Question 1

According to Adam Smith,economic progress results from

Accepted Answer

A)  government ownership of productive resources. 
B)  a perfectly equal distribution of income in a society. 
C)  allowing firms to achieve great economic power by monopolizing markets. 
D)  the division of labor and increased specialization. 
E)  rapid rates of population growth. 
A)  government ownership of productive resources. 
B)  a perfectly equal distribution of income in a society. 
C)  allowing firms to achieve great economic power by monopolizing markets. 
D)  the division of labor and increased specialization. 
E)  rapid rates of population growth.

Question 2

Statements,propositions,or predictions about economic issues that can be tested in principle by an appeal to the facts are called ________ economics.

Accepted Answer

A)  positive 
B)  passive 
C)  normative 
D)  mechanical 
E)  comparative 
A)  positive 
B)  passive 
C)  normative 
D)  mechanical 
E)  comparative

Question 3

The central questions in economics

Accepted Answer

A)  pertain solely to centrally planned economies. 
B)  reflect concerns arising from the problem of relative scarcity. 
C)  are statements about what ought to be. 
D)  eliminate the necessity of computing opportunity costs. 
E)  represent economic theories that become obsolete with the rise of capitalism. 
A)  pertain solely to centrally planned economies. 
B)  reflect concerns arising from the problem of relative scarcity. 
C)  are statements about what ought to be. 
D)  eliminate the necessity of computing opportunity costs. 
E)  represent economic theories that become obsolete with the rise of capitalism.

Question 4

Technology

Accepted Answer

A)  concentrates on the fine arts and literature. 
B)  is another name for capital. 
C)  permits society to ignore problems of allocation. 
D)  is a specific managerial technique. 
E)  sets limits on the ability to satisfy human wants with existing resources. 
A)  concentrates on the fine arts and literature. 
B)  is another name for capital. 
C)  permits society to ignore problems of allocation. 
D)  is a specific managerial technique. 
E)  sets limits on the ability to satisfy human wants with existing resources.

Question 5

In addition to its fertility,the value of land as an economic resource may stem from its

Accepted Answer

A)  location. 
B)  mobility. 
C)  omniscience. 
D)  gender. 
E)  conscience. 
A)  location. 
B)  mobility. 
C)  omniscience. 
D)  gender. 
E)  conscience.

Question 6

Adam Smith wrote that

Accepted Answer

A)  the economic problems of eighteenth-century Britain were in part caused by overspecialization. 
B)  the government should control the economy with an invisible hand. 
C)  the pursuit of private self-interest tends to promote the public interest. 
D)  the owners of resources should be given subsidies to induce them to employ those resources in the most efficient way. 
E)  eighteenth-century Britain needed a better-planned economy. 
A)  the economic problems of eighteenth-century Britain were in part caused by overspecialization. 
B)  the government should control the economy with an invisible hand. 
C)  the pursuit of private self-interest tends to promote the public interest. 
D)  the owners of resources should be given subsidies to induce them to employ those resources in the most efficient way. 
E)  eighteenth-century Britain needed a better-planned economy.

Question 7

The following question are based on the following production possibilities curve:
  
-Suppose 4 million tractors wear out each year.If society chooses point A as this year's output combination,then this year's food output is 8 million tons,and at the end of the year

Accepted Answer

A)  there will be 4 million more tractors than at the beginning of the year. 
B)  the production possibilities curve will shift outward. 
C)  there will be 4 million fewer tractors than at the beginning of the year. 
D)  there will be the same number of tractors as at the beginning of the year. 
E)  output cannot be determined due to insufficient information. 
A)  there will be 4 million more tractors than at the beginning of the year. 
B)  the production possibilities curve will shift outward. 
C)  there will be 4 million fewer tractors than at the beginning of the year. 
D)  there will be the same number of tractors as at the beginning of the year. 
E)  output cannot be determined due to insufficient information.

Question 8

The distinction between positive and normative economics is that positive economics deals with

Accepted Answer

A)  inflation; normative economics deals with unemployment. 
B)  human wants; normative economics deals with resources. 
C)  economic benefits; normative economics deals with economic costs. 
D)  opportunity costs; normative economics deals with choice. 
E)  descriptive statements and predictions about the world; normative economics deals with what ought to be. 
A)  inflation; normative economics deals with unemployment. 
B)  human wants; normative economics deals with resources. 
C)  economic benefits; normative economics deals with economic costs. 
D)  opportunity costs; normative economics deals with choice. 
E)  descriptive statements and predictions about the world; normative economics deals with what ought to be.

Question 9

The average yearly income per family in the United States is about $60,000.To more meaningfully interpret this figure,we would need information on the

Accepted Answer

A)  output per hour of labor. 
B)  amount of household consumption expenditures. 
C)  exchange rate. 
D)  number of families. 
E)  distribution of income. 
A)  output per hour of labor. 
B)  amount of household consumption expenditures. 
C)  exchange rate. 
D)  number of families. 
E)  distribution of income.

Question 10

Economic problems arise because

Accepted Answer

A)  the number of free resources is quite limited. 
B)  human wants and desires are limited. 
C)  the world's population is not growing as fast as output is expanding. 
D)  there is too much money in the world. 
E)  too many people are self-sufficient and thus do not produce enough. 
A)  the number of free resources is quite limited. 
B)  human wants and desires are limited. 
C)  the world's population is not growing as fast as output is expanding. 
D)  there is too much money in the world. 
E)  too many people are self-sufficient and thus do not produce enough.

Question 11

Human wants and desires

Accepted Answer

A)  are rarely influenced by advertising or cultural factors. 
B)  can be classified into the categories of land, labor, and capital. 
C)  are more readily satisfied when labor productivity declines. 
D)  appear to be insatiable in the aggregate. 
E)  fall dramatically as incomes rise in the economy. 
A)  are rarely influenced by advertising or cultural factors. 
B)  can be classified into the categories of land, labor, and capital. 
C)  are more readily satisfied when labor productivity declines. 
D)  appear to be insatiable in the aggregate. 
E)  fall dramatically as incomes rise in the economy.

Question 12

To suggest that the United States should take measures to preserve jobs in the steel industry is an example of ________ economics.

Accepted Answer

A)  positive 
B)  passive 
C)  normative 
D)  mechanical 
E)  comparative 
A)  positive 
B)  passive 
C)  normative 
D)  mechanical 
E)  comparative

Question 13

Answers to economic issues that depend on an individual's values or preferences are called ________ economics.

Accepted Answer

A)  positive 
B)  passive 
C)  normative 
D)  mechanical 
E)  comparative 
A)  positive 
B)  passive 
C)  normative 
D)  mechanical 
E)  comparative

Exam 1: What is Economics

According to Adam Smith,economic progress results from

Statements,propositions,or predictions about economic issues that can be tested in principle by an appeal to the facts are called ________ economics.

The central questions in economics

Technology

In addition to its fertility,the value of land as an economic resource may stem from its

Adam Smith wrote that

The following question are based on the following production possibilities curve: -Suppose 4 million tractors wear out each year.If society chooses point A as this year's output combination,then this year's food output is 8 million tons,and at the end of the year

The distinction between positive and normative economics is that positive economics deals with

The average yearly income per family in the United States is about $60,000.To more meaningfully interpret this figure,we would need information on the

Economic problems arise because

Human wants and desires

To suggest that the United States should take measures to preserve jobs in the steel industry is an example of ________ economics.

Answers to economic issues that depend on an individual's values or preferences are called ________ economics.

Markets and Prices

The Business Firm: Organization,motivation,and Optimal Input Decisions

Getting Behind the Demand and Supply Curves

Market Demand and Price Elasticity

Economic Efficiency,market Supply,and Perfect Competition

Monopoly and Its Regulation

Monopolistic Competition,oligopoly,and Antitrust Policy

Pollution and the Environment

The Supply and Demand for Labor

Interest,rent,and Profit

Poverty,income Inequality,and Discrimination

Economic Growth

Public Goods and the Role of the Government

National Income and Product

Business Fluctuations and Unemployment

The Determination of National Output and the Keynesian Multiplier

Fiscal Policy and National Output

Inflation

Money and the Banking System

The Federal Reserve and Monetary Policy

Supply Shocks and Inflation

Productivity,growth,and Technology Policy

Surpluses,deficits,public Debt,and the Federal Budget

Monetary Policy,interest Rates,and Economic Activity

Controversies Over Stabilization Policy

International Trade

Exchange Rates and the Balance of Payments

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