Question 1

Economists are often required to make unrealistic assumptions concerning the problems they are investigating.

Accepted Answer

A) True 
 B)False

Question 2

Jack buys a computer from Sam,knowing fully well that the technology used in it is obsolete.In this case,the trade is

Accepted Answer

A)  beneficial to both parties. 
B)  beneficial only to Sam. 
C)  beneficial only to Jack. 
D)  not beneficial to either of them. 
A)  beneficial to both parties. 
B)  beneficial only to Sam. 
C)  beneficial only to Jack. 
D)  not beneficial to either of them.

Question 3

If a government enacts a price floor on agricultural products to protect wheat farmers,the result is likely going to be

Accepted Answer

A)  an increase in price with a surplus of wheat. 
B)  an increase in price with a shortage of wheat. 
C)  a decrease in price with a surplus of wheat. 
D)  a decrease in price with a shortage of wheat. 
A)  an increase in price with a surplus of wheat. 
B)  an increase in price with a shortage of wheat. 
C)  a decrease in price with a surplus of wheat. 
D)  a decrease in price with a shortage of wheat.

Question 4

Consider the following information regarding a person's decision to go to college: college tuition is $20,000 per year,room and board is $10,000 per year,and books and materials are $2,000 per year.Suppose that instead of going to college this person could have earned $18,000 working in a store.An economist would calculate the cost of going to college as

Accepted Answer

A)  $20,000. 
B)  $30,000. 
C)  $32,000. 
D)  $50,000. 
E)  $18,000. 
A)  $20,000. 
B)  $30,000. 
C)  $32,000. 
D)  $50,000. 
E)  $18,000.

Question 5

Marginal analysis involves looking at the extra costs involved in a decision.

Accepted Answer

A) True 
 B)False

Question 6

Why do economists abstract,and is it appropriate?

Accepted Answer

Economists (and other scientists)abstrac

Question 7

Because there is a trade-off between inflation and unemployment in the short run,

Accepted Answer

A)  lower unemployment will typically cause inflation to fall. 
B)  policies designed to reduce unemployment will typically set off a recession. 
C)  policies designed to reduce inflation will cause unemployment to fall as well. 
D)  higher inflation will generally be associated with higher unemployment. 
E)  lower inflation will generally be associated with higher unemployment. 
A)  lower unemployment will typically cause inflation to fall. 
B)  policies designed to reduce unemployment will typically set off a recession. 
C)  policies designed to reduce inflation will cause unemployment to fall as well. 
D)  higher inflation will generally be associated with higher unemployment. 
E)  lower inflation will generally be associated with higher unemployment.

Question 8

A horizontal line has a slope of

Accepted Answer

A)  one. 
B)  zero. 
C)  infinity. 
D)  undefined. 
A)  one. 
B)  zero. 
C)  infinity. 
D)  undefined.

Question 9

During one winter quarter at Frozen U.,snow falls every Friday night.Students assume that,on their campus,Fridays cause snow.This hypothesis

Accepted Answer

A)  should more properly be considered a theory. 
B)  assumes that correlation implies causation. 
C)  assumes that causation implies correlation. 
D)  reflects the fallacy of composition. 
A)  should more properly be considered a theory. 
B)  assumes that correlation implies causation. 
C)  assumes that causation implies correlation. 
D)  reflects the fallacy of composition.

Question 10

Carefully define the following terms,and explain their importance in economics.
a.opportunity cost
b.abstraction
c.theory
d.model
e.marginal analysis

Accepted Answer

a.Opportunity cost for a decision is the

Question 11

An externality is defined as

Accepted Answer

A)  an opportunity cost that is not considered, which causes inefficiency. 
B)  a social cost that affects parties external to a transaction. 
C)  a transaction which imposes a loss on one of the parties involved. 
D)  a "cost of doing business" that cannot be allocated to any particular good. 
E)  the increase in cost associated with increased production. 
A)  an opportunity cost that is not considered, which causes inefficiency. 
B)  a social cost that affects parties external to a transaction. 
C)  a transaction which imposes a loss on one of the parties involved. 
D)  a "cost of doing business" that cannot be allocated to any particular good. 
E)  the increase in cost associated with increased production.

Question 12

Suppose Tammy grew up on a farm and is very good at plowing.In addition suppose she is a popular country singer who earns $4,000 per performance.If her husband Bob can plow (but not as well as Tammy)but he can't carry a tune,then it would be most efficient if

Accepted Answer

A)  Tammy did both the plowing and the singing. 
B)  Tammy specialized in plowing and Bob in singing. 
C)  Bob did both the plowing and singing. 
D)  Tammy specialized in singing and Bob in plowing. 
E)  They both plowed and sang. 
A)  Tammy did both the plowing and the singing. 
B)  Tammy specialized in plowing and Bob in singing. 
C)  Bob did both the plowing and singing. 
D)  Tammy specialized in singing and Bob in plowing. 
E)  They both plowed and sang.

Question 13

The use of abstraction in economics is analogous to the use of a road map providing directions to a location.

Accepted Answer

A) True 
 B)False

Question 14

The purpose of economic science is to

Accepted Answer

A)  show people that it is better to want less. 
B)  encourage people to care more about others. 
C)  analyze the problems of market economies only. 
D)  develop principles by which to rank alternative uses of scarce resources. 
E)  reach consensus on economic goals and objectives 
A)  show people that it is better to want less. 
B)  encourage people to care more about others. 
C)  analyze the problems of market economies only. 
D)  develop principles by which to rank alternative uses of scarce resources. 
E)  reach consensus on economic goals and objectives

Question 15

A line that slopes downward from left to right has a positive slope.

Accepted Answer

A) True 
 B)False

Question 16

In the early 1800s,there was a smallpox outbreak in a remote part of Russia.The government sent in a large group of army doctors,but they were too late to stop the epidemic.Thirty years later,there was another smallpox scare.A local statistician cautioned the government against a similar response,noting the increased mortality and high number of army doctors during the earlier epidemic.Was the statistician providing good advice?

Accepted Answer

The statistician confused correlation wi

Question 17

When a teacher in a private school points out to her high school principal that since there are empty seats in all classrooms,the cost of additional students is really zero,she is using the

Accepted Answer

A)  law of comparative advantage. 
B)  principle of marginal analysis. 
C)  theory of externalities. 
D)  notion of the cost decreases of the service sector. 
E)  concept of opportunity cost. 
A)  law of comparative advantage. 
B)  principle of marginal analysis. 
C)  theory of externalities. 
D)  notion of the cost decreases of the service sector. 
E)  concept of opportunity cost.

Question 18

A graph's origin is the point of intersection of all lines or curves in the graph.

Accepted Answer

A) True 
 B)False

Question 19

The slope of a downward-sloping straight line can be calculated as the distance from the

Accepted Answer

A)  horizontal intercept of the line to the origin divided by the distance from the origin to the vertical intercept of the line. 
B)  origin to the horizontal intercept of the line minus the distance from the origin to the vertical intercept of the line. 
C)  vertical intercept of the line to the origin divided by the distance from the origin to the horizontal intercept of the line. 
D)  vertical intercept of the line to the origin minus the distance from the origin to the horizontal intercept of the line. 
A)  horizontal intercept of the line to the origin divided by the distance from the origin to the vertical intercept of the line. 
B)  origin to the horizontal intercept of the line minus the distance from the origin to the vertical intercept of the line. 
C)  vertical intercept of the line to the origin divided by the distance from the origin to the horizontal intercept of the line. 
D)  vertical intercept of the line to the origin minus the distance from the origin to the horizontal intercept of the line.

Question 20

There are frequently market solutions that the government can use to deal with externalities.

Accepted Answer

A) True 
 B)False

Economists are often required to make unrealistic assumptions concerning the problems they are investigating.

Jack buys a computer from Sam,knowing fully well that the technology used in it is obsolete.In this case,the trade is

If a government enacts a price floor on agricultural products to protect wheat farmers,the result is likely going to be

Marginal analysis involves looking at the extra costs involved in a decision.

Why do economists abstract,and is it appropriate?

Because there is a trade-off between inflation and unemployment in the short run,

A horizontal line has a slope of

During one winter quarter at Frozen U.,snow falls every Friday night.Students assume that,on their campus,Fridays cause snow.This hypothesis

Carefully define the following terms,and explain their importance in economics. a.opportunity cost b.abstraction c.theory d.model e.marginal analysis

An externality is defined as

Suppose Tammy grew up on a farm and is very good at plowing.In addition suppose she is a popular country singer who earns $4,000 per performance.If her husband Bob can plow (but not as well as Tammy)but he can't carry a tune,then it would be most efficient if

The use of abstraction in economics is analogous to the use of a road map providing directions to a location.

The purpose of economic science is to

A line that slopes downward from left to right has a positive slope.

When a teacher in a private school points out to her high school principal that since there are empty seats in all classrooms,the cost of additional students is really zero,she is using the

A graph's origin is the point of intersection of all lines or curves in the graph.

The slope of a downward-sloping straight line can be calculated as the distance from the

There are frequently market solutions that the government can use to deal with externalities.

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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Exam 1: What Is Economics?

Economists are often required to make unrealistic assumptions concerning the problems they are investigating.

Jack buys a computer from Sam,knowing fully well that the technology used in it is obsolete.In this case,the trade is

If a government enacts a price floor on agricultural products to protect wheat farmers,the result is likely going to be

Marginal analysis involves looking at the extra costs involved in a decision.

Why do economists abstract,and is it appropriate?

Because there is a trade-off between inflation and unemployment in the short run,

A horizontal line has a slope of

During one winter quarter at Frozen U.,snow falls every Friday night.Students assume that,on their campus,Fridays cause snow.This hypothesis

Carefully define the following terms,and explain their importance in economics. a.opportunity cost b.abstraction c.theory d.model e.marginal analysis

An externality is defined as

Suppose Tammy grew up on a farm and is very good at plowing.In addition suppose she is a popular country singer who earns $4,000 per performance.If her husband Bob can plow (but not as well as Tammy)but he can't carry a tune,then it would be most efficient if

The use of abstraction in economics is analogous to the use of a road map providing directions to a location.

The purpose of economic science is to

A line that slopes downward from left to right has a positive slope.

When a teacher in a private school points out to her high school principal that since there are empty seats in all classrooms,the cost of additional students is really zero,she is using the

A graph's origin is the point of intersection of all lines or curves in the graph.

The slope of a downward-sloping straight line can be calculated as the distance from the

There are frequently market solutions that the government can use to deal with externalities.

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters