Question 1

Father says, "Earn a B-average on your next report card and I'll help you buy a car." An economist would say that this parent is providing his child a(n)

Accepted Answer

A) study disincentive. 
B) reason to slack off and not worry about her grades. 
C) bribe. 
D) incentive. 
A) study disincentive. 
B) reason to slack off and not worry about her grades. 
C) bribe. 
D) incentive.

Question 2

The potential rewards that are available to an individual if a particular activity is undertaken are known as

Accepted Answer

A) premiums. 
B) gifts. 
C) incentives. 
D) intrinsic values. 
A) premiums. 
B) gifts. 
C) incentives. 
D) intrinsic values.

Question 3

An inverse relationship will be graphed as

Accepted Answer

A) a line that is upward sloping. 
B) a line that is downward sloping. 
C) a loop. 
D) a U-shaped curve. 
A) a line that is upward sloping. 
B) a line that is downward sloping. 
C) a loop. 
D) a U-shaped curve.

Question 4

The ceteris paribus assumption means

Accepted Answer

A) favors are returned in kind. 
B) this is the proof of the matter. 
C) from many, one. 
D) other things are equal. 
A) favors are returned in kind. 
B) this is the proof of the matter. 
C) from many, one. 
D) other things are equal.

Question 5

When two variables have a direct relationship, the slope is

Accepted Answer

A) negative. 
B) positive. 
C) zero. 
D) infinity. 
A) negative. 
B) positive. 
C) zero. 
D) infinity.

Question 6

The difference between positive statements and normative statements is that

Accepted Answer

A) a positive statement involves a value judgment and a normative statement is a statement of fact. 
B) a positive statement is a statement of fact and a normative statement involves value judgments. 
C) value judgments are made in normative statements but assumed in positive statements. 
D) normative statements are provable while positive statements are not. 
A) a positive statement involves a value judgment and a normative statement is a statement of fact. 
B) a positive statement is a statement of fact and a normative statement involves value judgments. 
C) value judgments are made in normative statements but assumed in positive statements. 
D) normative statements are provable while positive statements are not.

Question 7

Microeconomics is the study of

Accepted Answer

A) aggregate measures of the economy. 
B) foreign policy economic issues. 
C) federal budget details. 
D) individual decision making. 
A) aggregate measures of the economy. 
B) foreign policy economic issues. 
C) federal budget details. 
D) individual decision making.

Question 8

Rational self-interest means

Accepted Answer

A) always increasing your wealth. 
B) pursuing what makes you better off. 
C) pursuing activities that maximize income. 
D) always pursuing activities that are consistent with your faith. 
A) always increasing your wealth. 
B) pursuing what makes you better off. 
C) pursuing activities that maximize income. 
D) always pursuing activities that are consistent with your faith.

Question 9

An economic model should capture

Accepted Answer

A) the essential relationships that help to analyze the problem. 
B) all possible variables that apply to the problem. 
C) only social value related variables. 
D) all of the above. 
A) the essential relationships that help to analyze the problem. 
B) all possible variables that apply to the problem. 
C) only social value related variables. 
D) all of the above.

Question 10

Why is economics called an empirical science?

Accepted Answer

A) because economics has been used to both create and destroy empires 
B) because economics uses impressions to evaluate the usefulness of its models 
C) because economics relies on real-world data to determine the usefulness of a model 
D) because economics utilizes intuition rather than data to evaluate a model's worth 
A) because economics has been used to both create and destroy empires 
B) because economics uses impressions to evaluate the usefulness of its models 
C) because economics relies on real-world data to determine the usefulness of a model 
D) because economics utilizes intuition rather than data to evaluate a model's worth

Question 11

Self-interest

Accepted Answer

A) relates strictly to material well-being, such as a person's stock of wealth at a point in time. 
B) is measured entirely based on an individual's income, whether earned from labor or inherited. 
C) is inconsistent with economic analysis, which suggests that self-interest is irrational. 
D) can involve any action that makes a person feel better off, such as charitable contributions. 
A) relates strictly to material well-being, such as a person's stock of wealth at a point in time. 
B) is measured entirely based on an individual's income, whether earned from labor or inherited. 
C) is inconsistent with economic analysis, which suggests that self-interest is irrational. 
D) can involve any action that makes a person feel better off, such as charitable contributions.

Question 12

Which of the following is NOT normative economic statement?

Accepted Answer

A) The minimum wage should be eliminated so unemployment can be reduced. 
B) Increases in the minimum wage cause increases in unemployment. 
C) The inflation rate should fall to increase individuals' well being. 
D) Taxes on cigarettes should be increased to reduce smoking. 
A) The minimum wage should be eliminated so unemployment can be reduced. 
B) Increases in the minimum wage cause increases in unemployment. 
C) The inflation rate should fall to increase individuals' well being. 
D) Taxes on cigarettes should be increased to reduce smoking.

Question 13

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

Accepted Answer

A) x = 14, y = 6. 
B) x = 6, y = 14. 
C) x = any multiple of 14, y = any multiple of 6. 
D) the origin is at 14 and 6. 
A) x = 14, y = 6. 
B) x = 6, y = 14. 
C) x = any multiple of 14, y = any multiple of 6. 
D) the origin is at 14 and 6.

Question 14

To test their theories, economists usually have to

Accepted Answer

A) set up careful laboratory experiments with all variables controlled. 
B) first examine theory and what has happened in the past in the real world. 
C) use only models that have a proven record of success. 
D) anticipate every factor with 100 percent accuracy. 
A) set up careful laboratory experiments with all variables controlled. 
B) first examine theory and what has happened in the past in the real world. 
C) use only models that have a proven record of success. 
D) anticipate every factor with 100 percent accuracy.

Question 15

The assumption that people do not intentionally make decisions that would leave them worse off is known as

Accepted Answer

A) the rationality assumption. 
B) the microeconomic assumption. 
C) the ceteris paribus assumption. 
D) the normative assumption. 
A) the rationality assumption. 
B) the microeconomic assumption. 
C) the ceteris paribus assumption. 
D) the normative assumption.

Question 16

A relationship between two variables in which one variable increases at the same time as the other decreases is called

Accepted Answer

A) nonlinear. 
B) constant. 
C) inverse. 
D) direct. 
A) nonlinear. 
B) constant. 
C) inverse. 
D) direct.

Question 17

Ceteris paribus means

Accepted Answer

A) making all the necessary changes. 
B) other things constant. 
C) for certain parameters. 
D) let the buyer beware. 
A) making all the necessary changes. 
B) other things constant. 
C) for certain parameters. 
D) let the buyer beware.

Question 18

John has an economics test tomorrow. He must study and has planned the rest of his day so that he can fit some study time in. He has decided to go to the gym and then study for several hours. Which of the following statements is TRUE?

Accepted Answer

A) John did not use the economic way of thinking because his decision on how to allocate his time did not involve money. 
B) John's decision on how to allocate his time is inconsistent with the rationality assumption since he has decided to go to the gym. 
C) John's decision on how to allocate his time is consistent with the rationality assumption since the decision is intended to make him better off. 
D) John's decision does not involve his pursuit of self-interest. 
A) John did not use the economic way of thinking because his decision on how to allocate his time did not involve money. 
B) John's decision on how to allocate his time is inconsistent with the rationality assumption since he has decided to go to the gym. 
C) John's decision on how to allocate his time is consistent with the rationality assumption since the decision is intended to make him better off. 
D) John's decision does not involve his pursuit of self-interest.

Question 19

A difference between biology and economics is that

Accepted Answer

A) economists use models and biologists use theories. 
B) biologists often use laboratory methods and economists do less often. 
C) economics explains events while biology predict events. 
D) biologists use the scientific method while economists do not. 
A) economists use models and biologists use theories. 
B) biologists often use laboratory methods and economists do less often. 
C) economics explains events while biology predict events. 
D) biologists use the scientific method while economists do not.

Question 20

What is meant by saying that economics is an empirical science?

Accepted Answer

A) Economic theories will be tested by seeing how well they correspond to people's declared preferences. 
B) Economic theories cannot be tested because there is no means of measuring economic variables with adequate precision. 
C) Economic theories cannot be tested because economic variables change too quickly. 
D) Economic theories will be tested by seeing how well they correspond to real-world phenomena. 
A) Economic theories will be tested by seeing how well they correspond to people's declared preferences. 
B) Economic theories cannot be tested because there is no means of measuring economic variables with adequate precision. 
C) Economic theories cannot be tested because economic variables change too quickly. 
D) Economic theories will be tested by seeing how well they correspond to real-world phenomena.

Father says, "Earn a B-average on your next report card and I'll help you buy a car." An economist would say that this parent is providing his child a(n)

The potential rewards that are available to an individual if a particular activity is undertaken are known as

An inverse relationship will be graphed as

The ceteris paribus assumption means

When two variables have a direct relationship, the slope is

The difference between positive statements and normative statements is that

Microeconomics is the study of

Rational self-interest means

An economic model should capture

Why is economics called an empirical science?

Self-interest

Which of the following is NOT normative economic statement?

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

To test their theories, economists usually have to

The assumption that people do not intentionally make decisions that would leave them worse off is known as

A relationship between two variables in which one variable increases at the same time as the other decreases is called

Ceteris paribus means

John has an economics test tomorrow. He must study and has planned the rest of his day so that he can fit some study time in. He has decided to go to the gym and then study for several hours. Which of the following statements is TRUE?

A difference between biology and economics is that

What is meant by saying that economics is an empirical science?

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

Father says, "Earn a B-average on your next report card and I'll help you buy a car." An economist would say that this parent is providing his child a(n)

The potential rewards that are available to an individual if a particular activity is undertaken are known as

An inverse relationship will be graphed as

The ceteris paribus assumption means

When two variables have a direct relationship, the slope is

The difference between positive statements and normative statements is that

Microeconomics is the study of

Rational self-interest means

An economic model should capture

Why is economics called an empirical science?

Self-interest

Which of the following is NOT normative economic statement?

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

To test their theories, economists usually have to

The assumption that people do not intentionally make decisions that would leave them worse off is known as

A relationship between two variables in which one variable increases at the same time as the other decreases is called

Ceteris paribus means

John has an economics test tomorrow. He must study and has planned the rest of his day so that he can fit some study time in. He has decided to go to the gym and then study for several hours. Which of the following statements is TRUE?

A difference between biology and economics is that

What is meant by saying that economics is an empirical science?

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