Question 1

A statement of opinion about which policy is best for America is

Accepted Answer

A)  an abstraction 
B)  a positive statement 
C)  a normative statement 
D)  a philosophical conundrum 
E)  empirically verifiable 
A)  an abstraction 
B)  a positive statement 
C)  a normative statement 
D)  a philosophical conundrum 
E)  empirically verifiable

Question 2

The opportunity cost of a particular activity

Accepted Answer

A)  is the same for everyone pursuing this activity 
B)  may include both monetary costs and forgone income 
C)  always decreases as more of that activity is pursued 
D)  usually is known with certainty 
E)  measures the direct benefits of that activity 
A)  is the same for everyone pursuing this activity 
B)  may include both monetary costs and forgone income 
C)  always decreases as more of that activity is pursued 
D)  usually is known with certainty 
E)  measures the direct benefits of that activity

Question 3

Positive economic statements are usually easier to refute with data than normative economic statements are.

Accepted Answer

A) True 
 B)False

Question 4

Simplifying assumptions always affect the conclusions derived from an economic model.

Accepted Answer

A) True 
 B)False

Question 5

Society as a whole faces opportunity costs because

Accepted Answer

A)  there is not enough money to go around 
B)  politicians are greedy 
C)  workers shirk their responsibilities and management is unable to compensate for this 
D)  resources are abundant 
E)  resources are scarce 
A)  there is not enough money to go around 
B)  politicians are greedy 
C)  workers shirk their responsibilities and management is unable to compensate for this 
D)  resources are abundant 
E)  resources are scarce

Question 6

$$\begin{array} { | c | c | c | } 
\hline { \text { Figure 1-1 } } \
\hline \begin{array} { c } 
\text { Haurs } \
\text { Studying }
\end{array} & \begin{array} { c } 
\text { Physics } \
\text { Scare }
\end{array} & \begin{array} { c } 
\text { Gedlay } \
\text { Scare }
\end{array} \
\hline [ & 4 [ & 3 [ \
\hline 1 & 50 & 60 \
\hline 2 & 60 & 80 \
\hline 3 & 85 & 90 \
\hline 4 & 90 & 100 \
\hline
\end{array}$$
-Grant has four hours of time to divide between studying for a physics exam and a geology exam.Figure 1-1 shows his estimates of the grades (on a scale of 0 to 100)that he could earn from studying a particular number of hours on each subject.If he plans on spending two hours studying each subject,what would be his opportunity cost of an additional hour studying physics?

Accepted Answer

A)  10 points on his geology exam 
B)  20 points on his geology exam 
C)  80 points on his geology exam 
D)  25 points on his physics exam 
E)  85 points on his physics exam 
A)  10 points on his geology exam 
B)  20 points on his geology exam 
C)  80 points on his geology exam 
D)  25 points on his physics exam 
E)  85 points on his physics exam

Question 7

Because resources are scarce,if society produces more of one commodity,it has to sacrifice some amount of another commodity.The amount sacrificed is

Accepted Answer

A)  a normative problem 
B)  the out-of-pocket cost 
C)  the opportunity cost 
D)  the lost profit 
E)  the total factor productivity 
A)  a normative problem 
B)  the out-of-pocket cost 
C)  the opportunity cost 
D)  the lost profit 
E)  the total factor productivity

Question 8

Because of economic scarcity

Accepted Answer

A)  there are not enough jobs for everyone 
B)  people are afraid to become entrepreneurs 
C)  the government interferes in the economy 
D)  businesses cannot obtain the resources they need 
E)  people and organizations have to allocate resources carefully 
A)  there are not enough jobs for everyone 
B)  people are afraid to become entrepreneurs 
C)  the government interferes in the economy 
D)  businesses cannot obtain the resources they need 
E)  people and organizations have to allocate resources carefully

Question 9

Economic models typically assume that decision makers face constraints because of scarce resources.

Accepted Answer

A) True 
 B)False

Question 10

The best economic theory is the one

Accepted Answer

A)  whose assumptions most closely match reality 
B)  that yields the most accurate predictions 
C)  that most simply represents reality 
D)  that most closely matches the conscious behavior of economic decision makers 
E)  that includes the most details 
A)  whose assumptions most closely match reality 
B)  that yields the most accurate predictions 
C)  that most simply represents reality 
D)  that most closely matches the conscious behavior of economic decision makers 
E)  that includes the most details

Question 11

An economic model is

Accepted Answer

A)  a concrete representation of reality 
B)  as close to reality as possible 
C)  too abstract to be useful when assumptions are involved 
D)  unrelated to reality 
E)  an abstract representation of reality 
A)  a concrete representation of reality 
B)  as close to reality as possible 
C)  too abstract to be useful when assumptions are involved 
D)  unrelated to reality 
E)  an abstract representation of reality

Question 12

If two economists disagree about the magnitude of employment effects of a proposed change in government policy,the difference in opinion

Accepted Answer

A)  must be positive in nature 
B)  must be normative in nature 
C)  is more likely to be normative than positive 
D)  is more likely to be positive than normative 
E)  would be neither positive nor normative in nature 
A)  must be positive in nature 
B)  must be normative in nature 
C)  is more likely to be normative than positive 
D)  is more likely to be positive than normative 
E)  would be neither positive nor normative in nature

Question 13

An entrepreneur is best described as

Accepted Answer

A)  someone that is hired to work in a firm 
B)  someone who creates human capital 
C)  someone with the ability to combine other resources in a productive enterprise 
D)  anyone who owns productive enterprise 
E)  anyone who produces long-lived physical capital 
A)  someone that is hired to work in a firm 
B)  someone who creates human capital 
C)  someone with the ability to combine other resources in a productive enterprise 
D)  anyone who owns productive enterprise 
E)  anyone who produces long-lived physical capital

Question 14

A good economic model

Accepted Answer

A)  is as simple as possible,including only necessary details 
B)  is as complex as possible,including many details 
C)  represents reality as concretely as possible 
D)  tries to be as detailed as the reality it is describing 
E)  is very detailed regardless of its purpose 
A)  is as simple as possible,including only necessary details 
B)  is as complex as possible,including many details 
C)  represents reality as concretely as possible 
D)  tries to be as detailed as the reality it is describing 
E)  is very detailed regardless of its purpose

Question 15

All production involves an opportunity cost because

Accepted Answer

A)  to produce costs money 
B)  costs of production are sky rocketing 
C)  to produce more of one thing,we must produce more of everything 
D)  to produce more of one thing,we must produce less of something else 
E)  when an individual obtains more of a good,he may not be fully satisfied 
A)  to produce costs money 
B)  costs of production are sky rocketing 
C)  to produce more of one thing,we must produce more of everything 
D)  to produce more of one thing,we must produce less of something else 
E)  when an individual obtains more of a good,he may not be fully satisfied

Question 16

If two economists completely agree about the magnitude of employment effects of a proposed change in government policy,but disagree about whether the change is a good idea.The difference in opinion

Accepted Answer

A)  must be normative in nature 
B)  is both positive and normative in nature 
C)  is more likely to be normative than positive 
D)  is more likely to be positive than normative 
E)  would be neither positive nor normative in nature 
A)  must be normative in nature 
B)  is both positive and normative in nature 
C)  is more likely to be normative than positive 
D)  is more likely to be positive than normative 
E)  would be neither positive nor normative in nature

Question 17

The money we pay for a good or service

Accepted Answer

A)  generally exceeds its opportunity cost. 
B)  generally equals its opportunity cost. 
C)  has no part in determining its opportunity cost. 
D)  generally equals two-thirds of its opportunity cost. 
E)  generally is only part of its opportunity cost. 
A)  generally exceeds its opportunity cost. 
B)  generally equals its opportunity cost. 
C)  has no part in determining its opportunity cost. 
D)  generally equals two-thirds of its opportunity cost. 
E)  generally is only part of its opportunity cost.

Question 18

Microeconomic models focus on the behavior of

Accepted Answer

A)  all households,businesses,and government sectors at the same time 
B)  the household sector as a whole 
C)  individual households and business firms 
D)  individual households,business firms,and government agencies 
E)  the business and government sectors 
A)  all households,businesses,and government sectors at the same time 
B)  the household sector as a whole 
C)  individual households and business firms 
D)  individual households,business firms,and government agencies 
E)  the business and government sectors

Question 19

Opportunity costs arise in production because

Accepted Answer

A)  resources are unlimited 
B)  resources must be shifted away from producing one good in order to produce another 
C)  wants are limited in society 
D)  monetary costs of inputs usually outweigh non-monetary costs 
E)  the monetary costs of only a few resources are zero 
A)  resources are unlimited 
B)  resources must be shifted away from producing one good in order to produce another 
C)  wants are limited in society 
D)  monetary costs of inputs usually outweigh non-monetary costs 
E)  the monetary costs of only a few resources are zero

Question 20

Using economic analysis to help understand world issues

Accepted Answer

A)  assumes that all decision makers use detailed economic analysis 
B)  highlights the role of choice when resources are scarce 
C)  has unlimited application 
D)  is not appropriate because reality is too complex for economic modeling 
E)  typically enables one nation to gain only when another nation loses 
A)  assumes that all decision makers use detailed economic analysis 
B)  highlights the role of choice when resources are scarce 
C)  has unlimited application 
D)  is not appropriate because reality is too complex for economic modeling 
E)  typically enables one nation to gain only when another nation loses

A statement of opinion about which policy is best for America is

The opportunity cost of a particular activity

Positive economic statements are usually easier to refute with data than normative economic statements are.

Simplifying assumptions always affect the conclusions derived from an economic model.

Society as a whole faces opportunity costs because

Because resources are scarce,if society produces more of one commodity,it has to sacrifice some amount of another commodity.The amount sacrificed is

Because of economic scarcity

Economic models typically assume that decision makers face constraints because of scarce resources.

The best economic theory is the one

An economic model is

If two economists disagree about the magnitude of employment effects of a proposed change in government policy,the difference in opinion

An entrepreneur is best described as

A good economic model

All production involves an opportunity cost because

If two economists completely agree about the magnitude of employment effects of a proposed change in government policy,but disagree about whether the change is a good idea.The difference in opinion

The money we pay for a good or service

Microeconomic models focus on the behavior of

Opportunity costs arise in production because

Using economic analysis to help understand world issues

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters

Exam 1: What is Economics?

A statement of opinion about which policy is best for America is

The opportunity cost of a particular activity

Positive economic statements are usually easier to refute with data than normative economic statements are.

Simplifying assumptions always affect the conclusions derived from an economic model.

Society as a whole faces opportunity costs because

Because resources are scarce,if society produces more of one commodity,it has to sacrifice some amount of another commodity.The amount sacrificed is

Because of economic scarcity

Economic models typically assume that decision makers face constraints because of scarce resources.

The best economic theory is the one

An economic model is

If two economists disagree about the magnitude of employment effects of a proposed change in government policy,the difference in opinion

An entrepreneur is best described as

A good economic model

All production involves an opportunity cost because

If two economists completely agree about the magnitude of employment effects of a proposed change in government policy,but disagree about whether the change is a good idea.The difference in opinion

The money we pay for a good or service

Microeconomic models focus on the behavior of

Opportunity costs arise in production because

Using economic analysis to help understand world issues

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters