Question 1

The achievement of greater efficiency in the United States has been at the expense of growing inequality.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following mathematical expressions represents the equation of a straight line with a slope of zero at all points on a graph with Y on the vertical axis and X on the horizontal axis?

Accepted Answer

A) Y = a + X 
B) X = bY 
C) X = a 
D) Y = a 
A) Y = a + X 
B) X = bY 
C) X = a 
D) Y = a D

Question 3

Although economic science can contribute theoretical and factual knowledge on a particular issue, the final decision on policy questions often depends on

Accepted Answer

A) information that is not currently available. 
B) social judgments. 
C) ethical norms. 
D) All of these responses are correct. 
A) information that is not currently available. 
B) social judgments. 
C) ethical norms. 
D) All of these responses are correct. D

Question 4

Economists disagree on most economic issues facing an economy.

Accepted Answer

A) True 
 B)False

Question 5

Figure 1-1  
-The slope of the line in Figure 1-1 is

Accepted Answer

A) 0.5. 
B) 2.0. 
C) −0.5. 
D) −2.0. 
A) 0.5. 
B) 2.0. 
C) −0.5. 
D) −2.0.

Question 6

Policy-oriented economists seek to develop theories to

Accepted Answer

A) explain how things work, so policies can be formulated. 
B) describe what happened in a particular time period in history. 
C) describe current economic events. 
D) find correlations between events. 
E) change people's values and ethics. 
A) explain how things work, so policies can be formulated. 
B) describe what happened in a particular time period in history. 
C) describe current economic events. 
D) find correlations between events. 
E) change people's values and ethics.

Question 7

Because there is a trade-off between inflation and unemployment in the short run,

Accepted Answer

A) lower unemployment will typically cause inflation to fall. 
B) policies designed to reduce unemployment will typically set off a recession. 
C) policies designed to reduce inflation will cause unemployment to fall as well. 
D) higher inflation will generally be associated with higher unemployment. 
E) lower inflation will generally be associated with higher unemployment. 
A) lower unemployment will typically cause inflation to fall. 
B) policies designed to reduce unemployment will typically set off a recession. 
C) policies designed to reduce inflation will cause unemployment to fall as well. 
D) higher inflation will generally be associated with higher unemployment. 
E) lower inflation will generally be associated with higher unemployment.

Question 8

Models are simplifications that are used to observe the workings of a system.

Accepted Answer

A) True 
 B)False

Question 9

Suppose Tammy grew up on a farm and is very good at plowing.In addition, suppose she is a popular country singer who earns $4,000 per performance.If her husband Bob can plow (but not as well as Tammy) but he can't carry a tune, then it would be most efficient if

Accepted Answer

A) Tammy did both the plowing and the singing. 
B) Tammy specialized in plowing and Bob in singing. 
C) Bob did both the plowing and singing. 
D) Tammy specialized in singing and Bob in plowing. 
E) they both plowed and sang. 
A) Tammy did both the plowing and the singing. 
B) Tammy specialized in plowing and Bob in singing. 
C) Bob did both the plowing and singing. 
D) Tammy specialized in singing and Bob in plowing. 
E) they both plowed and sang.

Question 10

If a rent control policy is enacted to protect apartment renters, this is likely to lead to

Accepted Answer

A) an increase in the supply of apartments. 
B) rise in the number of households looking for rental units. 
C) increased investment in rental properties. 
D) the conversion of office buildings to rental apartments. 
A) an increase in the supply of apartments. 
B) rise in the number of households looking for rental units. 
C) increased investment in rental properties. 
D) the conversion of office buildings to rental apartments.

Question 11

The lower left-hand corner of a graph where the two axes meet is called the graph's origin.

Accepted Answer

A) True 
 B)False

Question 12

Only economists and other "social" scientists have areas of dispute within their disciplines.

Accepted Answer

A) True 
 B)False

Question 13

To an economist, theory can be thought of as

Accepted Answer

A) abstraction for the sake of argument. 
B) one person's opinion, which is just as good as another's. 
C) another term for the description of a situation. 
D) beliefs that cannot necessarily be verified. 
E) explanation of mechanisms behind observed phenomena. 
A) abstraction for the sake of argument. 
B) one person's opinion, which is just as good as another's. 
C) another term for the description of a situation. 
D) beliefs that cannot necessarily be verified. 
E) explanation of mechanisms behind observed phenomena.

Question 14

Market-based policies are effective methods that the government can use to address externality problems.

Accepted Answer

A) True 
 B)False

Question 15

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 16

A theory is an abstraction used often by economists to

Accepted Answer

A) describe a problem. 
B) keep all assumptions in their proper places. 
C) explain why things work the way they do. 
D) describe a hierarchical ordering of facts. 
E) arrange variables into a graphical format. 
A) describe a problem. 
B) keep all assumptions in their proper places. 
C) explain why things work the way they do. 
D) describe a hierarchical ordering of facts. 
E) arrange variables into a graphical format.

Question 17

Which of the following is an example of an externality?

Accepted Answer

A) The reduction in health risks when Tom's family receives a measles vaccine 
B) Robert's purchase of a new car 
C) A firm's investment of new computer technology 
D) Eric's choice to buy a new lawn mower 
A) The reduction in health risks when Tom's family receives a measles vaccine 
B) Robert's purchase of a new car 
C) A firm's investment of new computer technology 
D) Eric's choice to buy a new lawn mower

Question 18

Using economic theory to analyze policy issues

Accepted Answer

A) is a way to avoid inconvenient facts. 
B) allows researchers to disprove a hypothesis. 
C) relies on simplifications to conduct studies. 
D) always includes the inclusion of political ideals. 
A) is a way to avoid inconvenient facts. 
B) allows researchers to disprove a hypothesis. 
C) relies on simplifications to conduct studies. 
D) always includes the inclusion of political ideals.

Question 19

Slope is measured as run/rise.

Accepted Answer

A) True 
 B)False

Question 20

In the early 1800s, there was a smallpox outbreak in a remote part of Russia.The government sent in a large group of army doctors, but they were too late to stop the epidemic.Thirty years later, there was another smallpox scare.A local statistician cautioned the government against a similar response, noting the increased mortality and high number of army doctors during the earlier epidemic.Was the statistician providing good advice?

Accepted Answer

The statistician confused correlation wi

Exam 1: What Is Economics

The achievement of greater efficiency in the United States has been at the expense of growing inequality.

Which of the following mathematical expressions represents the equation of a straight line with a slope of zero at all points on a graph with Y on the vertical axis and X on the horizontal axis?

Although economic science can contribute theoretical and factual knowledge on a particular issue, the final decision on policy questions often depends on

Economists disagree on most economic issues facing an economy.

Figure 1-1 -The slope of the line in Figure 1-1 is

Policy-oriented economists seek to develop theories to

Because there is a trade-off between inflation and unemployment in the short run,

Models are simplifications that are used to observe the workings of a system.

Suppose Tammy grew up on a farm and is very good at plowing.In addition, suppose she is a popular country singer who earns $4,000 per performance.If her husband Bob can plow (but not as well as Tammy) but he can't carry a tune, then it would be most efficient if

If a rent control policy is enacted to protect apartment renters, this is likely to lead to

The lower left-hand corner of a graph where the two axes meet is called the graph's origin.

Only economists and other "social" scientists have areas of dispute within their disciplines.

To an economist, theory can be thought of as

Market-based policies are effective methods that the government can use to address externality problems.

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 theory is an abstraction used often by economists to

Which of the following is an example of an externality?

Using economic theory to analyze policy issues

Slope is measured as run/rise.

The Economony: 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

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of 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

Contemporary Issues in the Useconomy

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