Question 1

Microeconomics analyzes individual parts of the economy rather than broad economic aggregates.

Accepted Answer

A) True 
 B)False

Question 2

Macroeconomics is the study of

Accepted Answer

A)  how wages are determined in a specific labor market 
B)  how to use the fewest natural resources to produce public goods 
C)  what is happening in the economy as a whole 
D)  how consumers and producers interact in individual markets 
E)  the price and the quantity exchanged in a market 
A)  how wages are determined in a specific labor market 
B)  how to use the fewest natural resources to produce public goods 
C)  what is happening in the economy as a whole 
D)  how consumers and producers interact in individual markets 
E)  the price and the quantity exchanged in a market

Question 3

A statement of fact that can be verified by observation is

Accepted Answer

A)  an abstraction 
B)  a positive statement 
C)  a normative statement 
D)  a philosophical conundrum 
E)  the basis of an assumption 
A)  an abstraction 
B)  a positive statement 
C)  a normative statement 
D)  a philosophical conundrum 
E)  the basis of an assumption

Question 4

Physical capital differs from raw materials in the sense that raw materials

Accepted Answer

A)  have a longer useful life in production 
B)  are considered human capital 
C)  cannot be used to produce goods and services 
D)  are used up in production 
E)  are not a resource used in production 
A)  have a longer useful life in production 
B)  are considered human capital 
C)  cannot be used to produce goods and services 
D)  are used up in production 
E)  are not a resource used in production

Question 5

Which of the following would be strictly a microeconomic topic?

Accepted Answer

A)  a general rise in interest rates 
B)  a drop in inflation 
C)  an increase in total production in the United States 
D)  a drop in the nation's unemployment rate 
E)  an increase in the price of the Ford Taurus 
A)  a general rise in interest rates 
B)  a drop in inflation 
C)  an increase in total production in the United States 
D)  a drop in the nation's unemployment rate 
E)  an increase in the price of the Ford Taurus

Question 6

Individuals face opportunity costs because

Accepted Answer

A)  the minimum wage is too low 
B)  technology is improving too quickly 
C)  time and funds are scarce 
D)  government cutbacks are widespread,except possibly among society's most affluent households 
E)  welfare gives individuals an incentive to stay at home 
A)  the minimum wage is too low 
B)  technology is improving too quickly 
C)  time and funds are scarce 
D)  government cutbacks are widespread,except possibly among society's most affluent households 
E)  welfare gives individuals an incentive to stay at home

Question 7

Due to resource scarcity,

Accepted Answer

A)  some economic activities have an opportunity cost 
B)  all economic activities have an opportunity cost 
C)  no economic activities have an opportunity cost 
D)  economic activities have opportunity costs equal to their market prices 
E)  economic activities have opportunity costs generally lower than their market prices 
A)  some economic activities have an opportunity cost 
B)  all economic activities have an opportunity cost 
C)  no economic activities have an opportunity cost 
D)  economic activities have opportunity costs equal to their market prices 
E)  economic activities have opportunity costs generally lower than their market prices

Question 8

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.He estimates that he will lose 5 hours at work,at a wage of $6 per hour.Carl's opportunity cost of attending the concert equals

Accepted Answer

A)  $35 
B)  $55 
C)  $30 
D)  $65 
E)  $85 
A)  $35 
B)  $55 
C)  $30 
D)  $65 
E)  $85

Question 9

The study of how firms interact in a market is a

Accepted Answer

A)  waste of time 
B)  normative subject 
C)  microeconomic topic 
D)  topic in political science 
E)  macroeconomic topic 
A)  waste of time 
B)  normative subject 
C)  microeconomic topic 
D)  topic in political science 
E)  macroeconomic topic

Question 10

Which of the following would be studied in macroeconomics?

Accepted Answer

A)  a drop in the price of personal computers 
B)  an individual household's decision on how to allocate its spending power 
C)  a rise in employment in movie theaters across the nation 
D)  total output in the nation 
E)  a local bank's increase in the interest rate offered on savings deposits 
A)  a drop in the price of personal computers 
B)  an individual household's decision on how to allocate its spending power 
C)  a rise in employment in movie theaters across the nation 
D)  total output in the nation 
E)  a local bank's increase in the interest rate offered on savings deposits

Question 11

A microeconomist might study which of the following?

Accepted Answer

A)  how inflation changes over time for several countries 
B)  how money supply aggregates are measured 
C)  economic growth in less-developed countries in Africa 
D)  the relationship between aggregate income and aggregate personal consumption 
E)  why wages for females are lower than for males in a particular labor market 
A)  how inflation changes over time for several countries 
B)  how money supply aggregates are measured 
C)  economic growth in less-developed countries in Africa 
D)  the relationship between aggregate income and aggregate personal consumption 
E)  why wages for females are lower than for males in a particular labor market

Question 12

Which of the following is most closely associated with positive economics?

Accepted Answer

A)  determining the impact of government spending on the actual level of total employment 
B)  determining the best level of immigration into the country 
C)  determining whether too many luxury goods are being produced 
D)  determining whether the government should reduce poverty 
E)  determining whether the government should alter income taxes in order to increase total employment 
A)  determining the impact of government spending on the actual level of total employment 
B)  determining the best level of immigration into the country 
C)  determining whether too many luxury goods are being produced 
D)  determining whether the government should reduce poverty 
E)  determining whether the government should alter income taxes in order to increase total employment

Question 13

What does economics have in common with sociology?

Accepted Answer

A)  Economics and sociology ask fundamentally the same questions. 
B)  Economics and sociology use the same tools to analyze issues. 
C)  Both are social sciences. 
D)  What and how economists study is very similar to what and how sociologists study. 
E)  Explaining something about society is only a secondary purpose in both areas. 
A)  Economics and sociology ask fundamentally the same questions. 
B)  Economics and sociology use the same tools to analyze issues. 
C)  Both are social sciences. 
D)  What and how economists study is very similar to what and how sociologists study. 
E)  Explaining something about society is only a secondary purpose in both areas.

Question 14

Which of the following is a characteristic of entrepreneurship?

Accepted Answer

A)  the ability to navigate bodies of water 
B)  it is produced using physical capital 
C)  it is used up quickly in the production process 
D)  it is a pre-existing resource like land 
E)  it is associated with risk taking and innovation 
A)  the ability to navigate bodies of water 
B)  it is produced using physical capital 
C)  it is used up quickly in the production process 
D)  it is a pre-existing resource like land 
E)  it is associated with risk taking and innovation

Question 15

The opportunity cost of an economic action is

Accepted Answer

A)  the value of the next best alternative that must be sacrificed 
B)  an issue in normative economic theory 
C)  the expense for the resources used plus the firm's profit 
D)  the out-of-pocket cost 
E)  the option to pay a reduced fee for the action 
A)  the value of the next best alternative that must be sacrificed 
B)  an issue in normative economic theory 
C)  the expense for the resources used plus the firm's profit 
D)  the out-of-pocket cost 
E)  the option to pay a reduced fee for the action

Question 16

The four main categories of resources are

Accepted Answer

A)  labor,money,capital,and inputs 
B)  capital,land,raw materials,and entrepreneurship 
C)  raw materials,money,labor,and capital 
D)  land,capital,labor,natural resources,and entrepreneurship 
E)  human capital,physical capital,labor,and natural resources 
A)  labor,money,capital,and inputs 
B)  capital,land,raw materials,and entrepreneurship 
C)  raw materials,money,labor,and capital 
D)  land,capital,labor,natural resources,and entrepreneurship 
E)  human capital,physical capital,labor,and natural resources

Question 17

"Senior citizens deserve an income that will allow them to live in comfort for their remaining years." This is

Accepted Answer

A)  neither a normative nor a positive statement 
B)  both a positive and a normative statement 
C)  strictly a macroeconomic issue 
D)  a positive statement 
E)  a normative statement 
A)  neither a normative nor a positive statement 
B)  both a positive and a normative statement 
C)  strictly a macroeconomic issue 
D)  a positive statement 
E)  a normative statement

Question 18

A consultant who earns $100 per hour takes four hours off work to go to the movies.The
Out-of-pocket cost for the cab and the movie ticket are $12.The total cost of the movie to the consultant is

Accepted Answer

A)  $12 
B)  $412 
C)  $400 
D)  $388 
E)  $112 
A)  $12 
B)  $412 
C)  $400 
D)  $388 
E)  $112

Question 19

The basic problem addressed in economics is

Accepted Answer

A)  scarce resources and unlimited wants 
B)  scarce wants and unlimited resources 
C)  cost minimization 
D)  how to manage a financial portfolio 
E)  unlimited time and unlimited potential 
A)  scarce resources and unlimited wants 
B)  scarce wants and unlimited resources 
C)  cost minimization 
D)  how to manage a financial portfolio 
E)  unlimited time and unlimited potential

Question 20

An economic model is a(n)

Accepted Answer

A)  philosophical inquiry 
B)  set of numbers that describe a firm (e.g. ,profits and assets) 
C)  abstract representation of reality 
D)  concrete representation of reality 
E)  ideal to which economic entities are compared 
A)  philosophical inquiry 
B)  set of numbers that describe a firm (e.g. ,profits and assets) 
C)  abstract representation of reality 
D)  concrete representation of reality 
E)  ideal to which economic entities are compared

Microeconomics analyzes individual parts of the economy rather than broad economic aggregates.

Macroeconomics is the study of

A statement of fact that can be verified by observation is

Physical capital differs from raw materials in the sense that raw materials

Which of the following would be strictly a microeconomic topic?

Individuals face opportunity costs because

Due to resource scarcity,

The study of how firms interact in a market is a

Which of the following would be studied in macroeconomics?

A microeconomist might study which of the following?

Which of the following is most closely associated with positive economics?

What does economics have in common with sociology?

Which of the following is a characteristic of entrepreneurship?

The opportunity cost of an economic action is

The four main categories of resources are

"Senior citizens deserve an income that will allow them to live in comfort for their remaining years." This is

A consultant who earns $100 per hour takes four hours off work to go to the movies.The Out-of-pocket cost for the cab and the movie ticket are $12.The total cost of the movie to the consultant is

The basic problem addressed in economics is

An economic model is a(n)

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?

Microeconomics analyzes individual parts of the economy rather than broad economic aggregates.

Macroeconomics is the study of

A statement of fact that can be verified by observation is

Physical capital differs from raw materials in the sense that raw materials

Which of the following would be strictly a microeconomic topic?

Individuals face opportunity costs because

Due to resource scarcity,

The study of how firms interact in a market is a

Which of the following would be studied in macroeconomics?

A microeconomist might study which of the following?

Which of the following is most closely associated with positive economics?

What does economics have in common with sociology?

Which of the following is a characteristic of entrepreneurship?

The opportunity cost of an economic action is

The four main categories of resources are

"Senior citizens deserve an income that will allow them to live in comfort for their remaining years." This is

A consultant who earns $100 per hour takes four hours off work to go to the movies.The Out-of-pocket cost for the cab and the movie ticket are $12.The total cost of the movie to the consultant is

The basic problem addressed in economics is

An economic model is a(n)

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