Question 1

The United States has been willing to trade-off greater efficiency for greater wage equality.

Accepted Answer

A) True 
 B)False

Question 2

The terms "correlation" and "causation" are synonymous.

Accepted Answer

A) True 
 B)False

Question 3

Externalities affect only the buyer and seller involved in an exchange.

Accepted Answer

A) True 
 B)False

Question 4

There is an inverse relationship between inflation and unemployment in the short run and this can be seen as an

Accepted Answer

A)  example of the equality-efficiency trade-off. 
B)  example of the impact of comparative advantage. 
C)  example of macroeconomic policy choices. 
D)  example of an externality. 
E)  example of the use of abstraction in economic analysis. 
A)  example of the equality-efficiency trade-off. 
B)  example of the impact of comparative advantage. 
C)  example of macroeconomic policy choices. 
D)  example of an externality. 
E)  example of the use of abstraction in economic analysis.

Question 5

Abstraction is used in economics to omit unnecessary details and focus on the essence of the problem being studied.

Accepted Answer

A) True 
 B)False

Question 6

The US Navy determines that the navigation system on its submarines, which use low-frequency radio waves, is reducing the population of humpback whales. The is an example of

Accepted Answer

A)  marginal thinking. 
B)  comparative advantage. 
C)  the market mechanism. 
D)  the Phillips curve. 
E)  an externality. 
A)  marginal thinking. 
B)  comparative advantage. 
C)  the market mechanism. 
D)  the Phillips curve. 
E)  an externality.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Abstraction can be thought of as

Accepted Answer

A)  avoiding reality in order to build theory. 
B)  omitting unimportant details in order to understand complex phenomena. 
C)  relying on absurdity to explain simplicity. 
D)  making complex assumptions when simple facts are sufficient. 
E)  stylizing reality rather than analyzing cause and effect. 
A)  avoiding reality in order to build theory. 
B)  omitting unimportant details in order to understand complex phenomena. 
C)  relying on absurdity to explain simplicity. 
D)  making complex assumptions when simple facts are sufficient. 
E)  stylizing reality rather than analyzing cause and effect.

Question 9

Opportunity cost includes

Accepted Answer

A)  only the actual amount spent on a choice. 
B)  the value of foregone actions but not dollar outlays. 
C)  the value of foregone options plus the dollar outlays associated with a choice. 
D)  the amount you are paid to select an opportunity. 
A)  only the actual amount spent on a choice. 
B)  the value of foregone actions but not dollar outlays. 
C)  the value of foregone options plus the dollar outlays associated with a choice. 
D)  the amount you are paid to select an opportunity.

Question 10

It is impossible for both nations to gain when trading with one other.

Accepted Answer

A) True 
 B)False

Question 11

Abstraction is unnecessary when economic analysis is done properly.

Accepted Answer

A) True 
 B)False

Question 12

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 13

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

Accepted Answer

A) True 
 B)False

Question 14

What is the "right" degree of abstraction necessary to analyze an economic problem?

Accepted Answer

A)  Simple abstraction of only minor details 
B)  Simple abstraction of only irrelevant details 
C)  Total abstraction of all variables 
D)  Total abstraction of all irrelevant details 
E)  There is no "right" degree of abstraction to analyze an economic problem. 
A)  Simple abstraction of only minor details 
B)  Simple abstraction of only irrelevant details 
C)  Total abstraction of all variables 
D)  Total abstraction of all irrelevant details 
E)  There is no "right" degree of abstraction to analyze an economic problem.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

An externality is defined as

Accepted Answer

A)  an opportunity cost that is not considered, which causes inefficiency. 
B)  a social cost that affects parties external to a transaction. 
C)  a transaction that imposes a loss on one of the parties involved. 
D)  a "cost of doing business" that cannot be allocated to any particular good. 
E)  the increase in cost associated with increased production. 
A)  an opportunity cost that is not considered, which causes inefficiency. 
B)  a social cost that affects parties external to a transaction. 
C)  a transaction that imposes a loss on one of the parties involved. 
D)  a "cost of doing business" that cannot be allocated to any particular good. 
E)  the increase in cost associated with increased production.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

In the winter quarter at Frozen U. one year, snow falls every Friday night. Students conclude that, on their campus, Fridays cause snow. This hypothesis

Accepted Answer

A)  should more properly be considered a theory. 
B)  assumes that correlation implies causation. 
C)  assumes that causation implies correlation. 
D)  reflects the fallacy of composition. 
A)  should more properly be considered a theory. 
B)  assumes that correlation implies causation. 
C)  assumes that causation implies correlation. 
D)  reflects the fallacy of composition.

Question 19

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 20

With the technological developments in the twenty-first century, productivity growth is no longer an important factor in economic well-being.

Accepted Answer

A) True 
 B)False

Exam 1: What Is Economics

The United States has been willing to trade-off greater efficiency for greater wage equality.

The terms "correlation" and "causation" are synonymous.

Externalities affect only the buyer and seller involved in an exchange.

There is an inverse relationship between inflation and unemployment in the short run and this can be seen as an

Abstraction is used in economics to omit unnecessary details and focus on the essence of the problem being studied.

The US Navy determines that the navigation system on its submarines, which use low-frequency radio waves, is reducing the population of humpback whales. The is an example of

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

Abstraction can be thought of as

Opportunity cost includes

It is impossible for both nations to gain when trading with one other.

Abstraction is unnecessary when economic analysis is done properly.

Which of the following is an example of an externality?

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

What is the "right" degree of abstraction necessary to analyze an economic problem?

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

An externality is defined as

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

In the winter quarter at Frozen U. one year, snow falls every Friday night. Students conclude that, on their campus, Fridays cause snow. This hypothesis

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

With the technological developments in the twenty-first century, productivity growth is no longer an important factor in economic well-being.

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