Exam 1: Economics: the World Around You

Tim has noticed that every time women's hemlines rise, stock market prices rise. He is therefore poised to invest in stocks the next time the local fashion editor predicts that shorter skirts will be in for the next season. Tim's error is called:

People are compelled to make a choice because of the lack of time and money to buy everything they want.

To say that "there is a scarcity of gold" means that:

The fallacy of composition:

Oil found underground in Texas is an example of:

A positive (nonzero) price for a good means the good is in surplus.

According to the U.S. Census Bureau, what is the difference between the earnings of a high school diploma holder and a medical practitioner between the ages of 25 and 64?

People can increase their wealth by:

A good or service is said to be scarce when:

Goods used to produce other goods are called:

In its most fundamental sense, economics is the study of:

"Since a household cannot afford to keep adding indefinitely to its debt, a country cannot afford to do so either." This statement is an example of:

According to the American Shareholders Association, a majority of Americans prefer to invest in education rather than stock markets, because of the volatility in the rate of return from the latter.

It seems as if the Internet has made the number of choices individuals have infinite. This means that:

Economics is the study of how people cope with:

Which of the following is not an example of rational self-interest, as defined by economists?

Which of the following in an example of an economic bad?

Which of the following is not physical capital, as economists use the term?

For an analysis to be considered positive, and not normative, it must include:

When people make choices that (at the time and with the information they have at their disposal) give them the greatest amount of satisfaction, they are said to be: