Question 1

Society's core economic problem is

Accepted Answer

A) the role of government in the economy 
B) a scarcity of land,labor,and machinery to produce goods and services 
C) the federal budget deficit 
D) an unequal distribution of income 
E) low living standards 
A) the role of government in the economy 
B) a scarcity of land,labor,and machinery to produce goods and services 
C) the federal budget deficit 
D) an unequal distribution of income 
E) low living standards

Question 2

A simplifying assumption

Accepted Answer

A) affects the important conclusions of an economic model 
B) increases the level of detail in an economic model 
C) makes an economic model a more concrete representation of reality 
D) eliminates unnecessary details from an economic model 
E) limits the validity of an economic model's conclusions 
A) affects the important conclusions of an economic model 
B) increases the level of detail in an economic model 
C) makes an economic model a more concrete representation of reality 
D) eliminates unnecessary details from an economic model 
E) limits the validity of an economic model's conclusions

Question 3

Due to a scarcity of resources,

Accepted Answer

A) governments should decide what should be produced 
B) the government must decide how to allocate available resources 
C) some members of each society must live in poverty 
D) every society must choose among competing uses of available resources 
E) resource availability exceeds the possible uses for available resources 
A) governments should decide what should be produced 
B) the government must decide how to allocate available resources 
C) some members of each society must live in poverty 
D) every society must choose among competing uses of available resources 
E) resource availability exceeds the possible uses for available resources

Question 4

Which of the following explains why individuals must make choices?

Accepted Answer

A) competition among firms 
B) scarcity of resources 
C) inflation 
D) changes in the money supply 
E) conflict between positive and normative economic statements 
A) competition among firms 
B) scarcity of resources 
C) inflation 
D) changes in the money supply 
E) conflict between positive and normative economic statements

Question 5

In examining consumer behavior,one of the constraints faced by consumers is

Accepted Answer

A) happiness 
B) quantities consumed 
C) tastes and preferences 
D) entrepreneurial ability 
E) income 
A) happiness 
B) quantities consumed 
C) tastes and preferences 
D) entrepreneurial ability 
E) income

Question 6

Carl is considering attending a concert with a ticket price of $35.He estimates that the cost of driving to the concert and parking there will total an additional $20.In order to attend the concert,Carl will have to take time off from his part-time job or forgo studying for an exam scheduled for the next morning.He estimates that he will lose 5 hours at work,at a wage of $6 per hour,or 5 hours of study time.If Carl considers studying the best alternative use of his time,his opportunity cost of attending the concert equals

Accepted Answer

A) $55 
B) $55 plus the value of the higher exam grade he could earn by studying for 5 hours 
C) $85 plus the value of the higher exam grade he could earn by studying for 5 hours 
D) $85 minus the value of the higher exam grade he could earn by studying for 5 hours 
E) $55 minus the value of the higher exam grade he could earn by studying for 5 hours 
A) $55 
B) $55 plus the value of the higher exam grade he could earn by studying for 5 hours 
C) $85 plus the value of the higher exam grade he could earn by studying for 5 hours 
D) $85 minus the value of the higher exam grade he could earn by studying for 5 hours 
E) $55 minus the value of the higher exam grade he could earn by studying for 5 hours

Question 7

Normative economics deals with

Accepted Answer

A) how the economy actually works 
B) how a change in government budgets affects the price level 
C) how prices are determined in specific markets 
D) value judgments 
E) the historical growth of an economy 
A) how the economy actually works 
B) how a change in government budgets affects the price level 
C) how prices are determined in specific markets 
D) value judgments 
E) the historical growth of an economy

Question 8

Which of the following is most closely associated with positive economics?

Accepted Answer

A) determining the impact of government spending on the actual level of total employment 
B) determining the best level of immigration into the country 
C) determining whether too many luxury goods are being produced 
D) determining whether the government should reduce poverty 
E) determining whether the government should alter income taxes in order to increase total employment 
A) determining the impact of government spending on the actual level of total employment 
B) determining the best level of immigration into the country 
C) determining whether too many luxury goods are being produced 
D) determining whether the government should reduce poverty 
E) determining whether the government should alter income taxes in order to increase total employment

Question 9

How retail gasoline stations behave in a local market is an example of a macroeconomic issue.

Accepted Answer

A) True 
 B)False

Question 10

The statement that "at 10 percent,the interest rate is too high for families to buy the home they deserve," is a(n)

Accepted Answer

A) positive statement 
B) normative statement 
C) morally ambiguous philosophical position 
D) affront to the American dream 
E) value judgment 
A) positive statement 
B) normative statement 
C) morally ambiguous philosophical position 
D) affront to the American dream 
E) value judgment

Question 11

An assumption that makes an economic model simpler without affecting its conclusions in important ways is

Accepted Answer

A) an indication of a positive assumption 
B) an efficient assumption 
C) useful in disguising the valid conclusions 
D) a simplifying assumption 
E) a critical assumption 
A) an indication of a positive assumption 
B) an efficient assumption 
C) useful in disguising the valid conclusions 
D) a simplifying assumption 
E) a critical assumption

Question 12

An economist would refer to an oil deposit as which type of resource?

Accepted Answer

A) land 
B) labor 
C) human capital 
D) physical capital 
E) entrepreneurship 
A) land 
B) labor 
C) human capital 
D) physical capital 
E) entrepreneurship

Question 13

The objective of an economic model is to

Accepted Answer

A) be an accurate description of reality 
B) yield better understanding of important relationships 
C) use simplifying assumptions to make positive economic statements 
D) use basic principles of economics to derive fundamental assumptions about human behavior 
E) predict real-world occurrences with complete accuracy 
A) be an accurate description of reality 
B) yield better understanding of important relationships 
C) use simplifying assumptions to make positive economic statements 
D) use basic principles of economics to derive fundamental assumptions about human behavior 
E) predict real-world occurrences with complete accuracy

Question 14

The opportunity cost of any activity can be measured by the

Accepted Answer

A) value of the best alternative to that activity 
B) price (or monetary costs)of the activity 
C) level of technology 
D) time needed to select among various alternatives 
E) fringe benefits associated with the activity 
A) value of the best alternative to that activity 
B) price (or monetary costs)of the activity 
C) level of technology 
D) time needed to select among various alternatives 
E) fringe benefits associated with the activity

Question 15

The opportunity cost of an economic action is

Accepted Answer

A) the value of the next best alternative that must be sacrificed 
B) an issue in normative economic theory 
C) the expense for the resources used plus the firm's profit 
D) the out-of-pocket cost 
E) the option to pay a reduced fee for the action 
A) the value of the next best alternative that must be sacrificed 
B) an issue in normative economic theory 
C) the expense for the resources used plus the firm's profit 
D) the out-of-pocket cost 
E) the option to pay a reduced fee for the action

Question 16

Scarcity means that society must make

Accepted Answer

A) goods 
B) services 
C) natural resources 
D) output 
E) choices 
A) goods 
B) services 
C) natural resources 
D) output 
E) choices

Question 17

Positive economics deals with

Accepted Answer

A) theories about improving people's self-esteem 
B) practical ways of improving people's self-esteem by making money 
C) opinions that affirm economists' theories 
D) statements about the way things ought to be 
E) statements of fact 
A) theories about improving people's self-esteem 
B) practical ways of improving people's self-esteem by making money 
C) opinions that affirm economists' theories 
D) statements about the way things ought to be 
E) statements of fact

Question 18

The Congressional Budget Office and the Office of Management and Budget each produce deficit forecasts for a fiscal year.They use models that are mostly similar but have notable differences.As such,the disagreements are likely usually over

Accepted Answer

A) normative issues 
B) positive issues 
C) the mathematical calculations in an economic model 
D) whether microeconomics or macroeconomics is more important 
E) whether economic theory is useful in explaining the behavior of actors in the economy 
A) normative issues 
B) positive issues 
C) the mathematical calculations in an economic model 
D) whether microeconomics or macroeconomics is more important 
E) whether economic theory is useful in explaining the behavior of actors in the economy

Society's core economic problem is

A simplifying assumption

Due to a scarcity of resources,

Which of the following explains why individuals must make choices?

In examining consumer behavior,one of the constraints faced by consumers is

Normative economics deals with

Which of the following is most closely associated with positive economics?

How retail gasoline stations behave in a local market is an example of a macroeconomic issue.

The statement that "at 10 percent,the interest rate is too high for families to buy the home they deserve," is a(n)

An assumption that makes an economic model simpler without affecting its conclusions in important ways is

An economist would refer to an oil deposit as which type of resource?

The objective of an economic model is to

The opportunity cost of any activity can be measured by the

The opportunity cost of an economic action is

Scarcity means that society must make

Positive economics deals with

The Congressional Budget Office and the Office of Management and Budget each produce deficit forecasts for a fiscal year.They use models that are mostly similar but have notable differences.As such,the disagreements are likely usually over

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

Society's core economic problem is

A simplifying assumption

Due to a scarcity of resources,

Which of the following explains why individuals must make choices?

In examining consumer behavior,one of the constraints faced by consumers is

Normative economics deals with

Which of the following is most closely associated with positive economics?

How retail gasoline stations behave in a local market is an example of a macroeconomic issue.

The statement that "at 10 percent,the interest rate is too high for families to buy the home they deserve," is a(n)

An assumption that makes an economic model simpler without affecting its conclusions in important ways is

An economist would refer to an oil deposit as which type of resource?

The objective of an economic model is to

The opportunity cost of any activity can be measured by the

The opportunity cost of an economic action is

Scarcity means that society must make

Positive economics deals with

The Congressional Budget Office and the Office of Management and Budget each produce deficit forecasts for a fiscal year.They use models that are mostly similar but have notable differences.As such,the disagreements are likely usually over

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