Question 1

If a decision maker uses marginal analysis,then the relevant costs are the

Accepted Answer

A)  full costs of a particular activity or product. 
B)  fixed costs which do not vary with the extra activity or output. 
C)  profits obtained on the activity or product. 
D)  average costs for a particular activity or product. 
E)  additional costs of a particular activity or product. 
A)  full costs of a particular activity or product. 
B)  fixed costs which do not vary with the extra activity or output. 
C)  profits obtained on the activity or product. 
D)  average costs for a particular activity or product. 
E)  additional costs of a particular activity or product.

Question 2

Graphs are useful because of the way they

Accepted Answer

A)  facilitate interpretation and analysis of data. 
B)  clarify interpretation and analysis of ideas. 
C)  permit a person to easily see relationships. 
D)  convey an idea that might otherwise take many words. 
E)  All of the above are correct. 
A)  facilitate interpretation and analysis of data. 
B)  clarify interpretation and analysis of ideas. 
C)  permit a person to easily see relationships. 
D)  convey an idea that might otherwise take many words. 
E)  All of the above are correct.

Question 3

You have just bought a used car,and drive away satisfied that you've made a good deal on the purchase.What would an economist say about your "gain" on the deal?

Accepted Answer

A)  Your gain has clearly meant that the seller lost on the deal. 
B)  The seller has clearly gained,and you have actually lost on the deal. 
C)  Both you and the seller have gained something. 
D)  If your gain is too large,then the deal should be re-negotiated. 
E)  If the seller's loss is too large,then the deal should be re-negotiated. 
A)  Your gain has clearly meant that the seller lost on the deal. 
B)  The seller has clearly gained,and you have actually lost on the deal. 
C)  Both you and the seller have gained something. 
D)  If your gain is too large,then the deal should be re-negotiated. 
E)  If the seller's loss is too large,then the deal should be re-negotiated.

Question 4

Rational choice requires that opportunity cost be

Accepted Answer

A)  ignored in making a decision. 
B)  considered for individual choices,but not for societal choices. 
C)  computed,but not actually used in making a decision. 
D)  considered as part of making a decision. 
E)  used as the sole decision criterion. 
A)  ignored in making a decision. 
B)  considered for individual choices,but not for societal choices. 
C)  computed,but not actually used in making a decision. 
D)  considered as part of making a decision. 
E)  used as the sole decision criterion.

Question 5

When economists are critical of government regulations that prohibit free individuals from making certain kinds of contracts,for example,to purchase a good or service,they will usually invoke the concept of

Accepted Answer

A)  marginal analysis. 
B)  mutual gains from voluntary trade. 
C)  inflation-unemployment trade-off. 
D)  the need for abstraction. 
E)  externalities. 
A)  marginal analysis. 
B)  mutual gains from voluntary trade. 
C)  inflation-unemployment trade-off. 
D)  the need for abstraction. 
E)  externalities.

Question 6

A horizontal line always has a slope of one.

Accepted Answer

A) True 
 B)False

Question 7

The optimal degree of abstraction depends on the objective of the analysis.

Accepted Answer

A) True 
 B)False

Question 8

Comparative advantage explains how two nations can benefit from trade.

Accepted Answer

A) True 
 B)False

Question 9

A line that rises from left to right has a positive slope.

Accepted Answer

A) True 
 B)False

Question 10

The steepness of a curve is partially determined by the units of measurement.

Accepted Answer

A) True 
 B)False

Question 11

Abstraction ignores many details in order to focus on the most important elements of a problem.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is correct?

Accepted Answer

A)  Theory and hypothesis are interchangeable terms for the same thing. 
B)  A hypothesis may result from a tested and confirmed theory. 
C)  A theory may result from a tested and confirmed hypothesis. 
D)  A hypothesis is a theory whose formulation relies on mathematics. 
A)  Theory and hypothesis are interchangeable terms for the same thing. 
B)  A hypothesis may result from a tested and confirmed theory. 
C)  A theory may result from a tested and confirmed hypothesis. 
D)  A hypothesis is a theory whose formulation relies on mathematics.

Question 13

It is impossible for both nations to gain when trading with one other.

Accepted Answer

A) True 
 B)False

Question 14

The high unemployment of 2008-2010 caused a substantial decrease in inflation which created fears of deflation.

Accepted Answer

A) True 
 B)False

Question 15

Economic problems are made manageable by stripping away some of the unnecessary details.

Accepted Answer

A) True 
 B)False

Question 16

Carefully define the following terms,and explain their importance in economics.
a.
opportunity cost
b.
abstraction
c.
theory
d.
model
e.
marginal analysis

Accepted Answer

a. Opportunity cost for a decision is th

Question 17

Tools used by economists include

Accepted Answer

A)  historical study. 
B)  mathematical reasoning. 
C)  statistical inference. 
D)  All of the above are correct. 
A)  historical study. 
B)  mathematical reasoning. 
C)  statistical inference. 
D)  All of the above are correct.

Question 18

An economist might be hired to answer which of the following questions?

Accepted Answer

A)  What will the price of oil be next year? 
B)  Why is the median income of women about half the median income of men? 
C)  How much will interest rates change as the federal deficit decreases? 
D)  How much will inflation change if import restrictions are imposed? 
E)  All of the above are correct. 
A)  What will the price of oil be next year? 
B)  Why is the median income of women about half the median income of men? 
C)  How much will interest rates change as the federal deficit decreases? 
D)  How much will inflation change if import restrictions are imposed? 
E)  All of the above are correct.

Question 19

Economics is a social science rather than a "hard" science like physics because

Accepted Answer

A)  economists abstract from reality when creating their theories. 
B)  economics is easier to study than physics. 
C)  economists must explain their theories to policy makers who lack formal mathematical training. 
D)  economists study human behavior,which is affected by an unpredictable and vast range of influences. 
A)  economists abstract from reality when creating their theories. 
B)  economics is easier to study than physics. 
C)  economists must explain their theories to policy makers who lack formal mathematical training. 
D)  economists study human behavior,which is affected by an unpredictable and vast range of influences.

Question 20

In the United States the distribution of income is relatively unequal,and output is relatively high,while in the former Soviet Union the distribution of income was more equal and output per worker was much lower.Give one possible explanation for this phenomenon.

Accepted Answer

This problem illustrates the trade-off b

If a decision maker uses marginal analysis,then the relevant costs are the

Graphs are useful because of the way they

You have just bought a used car,and drive away satisfied that you've made a good deal on the purchase.What would an economist say about your "gain" on the deal?

Rational choice requires that opportunity cost be

When economists are critical of government regulations that prohibit free individuals from making certain kinds of contracts,for example,to purchase a good or service,they will usually invoke the concept of

A horizontal line always has a slope of one.

The optimal degree of abstraction depends on the objective of the analysis.

Comparative advantage explains how two nations can benefit from trade.

A line that rises from left to right has a positive slope.

The steepness of a curve is partially determined by the units of measurement.

Abstraction ignores many details in order to focus on the most important elements of a problem.

Which of the following statements is correct?

It is impossible for both nations to gain when trading with one other.

The high unemployment of 2008-2010 caused a substantial decrease in inflation which created fears of deflation.

Economic problems are made manageable by stripping away some of the unnecessary details.

Carefully define the following terms,and explain their importance in economics. a. opportunity cost b. abstraction c. theory d. model e. marginal analysis

Tools used by economists include

An economist might be hired to answer which of the following questions?

Economics is a social science rather than a "hard" science like physics because

In the United States the distribution of income is relatively unequal,and output is relatively high,while in the former Soviet Union the distribution of income was more equal and output per worker was much lower.Give one possible explanation for this phenomenon.

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

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Exam 1: What Is Economics

If a decision maker uses marginal analysis,then the relevant costs are the

Graphs are useful because of the way they

You have just bought a used car,and drive away satisfied that you've made a good deal on the purchase.What would an economist say about your "gain" on the deal?

Rational choice requires that opportunity cost be

When economists are critical of government regulations that prohibit free individuals from making certain kinds of contracts,for example,to purchase a good or service,they will usually invoke the concept of

A horizontal line always has a slope of one.

The optimal degree of abstraction depends on the objective of the analysis.

Comparative advantage explains how two nations can benefit from trade.

A line that rises from left to right has a positive slope.

The steepness of a curve is partially determined by the units of measurement.

Abstraction ignores many details in order to focus on the most important elements of a problem.

Which of the following statements is correct?

It is impossible for both nations to gain when trading with one other.

The high unemployment of 2008-2010 caused a substantial decrease in inflation which created fears of deflation.

Economic problems are made manageable by stripping away some of the unnecessary details.

Carefully define the following terms,and explain their importance in economics. a. opportunity cost b. abstraction c. theory d. model e. marginal analysis

Tools used by economists include

An economist might be hired to answer which of the following questions?

Economics is a social science rather than a "hard" science like physics because

In the United States the distribution of income is relatively unequal,and output is relatively high,while in the former Soviet Union the distribution of income was more equal and output per worker was much lower.Give one possible explanation for this phenomenon.

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