Question 1

When economists use the term ceteris paribus,they are indicating that

Accepted Answer

A) the relationship between two economic variables cannot be determined. 
B) the analysis is true for the individual but not for the economy as a whole. 
C) all other variables except the ones specified are assumed to be constant. 
D) their conclusions are based on normative economics rather than positive economic analysis. 
A) the relationship between two economic variables cannot be determined. 
B) the analysis is true for the individual but not for the economy as a whole. 
C) all other variables except the ones specified are assumed to be constant. 
D) their conclusions are based on normative economics rather than positive economic analysis.

Question 2

Which of the following is true?

Accepted Answer

A) Changes in personal costs and benefits will exert a predictable influence on the choices of people. 
B) If one individual gains from an economic activity,then someone else must lose. 
C) If a good is provided free to an individual by government,its production will not consume valuable scarce resources. 
D) If the intentions behind a policy are good,you can be assured that the outcome will be desirable. 
A) Changes in personal costs and benefits will exert a predictable influence on the choices of people. 
B) If one individual gains from an economic activity,then someone else must lose. 
C) If a good is provided free to an individual by government,its production will not consume valuable scarce resources. 
D) If the intentions behind a policy are good,you can be assured that the outcome will be desirable.

Question 3

If you win the lottery this would be great for you,but if everyone simultaneously won the lottery this wouldn't be nearly as good,why?

Accepted Answer

A) association is not causation 
B) it is a violation of ceteris paribus 
C) the fallacy of composition 
D) what appear to be positive outcomes in society are actually normative. 
A) association is not causation 
B) it is a violation of ceteris paribus 
C) the fallacy of composition 
D) what appear to be positive outcomes in society are actually normative.

Question 4

The decision makers described by economic analysis

Accepted Answer

A) economize when seeking information. 
B) must have essentially perfect knowledge to make choices. 
C) will seek as much information as they can get. 
D) generally ignore the cost of seeking information. 
A) economize when seeking information. 
B) must have essentially perfect knowledge to make choices. 
C) will seek as much information as they can get. 
D) generally ignore the cost of seeking information.

Question 5

A tradeoff exists between a clean environment and a higher level of income in that

Accepted Answer

A) studies show that individuals with higher levels of income actually pollute less than low-income individuals. 
B) efforts to reduce pollution typically are not completely successful. 
C) laws that reduce pollution raise costs of production and reduce incomes. 
D) by employing individuals to clean up pollution,employment and income both rise. 
A) studies show that individuals with higher levels of income actually pollute less than low-income individuals. 
B) efforts to reduce pollution typically are not completely successful. 
C) laws that reduce pollution raise costs of production and reduce incomes. 
D) by employing individuals to clean up pollution,employment and income both rise.

Question 6

Which of the following is most consistent with economizing behavior?

Accepted Answer

A) If you get the same satisfaction from a hamburger and a fish sandwich,you should purchase the one that costs the most. 
B) Even if you know how to paint,hiring someone to do the job is consistent with economizing behavior,if your opportunity cost is high enough. 
C) If the government provides a good free to citizens,the opportunity cost of the good is zero. 
D) If you get the same satisfaction from going to the opera and going to an art museum,it makes no difference which you choose. 
A) If you get the same satisfaction from a hamburger and a fish sandwich,you should purchase the one that costs the most. 
B) Even if you know how to paint,hiring someone to do the job is consistent with economizing behavior,if your opportunity cost is high enough. 
C) If the government provides a good free to citizens,the opportunity cost of the good is zero. 
D) If you get the same satisfaction from going to the opera and going to an art museum,it makes no difference which you choose.

Question 7

Which of the following groups would most likely benefit from a law that is extremely tough on those who drink and drive?

Accepted Answer

A) truck drivers 
B) taxi drivers 
C) bartenders 
D) doctors and nurses 
A) truck drivers 
B) taxi drivers 
C) bartenders 
D) doctors and nurses

Question 8

The fact that some people love tomatoes while others dislike them illustrates that

Accepted Answer

A) the value of a good is subjective. 
B) the value created by a good does not depend on who consumes it. 
C) the value of a tomato cannot be determined by the person consuming it. 
D) tomatoes have a value that is determined by their cost of production rather than by the value to the consumer of the tomatoes. 
A) the value of a good is subjective. 
B) the value created by a good does not depend on who consumes it. 
C) the value of a tomato cannot be determined by the person consuming it. 
D) tomatoes have a value that is determined by their cost of production rather than by the value to the consumer of the tomatoes.

Question 9

Which of the following represents a normative statement?

Accepted Answer

A) Incentives matter. 
B) The temperature in this room is 120 degrees. 
C) It is too hot in this room. 
D) People will buy less butter at $1.50 per pound than they will at $1.00 per pound. 
A) Incentives matter. 
B) The temperature in this room is 120 degrees. 
C) It is too hot in this room. 
D) People will buy less butter at $1.50 per pound than they will at $1.00 per pound.

Question 10

Economics is primarily the study of

Accepted Answer

A) why people like to make money. 
B) the management of a business. 
C) the choices people make as the result of scarcity. 
D) how to make money in the stock market. 
A) why people like to make money. 
B) the management of a business. 
C) the choices people make as the result of scarcity. 
D) how to make money in the stock market.

Question 11

The unintended consequences of an economic change that are not immediately identifiable but are felt only with time are known in economics as

Accepted Answer

A) opportunity costs. 
B) marginal effects. 
C) secondary effects. 
D) scarcity constraints. 
A) opportunity costs. 
B) marginal effects. 
C) secondary effects. 
D) scarcity constraints.

Question 12

By scientific method we mean

Accepted Answer

A) the use of modern electronic testing equipment to understand the world. 
B) the dispassionate development and testing of theories about how the world works. 
C) the use of controlled laboratory experiments to understand the way the world works. 
D) finding evidence to support preconceived theories about how the world works. 
A) the use of modern electronic testing equipment to understand the world. 
B) the dispassionate development and testing of theories about how the world works. 
C) the use of controlled laboratory experiments to understand the way the world works. 
D) finding evidence to support preconceived theories about how the world works.

Question 13

Economics is primarily the study of

Accepted Answer

A) how to make money in the stock market. 
B) how to find lower cost methods of production. 
C) the choices we must make among alternatives because of scarcity. 
D) the proper form of industrial structure for the United States. 
A) how to make money in the stock market. 
B) how to find lower cost methods of production. 
C) the choices we must make among alternatives because of scarcity. 
D) the proper form of industrial structure for the United States.

Question 14

Which of the following is not scarce?

Accepted Answer

A) an individual's time 
B) air 
C) pencils 
D) automobiles 
A) an individual's time 
B) air 
C) pencils 
D) automobiles

Question 15

For the typical student,taking an introductory course in economics should

Accepted Answer

A) turn the student into an economist. 
B) teach the student solutions to most social problems. 
C) teach the student how to answer complex social questions. 
D) help the student learn to rationally analyze social problems. 
E) All of the above are correct. 
A) turn the student into an economist. 
B) teach the student solutions to most social problems. 
C) teach the student how to answer complex social questions. 
D) help the student learn to rationally analyze social problems. 
E) All of the above are correct.

Question 16

The economic way of thinking stresses that

Accepted Answer

A) changes in personal costs and benefits generally fail to exert much impact on behavior. 
B) incentives matter--individuals respond in predictable ways to changes in personal costs and benefits. 
C) if one individual gains from an economic activity,then someone else must lose and in the same proportion. 
D) if a good is provided by the government,its production will not consume valuable scarce resources. 
A) changes in personal costs and benefits generally fail to exert much impact on behavior. 
B) incentives matter--individuals respond in predictable ways to changes in personal costs and benefits. 
C) if one individual gains from an economic activity,then someone else must lose and in the same proportion. 
D) if a good is provided by the government,its production will not consume valuable scarce resources.

Question 17

What do economists mean when they state that a good is scarce?

Accepted Answer

A) There is a shortage or insufficient supply of the good at the existing price. 
B) It is impossible to expand the availability of the good beyond the current amount. 
C) People will want to buy more of the good regardless of the price of the good. 
D) The amount of the good that people would like exceeds the supply freely available from nature. 
A) There is a shortage or insufficient supply of the good at the existing price. 
B) It is impossible to expand the availability of the good beyond the current amount. 
C) People will want to buy more of the good regardless of the price of the good. 
D) The amount of the good that people would like exceeds the supply freely available from nature.

Question 18

The expression "There's no such thing as a free lunch" means

Accepted Answer

A) if one person gains,someone else must lose. 
B) each person must pay for exactly what he or she receives. 
C) the use of resources to produce a good has an opportunity cost because of scarcity. 
D) you cannot have a free lunch at the expense of someone else. 
A) if one person gains,someone else must lose. 
B) each person must pay for exactly what he or she receives. 
C) the use of resources to produce a good has an opportunity cost because of scarcity. 
D) you cannot have a free lunch at the expense of someone else.

Question 19

The economic way of thinking stresses that

Accepted Answer

A) greed is the primary motivation for human action. 
B) only material goods lead to happiness. 
C) an objective value can be attached to physical goods. 
D) as the cost of an option increases,people will be less likely to choose that option. 
A) greed is the primary motivation for human action. 
B) only material goods lead to happiness. 
C) an objective value can be attached to physical goods. 
D) as the cost of an option increases,people will be less likely to choose that option.

Question 20

Which of the following is true?

Accepted Answer

A) Scarcity and poverty are basically the same thing. 
B) Poverty implies that some basic level of need has not been attained. 
C) Scarcity is the result of prices being set too high. 
D) All of the above are true. 
A) Scarcity and poverty are basically the same thing. 
B) Poverty implies that some basic level of need has not been attained. 
C) Scarcity is the result of prices being set too high. 
D) All of the above are true.

Exam 1: The Economic Approach

When economists use the term ceteris paribus,they are indicating that

Which of the following is true?

If you win the lottery this would be great for you,but if everyone simultaneously won the lottery this wouldn't be nearly as good,why?

The decision makers described by economic analysis

A tradeoff exists between a clean environment and a higher level of income in that

Which of the following is most consistent with economizing behavior?

Which of the following groups would most likely benefit from a law that is extremely tough on those who drink and drive?

The fact that some people love tomatoes while others dislike them illustrates that

Which of the following represents a normative statement?

Economics is primarily the study of

The unintended consequences of an economic change that are not immediately identifiable but are felt only with time are known in economics as

By scientific method we mean

Economics is primarily the study of

Which of the following is not scarce?

For the typical student,taking an introductory course in economics should

The economic way of thinking stresses that

What do economists mean when they state that a good is scarce?

The expression "There's no such thing as a free lunch" means

The economic way of thinking stresses that

Which of the following is true?

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

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