Question 1

In scientific language, a theory is an untested assertion of alleged fact.

Accepted Answer

A) True 
 B)False

Question 2

Explain why an airline may decide to sell an air ticket to a stand-by passenger at less than the full fare if there are empty seats on the airplane?

Accepted Answer

The decision depends on the marginal, or

Question 3

Economists may disagree about how to solve an economic problem because they

Accepted Answer

A) may not be able to use the same models. 
B) always make the same value judgments. 
C) are unable to assemble all of the necessary facts about the economy. 
D) All of these responses are correct. 
A) may not be able to use the same models. 
B) always make the same value judgments. 
C) are unable to assemble all of the necessary facts about the economy. 
D) All of these responses are correct.

Question 4

What are the tools available to governments to mitigate cycles of boom and bust? Why do these tools fail?

Accepted Answer

Some of the tools available to the gover

Question 5

When controls over market prices are enacted, the consequences are always clear.

Accepted Answer

A) True 
 B)False

Question 6

In terms of the competing claims of equality and efficiency, in the United States we have

Accepted Answer

A) chosen greater wage inequality for lower unemployment. 
B) chosen higher unemployment for less wage inequality. 
C) both greater wage inequality and higher unemployment. 
D) not faced a trade-off between wage inequality and unemployment. 
E) been able to choose both less wage inequality and lower unemployment. 
A) chosen greater wage inequality for lower unemployment. 
B) chosen higher unemployment for less wage inequality. 
C) both greater wage inequality and higher unemployment. 
D) not faced a trade-off between wage inequality and unemployment. 
E) been able to choose both less wage inequality and lower unemployment.

Question 7

Economic models cannot take the form of

Accepted Answer

A) equations. 
B) words. 
C) graphs. 
D) actual duplication of observed conditions. 
A) equations. 
B) words. 
C) graphs. 
D) actual duplication of observed conditions.

Question 8

The process of focusing on only the most important factors to explain a phenomenon is called

Accepted Answer

A) abstraction. 
B) marginal analysis. 
C) rational choice. 
D) controlled experimentation. 
E) the trade-off between efficiency and equality. 
A) abstraction. 
B) marginal analysis. 
C) rational choice. 
D) controlled experimentation. 
E) the trade-off between efficiency and equality.

Question 9

Economists use models in order to

Accepted Answer

A) get around having to deal with actual facts. 
B) understand real-life events and predict outcomes. 
C) avoid having to use theories to understand economic conditions. 
D) help elect political candidates. 
A) get around having to deal with actual facts. 
B) understand real-life events and predict outcomes. 
C) avoid having to use theories to understand economic conditions. 
D) help elect political candidates.

Question 10

Economists are often required to make unrealistic assumptions concerning the problems they are investigating.

Accepted Answer

A) True 
 B)False

Question 11

Two variables that systematically change together are correlated.

Accepted Answer

A) True 
 B)False

Question 12

If a government enacts a price floor on agricultural products to protect wheat farmers, the result is likely going to be

Accepted Answer

A) an increase in price with a surplus of wheat. 
B) an increase in price with a shortage of wheat. 
C) a decrease in price with a surplus of wheat. 
D) a decrease in price with a shortage of wheat. 
A) an increase in price with a surplus of wheat. 
B) an increase in price with a shortage of wheat. 
C) a decrease in price with a surplus of wheat. 
D) a decrease in price with a shortage of wheat.

Question 13

If an economic curve has a negative slope, then one variable

Accepted Answer

A) falls as the other rises. 
B) changes at a slower rate than another. 
C) has a smaller value than another variable. 
D) changes after another variable. 
A) falls as the other rises. 
B) changes at a slower rate than another. 
C) has a smaller value than another variable. 
D) changes after another variable.

Question 14

When the economy experiences a bust, the government knows exactly which policies will spur an economic recovery.

Accepted Answer

A) True 
 B)False

Exam 1: What Is Economics

In scientific language, a theory is an untested assertion of alleged fact.

Explain why an airline may decide to sell an air ticket to a stand-by passenger at less than the full fare if there are empty seats on the airplane?

Economists may disagree about how to solve an economic problem because they

What are the tools available to governments to mitigate cycles of boom and bust? Why do these tools fail?

When controls over market prices are enacted, the consequences are always clear.

In terms of the competing claims of equality and efficiency, in the United States we have

Economic models cannot take the form of

The process of focusing on only the most important factors to explain a phenomenon is called

Economists use models in order to

Economists are often required to make unrealistic assumptions concerning the problems they are investigating.

Two variables that systematically change together are correlated.

If a government enacts a price floor on agricultural products to protect wheat farmers, the result is likely going to be

If an economic curve has a negative slope, then one variable

When the economy experiences a bust, the government knows exactly which policies will spur an economic recovery.

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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