Question 1

Why might raising the price of a good by a dollar lead to higher profits?

Accepted Answer

If the extra profit margin mad

Question 2

A market

Accepted Answer

A)  always involves the personal exchange of goods for money. 
B)  allows interactions between consumers and firms. 
C)  always takes place at a physical location. 
D)  has no influence on prices. 
A)  always involves the personal exchange of goods for money. 
B)  allows interactions between consumers and firms. 
C)  always takes place at a physical location. 
D)  has no influence on prices.

Question 3

Profit is

Accepted Answer

A)  maximized when the marketing department coordinates with the production department. 
B)  maximized when revenue is maximized. 
C)  used to beat a company's rivals. 
D)  the difference between a firm's revenues and its costs. 
A)  maximized when the marketing department coordinates with the production department. 
B)  maximized when revenue is maximized. 
C)  used to beat a company's rivals. 
D)  the difference between a firm's revenues and its costs.

Question 4

A firm's managers are constrained by

Accepted Answer

A)  consumers. 
B)  workers. 
C)  government. 
D)  All of the above. 
A)  consumers. 
B)  workers. 
C)  government. 
D)  All of the above.

Question 5

Economic models are most often tested

Accepted Answer

A)  using computer simulations. 
B)  using data from the distant past. 
C)  using data from the real world. 
D)  using logic alone. 
A)  using computer simulations. 
B)  using data from the distant past. 
C)  using data from the real world. 
D)  using logic alone.

Question 6

Explain why economists might disagree on the content of a model.

Accepted Answer

Economists might hav

Question 7

A microeconomic model CANNOT be used to

Accepted Answer

A)  evaluate the impact of a price change on a firm's revenue. 
B)  predict the impact of an increase in the minimum wage on unemployment. 
C)  evaluate the fairness of a proposal to nationalize health insurance. 
D)  evaluate the effect of an increase in stadium size on the price of a sport team's tickets. 
A)  evaluate the impact of a price change on a firm's revenue. 
B)  predict the impact of an increase in the minimum wage on unemployment. 
C)  evaluate the fairness of a proposal to nationalize health insurance. 
D)  evaluate the effect of an increase in stadium size on the price of a sport team's tickets.

Question 8

Microeconomic models are used to

Accepted Answer

A)  make predictions. 
B)  explain real-life phenomena. 
C)  evaluate production alternatives. 
D)  All of the above. 
A)  make predictions. 
B)  explain real-life phenomena. 
C)  evaluate production alternatives. 
D)  All of the above.

Question 9

If a model's predictions are correct,then

Accepted Answer

A)  its assumptions must have been correct. 
B)  it is proven to be correct. 
C)  Both A and B above. 
D)  None of the above. 
A)  its assumptions must have been correct. 
B)  it is proven to be correct. 
C)  Both A and B above. 
D)  None of the above.

Question 10

If an important assumption is omitted from an economic model

Accepted Answer

A)  the model's predictions will be accurate 50% of the time. 
B)  the model's predictions will be inaccurate. 
C)  the model will not predict anything. 
D)  the model will be rejected by other economists. 
A)  the model's predictions will be accurate 50% of the time. 
B)  the model's predictions will be inaccurate. 
C)  the model will not predict anything. 
D)  the model will be rejected by other economists.

Question 11

Give an example of a tradeoff a pizza restaurant might face.

Accepted Answer

Whether to

Question 12

Einstein was quoted saying "Everything should be made as simple as possible,but not simpler." When it comes to economic models this means that

Accepted Answer

A)  models shouldn't be too complex. 
B)  models shouldn't be too simple. 
C)  models should have a level of abstraction appropriate to the topic investigated. 
D)  All of the above. 
A)  models shouldn't be too complex. 
B)  models shouldn't be too simple. 
C)  models should have a level of abstraction appropriate to the topic investigated. 
D)  All of the above.

Question 13

Explain what the statement "We can't have everything we want" means.

Accepted Answer

Because resources are scarce,w

Question 14

Normative analysis offers decision makers the most valuable information when choosing among alternatives.

Accepted Answer

A) True 
 B)False

Question 15

Economists tend to judge a model based upon

Accepted Answer

A)  the reality of its assumptions. 
B)  the accuracy of its predictions. 
C)  its simplicity. 
D)  its complexity. 
A)  the reality of its assumptions. 
B)  the accuracy of its predictions. 
C)  its simplicity. 
D)  its complexity.

Question 16

Why might raising the price of a good by a dollar lead to lower profits?

Accepted Answer

If the extra profit margin mad

Question 17

Legislators argue that a minimum wage law is instituted to help poor people.Economists can attack the minimum wage law on two fronts.First,some argue that government should not help the poor.Second,some argue that minimum wage laws actually hurt the poor because it creates unemployment.Which argument is normative and which is positive?

Accepted Answer

An opinion about the role of g

Question 18

What is profit?

Accepted Answer

Profit is the differ

Question 19

Economic models are most useful in

Accepted Answer

A)  predicting changes in one variable due to a change in one or more other variables. 
B)  predicting the direction of the stock market. 
C)  explaining the future with the past. 
D)  generating untestable hypotheses. 
A)  predicting changes in one variable due to a change in one or more other variables. 
B)  predicting the direction of the stock market. 
C)  explaining the future with the past. 
D)  generating untestable hypotheses.

Question 20

Which of the following is an example of a normative statement?

Accepted Answer

A)  A higher price for a good causes people to want to buy less of that good. 
B)  A lower price for a good causes people to want to buy more of that good. 
C)  To make the good available to more people, a lower price should be set. 
D)  If you consume this good, you will be better off. 
A)  A higher price for a good causes people to want to buy less of that good. 
B)  A lower price for a good causes people to want to buy more of that good. 
C)  To make the good available to more people, a lower price should be set. 
D)  If you consume this good, you will be better off.

Why might raising the price of a good by a dollar lead to higher profits?

A market

Profit is

A firm's managers are constrained by

Economic models are most often tested

Explain why economists might disagree on the content of a model.

A microeconomic model CANNOT be used to

Microeconomic models are used to

If a model's predictions are correct,then

If an important assumption is omitted from an economic model

Give an example of a tradeoff a pizza restaurant might face.

Einstein was quoted saying "Everything should be made as simple as possible,but not simpler." When it comes to economic models this means that

Explain what the statement "We can't have everything we want" means.

Normative analysis offers decision makers the most valuable information when choosing among alternatives.

Economists tend to judge a model based upon

Why might raising the price of a good by a dollar lead to lower profits?

What is profit?

Economic models are most useful in

Which of the following is an example of a normative statement?

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 1: Introduction

Why might raising the price of a good by a dollar lead to higher profits?

A market

Profit is

A firm's managers are constrained by

Economic models are most often tested

Explain why economists might disagree on the content of a model.

A microeconomic model CANNOT be used to

Microeconomic models are used to

If a model's predictions are correct,then

If an important assumption is omitted from an economic model

Give an example of a tradeoff a pizza restaurant might face.

Einstein was quoted saying "Everything should be made as simple as possible,but not simpler." When it comes to economic models this means that

Explain what the statement "We can't have everything we want" means.

Normative analysis offers decision makers the most valuable information when choosing among alternatives.

Economists tend to judge a model based upon

Why might raising the price of a good by a dollar lead to lower profits?

What is profit?

Economic models are most useful in

Which of the following is an example of a normative statement?

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters