Question 1

Which of the following best illustrates the fallacy of composition?

Accepted Answer

A) If Mr.Johnson had more money,he could afford to buy more goods. 
B) If Ms.Dawes stood up at a basketball game,she could get a better view of the game;if everyone stood up at a basketball game,everyone could have a better view of the game. 
C) If the price of bread rose,consumers would buy less;if consumers bought less bread,the price of bread would rise. 
D) High housing prices cause people to buy less housing,but an increase in income might cause them to buy more housing. 
A) If Mr.Johnson had more money,he could afford to buy more goods. 
B) If Ms.Dawes stood up at a basketball game,she could get a better view of the game;if everyone stood up at a basketball game,everyone could have a better view of the game. 
C) If the price of bread rose,consumers would buy less;if consumers bought less bread,the price of bread would rise. 
D) High housing prices cause people to buy less housing,but an increase in income might cause them to buy more housing.

Question 2

The highest valued alternative option that must be given up in order to choose an action is called its

Accepted Answer

A) utility. 
B) opportunity cost. 
C) capital. 
D) ceteris paribus 
A) utility. 
B) opportunity cost. 
C) capital. 
D) ceteris paribus

Question 3

"Mediocre economists often consider only the immediate apparent effects of a change,whereas a good economist will also consider effects that may only become observable over time." This statement most clearly emphasizes

Accepted Answer

A) the fallacy of composition. 
B) economizing behavior. 
C) the importance of secondary effects. 
D) the fact that association is not causation. 
A) the fallacy of composition. 
B) economizing behavior. 
C) the importance of secondary effects. 
D) the fact that association is not causation.

Question 4

The economizing problem is essentially one of deciding how to make the best use of

Accepted Answer

A) limited resources to satisfy limited wants. 
B) unlimited resources to satisfy limited wants. 
C) limited resources to satisfy virtually unlimited wants. 
D) unlimited resources to satisfy unlimited wants. 
A) limited resources to satisfy limited wants. 
B) unlimited resources to satisfy limited wants. 
C) limited resources to satisfy virtually unlimited wants. 
D) unlimited resources to satisfy unlimited wants.

Question 5

The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year.The head of a local labor union states that wage gains should have been higher.The Secretary's statement is a(n)____ economic statement,and the labor head's statement is a(n)____ economic statement.

Accepted Answer

A) normative;normative 
B) normative;positive 
C) positive;normative 
D) positive;positive 
E) proper;improper 
A) normative;normative 
B) normative;positive 
C) positive;normative 
D) positive;positive 
E) proper;improper

Question 6

Which of the following are NOT scarce?

Accepted Answer

A) time for leisure activities 
B) computers 
C) compact discs 
D) the air we breathe 
A) time for leisure activities 
B) computers 
C) compact discs 
D) the air we breathe

Question 7

If people are self-interested,why does anyone give money to public radio?

Accepted Answer

Since people can listen to public radio

Question 8

Which of the following is part of the economic way of thinking?

Accepted Answer

A) Opportunity costs will always be incurred when scarce resources are used to produce a good. 
B) When the cost of an option increases,individuals will be less likely to choose it. 
C) In addition to their immediate direct effects,economic actions often generate secondary effects that are observable only after the passage of time. 
D) All of the above are part of the economic way of thinking. 
A) Opportunity costs will always be incurred when scarce resources are used to produce a good. 
B) When the cost of an option increases,individuals will be less likely to choose it. 
C) In addition to their immediate direct effects,economic actions often generate secondary effects that are observable only after the passage of time. 
D) All of the above are part of the economic way of thinking.

Question 9

Which of the following is true of resources?

Accepted Answer

A) Resources are inputs used to produce goods and services. 
B) Human resources reflect the skills and productive knowledge of human beings. 
C) With the passage of time,investment activities can increase the availability of resources. 
D) All of the above are true. 
A) Resources are inputs used to produce goods and services. 
B) Human resources reflect the skills and productive knowledge of human beings. 
C) With the passage of time,investment activities can increase the availability of resources. 
D) All of the above are true.

Question 10

When an economist states a good is scarce,she means that

Accepted Answer

A) production cannot expand the availability of the good. 
B) it is rare. 
C) desire for the good exceeds the amount that is freely available from nature. 
D) people would want to purchase more of the good at any price. 
A) production cannot expand the availability of the good. 
B) it is rare. 
C) desire for the good exceeds the amount that is freely available from nature. 
D) people would want to purchase more of the good at any price.

Exam 1: The Economic Approach

Which of the following best illustrates the fallacy of composition?

The highest valued alternative option that must be given up in order to choose an action is called its

"Mediocre economists often consider only the immediate apparent effects of a change,whereas a good economist will also consider effects that may only become observable over time." This statement most clearly emphasizes

The economizing problem is essentially one of deciding how to make the best use of

The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year.The head of a local labor union states that wage gains should have been higher.The Secretary's statement is a(n)____ economic statement,and the labor head's statement is a(n)____ economic statement.

Which of the following are NOT scarce?

If people are self-interested,why does anyone give money to public radio?

Which of the following is part of the economic way of thinking?

Which of the following is true of resources?

When an economist states a good is scarce,she means that

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Institutions,policies,and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

Filters

The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year.The head of a local labor union states that wage gains should have been higher.The Secretary's statement is a(n) economic statement,and the labor head's statement is a(n) economic statement.