Question 1

Some individuals or families can become completely saturated with a service such as television. This suggests that

Accepted Answer

A)  wants are limited 
B)  desires for a single commodity can be satisfied but then the focus will switch to other goods and services 
C)  a highly productive economy may someday be able to satisfy all human desires 
D)  resources are not truly fixed in supply as we generally assume 
E)  scarcity does not exist 
A)  wants are limited 
B)  desires for a single commodity can be satisfied but then the focus will switch to other goods and services 
C)  a highly productive economy may someday be able to satisfy all human desires 
D)  resources are not truly fixed in supply as we generally assume 
E)  scarcity does not exist B

Question 2

In economics, man-made resources such as tools, equipment, and structures that are used to produce other goods and services are referred to as

Accepted Answer

A)  consumer goods. 
B)  capital. 
C)  marginal goods. 
D)  infrastructures. 
A)  consumer goods. 
B)  capital. 
C)  marginal goods. 
D)  infrastructures. B

Question 3

"The national debt is too large. The government must stop spending so much money." This statement is

Accepted Answer

A)  a normative statement. 
B)  a positive statement. 
C)  a testable hypothesis. 
D)  both b and c. 
A)  a normative statement. 
B)  a positive statement. 
C)  a testable hypothesis. 
D)  both b and c. A

Question 4

Economics is primarily the study of

Accepted Answer

A)  how to make money in the stock market. 
B)  how to find lower cost methods of production. 
C)  the choices we must make among alternatives because of scarcity. 
D)  the proper form of industrial structure for the United States. 
A)  how to make money in the stock market. 
B)  how to find lower cost methods of production. 
C)  the choices we must make among alternatives because of scarcity. 
D)  the proper form of industrial structure for the United States.

Question 5

The three major categories of resources are

Accepted Answer

A)  human resources, physical resources, and natural resources. 
B)  scarce resources, capital resources, and abundant resources. 
C)  financial resources, global resources, and local resources. 
D)  common resources, private resources, and capital resources. 
A)  human resources, physical resources, and natural resources. 
B)  scarce resources, capital resources, and abundant resources. 
C)  financial resources, global resources, and local resources. 
D)  common resources, private resources, and capital resources.

Question 6

If people willingly give up something (such as money) for a good, then the good is

Accepted Answer

A)  not an economic good. 
B)  scarce. 
C)  available in an unlimited supply. 
D)  a luxury good. 
A)  not an economic good. 
B)  scarce. 
C)  available in an unlimited supply. 
D)  a luxury good.

Question 7

Which of the following best illustrates the fallacy of composition?

Accepted Answer

A)  If Mr. Johnson had more money, he could afford to buy more goods. 
B)  If Ms. Dawes stood up at a basketball game, she could get a better view of the game; if everyone stood up at a basketball game, everyone could have a better view of the game. 
C)  If the price of bread rose, consumers would buy less; if consumers bought less bread, the price of bread would rise. 
D)  High housing prices cause people to buy less housing, but an increase in income might cause them to buy more housing. 
A)  If Mr. Johnson had more money, he could afford to buy more goods. 
B)  If Ms. Dawes stood up at a basketball game, she could get a better view of the game; if everyone stood up at a basketball game, everyone could have a better view of the game. 
C)  If the price of bread rose, consumers would buy less; if consumers bought less bread, the price of bread would rise. 
D)  High housing prices cause people to buy less housing, but an increase in income might cause them to buy more housing.

Question 8

Which of the following is true?

Accepted Answer

A)  Positive economics deals with how people react to changes in benefits, and normative economics deals with how people react to changes in costs. 
B)  Positive economic statements are testable, but normative statements are not. 
C)  Positive economic statements involve value judgments while normative economics focuses on whether a policy will achieve its intended objectives. 
D)  Positive economic statements focus on policy issues while normative economics focuses on economic theory. 
A)  Positive economics deals with how people react to changes in benefits, and normative economics deals with how people react to changes in costs. 
B)  Positive economic statements are testable, but normative statements are not. 
C)  Positive economic statements involve value judgments while normative economics focuses on whether a policy will achieve its intended objectives. 
D)  Positive economic statements focus on policy issues while normative economics focuses on economic theory.

Question 9

Which of the following could be considered to be a secondary effect caused by making drugs such as cocaine illegal?

Accepted Answer

A)  The higher prices that result from making them illegal results in more property theft by users to afford the drugs. 
B)  The usage of police and law enforcement resources to enforce drug laws leads to lower enforcement (and thus a higher amount) of other crimes. 
C)  Without the ability to use the legal system to enforce contracts, violence often results when one party to a drug deal does not live up to their end of the bargain, thus the amount of violence increases by making drugs illegal. 
D)  All of the above would be considered secondary effects of making drugs illegal. 
A)  The higher prices that result from making them illegal results in more property theft by users to afford the drugs. 
B)  The usage of police and law enforcement resources to enforce drug laws leads to lower enforcement (and thus a higher amount) of other crimes. 
C)  Without the ability to use the legal system to enforce contracts, violence often results when one party to a drug deal does not live up to their end of the bargain, thus the amount of violence increases by making drugs illegal. 
D)  All of the above would be considered secondary effects of making drugs illegal.

Question 10

Which of the following is a normative economic statement?

Accepted Answer

A)  Congress should increase the legal minimum wage. 
B)  An increase in the legal minimum wage would cause unemployment to increase. 
C)  An increase in the legal minimum wage would cause unemployment to decrease. 
D)  An increase in the legal minimum wage would lead to more equality in the distribution of income. 
A)  Congress should increase the legal minimum wage. 
B)  An increase in the legal minimum wage would cause unemployment to increase. 
C)  An increase in the legal minimum wage would cause unemployment to decrease. 
D)  An increase in the legal minimum wage would lead to more equality in the distribution of income.

Question 11

Joe and Ed go to a diner that sells hamburgers for $5 and hot dogs for $3. They agree to split the lunch bill evenly. Ed chooses a hot dog. The marginal cost to Joe then of ordering a hamburger instead of a hot dog is

Accepted Answer

A)  $1. 
B)  $2. 
C)  $2.50. 
D)  $3. 
A)  $1. 
B)  $2. 
C)  $2.50. 
D)  $3.

Question 12

Economic theory

Accepted Answer

A)  is a set of definitions, postulates, and principles assembled in a manner that helps make cause-and-effect relationships clear in economics. 
B)  is like a guidebook in that it points out what to look for. 
C)  provides economists with a common language and way of thinking about how the world works. 
D)  is all of the above. 
A)  is a set of definitions, postulates, and principles assembled in a manner that helps make cause-and-effect relationships clear in economics. 
B)  is like a guidebook in that it points out what to look for. 
C)  provides economists with a common language and way of thinking about how the world works. 
D)  is all of the above.

Question 13

Evaluate this statement: "People engaged in economizing behavior will always buy the lowest priced item they can find."

Accepted Answer

As long as price is the only factor, we

Question 14

Which of the following represents a normative statement?

Accepted Answer

A)  Incentives matter. 
B)  The temperature in this room is 120 degrees. 
C)  It is too hot in this room. 
D)  People will buy less butter at $1.50 per pound than they will at $1.00 per pound. 
A)  Incentives matter. 
B)  The temperature in this room is 120 degrees. 
C)  It is too hot in this room. 
D)  People will buy less butter at $1.50 per pound than they will at $1.00 per pound.

Question 15

A fact based on observable phenomenon that is not influenced by differences in personal opinion is called

Accepted Answer

A)  an objective concept. 
B)  a subjective concept. 
C)  an unintended consequence. 
D)  ceteris paribus. 
A)  an objective concept. 
B)  a subjective concept. 
C)  an unintended consequence. 
D)  ceteris paribus.

Question 16

Criteria for rationing goods and resources must be established because of

Accepted Answer

A)  scarcity. 
B)  the use of capitalism as the method of economic organization. 
C)  the inability of politicians to develop efficient forms of economic organization. 
D)  shortages resulting from government inefficiency. 
A)  scarcity. 
B)  the use of capitalism as the method of economic organization. 
C)  the inability of politicians to develop efficient forms of economic organization. 
D)  shortages resulting from government inefficiency.

Question 17

Capital is a term economists use to refer to

Accepted Answer

A)  man-made resources used to produce other goods and services. 
B)  resources that are available in nature such as mineral deposits. 
C)  money that is used to consume goods and services, to distinguish it from money that is saved. 
D)  the value of the best alternative to an action. 
A)  man-made resources used to produce other goods and services. 
B)  resources that are available in nature such as mineral deposits. 
C)  money that is used to consume goods and services, to distinguish it from money that is saved. 
D)  the value of the best alternative to an action.

Question 18

While waiting in line to buy two tacos at 75 cents each, and a medium drink for 80 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $2.50. For Jordan, the marginal cost of purchasing the third taco would be

Accepted Answer

A)  zero. 
B)  20 cents. 
C)  75 cents. 
D)  80 cents. 
A)  zero. 
B)  20 cents. 
C)  75 cents. 
D)  80 cents.

Question 19

When economists say an individual displays economizing behavior, they simply mean that she is

Accepted Answer

A)  making a lot of money. 
B)  buying only those products that are cheap and of low quality. 
C)  learning how to run a business more effectively. 
D)  seeking the lowest cost method to accomplish her objectives. 
A)  making a lot of money. 
B)  buying only those products that are cheap and of low quality. 
C)  learning how to run a business more effectively. 
D)  seeking the lowest cost method to accomplish her objectives.

Question 20

The expression "There's no such thing as a free lunch" means

Accepted Answer

A)  in an exchange, if one person gains, someone else must lose. 
B)  each person must pay for exactly what he or she receives. 
C)  the use of resources to meet one need means that those resources can no longer be used to meet another need. 
D)  in an exchange, if one person gains, someone else must lose and equal amount. 
A)  in an exchange, if one person gains, someone else must lose. 
B)  each person must pay for exactly what he or she receives. 
C)  the use of resources to meet one need means that those resources can no longer be used to meet another need. 
D)  in an exchange, if one person gains, someone else must lose and equal amount.

Some individuals or families can become completely saturated with a service such as television. This suggests that

In economics, man-made resources such as tools, equipment, and structures that are used to produce other goods and services are referred to as

"The national debt is too large. The government must stop spending so much money." This statement is

Economics is primarily the study of

The three major categories of resources are

If people willingly give up something (such as money) for a good, then the good is

Which of the following best illustrates the fallacy of composition?

Which of the following is true?

Which of the following could be considered to be a secondary effect caused by making drugs such as cocaine illegal?

Which of the following is a normative economic statement?

Joe and Ed go to a diner that sells hamburgers for $5 and hot dogs for $3. They agree to split the lunch bill evenly. Ed chooses a hot dog. The marginal cost to Joe then of ordering a hamburger instead of a hot dog is

Economic theory

Evaluate this statement: "People engaged in economizing behavior will always buy the lowest priced item they can find."

Which of the following represents a normative statement?

A fact based on observable phenomenon that is not influenced by differences in personal opinion is called

Criteria for rationing goods and resources must be established because of

Capital is a term economists use to refer to

While waiting in line to buy two tacos at 75 cents each, and a medium drink for 80 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $2.50. For Jordan, the marginal cost of purchasing the third taco would be

When economists say an individual displays economizing behavior, they simply mean that she is

The expression "There's no such thing as a free lunch" means

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters

Exam 1: The Economic Approach

Some individuals or families can become completely saturated with a service such as television. This suggests that

In economics, man-made resources such as tools, equipment, and structures that are used to produce other goods and services are referred to as

"The national debt is too large. The government must stop spending so much money." This statement is

Economics is primarily the study of

The three major categories of resources are

If people willingly give up something (such as money) for a good, then the good is

Which of the following best illustrates the fallacy of composition?

Which of the following is true?

Which of the following could be considered to be a secondary effect caused by making drugs such as cocaine illegal?

Which of the following is a normative economic statement?

Joe and Ed go to a diner that sells hamburgers for $5 and hot dogs for $3. They agree to split the lunch bill evenly. Ed chooses a hot dog. The marginal cost to Joe then of ordering a hamburger instead of a hot dog is

Economic theory

Evaluate this statement: "People engaged in economizing behavior will always buy the lowest priced item they can find."

Which of the following represents a normative statement?

A fact based on observable phenomenon that is not influenced by differences in personal opinion is called

Criteria for rationing goods and resources must be established because of

Capital is a term economists use to refer to

While waiting in line to buy two tacos at 75 cents each, and a medium drink for 80 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $2.50. For Jordan, the marginal cost of purchasing the third taco would be

When economists say an individual displays economizing behavior, they simply mean that she is

The expression "There's no such thing as a free lunch" means

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters