Exam 1: The Art and Science of Economic Analysis.

The labor market is an example of:

A rational decision maker compares the expected marginal cost to the expected marginal benefit of any activity.

Step one in the scientific method to study economic problems is to:

Economic ____ usually involves some adjustment to the existing situation.

All economic models must involve simplifications because:

Which of the following is an accurate list, in order, of the steps of the scientific method?

Exhibit 1.1 -Refer to the circular-flow model in Exhibit 1.1. If C represents households and A represents product markets, then the flow from C to A is:

Because resources are scarce and wants are unlimited, _____.

A rational individual would make charitable contributions only if such contributions receive favorable tax treatment.

Normative economic statements refer to what should be.

An economist's main professional objective is to:

Natural resources are:

Which of the following would an economist classify as physical capital?

Resources are bought and sold in:

Exhibit 1.1 -Refer to the circular-flow model in Exhibit 1.1. If B represents resource markets and C represents households, then the flow from B to C is:

One of the difficulties with an economic policy such as rent control is that:

An entrepreneur is:

Resources are used only in the production of goods, not services.

Which of the following sentences is the best example of scarcity of time?

Rational choice takes time and requires information, but time and information are themselves ____.