Question 1

The statement "The unemployment rate in the U.S.was 5 percent last month" is

Accepted Answer

A) a value judgment 
B) an economic opinion 
C) a normative statement 
D) a positive statement 
E) totally beyond anything that should be permitted by modern society 
A) a value judgment 
B) an economic opinion 
C) a normative statement 
D) a positive statement 
E) totally beyond anything that should be permitted by modern society

Question 2

Land,labor,and money are the three categories of economic resources.

Accepted Answer

A) True 
 B)False

Question 3

The best economic theory is the one

Accepted Answer

A) whose assumptions most closely match reality 
B) that yields the most accurate predictions 
C) that most simply represents reality 
D) that most closely matches the conscious behavior of economic decision makers 
E) that includes the most details 
A) whose assumptions most closely match reality 
B) that yields the most accurate predictions 
C) that most simply represents reality 
D) that most closely matches the conscious behavior of economic decision makers 
E) that includes the most details

Question 4

A statement of fact that can be verified by observation is

Accepted Answer

A) an abstraction 
B) a positive statement 
C) a normative statement 
D) a philosophical conundrum 
E) the basis of an assumption 
A) an abstraction 
B) a positive statement 
C) a normative statement 
D) a philosophical conundrum 
E) the basis of an assumption

Question 5

For an individual,opportunity costs

Accepted Answer

A) decrease as consumption increases. 
B) include only the monetary costs of goods and services. 
C) reflect resource scarcity. 
D) reflect the fact that wants are unlimited. 
E) reflect the fundamental assumption that "more is better." 
A) decrease as consumption increases. 
B) include only the monetary costs of goods and services. 
C) reflect resource scarcity. 
D) reflect the fact that wants are unlimited. 
E) reflect the fundamental assumption that "more is better."

Question 6

Suppose your friends take you out for dinner on your birthday and you have a much better time than you would have had doing anything else.There is still an opportunity cost,even though they will not let you pay for anything.

Accepted Answer

A) True 
 B)False

Question 7

Suppose you start your own company making T-shirts that commemorate campus sporting events.An example of the resource capital would be

Accepted Answer

A) the factory you created in a building you are leasing 
B) your time and effort used to produce T-shirts 
C) the entire campus,since the demand for T-shirts is obtained from campus students 
D) the athletic facilities,since the athletic teams generate sporting events advertised on the T-shirts 
E) your creative designs used to commemorate different sporting events 
A) the factory you created in a building you are leasing 
B) your time and effort used to produce T-shirts 
C) the entire campus,since the demand for T-shirts is obtained from campus students 
D) the athletic facilities,since the athletic teams generate sporting events advertised on the T-shirts 
E) your creative designs used to commemorate different sporting events

Question 8

Which of the following is a characteristic of entrepreneurship?

Accepted Answer

A) the ability to navigate bodies of water 
B) it is produced using physical capital 
C) it is used up quickly in the production process 
D) it is a pre-existing resource like land 
E) it is associated with risk taking and innovation 
A) the ability to navigate bodies of water 
B) it is produced using physical capital 
C) it is used up quickly in the production process 
D) it is a pre-existing resource like land 
E) it is associated with risk taking and innovation

Question 9

An economic model is

Accepted Answer

A) a concrete representation of reality 
B) as close to reality as possible 
C) too abstract to be useful when assumptions are involved 
D) unrelated to reality 
E) an abstract representation of reality 
A) a concrete representation of reality 
B) as close to reality as possible 
C) too abstract to be useful when assumptions are involved 
D) unrelated to reality 
E) an abstract representation of reality

Question 10

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 11

The study of economics would be superfluous if __________ did not exist.

Accepted Answer

A) demand 
B) capital 
C) corporations 
D) profit 
E) scarcity 
A) demand 
B) capital 
C) corporations 
D) profit 
E) scarcity

Question 12

Consider an economic model designed to analyze the behavior of business firms.An assumption that the goal of the firms is to maximize profit would be

Accepted Answer

A) a simplifying assumption 
B) a critical assumption 
C) an abstraction from reality 
D) an unnecessary detail 
E) irrelevant to the conclusions of the model 
A) a simplifying assumption 
B) a critical assumption 
C) an abstraction from reality 
D) an unnecessary detail 
E) irrelevant to the conclusions of the model

Question 13

The unemployment rate for the economy as a whole is a(n)

Accepted Answer

A) normative value judgment 
B) positive value judgment 
C) microeconomic statistic 
D) macroeconomic statistic 
E) example of an economic model 
A) normative value judgment 
B) positive value judgment 
C) microeconomic statistic 
D) macroeconomic statistic 
E) example of an economic model

Question 14

The distinction between positive and normative economics

Accepted Answer

A) is that positive economics applies only to microeconomic problems 
B) is that normative economics applies only to microeconomic problems 
C) is the difference between an assumption and a conclusion 
D) helps us understand why economists sometimes disagree with one another 
E) explains why economics is not a social science 
A) is that positive economics applies only to microeconomic problems 
B) is that normative economics applies only to microeconomic problems 
C) is the difference between an assumption and a conclusion 
D) helps us understand why economists sometimes disagree with one another 
E) explains why economics is not a social science

Question 15

Which of the following is the best example of physical capital used to produce a textbook?

Accepted Answer

A) the expertise and writing ability of the author 
B) the ink used in the printing press 
C) the printing press 
D) the property on which the publisher's office is located 
E) the time spent by editors reviewing the textbook 
A) the expertise and writing ability of the author 
B) the ink used in the printing press 
C) the printing press 
D) the property on which the publisher's office is located 
E) the time spent by editors reviewing the textbook

Question 16

Understanding the distinction between positive and normative economic statements is important because it

Accepted Answer

A) enables us to derive better forecasts of macroeconomic aggregates such as GDP 
B) explains why economics is not a physical science 
C) is the primary distinction between macroeconomics and microeconomics 
D) provides a framework for understanding differences among economists 
E) enables us to see the rationale behind economic models 
A) enables us to derive better forecasts of macroeconomic aggregates such as GDP 
B) explains why economics is not a physical science 
C) is the primary distinction between macroeconomics and microeconomics 
D) provides a framework for understanding differences among economists 
E) enables us to see the rationale behind economic models

Question 17

Even if economic theory is based on positive analysis,economists may still disagree with each other because

Accepted Answer

A) economists tend to have excessive self-interest 
B) they ignore politics 
C) they are opinionated 
D) they may have different values,like everyone else 
E) they try to be right all the time 
A) economists tend to have excessive self-interest 
B) they ignore politics 
C) they are opinionated 
D) they may have different values,like everyone else 
E) they try to be right all the time

Question 18

Physical capital differs from raw materials in the sense that raw materials

Accepted Answer

A) have a longer useful life in production 
B) are considered human capital 
C) cannot be used to produce goods and services 
D) are used up in production 
E) are not a resource used in production 
A) have a longer useful life in production 
B) are considered human capital 
C) cannot be used to produce goods and services 
D) are used up in production 
E) are not a resource used in production

Question 19

A critical assumption

Accepted Answer

A) makes an economic model a more concrete representation of reality 
B) eliminates unnecessary details from an economic model 
C) has an important impact on the conclusions of an economic model 
D) is usually implicit in an economic model 
E) increases the level of abstraction of an economic model 
A) makes an economic model a more concrete representation of reality 
B) eliminates unnecessary details from an economic model 
C) has an important impact on the conclusions of an economic model 
D) is usually implicit in an economic model 
E) increases the level of abstraction of an economic model

Question 20

An economic model can be described as

Accepted Answer

A) an abstract representation of reality 
B) a detailed description of some economic phenomenon 
C) something that is often more complex than the real-world phenomenon it represents 
D) a vehicle for making positive economic statements 
E) a vehicle for making normative economic statements 
A) an abstract representation of reality 
B) a detailed description of some economic phenomenon 
C) something that is often more complex than the real-world phenomenon it represents 
D) a vehicle for making positive economic statements 
E) a vehicle for making normative economic statements

The statement "The unemployment rate in the U.S.was 5 percent last month" is

Land,labor,and money are the three categories of economic resources.

The best economic theory is the one

A statement of fact that can be verified by observation is

For an individual,opportunity costs

Suppose your friends take you out for dinner on your birthday and you have a much better time than you would have had doing anything else.There is still an opportunity cost,even though they will not let you pay for anything.

Suppose you start your own company making T-shirts that commemorate campus sporting events.An example of the resource capital would be

Which of the following is a characteristic of entrepreneurship?

An economic model is

Because households have limited incomes,they must

The study of economics would be superfluous if __________ did not exist.

Consider an economic model designed to analyze the behavior of business firms.An assumption that the goal of the firms is to maximize profit would be

The unemployment rate for the economy as a whole is a(n)

The distinction between positive and normative economics

Which of the following is the best example of physical capital used to produce a textbook?

Understanding the distinction between positive and normative economic statements is important because it

Even if economic theory is based on positive analysis,economists may still disagree with each other because

Physical capital differs from raw materials in the sense that raw materials

A critical assumption

An economic model can be described as

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 1: What Is Economics

The statement "The unemployment rate in the U.S.was 5 percent last month" is

Land,labor,and money are the three categories of economic resources.

The best economic theory is the one

A statement of fact that can be verified by observation is

For an individual,opportunity costs

Suppose your friends take you out for dinner on your birthday and you have a much better time than you would have had doing anything else.There is still an opportunity cost,even though they will not let you pay for anything.

Suppose you start your own company making T-shirts that commemorate campus sporting events.An example of the resource capital would be

Which of the following is a characteristic of entrepreneurship?

An economic model is

Because households have limited incomes,they must

The study of economics would be superfluous if __________ did not exist.

Consider an economic model designed to analyze the behavior of business firms.An assumption that the goal of the firms is to maximize profit would be

The unemployment rate for the economy as a whole is a(n)

The distinction between positive and normative economics

Which of the following is the best example of physical capital used to produce a textbook?

Understanding the distinction between positive and normative economic statements is important because it

Even if economic theory is based on positive analysis,economists may still disagree with each other because

Physical capital differs from raw materials in the sense that raw materials

A critical assumption

An economic model can be described as

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters