Question 1

What is experimental economics?

Accepted Answer

Experimental economics is a fi

Question 2

Consider the following statement: Keith purchased an entire week's groceries for his family of four for $200 while Jerry spent $250 for a week's groceries for his family of four.Can we conclude that Keith is more efficient than Jerry at grocery shopping? Why or why not?

Accepted Answer

The answer is it depends.Efficiency refe

Question 3

An economic policy is:

Accepted Answer

A) a generalization about the workings of an abstract economy. 
B) a physical or mental structure that significantly influences economic decisions. 
C) an action taken by the government to influence the course of economic events. 
D) a standard people use when they determine whether a particular activity or behavior is acceptable. 
A) a generalization about the workings of an abstract economy. 
B) a physical or mental structure that significantly influences economic decisions. 
C) an action taken by the government to influence the course of economic events. 
D) a standard people use when they determine whether a particular activity or behavior is acceptable.

Question 4

When your wages rise, the:

Accepted Answer

A) opportunity cost of an hour of work decreases. 
B) opportunity cost of an hour of leisure stays the same. 
C) cost of working increases. 
D) opportunity cost of an hour of leisure increases. 
A) opportunity cost of an hour of work decreases. 
B) opportunity cost of an hour of leisure stays the same. 
C) cost of working increases. 
D) opportunity cost of an hour of leisure increases.

Question 5

What are theorems? What are precepts? If two economists agree on a theorem,do they necessarily agree on precepts? If two economists agree on a precept,do they necessarily agree on theorems?

Accepted Answer

Theorems are propositions that are logic

Question 6

The quantity of goods and services available to society:

Accepted Answer

A) is fixed. 
B) depends on human action. 
C) is not of economic importance. 
D) will always grow to meet individuals' wants and desires. 
A) is fixed. 
B) depends on human action. 
C) is not of economic importance. 
D) will always grow to meet individuals' wants and desires.

Question 7

Economic systems:

Accepted Answer

A) can eliminate scarcity. 
B) address the questions what is produced, how it is produced, and for whom it is produced. 
C) provide all the goods people want and desire. 
D) provide equal distribution of well-being among its participants. 
A) can eliminate scarcity. 
B) address the questions what is produced, how it is produced, and for whom it is produced. 
C) provide all the goods people want and desire. 
D) provide equal distribution of well-being among its participants.

Question 8

Scarcity exists because:

Accepted Answer

A) individuals cannot solve the three central coordination problems. 
B) governments cannot solve the three central coordination problems. 
C) the supply of goods is always less than the demand. 
D) new wants continue to develop and willingness to meet them is limited. 
A) individuals cannot solve the three central coordination problems. 
B) governments cannot solve the three central coordination problems. 
C) the supply of goods is always less than the demand. 
D) new wants continue to develop and willingness to meet them is limited.

Question 9

Explain the differences between positive economics,normative economics,and the art of economics.Explain why you would categorize each of the following three statements as belonging to positive economics,normative economics,or the art of economics.
(a)The unemployment rate is 6.5 percent.
(b)The unemployment rate is unacceptably high.
(c)If the government wants to reduce the unemployment rate,it should try cutting taxes.

Accepted Answer

Positive economics is the study of what

Question 10

Your opportunity cost of taking this course is the:

Accepted Answer

A) tuition you paid for the course. 
B) net benefit of the activity you would have chosen if you had not taken the course. 
C) net benefit of taking this course. 
D) cost of the activity you would have chosen if you had not taken the course. 
A) tuition you paid for the course. 
B) net benefit of the activity you would have chosen if you had not taken the course. 
C) net benefit of taking this course. 
D) cost of the activity you would have chosen if you had not taken the course.

Question 11

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

\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 12

Many drugs are illegal in the United States. Despite this law, illegal drugs are usually available at a price many times higher than they would be if the drugs weren't illegal. The high price of illegal drugs is an example of:

Accepted Answer

A) the market affecting political forces. 
B) political forces affecting the market. 
C) the failure of the market. 
D) the failure of political forces. 
A) the market affecting political forces. 
B) political forces affecting the market. 
C) the failure of the market. 
D) the failure of political forces.

Question 13

The table below shows how the marginal benefit of car washes varies for Carol with the number purchased per month. $$\begin{array} { | c | c | } 
\hline \text { Car wawhes per month } & \begin{array} { c } 
\text { Marginal benefit of purchasing an additimal car } \
\text { wash }
\end{array} \
\hline 1 & \$ 6.00 \
\hline 2 & \$ 5.00 \
\hline 3 & \$ 4.00 \
\hline 4 & \$ 3.00 \
\hline 5 & \$ 2.00 \
\hline
\end{array}$$ The price of each car wash is reduced from $2.99 to $1.99. Assuming that the price of a car wash accurately reflects the marginal cost to Carol and that she is rational, she will increase the number of car washes purchased per month from:

Accepted Answer

A) one to two. 
B) two to three. 
C) three to four. 
D) four to five. 
A) one to two. 
B) two to three. 
C) three to four. 
D) four to five.

Question 14

Say that an economic model concludes that "government raising payroll taxes is a measure that can maintain current Social Security benefit levels for every retiree." This conclusion is:

Accepted Answer

A) a normative statement because there is disagreement over whether Social Security benefits should be maintained. 
B) a positive statement because raising payroll taxes is one way to maintain Social Security benefits. 
C) a statement in the art of economics because it is about policy. 
D) false because there is no payroll tax rate high enough to maintain current benefits. 
A) a normative statement because there is disagreement over whether Social Security benefits should be maintained. 
B) a positive statement because raising payroll taxes is one way to maintain Social Security benefits. 
C) a statement in the art of economics because it is about policy. 
D) false because there is no payroll tax rate high enough to maintain current benefits.

Question 15

A natural experiment is:

Accepted Answer

A) a naturally occurring event that approximates a controlled experiment. 
B) not possible given that economists study real-world events. 
C) a branch of economics that studies the economy through controlled lab experiments. 
D) what all economists do when they develop their models. 
A) a naturally occurring event that approximates a controlled experiment. 
B) not possible given that economists study real-world events. 
C) a branch of economics that studies the economy through controlled lab experiments. 
D) what all economists do when they develop their models.

Question 16

Prostitution is legal in Churchill County, Nevada, but a referendum threatened to close two brothels (prostitution businesses)in that county. What idea from Chapter 1 of the text does this story best illustrate?

Accepted Answer

A) Sunk costs do not matter in making decisions. 
B) Marginal revenue should equal marginal cost 
C) Social and political forces sometimes rein in market forces. 
D) Microeconomics and macroeconomics are very much interrelated. 
A) Sunk costs do not matter in making decisions. 
B) Marginal revenue should equal marginal cost 
C) Social and political forces sometimes rein in market forces. 
D) Microeconomics and macroeconomics are very much interrelated.

Question 17

Positive economics is:

Accepted Answer

A) subjective. 
B) neither objective nor subjective. 
C) more objective than normative economics. 
D) more subjective than normative economics. 
A) subjective. 
B) neither objective nor subjective. 
C) more objective than normative economics. 
D) more subjective than normative economics.

Question 18

The economic decision rule is to undertake an action only when the marginal benefits of that action are greater than its total costs.

Accepted Answer

A) True 
 B)False

Question 19

Why does classroom attendance rise during exam days and fall during other days?

Accepted Answer

Students apply economic reasoning and th

Question 20

Positive economics seeks to:

Accepted Answer

A) determine the most appropriate economic goals for society. 
B) determine what government economic policies are best. 
C) objectively explain how the economy functions. 
D) objectively explain how societies value different economic outcomes. 
A) determine the most appropriate economic goals for society. 
B) determine what government economic policies are best. 
C) objectively explain how the economy functions. 
D) objectively explain how societies value different economic outcomes.

Exam 1: Economics and Economic Reasoning

What is experimental economics?

Consider the following statement: Keith purchased an entire week's groceries for his family of four for $200 while Jerry spent $250 for a week's groceries for his family of four.Can we conclude that Keith is more efficient than Jerry at grocery shopping? Why or why not?

An economic policy is:

When your wages rise, the:

What are theorems? What are precepts? If two economists agree on a theorem,do they necessarily agree on precepts? If two economists agree on a precept,do they necessarily agree on theorems?

The quantity of goods and services available to society:

Economic systems:

Scarcity exists because:

Your opportunity cost of taking this course is the:

Many drugs are illegal in the United States. Despite this law, illegal drugs are usually available at a price many times higher than they would be if the drugs weren't illegal. The high price of illegal drugs is an example of:

Say that an economic model concludes that "government raising payroll taxes is a measure that can maintain current Social Security benefit levels for every retiree." This conclusion is:

A natural experiment is:

Prostitution is legal in Churchill County, Nevada, but a referendum threatened to close two brothels (prostitution businesses)in that county. What idea from Chapter 1 of the text does this story best illustrate?

Positive economics is:

The economic decision rule is to undertake an action only when the marginal benefits of that action are greater than its total costs.

Why does classroom attendance rise during exam days and fall during other days?

Positive economics seeks to:

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

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

Inflation, Deflation, and Macro Policy

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

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