Question 1

Macroeconomics includes the study of:

Accepted Answer

A)  inflation. 
B)  firm pricing policies. 
C)  the relative prices of oil and coal. 
D)  individual choice. 
A)  inflation. 
B)  firm pricing policies. 
C)  the relative prices of oil and coal. 
D)  individual choice.

Question 2

The study of individual choice is a focus in:

Accepted Answer

A)  microeconomics. 
B)  macroeconomics. 
C)  normative economics. 
D)  Ricardian economics. 
A)  microeconomics. 
B)  macroeconomics. 
C)  normative economics. 
D)  Ricardian economics.

Question 3

Say a pill existed that made people selfless. After taking it they were only interested in others, not themselves. Under the coordination definition of economics:

Accepted Answer

A)  no economic problem would exist. 
B)  there still would be an economic problem. 
C)  there would be a political problem but not an economic problem. 
D)  there would be a social problem but not an economic problem. 
A)  no economic problem would exist. 
B)  there still would be an economic problem. 
C)  there would be a political problem but not an economic problem. 
D)  there would be a social problem but not an economic problem.

Question 4

Value judgments in economics:

Accepted Answer

A)  are necessary when objective analysis cannot address a question. 
B)  can always be avoided with the use of objective analysis. 
C)  are essential parts of positive economics. 
D)  can be avoided through the use of normative economics. 
A)  are necessary when objective analysis cannot address a question. 
B)  can always be avoided with the use of objective analysis. 
C)  are essential parts of positive economics. 
D)  can be avoided through the use of normative economics.

Question 5

Only marginal costs, not sunk costs, affect economic decisions if individuals are rational.

Accepted Answer

A) True 
 B)False

Question 6

You've purchased a car for $20,000 and now are deciding whether to have a sunroof installed for $800 and a security system installed for $200. The marginal cost of adding both the sunroof and the security system is:

Accepted Answer

A)  $21,200. 
B)  $20,000. 
C)  $800. 
D)  $1,000. 
A)  $21,200. 
B)  $20,000. 
C)  $800. 
D)  $1,000.

Question 7

The opportunity cost of attending college for one year is best measured by the:

Accepted Answer

A)  benefit received by the student. 
B)  tuition paid for the year. 
C)  value of the next-best activity forgone by attending college. 
D)  total money expenses associated with attending college. 
A)  benefit received by the student. 
B)  tuition paid for the year. 
C)  value of the next-best activity forgone by attending college. 
D)  total money expenses associated with attending college.

Question 8

New Jersey raises its minimum wage while neighboring state Pennsylvania, does not. Economists compared the labor market in both states to draw conclusions about the effect of a minimum wage on employment and wages. This is an example of:

Accepted Answer

A)  simulation economics. 
B)  a natural experiment. 
C)  an economic principle. 
D)  the economic decision rule. 
A)  simulation economics. 
B)  a natural experiment. 
C)  an economic principle. 
D)  the economic decision rule.

Question 9

"We should support the market because it is efficient" is an example of:

Accepted Answer

A)  positive economics. 
B)  normative economics. 
C)  objective economics. 
D)  negative economics. 
A)  positive economics. 
B)  normative economics. 
C)  objective economics. 
D)  negative economics.

Question 10

The study of inflation is a topic in:

Accepted Answer

A)  microeconomics. 
B)  macroeconomics. 
C)  classical economics. 
D)  normative economics. 
A)  microeconomics. 
B)  macroeconomics. 
C)  classical economics. 
D)  normative economics.

Question 11

Brooke and Sandy both attend the same college and have the same expenses for tuition, books, and supplies. However, Brooke is a famous actress who could earn $2 million per year if she were not attending college whereas Sandy could earn $10,000 a year serving hamburgers if he were not attending college. It follows that the opportunity cost of attending college:

Accepted Answer

A)  is the same for both Brooke and Sandy. 
B)  is greater for Brooke than for Sandy. 
C)  is greater for Sandy than for Brooke. 
D)  for Brooke and Sandy cannot be compared. 
A)  is the same for both Brooke and Sandy. 
B)  is greater for Brooke than for Sandy. 
C)  is greater for Sandy than for Brooke. 
D)  for Brooke and Sandy cannot be compared.

Question 12

The answers to an economy's three central economic problems are determined by the interaction of three forces: economic forces, political forces, and social forces.

Accepted Answer

A) True 
 B)False

Question 13

According to the text, economics is the study of how:

Accepted Answer

A)  governments allocate resources in the face of constraints. 
B)  government policies can be used to meet individuals' wants and desires. 
C)  human beings coordinate their wants and desires. 
D)  scarce resources are allocated between capitalists and workers. 
A)  governments allocate resources in the face of constraints. 
B)  government policies can be used to meet individuals' wants and desires. 
C)  human beings coordinate their wants and desires. 
D)  scarce resources are allocated between capitalists and workers.

Question 14

The table below shows how the marginal benefit of pizza dinners varies for Luigi with the number consumed per month. $\begin{array}{l}
\begin{array}{|c|c|}
\hline \text { Dinners per month } &\text { Marginal benefit per dinner }\
\hline 1 & \$ 4.00 \
\hline 2 & \$ 3.00 \
\hline 3 & \$ 2.00 \
\hline 4 & \$ 1.00 \
\hline
\end{array}
\end{array}$

Suppose the price per dinner is $4.99 and accurately reflects the marginal cost of the dinners to Luigi. Assuming that Luigi is rational, he will:

Accepted Answer

A)  not consume any pizza dinners this month. 
B)  consume one pizza dinner this month. 
C)  consume two pizza dinners this month. 
D)  consume three pizza dinners this month. 
A)  not consume any pizza dinners this month. 
B)  consume one pizza dinner this month. 
C)  consume two pizza dinners this month. 
D)  consume three pizza dinners this month.

Question 15

Microeconomics and macroeconomics are:

Accepted Answer

A)  not related because they are taught as separate courses. 
B)  virtually identical, though one is much more difficult than the other. 
C)  interrelated because what happens in the economy as a whole is based on individual decisions. 
D)  interrelated because both are taught by the same teacher. 
A)  not related because they are taught as separate courses. 
B)  virtually identical, though one is much more difficult than the other. 
C)  interrelated because what happens in the economy as a whole is based on individual decisions. 
D)  interrelated because both are taught by the same teacher.

Question 16

The statement "government should provide affordable health care coverage for every member of society" is:

Accepted Answer

A)  a statement that everyone agrees with. 
B)  a statement that everyone disagrees with. 
C)  a positive statement. 
D)  a normative statement. 
A)  a statement that everyone agrees with. 
B)  a statement that everyone disagrees with. 
C)  a positive statement. 
D)  a normative statement.

Question 17

Chuck offers $240,000 for a house. The seller turns down the offer but says she will sell the house for $260,000. However, Chuck refuses to pay the higher price. If Chuck is following the economic decision rule, the marginal benefit of the house to:

Accepted Answer

A)  Chuck must be less than $260,000. 
B)  Chuck must be greater than $260,000. 
C)  The seller must be less than $260,000. 
D)  The seller must be less than $240,000. 
A)  Chuck must be less than $260,000. 
B)  Chuck must be greater than $260,000. 
C)  The seller must be less than $260,000. 
D)  The seller must be less than $240,000.

Question 18

The opportunity cost of undertaking an activity includes any sunk cost.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements about urban sprawl and traffic congestion is the best illustration of a normative statement?

Accepted Answer

A)  Snarled traffic cost motorists in the 85 largest U.S. cities 3.5 billion hours. 
B)  The average U.S. urban traveler is stuck in road traffic 46 hours a year. 
C)  Traffic congestion has increased in the last 20 years. 
D)  Because urban sprawl is the result of individual choice, it is okay. 
A)  Snarled traffic cost motorists in the 85 largest U.S. cities 3.5 billion hours. 
B)  The average U.S. urban traveler is stuck in road traffic 46 hours a year. 
C)  Traffic congestion has increased in the last 20 years. 
D)  Because urban sprawl is the result of individual choice, it is okay.

Question 20

An economist secures volunteers from her college campus and divides them into two groups that are ushered into different rooms. Both groups are given a test. Those in the first group who score 90 percent or more receive an Apple iPad. Upon exiting the room, those given iPads are offered the choice of receiving $150 in exchange for the iPad. Only a few take the exchange. Those in the second group who score 90 percent are offered either an Apple iPad or $150. About half the students choose $150. The professor uses this data to support a principle known as the endowment effect. The professor is engaging in:

Accepted Answer

A)  experimental economics. 
B)  natural experiments. 
C)  the economic decision rule. 
D)  a market coordination mechanism. 
A)  experimental economics. 
B)  natural experiments. 
C)  the economic decision rule. 
D)  a market coordination mechanism.

Macroeconomics includes the study of:

The study of individual choice is a focus in:

Say a pill existed that made people selfless. After taking it they were only interested in others, not themselves. Under the coordination definition of economics:

Value judgments in economics:

Only marginal costs, not sunk costs, affect economic decisions if individuals are rational.

You've purchased a car for $20,000 and now are deciding whether to have a sunroof installed for $800 and a security system installed for $200. The marginal cost of adding both the sunroof and the security system is:

The opportunity cost of attending college for one year is best measured by the:

New Jersey raises its minimum wage while neighboring state Pennsylvania, does not. Economists compared the labor market in both states to draw conclusions about the effect of a minimum wage on employment and wages. This is an example of:

"We should support the market because it is efficient" is an example of:

The study of inflation is a topic in:

The answers to an economy's three central economic problems are determined by the interaction of three forces: economic forces, political forces, and social forces.

According to the text, economics is the study of how:

Microeconomics and macroeconomics are:

The statement "government should provide affordable health care coverage for every member of society" is:

Chuck offers $240,000 for a house. The seller turns down the offer but says she will sell the house for $260,000. However, Chuck refuses to pay the higher price. If Chuck is following the economic decision rule, the marginal benefit of the house to:

The opportunity cost of undertaking an activity includes any sunk cost.

Which of the following statements about urban sprawl and traffic congestion is the best illustration of a normative statement?

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Filters

Exam 1: Economics and Economic Reasoning

Macroeconomics includes the study of:

The study of individual choice is a focus in:

Say a pill existed that made people selfless. After taking it they were only interested in others, not themselves. Under the coordination definition of economics:

Value judgments in economics:

Only marginal costs, not sunk costs, affect economic decisions if individuals are rational.

You've purchased a car for $20,000 and now are deciding whether to have a sunroof installed for $800 and a security system installed for $200. The marginal cost of adding both the sunroof and the security system is:

The opportunity cost of attending college for one year is best measured by the:

New Jersey raises its minimum wage while neighboring state Pennsylvania, does not. Economists compared the labor market in both states to draw conclusions about the effect of a minimum wage on employment and wages. This is an example of:

"We should support the market because it is efficient" is an example of:

The study of inflation is a topic in:

The answers to an economy's three central economic problems are determined by the interaction of three forces: economic forces, political forces, and social forces.

According to the text, economics is the study of how:

Microeconomics and macroeconomics are:

The statement "government should provide affordable health care coverage for every member of society" is:

Chuck offers $240,000 for a house. The seller turns down the offer but says she will sell the house for $260,000. However, Chuck refuses to pay the higher price. If Chuck is following the economic decision rule, the marginal benefit of the house to:

The opportunity cost of undertaking an activity includes any sunk cost.

Which of the following statements about urban sprawl and traffic congestion is the best illustration of a normative statement?

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Filters