Question 1

The level of detail in an economic model

Accepted Answer

A)  is as close as possible to the level of detail in reality 
B)  depends on the purpose of the model 
C)  is as complex as possible 
D)  is the same regardless of the purpose of the model 
E)  is as complex as possible to accomplish its purpose 
A)  is as close as possible to the level of detail in reality 
B)  depends on the purpose of the model 
C)  is as complex as possible 
D)  is the same regardless of the purpose of the model 
E)  is as complex as possible to accomplish its purpose

Question 2

For an individual,opportunity costs

Accepted Answer

A)  decrease as consumption increases. 
B)  include only the monetary costs of goods and services. 
C)  reflect resource scarcity. 
D)  reflect the fact that wants are unlimited. 
E)  reflect the fundamental assumption that "more is better." 
A)  decrease as consumption increases. 
B)  include only the monetary costs of goods and services. 
C)  reflect resource scarcity. 
D)  reflect the fact that wants are unlimited. 
E)  reflect the fundamental assumption that "more is better."

Question 3

The price that a firm's only competitor charges would be a

Accepted Answer

A)  topic in microeconomics 
B)  topic in finance 
C)  macroeconomic topic 
D)  topic in public finance 
E)  normative issue 
A)  topic in microeconomics 
B)  topic in finance 
C)  macroeconomic topic 
D)  topic in public finance 
E)  normative issue

Question 4

In the United States,individuals are forced to make choices

Accepted Answer

A)  because time is scarce,though spending power is not 
B)  because spending power is scarce,though time is not 
C)  though neither time nor spending power are scarce 
D)  because both time and spending power are scarce 
E)  because living standards are low 
A)  because time is scarce,though spending power is not 
B)  because spending power is scarce,though time is not 
C)  though neither time nor spending power are scarce 
D)  because both time and spending power are scarce 
E)  because living standards are low

Question 5

Macroeconomics focuses on the behavior of economic agents such as the consumer,a business firm,or a specific market.

Accepted Answer

A) True 
 B)False

Question 6

The price of apples in Denver,Colorado is

Accepted Answer

A)  a normative value judgment 
B)  an example of a factor of production 
C)  a microeconomic variable 
D)  a macroeconomic variable 
E)  not the sort of thing that economists would try to explain 
A)  a normative value judgment 
B)  an example of a factor of production 
C)  a microeconomic variable 
D)  a macroeconomic variable 
E)  not the sort of thing that economists would try to explain

Question 7

The statement that "at 10 percent,the interest rate is too high for families to buy a home they could have afforded when the interest rate was below 7 percent ," is a(n)

Accepted Answer

A)  positive statement 
B)  normative statement 
C)  morally ambiguous philosophical position 
D)  affront to the American dream 
E)  value judgment 
A)  positive statement 
B)  normative statement 
C)  morally ambiguous philosophical position 
D)  affront to the American dream 
E)  value judgment

Question 8

An economist claims that "the evidence suggests that high rates of inflation are associated with slow long-term economic growth." This is an example of

Accepted Answer

A)  positive economics 
B)  normative economics 
C)  negative economics 
D)  a simplifying assumption 
E)  microeconomic analysis 
A)  positive economics 
B)  normative economics 
C)  negative economics 
D)  a simplifying assumption 
E)  microeconomic analysis

Question 9

Suppose you start your own company making T-shirts that commemorate campus sporting events.An example of the resource capital would be

Accepted Answer

A)  the factory you created in a building you are leasing 
B)  your time and effort used to produce T-shirts 
C)  the entire campus,since the demand for T-shirts is obtained from campus students 
D)  the athletic facilities,since the athletic teams generate sporting events advertised on the T-shirts 
E)  your creative designs used to commemorate different sporting events 
A)  the factory you created in a building you are leasing 
B)  your time and effort used to produce T-shirts 
C)  the entire campus,since the demand for T-shirts is obtained from campus students 
D)  the athletic facilities,since the athletic teams generate sporting events advertised on the T-shirts 
E)  your creative designs used to commemorate different sporting events

Question 10

For society as a whole,producing more of one good or service has an opportunity cost because

Accepted Answer

A)  human wants are limited and resources are unlimited 
B)  both human wants and resources are unlimited 
C)  resources are limited;human wants are irrelevant 
D)  human wants are unlimited and resources are limited 
E)  both human wants and resources are limited 
A)  human wants are limited and resources are unlimited 
B)  both human wants and resources are unlimited 
C)  resources are limited;human wants are irrelevant 
D)  human wants are unlimited and resources are limited 
E)  both human wants and resources are limited

Question 11

Consider an economic model designed to analyze the behavior of business firms.An assumption that the goal of the firms is to maximize profit would be

Accepted Answer

A)  a simplifying assumption 
B)  a critical assumption 
C)  an abstraction from reality 
D)  an unnecessary detail 
E)  irrelevant to the conclusions of the model 
A)  a simplifying assumption 
B)  a critical assumption 
C)  an abstraction from reality 
D)  an unnecessary detail 
E)  irrelevant to the conclusions of the model

Question 12

If the president of Chile commented that "the crime rate in Chile is currently too high," this would be an example of a normative statement.

Accepted Answer

A) True 
 B)False

Question 13

Carl is considering attending a concert with a ticket price of $35.He estimates that the cost of driving to the concert and parking there will total an additional $20.In order to attend the concert,Carl will have to take time off from his part-time job or forgo studying for an exam scheduled for the next morning.He estimates that he will lose 5 hours at work,at a wage of $6 per hour,or 5 hours of study time.If Carl considers studying the best alternative use of his time,his opportunity cost of attending the concert equals

Accepted Answer

A)  $55 
B)  $55 plus the value of the higher exam grade he could earn by studying for 5 hours 
C)  $85 plus the value of the higher exam grade he could earn by studying for 5 hours 
D)  $85 minus the value of the higher exam grade he could earn by studying for 5 hours 
E)  $55 minus the value of the higher exam grade he could earn by studying for 5 hours 
A)  $55 
B)  $55 plus the value of the higher exam grade he could earn by studying for 5 hours 
C)  $85 plus the value of the higher exam grade he could earn by studying for 5 hours 
D)  $85 minus the value of the higher exam grade he could earn by studying for 5 hours 
E)  $55 minus the value of the higher exam grade he could earn by studying for 5 hours

Question 14

A critical assumption

Accepted Answer

A)  makes an economic model a more concrete representation of reality 
B)  eliminates unnecessary details from an economic model 
C)  has an important impact on the conclusions of an economic model 
D)  is usually implicit in an economic model 
E)  increases the level of abstraction of an economic model 
A)  makes an economic model a more concrete representation of reality 
B)  eliminates unnecessary details from an economic model 
C)  has an important impact on the conclusions of an economic model 
D)  is usually implicit in an economic model 
E)  increases the level of abstraction of an economic model

Question 15

Macroeconomics is the study of

Accepted Answer

A)  how the price of gasoline is determined 
B)  large objects 
C)  the economic behavior of individual decision makers 
D)  the behavior of the economy as a whole 
E)  the economic behavior of individual firms 
A)  how the price of gasoline is determined 
B)  large objects 
C)  the economic behavior of individual decision makers 
D)  the behavior of the economy as a whole 
E)  the economic behavior of individual firms

Question 16

Economic models come in the form of

Accepted Answer

A)  three-dimensional objects 
B)  all of the following 
C)  words 
D)  diagrams 
E)  mathematical equations 
A)  three-dimensional objects 
B)  all of the following 
C)  words 
D)  diagrams 
E)  mathematical equations

Question 17

Which of the following is the best example of physical capital used to produce a textbook?

Accepted Answer

A)  the expertise and writing ability of the author 
B)  the ink used in the printing press 
C)  the printing press 
D)  the property on which the publisher's office is located 
E)  the time spent by editors reviewing the textbook 
A)  the expertise and writing ability of the author 
B)  the ink used in the printing press 
C)  the printing press 
D)  the property on which the publisher's office is located 
E)  the time spent by editors reviewing the textbook

Question 18

Economics is

Accepted Answer

A)  the narrow study of how to make money in financial markets 
B)  the broad study of how to allocate unlimited resources to satisfy limited uses 
C)  the broad study of how to allocate limited resources to satisfy unlimited wants 
D)  the narrow study of using stocks and bonds to their maximum potential 
E)  the narrow study of how to be conservative in financial affairs 
A)  the narrow study of how to make money in financial markets 
B)  the broad study of how to allocate unlimited resources to satisfy limited uses 
C)  the broad study of how to allocate limited resources to satisfy unlimited wants 
D)  the narrow study of using stocks and bonds to their maximum potential 
E)  the narrow study of how to be conservative in financial affairs

Question 19

Microeconomic topics include the overall unemployment rate in the United States and the rate of inflation.

Accepted Answer

A) True 
 B)False

Question 20

Due to society's overall scarcity of resources,

Accepted Answer

A)  only households are constrained by income 
B)  only government agencies are constrained by limited budgets 
C)  only business firms are constrained by the cost of buying their inputs 
D)  households,business firms and government agencies all face constraints 
E)  households and business firms face constraints,but government agencies do not 
A)  only households are constrained by income 
B)  only government agencies are constrained by limited budgets 
C)  only business firms are constrained by the cost of buying their inputs 
D)  households,business firms and government agencies all face constraints 
E)  households and business firms face constraints,but government agencies do not

The level of detail in an economic model

For an individual,opportunity costs

The price that a firm's only competitor charges would be a

In the United States,individuals are forced to make choices

Macroeconomics focuses on the behavior of economic agents such as the consumer,a business firm,or a specific market.

The price of apples in Denver,Colorado is

The statement that "at 10 percent,the interest rate is too high for families to buy a home they could have afforded when the interest rate was below 7 percent ," is a(n)

An economist claims that "the evidence suggests that high rates of inflation are associated with slow long-term economic growth." This is an example of

Suppose you start your own company making T-shirts that commemorate campus sporting events.An example of the resource capital would be

For society as a whole,producing more of one good or service has an opportunity cost because

Consider an economic model designed to analyze the behavior of business firms.An assumption that the goal of the firms is to maximize profit would be

If the president of Chile commented that "the crime rate in Chile is currently too high," this would be an example of a normative statement.

A critical assumption

Macroeconomics is the study of

Economic models come in the form of

Which of the following is the best example of physical capital used to produce a textbook?

Economics is

Microeconomic topics include the overall unemployment rate in the United States and the rate of inflation.

Due to society's overall 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?

The level of detail in an economic model

For an individual,opportunity costs

The price that a firm's only competitor charges would be a

In the United States,individuals are forced to make choices

Macroeconomics focuses on the behavior of economic agents such as the consumer,a business firm,or a specific market.

The price of apples in Denver,Colorado is

The statement that "at 10 percent,the interest rate is too high for families to buy a home they could have afforded when the interest rate was below 7 percent ," is a(n)

An economist claims that "the evidence suggests that high rates of inflation are associated with slow long-term economic growth." This is an example of

Suppose you start your own company making T-shirts that commemorate campus sporting events.An example of the resource capital would be

For society as a whole,producing more of one good or service has an opportunity cost because

Consider an economic model designed to analyze the behavior of business firms.An assumption that the goal of the firms is to maximize profit would be

If the president of Chile commented that "the crime rate in Chile is currently too high," this would be an example of a normative statement.

A critical assumption

Macroeconomics is the study of

Economic models come in the form of

Which of the following is the best example of physical capital used to produce a textbook?

Economics is

Microeconomic topics include the overall unemployment rate in the United States and the rate of inflation.

Due to society's overall 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