge impact on a country's standard of living.

Accepted Answer

A) True 
 B)False

Question 12

The term opportunity cost refers to the

Accepted Answer

A)  value of what is gained when a choice is made. 
B)  difference between the value of what is gained and the value of what is forgone when a choice is made. 
C)  value of what is forgone when a choice is made. 
D)  direct costs involved in making a choice. 
A)  value of what is gained when a choice is made. 
B)  difference between the value of what is gained and the value of what is forgone when a choice is made. 
C)  value of what is forgone when a choice is made. 
D)  direct costs involved in making a choice.

Question 13

Productivity growth is the main cause of rising living standards.

Accepted Answer

A) True 
 B)False

Question 14

During a war,a government will often draft people,most of whom are presently employed,into the army.An economist,computing the real cost of the war,would be sure to include which of the following items?

Accepted Answer

A)  the value of the civilian goods no longer produced by the new soldiers 
B)  the cost of feeding and clothing the new soldiers 
C)  the dollar cost of the payroll 
D)  the higher prices of civilian goods due to wartime shortages 
E)  the cost of transporting the soldiers to combat 
A)  the value of the civilian goods no longer produced by the new soldiers 
B)  the cost of feeding and clothing the new soldiers 
C)  the dollar cost of the payroll 
D)  the higher prices of civilian goods due to wartime shortages 
E)  the cost of transporting the soldiers to combat

Question 15

The government uses fiscal and monetary policy to mitigate the effects of economic fluctuations.

Accepted Answer

A) True 
 B)False

Question 16

In both the 1970s and the 1990s,extreme economic events caused unemployment to move in the same direction as inflation.

Accepted Answer

A) True 
 B)False

Question 17

When residents surrounding an airport complain about noise from aircraft landings and takeoffs,the relevant economic analysis is that of

Accepted Answer

A)  externalities. 
B)  equality-efficiency trade-off. 
C)  comparative advantage. 
D)  the cost decrease of the service sector. 
E)  the cost disease of personal services. 
A)  externalities. 
B)  equality-efficiency trade-off. 
C)  comparative advantage. 
D)  the cost decrease of the service sector. 
E)  the cost disease of personal services.

Question 18

If trade between two countries is voluntary,one can expect that

Accepted Answer

A)  one country's gain is necessarily the other's loss. 
B)  one country will exploit the other one. 
C)  neither country really gains from trade. 
D)  the larger country will always gain at the expense of the smaller. 
E)  both countries expect to gain something. 
A)  one country's gain is necessarily the other's loss. 
B)  one country will exploit the other one. 
C)  neither country really gains from trade. 
D)  the larger country will always gain at the expense of the smaller. 
E)  both countries expect to gain something.

Question 19

Economic analysis requires both mathematical reasoning and historical study.

Accepted Answer

A) True 
 B)False

Question 20

Externalities are social costs that affect parties external to a particular economic transaction.

Accepted Answer

A) True 
 B)False

A theory is an abstraction used often by economists to

Explain why an airline may decide to sell an air ticket to a stand-by passenger at less than the full-fare if there are empty seats on the airplane?

How is a production indifference map helpful?

In contrast to the United States,the European Union has chosen

Because there is a trade-off between inflation and unemployment in the short run,

Models are used to describe cause-and-effect relationships.

Figure 1-1 -Which of the following mathematical expressions represents the equation of a straight line with a slope of zero at all points on a graph with Y on the vertical axis and X on the horizontal axis?

Graphs are valuable because they facilitate interpretation of data.

Economic theory

A small increase in productivity growth can have a huge impact on a country's standard of living.

The term opportunity cost refers to the

Productivity growth is the main cause of rising living standards.

During a war,a government will often draft people,most of whom are presently employed,into the army.An economist,computing the real cost of the war,would be sure to include which of the following items?

The government uses fiscal and monetary policy to mitigate the effects of economic fluctuations.

In both the 1970s and the 1990s,extreme economic events caused unemployment to move in the same direction as inflation.

When residents surrounding an airport complain about noise from aircraft landings and takeoffs,the relevant economic analysis is that of

If trade between two countries is voluntary,one can expect that

Economic analysis requires both mathematical reasoning and historical study.

Externalities are social costs that affect parties external to a particular economic transaction.

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters

Exam 1: What Is Economics

A theory is an abstraction used often by economists to

Explain why an airline may decide to sell an air ticket to a stand-by passenger at less than the full-fare if there are empty seats on the airplane?

How is a production indifference map helpful?

In contrast to the United States,the European Union has chosen

Because there is a trade-off between inflation and unemployment in the short run,

Models are used to describe cause-and-effect relationships.

Figure 1-1 -Which of the following mathematical expressions represents the equation of a straight line with a slope of zero at all points on a graph with Y on the vertical axis and X on the horizontal axis?

Graphs are valuable because they facilitate interpretation of data.

Economic theory

A small increase in productivity growth can have a huge impact on a country's standard of living.

The term opportunity cost refers to the

Productivity growth is the main cause of rising living standards.

During a war,a government will often draft people,most of whom are presently employed,into the army.An economist,computing the real cost of the war,would be sure to include which of the following items?

The government uses fiscal and monetary policy to mitigate the effects of economic fluctuations.

In both the 1970s and the 1990s,extreme economic events caused unemployment to move in the same direction as inflation.

When residents surrounding an airport complain about noise from aircraft landings and takeoffs,the relevant economic analysis is that of

If trade between two countries is voluntary,one can expect that

Economic analysis requires both mathematical reasoning and historical study.

Externalities are social costs that affect parties external to a particular economic transaction.

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters