Question 1

If a good is scarce,

Accepted Answer

A)  there will be shortages of it if the good is rationed by markets. 
B)  the good will have a price in a market setting. 
C)  there will be enough of the good freely available from nature to satisfy the human desire for it. 
D)  all of the above are true. 
A)  there will be shortages of it if the good is rationed by markets. 
B)  the good will have a price in a market setting. 
C)  there will be enough of the good freely available from nature to satisfy the human desire for it. 
D)  all of the above are true.

Question 2

Which of the following is true?

Accepted Answer

A)  Human choice is generally not influenced by changes in incentives. 
B)  What is true for the individual must be true for the group as a whole. 
C)  Using scarce resources to meet one need reduces our ability to meet needs in other areas. 
D)  The economic way of thinking stresses that good intentions usually lead to sound economic policy. 
A)  Human choice is generally not influenced by changes in incentives. 
B)  What is true for the individual must be true for the group as a whole. 
C)  Using scarce resources to meet one need reduces our ability to meet needs in other areas. 
D)  The economic way of thinking stresses that good intentions usually lead to sound economic policy.

Question 3

Economics is primarily the study of

Accepted Answer

A)  how to make money in the stock market. 
B)  how to find lower cost methods of production. 
C)  the choices we must make among alternatives because of scarcity. 
D)  the proper form of industrial structure for the United States. 
A)  how to make money in the stock market. 
B)  how to find lower cost methods of production. 
C)  the choices we must make among alternatives because of scarcity. 
D)  the proper form of industrial structure for the United States.

Question 4

What is the best test of an economic theory?

Accepted Answer

A)  Its eloquence. 
B)  The plausibility of its assumptions. 
C)  Its ability to predict real-world events, patterns, and changes. 
D)  Whether it produces implications that are favored by the researcher. 
A)  Its eloquence. 
B)  The plausibility of its assumptions. 
C)  Its ability to predict real-world events, patterns, and changes. 
D)  Whether it produces implications that are favored by the researcher.

Question 5

Real (adjusted for inflation) federal spending per person in the United States

Accepted Answer

A)  has increased by approximately 10 percent per decade during the last 225 years. 
B)  increased more rapidly during the nineteenth century than during the twentieth century. 
C)  was approximately 75 times the level of 1916 in recent years. 
D)  increased rapidly during the first half of the twentieth century but has changed very little since 1950. 
A)  has increased by approximately 10 percent per decade during the last 225 years. 
B)  increased more rapidly during the nineteenth century than during the twentieth century. 
C)  was approximately 75 times the level of 1916 in recent years. 
D)  increased rapidly during the first half of the twentieth century but has changed very little since 1950.

Question 6

When economists say that people choose rationally, this means

Accepted Answer

A)  they gather all relevant information before making their purchases 
B)  once a pattern of behavior has been established, people tend to become set in their ways 
C)  people respond in predictable ways to changes in costs and benefits 
D)  people rarely make errors when they are permitted to make transactions 
E)  once made, decisions are never reversed 
A)  they gather all relevant information before making their purchases 
B)  once a pattern of behavior has been established, people tend to become set in their ways 
C)  people respond in predictable ways to changes in costs and benefits 
D)  people rarely make errors when they are permitted to make transactions 
E)  once made, decisions are never reversed

Question 7

Which of the following best describes the difference between an objective concept and a subjective concept?

Accepted Answer

A)  A subjective concept is a fact based on observation that is not subject to personal opinion, while an objective concept is based on personal preferences and value judgments. 
B)  An objective concept is a fact based on observation that is not subject to personal opinion, while a subjective concept is based on personal preferences and value judgments. 
C)  A subjective concept relates to issues in microeconomics, while an objective concept relates to issues in macroeconomics. 
D)  An objective concept can only be illustrated in words, while a subjective concept can usually be illustrated with a graph. 
A)  A subjective concept is a fact based on observation that is not subject to personal opinion, while an objective concept is based on personal preferences and value judgments. 
B)  An objective concept is a fact based on observation that is not subject to personal opinion, while a subjective concept is based on personal preferences and value judgments. 
C)  A subjective concept relates to issues in microeconomics, while an objective concept relates to issues in macroeconomics. 
D)  An objective concept can only be illustrated in words, while a subjective concept can usually be illustrated with a graph.

Question 8

"After every fall election, the weather starts to turn cold, therefore elections cause cold weather." This statement

Accepted Answer

A)  confuses positive and normative analysis. 
B)  commits the fallacy of composition. 
C)  fails to recognize that association is not causation. 
D)  confuses macroeconomics with microeconomics. 
A)  confuses positive and normative analysis. 
B)  commits the fallacy of composition. 
C)  fails to recognize that association is not causation. 
D)  confuses macroeconomics with microeconomics.

Question 9

In recent years, what percentage of American families have derived income transfers from at least one government transfer program?

Accepted Answer

A)  less than 20 percent 
B)  approximately 55 percent 
C)  approximately 62 percent 
D)  nearly 75 percent 
A)  less than 20 percent 
B)  approximately 55 percent 
C)  approximately 62 percent 
D)  nearly 75 percent

Question 10

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 11

What is the best test of an economic theory?

Accepted Answer

A)  The accuracy of the assumptions behind the theory. 
B)  The ability of the theory to predict real-world events. 
C)  The implications of the theory for current public policy. 
D)  How much mathematical detail is behind the theory. 
A)  The accuracy of the assumptions behind the theory. 
B)  The ability of the theory to predict real-world events. 
C)  The implications of the theory for current public policy. 
D)  How much mathematical detail is behind the theory.

Question 12

Which of the following is true?

Accepted Answer

A)  Changes in personal costs and benefits will exert a predictable influence on the choices of people. 
B)  If one individual gains from an economic activity, then someone else must lose. 
C)  If a good is provided free to an individual by government, its production will not consume valuable scarce resources. 
D)  If the intentions behind a policy are good, you can be assured that the outcome will be desirable. 
A)  Changes in personal costs and benefits will exert a predictable influence on the choices of people. 
B)  If one individual gains from an economic activity, then someone else must lose. 
C)  If a good is provided free to an individual by government, its production will not consume valuable scarce resources. 
D)  If the intentions behind a policy are good, you can be assured that the outcome will be desirable.

Question 13

To say that people make marginal decisions means that

Accepted Answer

A)  they usually wait until the last minute before making a decision to buy 
B)  they weigh the additional costs and additional benefits of various activities before they make a decision 
C)  most people just barely get by on the incomes they earn and live from day to day on the very edge of subsistence 
D)  they consider the total cost and benefit of various activities before they make a purchase 
A)  they usually wait until the last minute before making a decision to buy 
B)  they weigh the additional costs and additional benefits of various activities before they make a decision 
C)  most people just barely get by on the incomes they earn and live from day to day on the very edge of subsistence 
D)  they consider the total cost and benefit of various activities before they make a purchase

Question 14

The unintended consequences of an economic change that are not immediately identifiable but are felt only with time are known in economics as

Accepted Answer

A)  opportunity costs. 
B)  marginal effects. 
C)  secondary effects. 
D)  scarcity constraints. 
A)  opportunity costs. 
B)  marginal effects. 
C)  secondary effects. 
D)  scarcity constraints.

Question 15

Which of the following are NOT scarce?

Accepted Answer

A)  time for leisure activities 
B)  computers 
C)  compact discs 
D)  the air we breathe 
A)  time for leisure activities 
B)  computers 
C)  compact discs 
D)  the air we breathe

Question 16

When deciding whether to buy a second car, the economic way of thinking indicates that the purchaser should compare

Accepted Answer

A)  the benefits expected from two cars with the cost of both. 
B)  the additional benefits expected from a second car with the cost of the two cars. 
C)  the dollar cost of the two cars with the potential income that the cars will generate. 
D)  the additional benefits of the second car with the additional cost of the second car. 
A)  the benefits expected from two cars with the cost of both. 
B)  the additional benefits expected from a second car with the cost of the two cars. 
C)  the dollar cost of the two cars with the potential income that the cars will generate. 
D)  the additional benefits of the second car with the additional cost of the second car.

Question 17

When an individual weighs her options and makes a choice that maximizes her benefit at the minimum cost, economists refer to this as a process of

Accepted Answer

A)  rational decision making. 
B)  objective decision making because the value of goods is determined objectively. 
C)  marginal management analysis. 
D)  random decision making. 
A)  rational decision making. 
B)  objective decision making because the value of goods is determined objectively. 
C)  marginal management analysis. 
D)  random decision making.

Question 18

The economic way of thinking stresses that

Accepted Answer

A)  changes in personal costs and benefits generally fail to exert much impact on behavior. 
B)  incentives matter--individuals respond in predictable ways to changes in personal costs and benefits. 
C)  if one individual gains from an economic activity, then someone else must lose and in the same proportion. 
D)  if a good is provided by the government, its production will not consume valuable scarce resources. 
A)  changes in personal costs and benefits generally fail to exert much impact on behavior. 
B)  incentives matter--individuals respond in predictable ways to changes in personal costs and benefits. 
C)  if one individual gains from an economic activity, then someone else must lose and in the same proportion. 
D)  if a good is provided by the government, its production will not consume valuable scarce resources.

Question 19

A marginal change usually is a

Accepted Answer

A)  change that involves little, if anything, that is important. 
B)  large, significant adjustment. 
C)  change for the worse, and so it is usually a short-term change. 
D)  small, incremental adjustment. 
A)  change that involves little, if anything, that is important. 
B)  large, significant adjustment. 
C)  change for the worse, and so it is usually a short-term change. 
D)  small, incremental adjustment.

Question 20

If the government provides free schooling for all students, an economist would say education is

Accepted Answer

A)  a free good, having no cost. 
B)  scarce even though its cost is paid by taxpayers rather than by students. 
C)  an example of a good that is no longer scarce. 
D)  all of the above. 
A)  a free good, having no cost. 
B)  scarce even though its cost is paid by taxpayers rather than by students. 
C)  an example of a good that is no longer scarce. 
D)  all of the above.

If a good is scarce,

Which of the following is true?

Economics is primarily the study of

What is the best test of an economic theory?

Real (adjusted for inflation) federal spending per person in the United States

When economists say that people choose rationally, this means

Which of the following best describes the difference between an objective concept and a subjective concept?

"After every fall election, the weather starts to turn cold, therefore elections cause cold weather." This statement

In recent years, what percentage of American families have derived income transfers from at least one government transfer program?

Rational choice requires that opportunity cost be

What is the best test of an economic theory?

Which of the following is true?

To say that people make marginal decisions means that

The unintended consequences of an economic change that are not immediately identifiable but are felt only with time are known in economics as

Which of the following are NOT scarce?

When deciding whether to buy a second car, the economic way of thinking indicates that the purchaser should compare

When an individual weighs her options and makes a choice that maximizes her benefit at the minimum cost, economists refer to this as a process of

The economic way of thinking stresses that

A marginal change usually is a

If the government provides free schooling for all students, an economist would say education is

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters

Exam 1: The Economic Approach

If a good is scarce,

Which of the following is true?

Economics is primarily the study of

What is the best test of an economic theory?

Real (adjusted for inflation) federal spending per person in the United States

When economists say that people choose rationally, this means

Which of the following best describes the difference between an objective concept and a subjective concept?

"After every fall election, the weather starts to turn cold, therefore elections cause cold weather." This statement

In recent years, what percentage of American families have derived income transfers from at least one government transfer program?

Rational choice requires that opportunity cost be

What is the best test of an economic theory?

Which of the following is true?

To say that people make marginal decisions means that

The unintended consequences of an economic change that are not immediately identifiable but are felt only with time are known in economics as

Which of the following are NOT scarce?

When deciding whether to buy a second car, the economic way of thinking indicates that the purchaser should compare

When an individual weighs her options and makes a choice that maximizes her benefit at the minimum cost, economists refer to this as a process of

The economic way of thinking stresses that

A marginal change usually is a

If the government provides free schooling for all students, an economist would say education is

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters