Question 1

The growth rate of productivity is the most important determinant of material well-being in the short run.

Accepted Answer

A) True 
 B)False

Question 2

In the twentieth century, Russian peasants noticed that during cholera epidemics there were lots of doctors around; in an attempt to eliminate cholera, they killed all the doctors. This is an example of

Accepted Answer

A)  mistaking correlation with causation. 
B)  the fallacy of opportunism. 
C)  excessive abstraction. 
D)  rationality. 
E)  marginal analysis. 
A)  mistaking correlation with causation. 
B)  the fallacy of opportunism. 
C)  excessive abstraction. 
D)  rationality. 
E)  marginal analysis.

Question 3

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 4

The statement "saccharine causes cancer" is not a theory; it is a hypothesis.

Accepted Answer

A) True 
 B)False

Question 5

A government has the ability to use fiscal and monetary policy to mitigate the effects of economic fluctuations.

Accepted Answer

A) True 
 B)False

Question 6

Government controls over market prices are often enacted to benefit a specific group.

Accepted Answer

A) True 
 B)False

Question 7

Abstract economic theory can be used by academicians but not by politicians or business people.

Accepted Answer

A) True 
 B)False

Question 8

Graphs are valuable because they facilitate interpretation of data.

Accepted Answer

A) True 
 B)False

Question 9

Tools used by economists include

Accepted Answer

A)  historical study. 
B)  mathematical reasoning. 
C)  statistical inference. 
D)  All of these responses are correct. 
A)  historical study. 
B)  mathematical reasoning. 
C)  statistical inference. 
D)  All of these responses are correct.

Question 10

Which of the following is an example of an undesirable side effect of the operation of the market mechanism?

Accepted Answer

A)  Negative externalities 
B)  Comparative advantages 
C)  Abstractions 
D)  Productivity growth 
A)  Negative externalities 
B)  Comparative advantages 
C)  Abstractions 
D)  Productivity growth

Question 11

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.

Question 12

The Phillips curve illustrates the trade-off between inflation and economic growth.

Accepted Answer

A) True 
 B)False

Question 13

Since a trade-off exists between total output and equality of income distribution,

Accepted Answer

A)  greater equality of distribution will generally result in higher levels of output. 
B)  greater output is generally associated with more equal distribution. 
C)  policies designed to increase output will only succeed if distribution is more equal. 
D)  policies intended to expand output must necessarily fail. 
E)  policies designed to equalize distribution may adversely affect the size of output. 
A)  greater equality of distribution will generally result in higher levels of output. 
B)  greater output is generally associated with more equal distribution. 
C)  policies designed to increase output will only succeed if distribution is more equal. 
D)  policies intended to expand output must necessarily fail. 
E)  policies designed to equalize distribution may adversely affect the size of output.

Question 14

The United States produces both automobiles and computers more efficiently than Mexico. Nevertheless, it is possible that both nations would benefit from trade in these items. The reason for this is

Accepted Answer

A)  the law of comparative advantage. 
B)  the inflation-unemployment trade-off. 
C)  externalities. 
D)  the cost disease of personal services. 
E)  attempts to repeal the law of supply and demand. 
A)  the law of comparative advantage. 
B)  the inflation-unemployment trade-off. 
C)  externalities. 
D)  the cost disease of personal services. 
E)  attempts to repeal the law of supply and demand.

Question 15

One of the consequences of preventing wages from falling in the European Union has been growing unemployment.

Accepted Answer

A) True 
 B)False

Question 16

The use of abstraction in economic analysis is one of its primary weaknesses.

Accepted Answer

A) True 
 B)False

Question 17

Productivity growth is the main cause of rising living standards.

Accepted Answer

A) True 
 B)False

Question 18

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.

Question 19

A large airline calculates that the additional cost of a having a passenger on a flight to the Bahamas as the cost of a bag of peanuts and a soft drink, which totals $1.50, but the airline's price is $600 for potential customers who want to buy vacant seats on the day of the flight. Which economic principle is this airline failing to utilize?

Accepted Answer

The airline is failing to think at the m

Question 20

Individuals will have different value judgments about the appropriate rate of unemployment and the appropriate rate of inflation.

Accepted Answer

A) True 
 B)False

The growth rate of productivity is the most important determinant of material well-being in the short run.

In the twentieth century, Russian peasants noticed that during cholera epidemics there were lots of doctors around; in an attempt to eliminate cholera, they killed all the doctors. This is an example of

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

The statement "saccharine causes cancer" is not a theory; it is a hypothesis.

A government has the ability to use fiscal and monetary policy to mitigate the effects of economic fluctuations.

Government controls over market prices are often enacted to benefit a specific group.

Abstract economic theory can be used by academicians but not by politicians or business people.

Graphs are valuable because they facilitate interpretation of data.

Tools used by economists include

Which of the following is an example of an undesirable side effect of the operation of the market mechanism?

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

The Phillips curve illustrates the trade-off between inflation and economic growth.

Since a trade-off exists between total output and equality of income distribution,

The United States produces both automobiles and computers more efficiently than Mexico. Nevertheless, it is possible that both nations would benefit from trade in these items. The reason for this is

One of the consequences of preventing wages from falling in the European Union has been growing unemployment.

The use of abstraction in economic analysis is one of its primary weaknesses.

Productivity growth is the main cause of rising living standards.

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

Individuals will have different value judgments about the appropriate rate of unemployment and the appropriate rate of inflation.

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

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 Us Economy

Filters

Exam 1: What Is Economics

The growth rate of productivity is the most important determinant of material well-being in the short run.

In the twentieth century, Russian peasants noticed that during cholera epidemics there were lots of doctors around; in an attempt to eliminate cholera, they killed all the doctors. This is an example of

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

The statement "saccharine causes cancer" is not a theory; it is a hypothesis.

A government has the ability to use fiscal and monetary policy to mitigate the effects of economic fluctuations.

Government controls over market prices are often enacted to benefit a specific group.

Abstract economic theory can be used by academicians but not by politicians or business people.

Graphs are valuable because they facilitate interpretation of data.

Tools used by economists include

Which of the following is an example of an undesirable side effect of the operation of the market mechanism?

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

The Phillips curve illustrates the trade-off between inflation and economic growth.

Since a trade-off exists between total output and equality of income distribution,

The United States produces both automobiles and computers more efficiently than Mexico. Nevertheless, it is possible that both nations would benefit from trade in these items. The reason for this is

One of the consequences of preventing wages from falling in the European Union has been growing unemployment.

The use of abstraction in economic analysis is one of its primary weaknesses.

Productivity growth is the main cause of rising living standards.

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

Individuals will have different value judgments about the appropriate rate of unemployment and the appropriate rate of inflation.

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

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 Us Economy

Filters