Question 1

Value judgments are based on people's tastes, preferences, and ethical opinions.

Accepted Answer

A) True 
 B)False

Question 2

A vertical line has a slope of

Accepted Answer

A)  infinity. 
B)  zero. 
C)  undefined. 
D)  1,000 
A)  infinity. 
B)  zero. 
C)  undefined. 
D)  1,000

Question 3

Economists are often perceived as disagreeing with each other. Is this the way things really are?

Accepted Answer

A)  No, economists agree on much more than is commonly supposed. 
B)  No, the problem is that some economists are smarter than others. 
C)  No, economists "stage" disagreements for public amusement. 
D)  Yes, economists rarely agree on much of anything. 
E)  Yes, economists are unable to analyze problems dispassionately. 
A)  No, economists agree on much more than is commonly supposed. 
B)  No, the problem is that some economists are smarter than others. 
C)  No, economists "stage" disagreements for public amusement. 
D)  Yes, economists rarely agree on much of anything. 
E)  Yes, economists are unable to analyze problems dispassionately.

Question 4

Over the past century, the main factor responsible for rising living standards in the United States has been productivity growth.

Accepted Answer

A) True 
 B)False

Question 5

Which person has the highest opportunity cost of obtaining a college degree (assuming that attending college requires giving up his or her current position)?

Accepted Answer

A)  Bill, who is unemployed. 
B)  Jane, who is an unwed mother and earns $15,000 a year. 
C)  Larry, who is a technician in the navy earning $18,000 a year with free food and housing. 
D)  Mary, who has a job earning $60,000 a year as a computer programmer. 
E)  Unable to determine from the data given. 
A)  Bill, who is unemployed. 
B)  Jane, who is an unwed mother and earns $15,000 a year. 
C)  Larry, who is a technician in the navy earning $18,000 a year with free food and housing. 
D)  Mary, who has a job earning $60,000 a year as a computer programmer. 
E)  Unable to determine from the data given.

Question 6

Economists probably agree more often than they disagree.

Accepted Answer

A) True 
 B)False

Question 7

A music venue discovers that its concerts consistently have empty seats in the back rows of the facility. If the venue owner uses marginal analysis to evaluate this situation, he should

Accepted Answer

A)  raise the price of seats in the front rows. 
B)  remove the last few rows. 
C)  lower the ticket price for the seats on the back rows. 
D)  cancel concerts that are not sellouts. 
E)  book acts that are less expensive. 
A)  raise the price of seats in the front rows. 
B)  remove the last few rows. 
C)  lower the ticket price for the seats on the back rows. 
D)  cancel concerts that are not sellouts. 
E)  book acts that are less expensive.

Question 8

Economic models

Accepted Answer

A)  are always based on realistic assumptions. 
B)  usually predict perfectly. 
C)  can never be tested with real-world data. 
D)  are used to describe cause-and-effect relationships. 
E)  are too simple to be of much use. 
A)  are always based on realistic assumptions. 
B)  usually predict perfectly. 
C)  can never be tested with real-world data. 
D)  are used to describe cause-and-effect relationships. 
E)  are too simple to be of much use.

Question 9

The optimal degree of abstraction depends on the objective of the analysis.

Accepted Answer

A) True 
 B)False

Question 10

Government controls over market prices frequently "backfire."

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Economics is a social science in the sense that it

Accepted Answer

A)  rigorously examines human behavior. 
B)  is not as scientific as physics. 
C)  relies on historical data instead of mathematical data. 
D)  relies on statistics instead of mathematics. 
E)  All of these responses are correct. 
A)  rigorously examines human behavior. 
B)  is not as scientific as physics. 
C)  relies on historical data instead of mathematical data. 
D)  relies on statistics instead of mathematics. 
E)  All of these responses are correct.

Question 13

Externalities can only involve the imposition of harm on a party not directly involved in an economic transaction.

Accepted Answer

A) True 
 B)False

Question 14

An "opportunity cost" may be described as

Accepted Answer

A)  the value of what must be given up. 
B)  the opportunity foregone. 
C)  the value of the next best alternative. 
D)  the correct measure of cost. 
E)  All of these responses are correct. 
A)  the value of what must be given up. 
B)  the opportunity foregone. 
C)  the value of the next best alternative. 
D)  the correct measure of cost. 
E)  All of these responses are correct.

Question 15

Two advisors to the president have given their policy recommendations, and they are in disagreement. Why do these economists disagree?

Accepted Answer

A)  Because they do not have all relevant information about the problem 
B)  Because they disagree on the nature of some cause-effect relationship 
C)  Because they have different values and opinions 
D)  All of the above are reasons for disagreements among economists. 
A)  Because they do not have all relevant information about the problem 
B)  Because they disagree on the nature of some cause-effect relationship 
C)  Because they have different values and opinions 
D)  All of the above are reasons for disagreements among economists.

Question 16

The slope of a line with rise of five and run of two is positive.

Accepted Answer

A) True 
 B)False

Question 17

To an economist, the cost of a college education

Accepted Answer

A)  includes the income that the student could have earned during the time spent in college. 
B)  can be measured solely by the dollar cost of tuition, books, and other fees. 
C)  includes only the cost of schooling, not the cost of housing and food. 
D)  excludes financial aid in computation of the cost of schooling. 
E)  All of these responses are correct. 
A)  includes the income that the student could have earned during the time spent in college. 
B)  can be measured solely by the dollar cost of tuition, books, and other fees. 
C)  includes only the cost of schooling, not the cost of housing and food. 
D)  excludes financial aid in computation of the cost of schooling. 
E)  All of these responses are correct.

Question 18

Statistical correlation always implies causation.

Accepted Answer

A) True 
 B)False

Question 19

The concept of economic efficiency refers to the size of the "economic pie" whereas the concept of equality refers to how the "pie" is distributed.

Accepted Answer

A) True 
 B)False

Question 20

When nations trade based upon comparative advantage, only one side of the transaction will benefit.

Accepted Answer

A) True 
 B)False

Exam 1: What Is Economics

Value judgments are based on people's tastes, preferences, and ethical opinions.

A vertical line has a slope of

Economists are often perceived as disagreeing with each other. Is this the way things really are?

Over the past century, the main factor responsible for rising living standards in the United States has been productivity growth.

Which person has the highest opportunity cost of obtaining a college degree (assuming that attending college requires giving up his or her current position)?

Economists probably agree more often than they disagree.

A music venue discovers that its concerts consistently have empty seats in the back rows of the facility. If the venue owner uses marginal analysis to evaluate this situation, he should

Economic models

The optimal degree of abstraction depends on the objective of the analysis.

Government controls over market prices frequently "backfire."

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

Economics is a social science in the sense that it

Externalities can only involve the imposition of harm on a party not directly involved in an economic transaction.

An "opportunity cost" may be described as

Two advisors to the president have given their policy recommendations, and they are in disagreement. Why do these economists disagree?

The slope of a line with rise of five and run of two is positive.

To an economist, the cost of a college education

Statistical correlation always implies causation.

The concept of economic efficiency refers to the size of the "economic pie" whereas the concept of equality refers to how the "pie" is distributed.

When nations trade based upon comparative advantage, only one side of the transaction will benefit.

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

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