Question 1

Exhibit 1.1
  
-Refer to the circular-flow model in Exhibit 1.1. Box B represents:

Accepted Answer

A)  firms. 
B)  resource markets. 
C)  households. 
D)  product markets. 
E)  expenditures. 
A)  firms. 
B)  resource markets. 
C)  households. 
D)  product markets. 
E)  expenditures.

Question 2

Which of the following is not classified as physical capital by economists?

Accepted Answer

A)  A $20 bill in a firm's petty cash drawer 
B)  The building where an economics class meets 
C)  A plumber's wrench 
D)  A railroad car 
E)  A factory 
A)  A $20 bill in a firm's petty cash drawer 
B)  The building where an economics class meets 
C)  A plumber's wrench 
D)  A railroad car 
E)  A factory

Question 3

Economics:

Accepted Answer

A)  studies human behavior when scarcity exists and choices must be made. 
B)  does not provide a reasonable explanation of how people make decisions. 
C)  does not accurately explain any human behavior since it is based on the assumption of rationality. 
D)  is better at showing the way things ought to be than other social sciences. 
E)  is the only social science that can explain the existence and behavior of public institutions. 
A)  studies human behavior when scarcity exists and choices must be made. 
B)  does not provide a reasonable explanation of how people make decisions. 
C)  does not accurately explain any human behavior since it is based on the assumption of rationality. 
D)  is better at showing the way things ought to be than other social sciences. 
E)  is the only social science that can explain the existence and behavior of public institutions.

Question 4

Table 1.1
 $$\begin{array}{l}
\text { Table } 1.1\
\begin{array} { | l | l | } 
\hline \text { Hours } & \text { Revenue } \
\hline 1 & 10 \
\hline 2 & 20 \
\hline 3 & 30 \
\hline 4 & 40 \
\hline 5 & 50 \
\hline
\end{array}
\end{array}$$
-Refer to Table 1.1. What is Sergio's marginal benefit if he tutors for three hours instead of two hours?

Accepted Answer

A)  $50 
B)  $40 
C)  $30 
D)  $20 
E)  $10 
A)  $50 
B)  $40 
C)  $30 
D)  $20 
E)  $10

Question 5

Households:

Accepted Answer

A)  own and sell resources. 
B)  play a very minor role in an economy. 
C)  supply goods and services. 
D)  are the largest purchasers of resources. 
E)  set the price for goods. 
A)  own and sell resources. 
B)  play a very minor role in an economy. 
C)  supply goods and services. 
D)  are the largest purchasers of resources. 
E)  set the price for goods.

Question 6

As goods and services are scarce, _____.

Accepted Answer

A)  the opportunity cost is zero 
B)  people must choose among alternatives 
C)  all human wants can be satisfied 
D)  resource prices are fixed 
E)  commodities are free 
A)  the opportunity cost is zero 
B)  people must choose among alternatives 
C)  all human wants can be satisfied 
D)  resource prices are fixed 
E)  commodities are free

Question 7

Economists employ the scientific method to help explain economic behavior. In part, this means that:

Accepted Answer

A)  there is a single economic theory accepted by all economists. 
B)  economic hypotheses are tested to determine their validity. 
C)  all economic laws have been proven true by laboratory tests. 
D)  personal values never enter into economic policy recommendations. 
E)  assumptions are not necessary in economics. 
A)  there is a single economic theory accepted by all economists. 
B)  economic hypotheses are tested to determine their validity. 
C)  all economic laws have been proven true by laboratory tests. 
D)  personal values never enter into economic policy recommendations. 
E)  assumptions are not necessary in economics.

Question 8

The "other-things-constant" assumption:

Accepted Answer

A)  allows an economist to make useful predictions. 
B)  is a prediction. 
C)  applies only to consumers' decisions and not to those of firms. 
D)  forces an economist to ignore reality, where things are constantly changing. 
E)  implies rational self-interest on the part of all economic actors. 
A)  allows an economist to make useful predictions. 
B)  is a prediction. 
C)  applies only to consumers' decisions and not to those of firms. 
D)  forces an economist to ignore reality, where things are constantly changing. 
E)  implies rational self-interest on the part of all economic actors.

Question 9

Exhibit 1.2
  
-Refer to the circular-flow model in Exhibit 1.2. The flow from firms to product markets is:

Accepted Answer

A)  goods and services. 
B)  products. 
C)  labor, capital, natural resources, and entrepreneurial ability. 
D)  resources. 
E)  wages, interest, rent, and profit. 
A)  goods and services. 
B)  products. 
C)  labor, capital, natural resources, and entrepreneurial ability. 
D)  resources. 
E)  wages, interest, rent, and profit.

Question 10

The difference between positive economic statements and normative economic statements is that:

Accepted Answer

A)  positive statements are based on opinion, while normative statements are always true. 
B)  positive statements are based on opinion, while normative statements are based on fact. 
C)  positive statements are true and normative statements are often false. 
D)  positive statements are often false and normative statements are true. 
E)  positive statements are based on fact, while normative statements are based on opinion. 
A)  positive statements are based on opinion, while normative statements are always true. 
B)  positive statements are based on opinion, while normative statements are based on fact. 
C)  positive statements are true and normative statements are often false. 
D)  positive statements are often false and normative statements are true. 
E)  positive statements are based on fact, while normative statements are based on opinion.

Question 11

As a scientist, an economist's main professional objective is to become wealthy.

Accepted Answer

A) True 
 B)False

Question 12

Sources of confusion in economic analysis include:

Accepted Answer

A)  fallacy of segmentation. 
B)  mistake of ignoring secondary effects. 
C)  rational self-interest. 
D)  telling stories. 
E)  making positive economic statements. 
A)  fallacy of segmentation. 
B)  mistake of ignoring secondary effects. 
C)  rational self-interest. 
D)  telling stories. 
E)  making positive economic statements.

Question 13

Exhibit 1.3
  
-Refer to Exhibit 1.3 of the Scientific Method: Step-by-Step. Step 3 is:

Accepted Answer

A)  Identify the question and define relevant variables. 
B)  Test the hypothesis. 
C)  Formulate a hypothesis. 
D)  Specify assumptions. 
E)  Use the hypothesis until a better one shows up. 
A)  Identify the question and define relevant variables. 
B)  Test the hypothesis. 
C)  Formulate a hypothesis. 
D)  Specify assumptions. 
E)  Use the hypothesis until a better one shows up.

Question 14

Rent is the payment received by resource owners for the use of their natural resources.

Accepted Answer

A) True 
 B)False

Question 15

Exhibit 1.1
  
-Refer to the circular-flow model in Exhibit 1.1. If box D represents firms, then box C represents:

Accepted Answer

A)  firms. 
B)  resource markets. 
C)  households. 
D)  product markets. 
E)  expenditures. 
A)  firms. 
B)  resource markets. 
C)  households. 
D)  product markets. 
E)  expenditures.

Question 16

Economists believe that:

Accepted Answer

A)  people who choose to promote the interests of others cannot be acting rationally. 
B)  people show concern only for those whom they know personally. 
C)  charitable donations would disappear if tax deductions for charitable giving were eliminated. 
D)  the notion of self-interest rules out concern for others. 
E)  concern for the welfare of others is consistent with the concept of self-interest. 
A)  people who choose to promote the interests of others cannot be acting rationally. 
B)  people show concern only for those whom they know personally. 
C)  charitable donations would disappear if tax deductions for charitable giving were eliminated. 
D)  the notion of self-interest rules out concern for others. 
E)  concern for the welfare of others is consistent with the concept of self-interest.

Question 17

In economics, capital is defined as:

Accepted Answer

A)  natural resources, such as water, oil, and iron ore. 
B)  the number of people in the labor force. 
C)  all human creations used to produce goods and services. 
D)  the money exchanged in the underground economy. 
E)  the willingness of business owners to take risks. 
A)  natural resources, such as water, oil, and iron ore. 
B)  the number of people in the labor force. 
C)  all human creations used to produce goods and services. 
D)  the money exchanged in the underground economy. 
E)  the willingness of business owners to take risks.

Question 18

An economic theory:

Accepted Answer

A)  distorts reality in all its complexity. 
B)  is based on normative statements. 
C)  focuses on the unique aspects of each situation. 
D)  is a simplification of reality. 
E)  bears no relation to reality. 
A)  distorts reality in all its complexity. 
B)  is based on normative statements. 
C)  focuses on the unique aspects of each situation. 
D)  is a simplification of reality. 
E)  bears no relation to reality.

Question 19

Labor and capital are exchanged in the resource market.

Accepted Answer

A) True 
 B)False

Question 20

Rational choice implies:

Accepted Answer

A)  the use of an economic model. 
B)  making decisions aimed at achieving some predetermined goal. 
C)  that only monetary costs and benefits are weighed. 
D)  that the individual will never regret any action taken. 
E)  that scarcity can be eliminated for that individual. 
A)  the use of an economic model. 
B)  making decisions aimed at achieving some predetermined goal. 
C)  that only monetary costs and benefits are weighed. 
D)  that the individual will never regret any action taken. 
E)  that scarcity can be eliminated for that individual.

Exhibit 1.1 -Refer to the circular-flow model in Exhibit 1.1. Box B represents:

Which of the following is not classified as physical capital by economists?

Economics:

Table 1.1 Table 1.1 Hours Revenue 1 10 2 20 3 30 4 40 5 50 -Refer to Table 1.1. What is Sergio's marginal benefit if he tutors for three hours instead of two hours?

Households:

As goods and services are scarce, _____.

Economists employ the scientific method to help explain economic behavior. In part, this means that:

The "other-things-constant" assumption:

Exhibit 1.2 -Refer to the circular-flow model in Exhibit 1.2. The flow from firms to product markets is:

The difference between positive economic statements and normative economic statements is that:

As a scientist, an economist's main professional objective is to become wealthy.

Sources of confusion in economic analysis include:

Exhibit 1.3 -Refer to Exhibit 1.3 of the Scientific Method: Step-by-Step. Step 3 is:

Rent is the payment received by resource owners for the use of their natural resources.

Exhibit 1.1 -Refer to the circular-flow model in Exhibit 1.1. If box D represents firms, then box C represents:

Economists believe that:

In economics, capital is defined as:

An economic theory:

Labor and capital are exchanged in the resource market.

Rational choice implies:

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters

Exam 1: The Art and Science of Economic Analysis.

Exhibit 1.1 -Refer to the circular-flow model in Exhibit 1.1. Box B represents:

Which of the following is not classified as physical capital by economists?

Economics:

Table 1.1 Table 1.1 Hours Revenue 1 10 2 20 3 30 4 40 5 50 -Refer to Table 1.1. What is Sergio's marginal benefit if he tutors for three hours instead of two hours?

Households:

As goods and services are scarce, _____.

Economists employ the scientific method to help explain economic behavior. In part, this means that:

The "other-things-constant" assumption:

Exhibit 1.2 -Refer to the circular-flow model in Exhibit 1.2. The flow from firms to product markets is:

The difference between positive economic statements and normative economic statements is that:

As a scientist, an economist's main professional objective is to become wealthy.

Sources of confusion in economic analysis include:

Exhibit 1.3 -Refer to Exhibit 1.3 of the Scientific Method: Step-by-Step. Step 3 is:

Rent is the payment received by resource owners for the use of their natural resources.

Exhibit 1.1 -Refer to the circular-flow model in Exhibit 1.1. If box D represents firms, then box C represents:

Economists believe that:

In economics, capital is defined as:

An economic theory:

Labor and capital are exchanged in the resource market.

Rational choice implies:

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters