Question 1

The economic behavior of government is constrained by

Accepted Answer

A)  limited budgets 
B)  the absence of prices on most government output 
C)  moral philosophy of the community 
D)  low voter participation rates 
E)  political self interest 
A)  limited budgets 
B)  the absence of prices on most government output 
C)  moral philosophy of the community 
D)  low voter participation rates 
E)  political self interest

Question 2

The statement that "IBM's stock closed at $85" is

Accepted Answer

A)  a normative statement 
B)  a positive statement 
C)  a macroeconomic observation 
D)  financial manipulation 
E)  a sign that the market may be undervalued 
A)  a normative statement 
B)  a positive statement 
C)  a macroeconomic observation 
D)  financial manipulation 
E)  a sign that the market may be undervalued

Question 3

In examining consumer behavior,one of the constraints faced by consumers is

Accepted Answer

A)  happiness 
B)  quantities consumed 
C)  tastes and preferences 
D)  entrepreneurial ability 
E)  income 
A)  happiness 
B)  quantities consumed 
C)  tastes and preferences 
D)  entrepreneurial ability 
E)  income

Question 4

Consider an economic model designed to analyze the purchasing decisions of households.An assumption that a household chooses between only two goods would be an example of a

Accepted Answer

A)  simplifying assumption 
B)  critical assumption 
C)  macroeconomic assumption 
D)  financial assumption 
E)  positive assumption 
A)  simplifying assumption 
B)  critical assumption 
C)  macroeconomic assumption 
D)  financial assumption 
E)  positive assumption

Question 5

Because households have limited incomes,they must

Accepted Answer

A)  rarely take vacations 
B)  live below the poverty line 
C)  allocate their spending carefully 
D)  gamble in casinos frequently 
E)  save for the future 
A)  rarely take vacations 
B)  live below the poverty line 
C)  allocate their spending carefully 
D)  gamble in casinos frequently 
E)  save for the future

Question 6

Which of the following is a normative statement?

Accepted Answer

A)  Fifteen percent of Americans go without health insurance in a year. 
B)  The Consumer Price Index rose three-tenths of one percent in May. 
C)  An increase in the minimum wage will increase teenage unemployment. 
D)  Americans would be better served by single-payer health care system. 
E)  The French trade deficit reached an all-time high last year. 
A)  Fifteen percent of Americans go without health insurance in a year. 
B)  The Consumer Price Index rose three-tenths of one percent in May. 
C)  An increase in the minimum wage will increase teenage unemployment. 
D)  Americans would be better served by single-payer health care system. 
E)  The French trade deficit reached an all-time high last year.

Question 7

Economic models are used primarily to

Accepted Answer

A)  predict behavior under specific circumstances 
B)  make an exact reproduction of one facet of the economy 
C)  increase the mathematical complexity and rigor of economics 
D)  provide simple answers to simple questions 
E)  give accurate forecasts of the future 
A)  predict behavior under specific circumstances 
B)  make an exact reproduction of one facet of the economy 
C)  increase the mathematical complexity and rigor of economics 
D)  provide simple answers to simple questions 
E)  give accurate forecasts of the future

Question 8

Positive economics deals with

Accepted Answer

A)  value judgments 
B)  how the economy does work 
C)  how the economy should work 
D)  how the federal government should operate 
E)  what the price level should be 
A)  value judgments 
B)  how the economy does work 
C)  how the economy should work 
D)  how the federal government should operate 
E)  what the price level should be

Question 9

After graduating from high school,Steve had the following three choices for his immediate future,listed in order of preference: (1)attend our campus, (2)work in a printed circuit board factory,or (3)attend a rival college.His opportunity cost of going to college here includes which of the following?

Accepted Answer

A)  The cost of books and supplies at the rival college 
B)  The income he could have earned at the printed circuit board factory plus the direct cost of attending college here (tuition,textbooks,etc. ) 
C)  The benefits he could have received from going to the rival college 
D)  Only the tuition and fees paid for taking classes here 
E)  Cannot be determined from the information given 
A)  The cost of books and supplies at the rival college 
B)  The income he could have earned at the printed circuit board factory plus the direct cost of attending college here (tuition,textbooks,etc. ) 
C)  The benefits he could have received from going to the rival college 
D)  Only the tuition and fees paid for taking classes here 
E)  Cannot be determined from the information given

Question 10

Economics is

Accepted Answer

A)  exclusively the study of the markets for stocks and bonds 
B)  the study of choice under conditions of scarcity 
C)  exclusively the study of business firms 
D)  fundamentally the same as sociology 
E)  applicable only when scarcity is not a problem 
A)  exclusively the study of the markets for stocks and bonds 
B)  the study of choice under conditions of scarcity 
C)  exclusively the study of business firms 
D)  fundamentally the same as sociology 
E)  applicable only when scarcity is not a problem

Question 11

Suppose that the Council of Economic Advisers tells the President that "the unemployment rate is 4 percent." The President responds,"That rate is still too high." The President's statement is

Accepted Answer

A)  a normative statement 
B)  a positive statement 
C)  empirically verifiable by checking economic data 
D)  an indisputable statistical fact 
E)  an incorrect positive statement 
A)  a normative statement 
B)  a positive statement 
C)  empirically verifiable by checking economic data 
D)  an indisputable statistical fact 
E)  an incorrect positive statement

Question 12

Society has to establish priorities among its goals because of

Accepted Answer

A)  lazy politicians 
B)  manipulative politicians 
C)  uneducated voters 
D)  a scarcity of resources 
E)  too many bosses and not enough workers 
A)  lazy politicians 
B)  manipulative politicians 
C)  uneducated voters 
D)  a scarcity of resources 
E)  too many bosses and not enough workers

The economic behavior of government is constrained by

The statement that "IBM's stock closed at $85" is

In examining consumer behavior,one of the constraints faced by consumers is

Consider an economic model designed to analyze the purchasing decisions of households.An assumption that a household chooses between only two goods would be an example of a

Because households have limited incomes,they must

Which of the following is a normative statement?

Economic models are used primarily to

Positive economics deals with

After graduating from high school,Steve had the following three choices for his immediate future,listed in order of preference: (1)attend our campus, (2)work in a printed circuit board factory,or (3)attend a rival college.His opportunity cost of going to college here includes which of the following?

Economics is

Suppose that the Council of Economic Advisers tells the President that "the unemployment rate is 4 percent." The President responds,"That rate is still too high." The President's statement is

Society has to establish priorities among its goals because of

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 economic behavior of government is constrained by

The statement that "IBM's stock closed at $85" is

In examining consumer behavior,one of the constraints faced by consumers is

Consider an economic model designed to analyze the purchasing decisions of households.An assumption that a household chooses between only two goods would be an example of a

Because households have limited incomes,they must

Which of the following is a normative statement?

Economic models are used primarily to

Positive economics deals with

Economics is

Suppose that the Council of Economic Advisers tells the President that "the unemployment rate is 4 percent." The President responds,"That rate is still too high." The President's statement is

Society has to establish priorities among its goals because of

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