Question 1

Inaccurate prediction generally invalidates the use of theory in economics.

Accepted Answer

A) True 
 B)False

Question 2

Economic models are often expressed in

Accepted Answer

A)  equations. 
B)  words. 
C)  graphs. 
D)  physical objects.. 
A)  equations. 
B)  words. 
C)  graphs. 
D)  physical objects..

Question 3

Opportunity cost is the

Accepted Answer

A)  cost incurred when one fails to take advantage of an opportunity. 
B)  cost incurred in order to increase the availability of attractive opportunities. 
C)  cost of the best option forgone as a result of choosing an alternative. 
D)  drudgery of the undesirable aspects of an option. 
A)  cost incurred when one fails to take advantage of an opportunity. 
B)  cost incurred in order to increase the availability of attractive opportunities. 
C)  cost of the best option forgone as a result of choosing an alternative. 
D)  drudgery of the undesirable aspects of an option.

Question 4

In economics,abstraction from reality is necessary because of the complexity of the real world.

Accepted Answer

A) True 
 B)False

Question 5

It has been said that "economics is the science of common sense." Is economics synonymous with common sense?

Accepted Answer

A large portion of economics will agree

Question 6

In Egypt,in 1970,the Aswan Dam was completed.By preventing the annual flood of the Nile (thereby providing millions of acres of arable land)and by providing electricity,the dam was expected to raise the living standard of the Egyptian people-and it has.However,it has also led to a rise in the water table which causes Egypt's limestone structures,including the pyramids,to absorb more salt water and to suffer serious erosion from crystallized salts.Combined with air pollution and traffic vibration,this erosion is turning the pyramids to dust.Economists analyze this type of problem with the concept of

Accepted Answer

A)  an externality. 
B)  the antiquity problem. 
C)  a free-rider problem. 
D)  the public good problem. 
E)  the trade-off between equity and output. 
A)  an externality. 
B)  the antiquity problem. 
C)  a free-rider problem. 
D)  the public good problem. 
E)  the trade-off between equity and output.

Question 7

In economics the true cost of making a choice is the value of what must be given up.

Accepted Answer

A) True 
 B)False

Question 8

If an economic curve has a negative slope,then one variable

Accepted Answer

A)  falls as the other rises. 
B)  changes at a slower rate than another. 
C)  has a smaller value than another. 
D)  changes after another variable. 
A)  falls as the other rises. 
B)  changes at a slower rate than another. 
C)  has a smaller value than another. 
D)  changes after another variable.

Question 9

A contour map illustrates which of the following?

Accepted Answer

A)  the cause-effect relationship between two variables 
B)  the cause-effect relationship between three variables 
C)  the way that three variables are correlated 
D)  the way that one variable affects another,which in turn affects a third variable 
E)  the way that two variables are correlated and in turn cause changes in a third variable 
A)  the cause-effect relationship between two variables 
B)  the cause-effect relationship between three variables 
C)  the way that three variables are correlated 
D)  the way that one variable affects another,which in turn affects a third variable 
E)  the way that two variables are correlated and in turn cause changes in a third variable

Question 10

If an airline company has several empty seats on a flight and the full price of an air ticket is $500 and the marginal cost per passenger is $100,then it will be profitable for the airline to

Accepted Answer

A)  charge a stand-by passenger no less than the full fare of $500. 
B)  charge a stand-by passenger less than $100. 
C)  charge a stand-by passenger more than $500. 
D)  charge a stand-by passenger more than $100. 
E)  fill the seats at the last minute for any price. 
A)  charge a stand-by passenger no less than the full fare of $500. 
B)  charge a stand-by passenger less than $100. 
C)  charge a stand-by passenger more than $500. 
D)  charge a stand-by passenger more than $100. 
E)  fill the seats at the last minute for any price.

Question 11

Why do economists tend to create models in diagrammatic form?

Accepted Answer

A)  Diagrams hide reality,and theory is an attempt to avoid reality. 
B)  It is easier than building models out of physical objects. 
C)  Economic reality cannot possibly be represented except in diagrams. 
D)  Most economists are frustrated artists,and like to draw when possible. 
E)  All of the above are correct. 
A)  Diagrams hide reality,and theory is an attempt to avoid reality. 
B)  It is easier than building models out of physical objects. 
C)  Economic reality cannot possibly be represented except in diagrams. 
D)  Most economists are frustrated artists,and like to draw when possible. 
E)  All of the above are correct.

Question 12

Economists probably agree more often than they disagree.

Accepted Answer

A) True 
 B)False

Question 13

The statement "saccharine causes cancer" is not a theory; it is a hypothesis.

Accepted Answer

A) True 
 B)False

Question 14

When variable A rises by 10 units,variable B rises by 15 units.The slope of the line describing this relationship is

Accepted Answer

A)  always 2/3. 
B)  either 2/3 or 1.5,depending on which variable goes on which axis of the graph. 
C)  either 1.5 or −1.5,depending on which variable goes on which axis. 
D)  always −1.5. 
A)  always 2/3. 
B)  either 2/3 or 1.5,depending on which variable goes on which axis of the graph. 
C)  either 1.5 or −1.5,depending on which variable goes on which axis. 
D)  always −1.5.

Question 15

A theory is a deliberate simplification or abstraction of factual relationships.

Accepted Answer

A) True 
 B)False

Question 16

Economists use models in order to

Accepted Answer

A)  experiment with alternative circumstances. 
B)  make educated guesses about real life events. 
C)  predict outcomes under various hypothetical conditions. 
D)  increase understanding of how a relationship actually works. 
E)  All of the above are correct. 
A)  experiment with alternative circumstances. 
B)  make educated guesses about real life events. 
C)  predict outcomes under various hypothetical conditions. 
D)  increase understanding of how a relationship actually works. 
E)  All of the above are correct.

Question 17

Which of the following is an example of an externality?

Accepted Answer

A)  Drug abuse affecting David's health. 
B)  Sara taking a break from work. 
C)  A transaction between two parties,affecting them alone. 
D)  Tom's smoking affecting his roommate's health. 
A)  Drug abuse affecting David's health. 
B)  Sara taking a break from work. 
C)  A transaction between two parties,affecting them alone. 
D)  Tom's smoking affecting his roommate's health.

Question 18

Figure 1-2  
-If movement along a graph causes the value on the vertical axis to rise by 5 units and the value on the horizontal axis to fall by 10 units,the slope of the function is

Accepted Answer

A)  5. 
B)  −.5. 
C)  −2. 
D)  −72. 
A)  5. 
B)  −.5. 
C)  −2. 
D)  −72.

Question 19

The law of comparative advantages explains why

Accepted Answer

A)  advanced nations will not trade with less-developed countries. 
B)  an advanced nation will not trade with other countries. 
C)  less-developed countries only trade among themselves. 
D)  nations trade with each other,regardless of their relative levels of economic development. 
E)  nations erect trade barriers. 
A)  advanced nations will not trade with less-developed countries. 
B)  an advanced nation will not trade with other countries. 
C)  less-developed countries only trade among themselves. 
D)  nations trade with each other,regardless of their relative levels of economic development. 
E)  nations erect trade barriers.

Question 20

"Assume that all individuals have perfect information about prices now and in the future,that they have identical tastes,that all markets are competitive,and that there is no government." This statement is indicative of how economists

Accepted Answer

A)  apply the law of supply and demand. 
B)  employ marginal analysis. 
C)  are prevented from getting correct answers. 
D)  abstract for analytic purposes. 
E)  use realistic assumptions to develop theory. 
A)  apply the law of supply and demand. 
B)  employ marginal analysis. 
C)  are prevented from getting correct answers. 
D)  abstract for analytic purposes. 
E)  use realistic assumptions to develop theory.

Inaccurate prediction generally invalidates the use of theory in economics.

Economic models are often expressed in

Opportunity cost is the

In economics,abstraction from reality is necessary because of the complexity of the real world.

It has been said that "economics is the science of common sense." Is economics synonymous with common sense?

In economics the true cost of making a choice is the value of what must be given up.

If an economic curve has a negative slope,then one variable

A contour map illustrates which of the following?

If an airline company has several empty seats on a flight and the full price of an air ticket is $500 and the marginal cost per passenger is $100,then it will be profitable for the airline to

Why do economists tend to create models in diagrammatic form?

Economists probably agree more often than they disagree.

The statement "saccharine causes cancer" is not a theory; it is a hypothesis.

When variable A rises by 10 units,variable B rises by 15 units.The slope of the line describing this relationship is

A theory is a deliberate simplification or abstraction of factual relationships.

Economists use models in order to

Which of the following is an example of an externality?

Figure 1-2 -If movement along a graph causes the value on the vertical axis to rise by 5 units and the value on the horizontal axis to fall by 10 units,the slope of the function is

The law of comparative advantages explains why

"Assume that all individuals have perfect information about prices now and in the future,that they have identical tastes,that all markets are competitive,and that there is no government." This statement is indicative of how economists

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

Inaccurate prediction generally invalidates the use of theory in economics.

Economic models are often expressed in

Opportunity cost is the

In economics,abstraction from reality is necessary because of the complexity of the real world.

It has been said that "economics is the science of common sense." Is economics synonymous with common sense?

In economics the true cost of making a choice is the value of what must be given up.

If an economic curve has a negative slope,then one variable

A contour map illustrates which of the following?

If an airline company has several empty seats on a flight and the full price of an air ticket is $500 and the marginal cost per passenger is $100,then it will be profitable for the airline to

Why do economists tend to create models in diagrammatic form?

Economists probably agree more often than they disagree.

The statement "saccharine causes cancer" is not a theory; it is a hypothesis.

When variable A rises by 10 units,variable B rises by 15 units.The slope of the line describing this relationship is

A theory is a deliberate simplification or abstraction of factual relationships.

Economists use models in order to

Which of the following is an example of an externality?

Figure 1-2 -If movement along a graph causes the value on the vertical axis to rise by 5 units and the value on the horizontal axis to fall by 10 units,the slope of the function is

The law of comparative advantages explains why

"Assume that all individuals have perfect information about prices now and in the future,that they have identical tastes,that all markets are competitive,and that there is no government." This statement is indicative of how economists

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