Question 1

Slope will vary along a curve (as opposed to a straight line).

Accepted Answer

A) True 
 B)False

Question 2

It is possible to represent three dimensions on a two-dimensional graph by using

Accepted Answer

A)  a contour map. 
B)  a razor blade. 
C)  curved lines. 
D)  all of the above. 
A)  a contour map. 
B)  a razor blade. 
C)  curved lines. 
D)  all of the above.

Question 3

The government uses fiscal and monetary policy to mitigate the effects of economic fluctuations.

Accepted Answer

A) True 
 B)False

Question 4

"The hotter it gets, the more water people drink." This statement implies that the relationship between temperature and water consumption must have a

Accepted Answer

A)  negative slope. 
B)  positive slope. 
C)  slope always equal to one. 
D)  slope always equal to 45 degrees. 
A)  negative slope. 
B)  positive slope. 
C)  slope always equal to one. 
D)  slope always equal to 45 degrees.

Question 5

Harry Truman is credited with the statement, "Give me a one-armed economist," because economists are likely to say, "On the one hand, ...on the other hand." Why do economists "waffle" more than physicists or chemists?

Accepted Answer

Economists describe human behavior, whic

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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 8

Economists disagree on most economic issues facing an economy.

Accepted Answer

A) True 
 B)False

Question 9

If a government enacts a rent control to protect apartment tenants, the result is likely going to be

Accepted Answer

A)  an increase in rents with a surplus of apartments. 
B)  an increase in rents with a shortage of apartments. 
C)  a decrease in rents with a surplus of apartments. 
D)  a decrease in rents with a shortage of apartments. 
A)  an increase in rents with a surplus of apartments. 
B)  an increase in rents with a shortage of apartments. 
C)  a decrease in rents with a surplus of apartments. 
D)  a decrease in rents with a shortage of apartments.

Question 10

Is it possible to express an economic model in words without diagrams?

Accepted Answer

A)  No, models can only be stated in diagrams. 
B)  No, the very definition of model requires mathematical form. 
C)  Yes, some of the simplest models are verbal statements. 
D)  Yes, although the best models always use diagrams. 
E)  Uncertain, economic theory has not answered this question yet. 
A)  No, models can only be stated in diagrams. 
B)  No, the very definition of model requires mathematical form. 
C)  Yes, some of the simplest models are verbal statements. 
D)  Yes, although the best models always use diagrams. 
E)  Uncertain, economic theory has not answered this question yet.

Question 11

The 1981 tax reform act reduced taxes on high-income individuals.Many economists believed that high tax rates would deter high-income individuals from working and investing, thus slowing the growth of income.This illustrates the issue of

Accepted Answer

A)  the equality-efficiency trade-off. 
B)  usury. 
C)  the effects of budget deficits on future generations. 
D)  the cost disease of the public sector. 
E)  the importance of externalities. 
A)  the equality-efficiency trade-off. 
B)  usury. 
C)  the effects of budget deficits on future generations. 
D)  the cost disease of the public sector. 
E)  the importance of externalities.

Question 12

Economic models

Accepted Answer

A)  are always based on realistic assumptions. 
B)  usually predict perfectly. 
C)  can never be tested with real world data. 
D)  are used to describe cause-and-effect relationships. 
E)  are too simple to be of much use. 
A)  are always based on realistic assumptions. 
B)  usually predict perfectly. 
C)  can never be tested with real world data. 
D)  are used to describe cause-and-effect relationships. 
E)  are too simple to be of much use.

Question 13

During a war, a government will often draft people, most of whom are presently employed, into the army.An economist, computing the real cost of the war, would be sure to include which of the following items?

Accepted Answer

A)  the value of the civilian goods no longer produced by the new soldiers 
B)  the cost of feeding and clothing the new soldiers 
C)  the dollar cost of the payroll 
D)  the higher prices of civilian goods due to wartime shortages 
E)  the cost of transporting the soldiers to combat 
A)  the value of the civilian goods no longer produced by the new soldiers 
B)  the cost of feeding and clothing the new soldiers 
C)  the dollar cost of the payroll 
D)  the higher prices of civilian goods due to wartime shortages 
E)  the cost of transporting the soldiers to combat

Question 14

Economic theory is necessary and extremely important because of its relationship to economic policy.

Accepted Answer

A) True 
 B)False

Question 15

An economic model can be defined as

Accepted Answer

A)  a testable claim which can be evaluated with proper data. 
B)  a representation of a theory or a part of a theory. 
C)  another word for theory. 
D)  a method to distinguish correlation from causation. 
E)  All of the above are correct. 
A)  a testable claim which can be evaluated with proper data. 
B)  a representation of a theory or a part of a theory. 
C)  another word for theory. 
D)  a method to distinguish correlation from causation. 
E)  All of the above are correct.

Question 16

A graph's origin is the point of intersection of all lines or curves in the graph.

Accepted Answer

A) True 
 B)False

Question 17

The slope of a curved line at a particular point is

Accepted Answer

A)  always greater than the slope of a straight line at the same point. 
B)  always smaller than the slope of a straight line at the same point. 
C)  defined as the slope of the straight line representing the average values for the entire curve. 
D)  defined as the slope of the straight line that is tangent to the curve at that point. 
A)  always greater than the slope of a straight line at the same point. 
B)  always smaller than the slope of a straight line at the same point. 
C)  defined as the slope of the straight line representing the average values for the entire curve. 
D)  defined as the slope of the straight line that is tangent to the curve at that point.

Question 18

Lower inflation rates are usually correlated with lower unemployment rates.

Accepted Answer

A) True 
 B)False

Question 19

Why do economists abstract, and is it appropriate?

Accepted Answer

Economists (and other scientists) abstra

Question 20

The slope of a downward-sloping straight line can be calculated as the distance from the

Accepted Answer

A)  horizontal intercept of the line to the origin divided by the distance from the origin to the vertical intercept of the line. 
B)  origin to the horizontal intercept of the line minus the distance from the origin to the vertical intercept of the line. 
C)  vertical intercept of the line to the origin divided by the distance from the origin to the horizontal intercept of the line. 
D)  vertical intercept of the line to the origin minus the distance from the origin to the horizontal intercept of the line. 
A)  horizontal intercept of the line to the origin divided by the distance from the origin to the vertical intercept of the line. 
B)  origin to the horizontal intercept of the line minus the distance from the origin to the vertical intercept of the line. 
C)  vertical intercept of the line to the origin divided by the distance from the origin to the horizontal intercept of the line. 
D)  vertical intercept of the line to the origin minus the distance from the origin to the horizontal intercept of the line.

Exam 1: What Is Economics?

Slope will vary along a curve (as opposed to a straight line).

It is possible to represent three dimensions on a two-dimensional graph by using

The government uses fiscal and monetary policy to mitigate the effects of economic fluctuations.

"The hotter it gets, the more water people drink." This statement implies that the relationship between temperature and water consumption must have a

Harry Truman is credited with the statement, "Give me a one-armed economist," because economists are likely to say, "On the one hand, ...on the other hand." Why do economists "waffle" more than physicists or chemists?

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

Which of the following is an example of an externality?

Economists disagree on most economic issues facing an economy.

If a government enacts a rent control to protect apartment tenants, the result is likely going to be

Is it possible to express an economic model in words without diagrams?

The 1981 tax reform act reduced taxes on high-income individuals.Many economists believed that high tax rates would deter high-income individuals from working and investing, thus slowing the growth of income.This illustrates the issue of

Economic models

During a war, a government will often draft people, most of whom are presently employed, into the army.An economist, computing the real cost of the war, would be sure to include which of the following items?

Economic theory is necessary and extremely important because of its relationship to economic policy.

An economic model can be defined as

A graph's origin is the point of intersection of all lines or curves in the graph.

The slope of a curved line at a particular point is

Lower inflation rates are usually correlated with lower unemployment rates.

Why do economists abstract, and is it appropriate?

The slope of a downward-sloping straight line can be calculated as the distance from the

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

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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