Question 1

Producers use inputs,or resources,to produce their goods.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following is considered to be the basic economic problem across all countries of the world?

Accepted Answer

A) Inflation 
B) Unemployment 
C) Poverty 
D) Scarcity 
E) Wage disparity 
A) Inflation 
B) Unemployment 
C) Poverty 
D) Scarcity 
E) Wage disparity D

Question 3

Which of the following phrases correctly describes at least one of the factors of production?

Accepted Answer

A) Natural resources,such as minerals,timber,and water,as well as land itself 
B) The physical and intellectual services of technological advances 
C) Buildings and warehouses,but not factories 
D) Inventories 
E) Automobiles 
A) Natural resources,such as minerals,timber,and water,as well as land itself 
B) The physical and intellectual services of technological advances 
C) Buildings and warehouses,but not factories 
D) Inventories 
E) Automobiles A

Question 4

A positive (nonzero) price for a good means the good is in surplus.

Accepted Answer

A) True 
 B)False

Question 5

People earn an income by selling their resources or by using them.Owners of land receive _____,while the owners of capital receive _____.

Accepted Answer

A) rent; profit 
B) wage; profit 
C) profit; rent 
D) rent; interest 
E) interest; profit 
A) rent; profit 
B) wage; profit 
C) profit; rent 
D) rent; interest 
E) interest; profit

Question 6

If you agree that government should use a lottery to raise funds for improving education,you are using normative analysis.

Accepted Answer

A) True 
 B)False

Question 7

In economics,money is capital because it can be used to buy resources to produce goods.

Accepted Answer

A) True 
 B)False

Question 8

Purified bottled water is an example of a free good.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following trends has been observed in the U.S.with respect to higher education?

Accepted Answer

A) Students from less educated families stand a better chance of getting admitted to colleges. 
B) The divorce rate for college grads is twice as high as that of high school grads. 
C) The divorce rates for college grads are accelerating every year. 
D) High school grads are twice as likely to smoke as college grads. 
E) College grads are likely to live shorter and less healthy lives than high school grads. 
A) Students from less educated families stand a better chance of getting admitted to colleges. 
B) The divorce rate for college grads is twice as high as that of high school grads. 
C) The divorce rates for college grads are accelerating every year. 
D) High school grads are twice as likely to smoke as college grads. 
E) College grads are likely to live shorter and less healthy lives than high school grads.

Question 10

Macroeconomics is concerned primarily with:

Accepted Answer

A) the operation of a particular firm. 
B) the labor market. 
C) individual consumer behavior. 
D) aggregate sectors of the economy such as the consumer sector or the business sector. 
E) a detailed examination of how price and output decisions are made in specific markets. 
A) the operation of a particular firm. 
B) the labor market. 
C) individual consumer behavior. 
D) aggregate sectors of the economy such as the consumer sector or the business sector. 
E) a detailed examination of how price and output decisions are made in specific markets.

Question 11

"The Super Bowl on January 28,2001,was won by the Baltimore Ravens.Since the Ravens were originally from Cleveland and are part of the old NFL,the stock market is expected to decline in 2001." This statement is an example of:

Accepted Answer

A) the interpretation of association as causation. 
B) ceteris paribus ("everything else held constant"),analysis. 
C) rational behavior. 
D) the fallacy of composition. 
E) marginal analysis. 
A) the interpretation of association as causation. 
B) ceteris paribus ("everything else held constant"),analysis. 
C) rational behavior. 
D) the fallacy of composition. 
E) marginal analysis.

Question 12

"If I stand up at a baseball game,I can see better; therefore,everyone should stand up to see better." This statement illustrates:

Accepted Answer

A) the fallacy of composition. 
B) interpreting association as causation. 
C) the scientific method. 
D) positive economics. 
E) normative economics. 
A) the fallacy of composition. 
B) interpreting association as causation. 
C) the scientific method. 
D) positive economics. 
E) normative economics.

Question 13

Aunt Flora has discovered that her sick potted philodendron plant responds well to a certain type of fertilizer.She applies the fertilizer to the many flowers in her garden to make them all grow better.All but the philodendron die.Aunt Flora's mistake is called:

Accepted Answer

A) ceteris paribus. 
B) the fallacy of composition. 
C) the interpretation of association as causation 
D) the problem of heteroscedasticity. 
E) the problem of autocorrelation. 
A) ceteris paribus. 
B) the fallacy of composition. 
C) the interpretation of association as causation 
D) the problem of heteroscedasticity. 
E) the problem of autocorrelation.

Question 14

It has been generally observed,the rich have limited wants while the poor have unlimited wants.

Accepted Answer

A) True 
 B)False

Question 15

The good for which has no scarcity is called:

Accepted Answer

A) a necessity. 
B) an economic good. 
C) a free good. 
D) an economic bad. 
E) a social bad. 
A) a necessity. 
B) an economic good. 
C) a free good. 
D) an economic bad. 
E) a social bad.

Question 16

According to the text,human beings are self-interested,not selfish.This means:

Accepted Answer

A) people are never selfish. 
B) people never act in a spiteful or belligerent manner. 
C) people never act in a fit of rage. 
D) people contribute to charities and otherwise help others. 
E) people care only about themselves and their families. 
A) people are never selfish. 
B) people never act in a spiteful or belligerent manner. 
C) people never act in a fit of rage. 
D) people contribute to charities and otherwise help others. 
E) people care only about themselves and their families.

Question 17

Which of the following is a free good?

Accepted Answer

A) Toll free roads 
B) Purified water 
C) Flora and fauna at a national park 
D) Air 
E) Congested roads 
A) Toll free roads 
B) Purified water 
C) Flora and fauna at a national park 
D) Air 
E) Congested roads

Question 18

Which of the following defines an economic good?

Accepted Answer

A) Anything that is provided by the government 
B) Anything that is provided by the nonprofit institutions 
C) Anything with a price on it 
D) Anything that has a very high demand in the market 
E) Anything that has a very high supply in the market 
A) Anything that is provided by the government 
B) Anything that is provided by the nonprofit institutions 
C) Anything with a price on it 
D) Anything that has a very high demand in the market 
E) Anything that has a very high supply in the market

Question 19

Only poor countries have to make choices because of limited resources.

Accepted Answer

A) True 
 B)False

Question 20

The wage disparity between college-educated and non-college-educated workers in the U.S.has declined since 2001 because:

Accepted Answer

A) more Americans are pursuing college education. 
B) the colleges emphasize on technical education rather then textual knowledge. 
C) most of the skilled sector jobs have been outsourced to India and China. 
D) the variety of courses offered by the U.S.institutions have increased. 
E) the number of non-college-educated workers in the workforce has declined. 
A) more Americans are pursuing college education. 
B) the colleges emphasize on technical education rather then textual knowledge. 
C) most of the skilled sector jobs have been outsourced to India and China. 
D) the variety of courses offered by the U.S.institutions have increased. 
E) the number of non-college-educated workers in the workforce has declined.

Exam 1: Economics: The World Around You

Producers use inputs,or resources,to produce their goods.

Which of the following is considered to be the basic economic problem across all countries of the world?

Which of the following phrases correctly describes at least one of the factors of production?

A positive (nonzero) price for a good means the good is in surplus.

People earn an income by selling their resources or by using them.Owners of land receive _____,while the owners of capital receive _____.

If you agree that government should use a lottery to raise funds for improving education,you are using normative analysis.

In economics,money is capital because it can be used to buy resources to produce goods.

Purified bottled water is an example of a free good.

Which of the following trends has been observed in the U.S.with respect to higher education?

Macroeconomics is concerned primarily with:

"The Super Bowl on January 28,2001,was won by the Baltimore Ravens.Since the Ravens were originally from Cleveland and are part of the old NFL,the stock market is expected to decline in 2001." This statement is an example of:

"If I stand up at a baseball game,I can see better; therefore,everyone should stand up to see better." This statement illustrates:

Aunt Flora has discovered that her sick potted philodendron plant responds well to a certain type of fertilizer.She applies the fertilizer to the many flowers in her garden to make them all grow better.All but the philodendron die.Aunt Flora's mistake is called:

It has been generally observed,the rich have limited wants while the poor have unlimited wants.

The good for which has no scarcity is called:

According to the text,human beings are self-interested,not selfish.This means:

Which of the following is a free good?

Which of the following defines an economic good?

Only poor countries have to make choices because of limited resources.

The wage disparity between college-educated and non-college-educated workers in the U.S.has declined since 2001 because:

Choice, opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

Consumer Choice

Supply: The Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution,Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

People earn an income by selling their resources or by using them.Owners of land receive _,while the owners of capital receive _.