Question 1

Economics is the study of

Accepted Answer

A)  scarcity under conditions of democracy 
B)  choice within a system of free speech 
C)  financial markets 
D)  the role of government in a market system 
E)  choice under conditions of scarcity 
A)  scarcity under conditions of democracy 
B)  choice within a system of free speech 
C)  financial markets 
D)  the role of government in a market system 
E)  choice under conditions of scarcity

Question 2

A critical assumption is one

Accepted Answer

A)  that affects a model in important ways 
B)  that is understood only by economists 
C)  that makes a model simpler without affecting any of its important conclusions 
D)  with negative implications for a process or outcome 
E)  that is critically unreasonable 
A)  that affects a model in important ways 
B)  that is understood only by economists 
C)  that makes a model simpler without affecting any of its important conclusions 
D)  with negative implications for a process or outcome 
E)  that is critically unreasonable

Question 3

Macroeconomics is the branch of economics that concerns

Accepted Answer

A)  the behavior of individual actors in the economy 
B)  output in a specific industry 
C)  the overall health of the economy 
D)  the federal government only 
E)  prices in a specific industry 
A)  the behavior of individual actors in the economy 
B)  output in a specific industry 
C)  the overall health of the economy 
D)  the federal government only 
E)  prices in a specific industry

Question 4

Economics is the study of

Accepted Answer

A)  how to start a business 
B)  how to make money in stocks,bonds,and real estate 
C)  choice under conditions of abundance 
D)  choice under conditions of scarcity 
E)  multinational business 
A)  how to start a business 
B)  how to make money in stocks,bonds,and real estate 
C)  choice under conditions of abundance 
D)  choice under conditions of scarcity 
E)  multinational business

Question 5

Suppose two economists agree about who would be helped or hurt by certain legislation,but disagree about whether the legislation would be a good idea.These disagreements

Accepted Answer

A)  are positive in nature 
B)  are minor and rarely lead to different policies or conclusions 
C)  are normative in nature 
D)  occur as the result of a mistake made by an economist 
E)  occur because economic models are more complex,and subject to error,than the real world 
A)  are positive in nature 
B)  are minor and rarely lead to different policies or conclusions 
C)  are normative in nature 
D)  occur as the result of a mistake made by an economist 
E)  occur because economic models are more complex,and subject to error,than the real world

Question 6

People and organizations have to make choices about how to allocate time and money because

Accepted Answer

A)  government requires it 
B)  corporations control our lives 
C)  time and money are both scarce 
D)  religious values conflict with economics 
E)  there are unlimited resources 
A)  government requires it 
B)  corporations control our lives 
C)  time and money are both scarce 
D)  religious values conflict with economics 
E)  there are unlimited resources

Question 7

Suppose two economists disagree about who would be helped or hurt by certain legislation.These disagreements

Accepted Answer

A)  are positive in nature 
B)  are minor and rarely lead to different policies or conclusions 
C)  are normative in nature 
D)  occur as the result of a mistake made by an economist 
E)  occur because economic models are more complex,and subject to error,than the real world 
A)  are positive in nature 
B)  are minor and rarely lead to different policies or conclusions 
C)  are normative in nature 
D)  occur as the result of a mistake made by an economist 
E)  occur because economic models are more complex,and subject to error,than the real world

Question 8

A professional basketball players' union negotiates a contract that dramatically increases all players' salaries.How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?

Accepted Answer

A)  It would not affect the opportunity cost of playing basketball or of broadcasting. 
B)  It would increase the opportunity cost of continuing to play professional basketball. 
C)  It would cause the production possibilities frontier to become convex. 
D)  It would increase the opportunity cost of becoming a broadcaster. 
E)  It should have no bearing on the player's decision from an economic standpoint. 
A)  It would not affect the opportunity cost of playing basketball or of broadcasting. 
B)  It would increase the opportunity cost of continuing to play professional basketball. 
C)  It would cause the production possibilities frontier to become convex. 
D)  It would increase the opportunity cost of becoming a broadcaster. 
E)  It should have no bearing on the player's decision from an economic standpoint.

Question 9

The overall performance of the economic system as a whole is the focus of

Accepted Answer

A)  international finance 
B)  labor economics 
C)  microeconomics 
D)  macroeconomics 
E)  public economics 
A)  international finance 
B)  labor economics 
C)  microeconomics 
D)  macroeconomics 
E)  public economics

Question 10

Normative economics deals with

Accepted Answer

A)  how the economy actually works 
B)  how a change in government budgets affects the price level 
C)  how prices are determined in specific markets 
D)  value judgments 
E)  the historical growth of an economy 
A)  how the economy actually works 
B)  how a change in government budgets affects the price level 
C)  how prices are determined in specific markets 
D)  value judgments 
E)  the historical growth of an economy

Question 11

Opportunity costs arise because of resource scarcity.

Accepted Answer

A) True 
 B)False

Question 12

Because economists have different values,like everyone else,they

Accepted Answer

A)  tend to be self centered,so positive economics is impossible 
B)  ignore politics 
C)  use abstraction to be realistic 
D)  may disagree,even though economic theory is based on positive statements 
E)  try to be right all the time 
A)  tend to be self centered,so positive economics is impossible 
B)  ignore politics 
C)  use abstraction to be realistic 
D)  may disagree,even though economic theory is based on positive statements 
E)  try to be right all the time

Question 13

If an economic model includes an assumption that there are only two nations in the world,this would be an example of

Accepted Answer

A)  a critical assumption 
B)  an implicit assumption 
C)  a simplifying assumption 
D)  a concrete assumption 
E)  a detail assumption 
A)  a critical assumption 
B)  an implicit assumption 
C)  a simplifying assumption 
D)  a concrete assumption 
E)  a detail assumption

Question 14

An assumption that makes an economic model simpler without affecting its conclusions in important ways is

Accepted Answer

A)  an indication of a positive assumption 
B)  an efficient assumption 
C)  useful in disguising the valid conclusions 
D)  a simplifying assumption 
E)  a critical assumption 
A)  an indication of a positive assumption 
B)  an efficient assumption 
C)  useful in disguising the valid conclusions 
D)  a simplifying assumption 
E)  a critical assumption

Question 15

Even if economic theory is based on positive analysis,economists may still disagree with each other because

Accepted Answer

A)  economists tend to have excessive self-interest 
B)  they ignore politics 
C)  they are opinionated 
D)  they may have different values,like everyone else 
E)  they try to be right all the time 
A)  economists tend to have excessive self-interest 
B)  they ignore politics 
C)  they are opinionated 
D)  they may have different values,like everyone else 
E)  they try to be right all the time

Question 16

Which of the following explains why economists may disagree over normative issues?

Accepted Answer

A)  They have different beliefs and values. 
B)  They examine the same data to draw their conclusions. 
C)  They need to disagree in order to publish their research findings. 
D)  They often employ different statistical techniques when examining data. 
E)  Some work only on microeconomic issues,while others focus exclusively on macroeconomic issues. 
A)  They have different beliefs and values. 
B)  They examine the same data to draw their conclusions. 
C)  They need to disagree in order to publish their research findings. 
D)  They often employ different statistical techniques when examining data. 
E)  Some work only on microeconomic issues,while others focus exclusively on macroeconomic issues.

Question 17

Positive economics deals with

Accepted Answer

A)  theories about improving people's self-esteem 
B)  practical ways of improving people's self-esteem by making money 
C)  opinions that affirm economists' theories 
D)  statements about the way things ought to be 
E)  statements of fact 
A)  theories about improving people's self-esteem 
B)  practical ways of improving people's self-esteem by making money 
C)  opinions that affirm economists' theories 
D)  statements about the way things ought to be 
E)  statements of fact

Question 18

No society can provide its citizens with everything that they want because of

Accepted Answer

A)  greedy politicians 
B)  lazy workers 
C)  an educational system that does not provide hands on experience 
D)  firms that strive to maximize profits 
E)  a scarcity of resources 
A)  greedy politicians 
B)  lazy workers 
C)  an educational system that does not provide hands on experience 
D)  firms that strive to maximize profits 
E)  a scarcity of resources

Question 19

The ultimate purpose of an economic model is to

Accepted Answer

A)  explain reality as completely as possible 
B)  establish assumptions that closely resemble reality 
C)  help us understand economic behavior 
D)  determine what each decision maker wants to maximize 
E)  guide government policy decisions 
A)  explain reality as completely as possible 
B)  establish assumptions that closely resemble reality 
C)  help us understand economic behavior 
D)  determine what each decision maker wants to maximize 
E)  guide government policy decisions

Question 20

Due to a scarcity of resources,

Accepted Answer

A)  governments should decide what should be produced 
B)  the government must decide how to allocate available resources 
C)  some members of each society must live in poverty 
D)  every society must choose among competing uses of available resources 
E)  resource availability exceeds the possible uses for available resources 
A)  governments should decide what should be produced 
B)  the government must decide how to allocate available resources 
C)  some members of each society must live in poverty 
D)  every society must choose among competing uses of available resources 
E)  resource availability exceeds the possible uses for available resources

Economics is the study of

A critical assumption is one

Macroeconomics is the branch of economics that concerns

Economics is the study of

Suppose two economists agree about who would be helped or hurt by certain legislation,but disagree about whether the legislation would be a good idea.These disagreements

People and organizations have to make choices about how to allocate time and money because

Suppose two economists disagree about who would be helped or hurt by certain legislation.These disagreements

A professional basketball players' union negotiates a contract that dramatically increases all players' salaries.How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?

The overall performance of the economic system as a whole is the focus of

Normative economics deals with

Opportunity costs arise because of resource scarcity.

Because economists have different values,like everyone else,they

If an economic model includes an assumption that there are only two nations in the world,this would be an example of

An assumption that makes an economic model simpler without affecting its conclusions in important ways is

Even if economic theory is based on positive analysis,economists may still disagree with each other because

Which of the following explains why economists may disagree over normative issues?

Positive economics deals with

No society can provide its citizens with everything that they want because of

The ultimate purpose of an economic model is to

Due to a scarcity of resources,

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?

Economics is the study of

A critical assumption is one

Macroeconomics is the branch of economics that concerns

Economics is the study of

Suppose two economists agree about who would be helped or hurt by certain legislation,but disagree about whether the legislation would be a good idea.These disagreements

People and organizations have to make choices about how to allocate time and money because

Suppose two economists disagree about who would be helped or hurt by certain legislation.These disagreements

A professional basketball players' union negotiates a contract that dramatically increases all players' salaries.How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?

The overall performance of the economic system as a whole is the focus of

Normative economics deals with

Opportunity costs arise because of resource scarcity.

Because economists have different values,like everyone else,they

If an economic model includes an assumption that there are only two nations in the world,this would be an example of

An assumption that makes an economic model simpler without affecting its conclusions in important ways is

Even if economic theory is based on positive analysis,economists may still disagree with each other because

Which of the following explains why economists may disagree over normative issues?

Positive economics deals with

No society can provide its citizens with everything that they want because of

The ultimate purpose of an economic model is to

Due to a scarcity of resources,

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