Question 1

In economics

Accepted Answer

A) both resources and wants are limited. 
B) both resources and wants are unlimited. 
C) resources are limited but wants are unlimited. 
D) resources are unlimited but wants are limited. 
A) both resources and wants are limited. 
B) both resources and wants are unlimited. 
C) resources are limited but wants are unlimited. 
D) resources are unlimited but wants are limited.

Question 2

Microeconomics is defined as that part of economic analysis that

Accepted Answer

A) studies the behavior of the economy as a whole. 
B) includes the problems of inflation and unemployment. 
C) studies individual decision making by households and firms. 
D) concerns aggregate production and consumption. 
A) studies the behavior of the economy as a whole. 
B) includes the problems of inflation and unemployment. 
C) studies individual decision making by households and firms. 
D) concerns aggregate production and consumption.

Question 3

Individual decision making by consumers and producers is the focus of

Accepted Answer

A) macroeconomics. 
B) microeconomics. 
C) aggregate measures. 
D) any economic model. 
A) macroeconomics. 
B) microeconomics. 
C) aggregate measures. 
D) any economic model.

Question 4

Behavioral economics is an approach to the study of consumer behavior

Accepted Answer

A) that emphasizes psychological limitations and complications that potentially interfere with rational decision making. 
B) that emphasizes the capabilities of individuals to succeed in attaining all their unlimited wants utilizing limited resources. 
C) that, in contrast to standard approaches in economics, utilizes the ceteris paribus assumption. 
D) that, in contrast to standard approaches in economics, relies on real-world data to evaluate the usefulness of economic models. 
A) that emphasizes psychological limitations and complications that potentially interfere with rational decision making. 
B) that emphasizes the capabilities of individuals to succeed in attaining all their unlimited wants utilizing limited resources. 
C) that, in contrast to standard approaches in economics, utilizes the ceteris paribus assumption. 
D) that, in contrast to standard approaches in economics, relies on real-world data to evaluate the usefulness of economic models.

Question 5

Economics is the study of

Accepted Answer

A) nonhuman phenomena. 
B) the determinants of preferences. 
C) scarce resources and unlimited wants. 
D) the physical sciences. 
A) nonhuman phenomena. 
B) the determinants of preferences. 
C) scarce resources and unlimited wants. 
D) the physical sciences.

Question 6

Which of the following statements concerning economic models is FALSE?

Accepted Answer

A) Economic models must provide usable predictions. 
B) Economic models are based on pure fact and no assumptions. 
C) Economic models are tested empirically. 
D) Economic models relate to how people behave. 
A) Economic models must provide usable predictions. 
B) Economic models are based on pure fact and no assumptions. 
C) Economic models are tested empirically. 
D) Economic models relate to how people behave.

Question 7

What is meant by the term "incentives," and why are they important?

Accepted Answer

Incentives are rewards for engaging in p

Question 8

Which of the following statements is NOT true?

Accepted Answer

A) Economics is a social science. 
B) Economics is an empirical science. 
C) Economics does not use theories. 
D) Economics is the study of how people allocate their limited resources to satisfy their unlimited wants. 
A) Economics is a social science. 
B) Economics is an empirical science. 
C) Economics does not use theories. 
D) Economics is the study of how people allocate their limited resources to satisfy their unlimited wants.

Question 9

Economics can be described as the study of how people use ________ resources to satisfy ________ wants.

Accepted Answer

A) unlimited; unlimited 
B) unlimited; limited 
C) limited; unlimited 
D) limited; limited 
A) unlimited; unlimited 
B) unlimited; limited 
C) limited; unlimited 
D) limited; limited

Question 10

A model is used to explain economic behavior. Therefore

Accepted Answer

A) the assumptions must be complex while the model itself is simple. 
B) the model must be complex. 
C) the model must be simple. 
D) the model can be either simple or complex so long as it explains economic behavior. 
A) the assumptions must be complex while the model itself is simple. 
B) the model must be complex. 
C) the model must be simple. 
D) the model can be either simple or complex so long as it explains economic behavior.

Question 11

Economics is best defined as the

Accepted Answer

A) study of how people make choices to satisfy their wants. 
B) study of individual self-interests. 
C) study of how government can most efficiently raise funds by taxation. 
D) process by which goods are sold in free markets. 
A) study of how people make choices to satisfy their wants. 
B) study of individual self-interests. 
C) study of how government can most efficiently raise funds by taxation. 
D) process by which goods are sold in free markets.

Question 12

Macroeconomics is concerned primarily with

Accepted Answer

A) positive economics. 
B) production and prices in particular markets. 
C) aggregate economic variables. 
D) normative issues. 
A) positive economics. 
B) production and prices in particular markets. 
C) aggregate economic variables. 
D) normative issues.

Question 13

The "paired observation" of (-14, -6)means

Accepted Answer

A) x = -14, y = -6 
B) x = -6, y = -14 
C) that the distance between the two points will be 8. 
D) the origin is at -14 and -6. 
A) x = -14, y = -6 
B) x = -6, y = -14 
C) that the distance between the two points will be 8. 
D) the origin is at -14 and -6.

Question 14

Which of the following is a microeconomic topic?

Accepted Answer

A) the increase in the amount of imports from China to the United States 
B) the rate at which the cost of living has increased in Canada 
C) the marketing strategy of the Apple Computer company 
D) the increase in the employment level of the United States in the past year 
A) the increase in the amount of imports from China to the United States 
B) the rate at which the cost of living has increased in Canada 
C) the marketing strategy of the Apple Computer company 
D) the increase in the employment level of the United States in the past year

Question 15

People behave rationally when they

Accepted Answer

A) follow the advice of government leaders. 
B) never have regrets about their decisions. 
C) make decisions they think will make themselves better off. 
D) make decisions solely based on financial outcomes. 
A) follow the advice of government leaders. 
B) never have regrets about their decisions. 
C) make decisions they think will make themselves better off. 
D) make decisions solely based on financial outcomes.

Question 16

When people donate money to a charity, they behave

Accepted Answer

A) rationally if the act gives them satisfaction. 
B) irrationally because the act does not benefit anyone. 
C) in an unpredictable manner because the act involves no incentive. 
D) in a way that only makes themselves worse off. 
A) rationally if the act gives them satisfaction. 
B) irrationally because the act does not benefit anyone. 
C) in an unpredictable manner because the act involves no incentive. 
D) in a way that only makes themselves worse off.

Question 17

Normative economic analysis tends to

Accepted Answer

A) generate testable hypotheses. 
B) include the way someone thinks things should be or ought to be. 
C) involve descriptive statements. 
D) lead to empirical testing of data. 
A) generate testable hypotheses. 
B) include the way someone thinks things should be or ought to be. 
C) involve descriptive statements. 
D) lead to empirical testing of data.

Question 18

Economic models

Accepted Answer

A) should be designed so as to capture every detail or interrelationship that exists. 
B) are simplified representations of the real world. 
C) must employ the use of laboratory methods. 
D) All of the above are correct. 
A) should be designed so as to capture every detail or interrelationship that exists. 
B) are simplified representations of the real world. 
C) must employ the use of laboratory methods. 
D) All of the above are correct.

Question 19

Economics is an empirical science, which means that economists

Accepted Answer

A) must use laboratory experiments to test their theories. 
B) evaluate a model or theory by whether its assumptions are consistent with the real world. 
C) try to prove their models are true by referring to logic. 
D) look for evidence to determine whether the model is useful or not. 
A) must use laboratory experiments to test their theories. 
B) evaluate a model or theory by whether its assumptions are consistent with the real world. 
C) try to prove their models are true by referring to logic. 
D) look for evidence to determine whether the model is useful or not.

Question 20

Economics seeks to use only positive analysis to

Accepted Answer

A) provide a value-free analysis. 
B) seek the best answer. 
C) predict how people should act. 
D) provide normative values. 
A) provide a value-free analysis. 
B) seek the best answer. 
C) predict how people should act. 
D) provide normative values.

In economics

Microeconomics is defined as that part of economic analysis that

Individual decision making by consumers and producers is the focus of

Behavioral economics is an approach to the study of consumer behavior

Economics is the study of

Which of the following statements concerning economic models is FALSE?

What is meant by the term "incentives," and why are they important?

Which of the following statements is NOT true?

Economics can be described as the study of how people use resources to satisfy wants.

A model is used to explain economic behavior. Therefore

Economics is best defined as the

Macroeconomics is concerned primarily with

The "paired observation" of (-14, -6)means

Which of the following is a microeconomic topic?

People behave rationally when they

When people donate money to a charity, they behave

Normative economic analysis tends to

Economic models

Economics is an empirical science, which means that economists

Economics seeks to use only positive analysis to

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

In economics

Microeconomics is defined as that part of economic analysis that

Individual decision making by consumers and producers is the focus of

Behavioral economics is an approach to the study of consumer behavior

Economics is the study of

Which of the following statements concerning economic models is FALSE?

What is meant by the term "incentives," and why are they important?

Which of the following statements is NOT true?

Economics can be described as the study of how people use ________ resources to satisfy ________ wants.

A model is used to explain economic behavior. Therefore

Economics is best defined as the

Macroeconomics is concerned primarily with

The "paired observation" of (-14, -6)means

Which of the following is a microeconomic topic?

People behave rationally when they

When people donate money to a charity, they behave

Normative economic analysis tends to

Economic models

Economics is an empirical science, which means that economists

Economics seeks to use only positive analysis to

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

Economics can be described as the study of how people use resources to satisfy wants.