Question 1

The use of data in economic models is important because

Accepted Answer

A) the model's predictive value rests on supportive evidence from real-world data. 
B) the models are always complex in nature. 
C) models must analyze every possible angle of the problem. 
D) social problems analyzed by economists require long streams of data. 
A) the model's predictive value rests on supportive evidence from real-world data. 
B) the models are always complex in nature. 
C) models must analyze every possible angle of the problem. 
D) social problems analyzed by economists require long streams of data.

Question 2

Economics is an empirical science, which means that economists

Accepted Answer

A) look at evidence to see whether or not the model is applicable. 
B) test their models by utilizing unknown variables. 
C) do only laboratory experiments. 
D) refuse to test their models since the usefulness of a model is determined by whether it is logical or not. 
A) look at evidence to see whether or not the model is applicable. 
B) test their models by utilizing unknown variables. 
C) do only laboratory experiments. 
D) refuse to test their models since the usefulness of a model is determined by whether it is logical or not.

Question 3

Analysis that is limited to making either purely descriptive statements or scientific predictions is

Accepted Answer

A) positive economics. 
B) normative economics. 
C) microeconomics. 
D) macroeconomics. 
A) positive economics. 
B) normative economics. 
C) microeconomics. 
D) macroeconomics.

Question 4

Normative economic analysis involves

Accepted Answer

A) true statements of facts only. 
B) testable hypotheses by scientists. 
C) value judgments and opinions. 
D) purely descriptive statements. 
A) true statements of facts only. 
B) testable hypotheses by scientists. 
C) value judgments and opinions. 
D) purely descriptive statements.

Question 5

Assumptions are necessary to

Accepted Answer

A) make economics a social science. 
B) define a set of circumstances where a model is most likely to apply. 
C) define the relationship between wants and resources under all circumstances. 
D) define the specific cause and effect relationship that is being explained by social sciences. 
A) make economics a social science. 
B) define a set of circumstances where a model is most likely to apply. 
C) define the relationship between wants and resources under all circumstances. 
D) define the specific cause and effect relationship that is being explained by social sciences.

Question 6

Which of the following statements concerning the distinction between positive and normative economics is TRUE?

Accepted Answer

A) Positive statements are concerned with what is, while normative statements are concerned with what someone thinks should be. 
B) Positive statements are concerned with what people think, while normative statements are concerned with what people do. 
C) Positive statements are true while normative statements are false. 
D) Positive statements are concerned with what is while normative statements are concerned with what will be. 
A) Positive statements are concerned with what is, while normative statements are concerned with what someone thinks should be. 
B) Positive statements are concerned with what people think, while normative statements are concerned with what people do. 
C) Positive statements are true while normative statements are false. 
D) Positive statements are concerned with what is while normative statements are concerned with what will be.

Question 7

The assumption that individuals will not intentionally make decisions that will leave them worse off is known as

Accepted Answer

A) microeconomic analysis. 
B) macroeconomic analysis. 
C) a model or theory. 
D) the rationality assumption. 
A) microeconomic analysis. 
B) macroeconomic analysis. 
C) a model or theory. 
D) the rationality assumption.

Question 8

Whenever statements embodying values are made, we enter the realm of

Accepted Answer

A) positive economics. 
B) normative economics. 
C) microeconomics. 
D) macroeconomics. 
A) positive economics. 
B) normative economics. 
C) microeconomics. 
D) macroeconomics.

Question 9

Which of the following is a positive economic statement?

Accepted Answer

A) We should strive to achieve full employment in the United States. 
B) The President of the United States should promote stable prices in the United States. 
C) If the price of eggs increases, the quantity demanded of bacon will fall. 
D) We should try to eliminate poverty in the United States. 
A) We should strive to achieve full employment in the United States. 
B) The President of the United States should promote stable prices in the United States. 
C) If the price of eggs increases, the quantity demanded of bacon will fall. 
D) We should try to eliminate poverty in the United States.

Question 10

Positive economics

Accepted Answer

A) always gives an optimistic spin to economic news. 
B) is concerned with the economic policies that should be implemented. 
C) is objective. 
D) was not used by nineteenth century economists. 
A) always gives an optimistic spin to economic news. 
B) is concerned with the economic policies that should be implemented. 
C) is objective. 
D) was not used by nineteenth century economists.

Question 11

Economic models relate to

Accepted Answer

A) people's choices. 
B) how people think about something. 
C) group opinions. 
D) the reasons people give for donating to charity. 
A) people's choices. 
B) how people think about something. 
C) group opinions. 
D) the reasons people give for donating to charity.

Question 12

One major assumption of economics is that people

Accepted Answer

A) act as if they systematically pursue self-interest. 
B) behave randomly without any predictable pattern. 
C) are sometimes rational and sometimes irrational. 
D) always pursue the interests of others. 
A) act as if they systematically pursue self-interest. 
B) behave randomly without any predictable pattern. 
C) are sometimes rational and sometimes irrational. 
D) always pursue the interests of others.

Question 13

Economics is the study of

Accepted Answer

A) how to own as many resources as possible. 
B) ceteris paribus. 
C) the way people think rather than the way they act. 
D) how people allocate their limited resources to satisfy their unlimited wants. 
A) how to own as many resources as possible. 
B) ceteris paribus. 
C) the way people think rather than the way they act. 
D) how people allocate their limited resources to satisfy their unlimited wants.

Question 14

Which of the following is an example of a positive economic statement?

Accepted Answer

A) The unemployment rate last month was 5.4 percent. 
B) The unemployment rate last month was too high. 
C) Because of the high unemployment rate last month the government should increase government spending. 
D) The unemployment rate should be measured differently because it doesn't include students who can't find jobs. 
A) The unemployment rate last month was 5.4 percent. 
B) The unemployment rate last month was too high. 
C) Because of the high unemployment rate last month the government should increase government spending. 
D) The unemployment rate should be measured differently because it doesn't include students who can't find jobs.

Question 15

Resources are

Accepted Answer

A) unlimited. 
B) able to be replicated in large quantities. 
C) what people would buy if their income was unlimited. 
D) used to produce goods and services to satisfy people's wants. 
A) unlimited. 
B) able to be replicated in large quantities. 
C) what people would buy if their income was unlimited. 
D) used to produce goods and services to satisfy people's wants.

Question 16

If the slope of a curve is 1/5, we know that

Accepted Answer

A) the relationship is linear, and the line moves from lower left to upper right. 
B) the relationship is non-linear, and the line moves from lower left to upper right. 
C) the relationship is linear, and the line moves from upper left to lower right. 
D) the relationship is non-linear, and the line moves from upper left to lower right. 
A) the relationship is linear, and the line moves from lower left to upper right. 
B) the relationship is non-linear, and the line moves from lower left to upper right. 
C) the relationship is linear, and the line moves from upper left to lower right. 
D) the relationship is non-linear, and the line moves from upper left to lower right.

Question 17

Suppose that on average there are five more car accidents for every extra inch of snowfall in a certain region. If snowfall is graphed on the y axis and car accidents on the x axis, then if we graph this relationship, the slope of the line will be

Accepted Answer

A) 25. 
B) 5. 
C) 1/5. 
D) 1. 
A) 25. 
B) 5. 
C) 1/5. 
D) 1.

Question 18

The idea of bounded rationality is used to address all of the following characteristics EXCEPT

Accepted Answer

A) unbounded selfishness. 
B) unbounded knowledge. 
C) unbounded willpower. 
D) unbounded rationality. 
A) unbounded selfishness. 
B) unbounded knowledge. 
C) unbounded willpower. 
D) unbounded rationality.

Question 19

"If the United States enters a war in the Middle East, gasoline prices will go up." This statement is an example of

Accepted Answer

A) a positive statement. 
B) an argument. 
C) a normative statement. 
D) a factual statement. 
A) a positive statement. 
B) an argument. 
C) a normative statement. 
D) a factual statement.

Question 20

Which of the following is a microeconomic concern?

Accepted Answer

A) the rate of economic growth in the United States 
B) the current unemployment rate in the United States 
C) consumer behavior 
D) national output of the United States 
A) the rate of economic growth in the United States 
B) the current unemployment rate in the United States 
C) consumer behavior 
D) national output of the United States

The use of data in economic models is important because

Economics is an empirical science, which means that economists

Analysis that is limited to making either purely descriptive statements or scientific predictions is

Normative economic analysis involves

Assumptions are necessary to

Which of the following statements concerning the distinction between positive and normative economics is TRUE?

The assumption that individuals will not intentionally make decisions that will leave them worse off is known as

Whenever statements embodying values are made, we enter the realm of

Which of the following is a positive economic statement?

Positive economics

Economic models relate to

One major assumption of economics is that people

Economics is the study of

Which of the following is an example of a positive economic statement?

Resources are

If the slope of a curve is 1/5, we know that

Suppose that on average there are five more car accidents for every extra inch of snowfall in a certain region. If snowfall is graphed on the y axis and car accidents on the x axis, then if we graph this relationship, the slope of the line will be

The idea of bounded rationality is used to address all of the following characteristics EXCEPT

"If the United States enters a war in the Middle East, gasoline prices will go up." This statement is an example of

Which of the following is a microeconomic concern?

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 1: The Nature of Economics

The use of data in economic models is important because

Economics is an empirical science, which means that economists

Analysis that is limited to making either purely descriptive statements or scientific predictions is

Normative economic analysis involves

Assumptions are necessary to

Which of the following statements concerning the distinction between positive and normative economics is TRUE?

The assumption that individuals will not intentionally make decisions that will leave them worse off is known as

Whenever statements embodying values are made, we enter the realm of

Which of the following is a positive economic statement?

Positive economics

Economic models relate to

One major assumption of economics is that people

Economics is the study of

Which of the following is an example of a positive economic statement?

Resources are

If the slope of a curve is 1/5, we know that

Suppose that on average there are five more car accidents for every extra inch of snowfall in a certain region. If snowfall is graphed on the y axis and car accidents on the x axis, then if we graph this relationship, the slope of the line will be

The idea of bounded rationality is used to address all of the following characteristics EXCEPT

"If the United States enters a war in the Middle East, gasoline prices will go up." This statement is an example of

Which of the following is a microeconomic concern?

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters