Question 1

When a presidential candidate with a Ph.D.in economics makes a statement about what should be done to balance the budget,he or she is making a:

Accepted Answer

A) normative statement. 
B) positive statement. 
C) microeconomic statement. 
D) statement that is objective. 
E) statement of fact. 
A) normative statement. 
B) positive statement. 
C) microeconomic statement. 
D) statement that is objective. 
E) statement of fact.

Question 2

According to the U.S.Census Bureau,what is the difference between the earnings of a high school diploma holder and a medical practitioner between the ages of 25 and 64?

Accepted Answer

A) $3.2 million 
B) $1.2 million 
C) $5 million 
D) No wage disparity 
E) $8.5 million 
A) $3.2 million 
B) $1.2 million 
C) $5 million 
D) No wage disparity 
E) $8.5 million

Question 3

Which of the following categories of educated workforce in the U.S.,aged between 25 and 64,usually receive the highest income?

Accepted Answer

A) College graduates 
B) Individuals with professional degrees 
C) Individuals with a master degree 
D) College drop-outs 
E) High school students 
A) College graduates 
B) Individuals with professional degrees 
C) Individuals with a master degree 
D) College drop-outs 
E) High school students

Question 4

Microeconomics is concerned primarily with how individuals make their economic decisions.

Accepted Answer

A) True 
 B)False

Question 5

For an analysis to be considered positive,and not normative,it must include:

Accepted Answer

A) some consideration of what ought to be. 
B) conclusions based on opinion. 
C) the rigors of the scientific method. 
D) suggestions for laws designed to protect people from harming themselves. 
E) strict implementation of policy prescriptions. 
A) some consideration of what ought to be. 
B) conclusions based on opinion. 
C) the rigors of the scientific method. 
D) suggestions for laws designed to protect people from harming themselves. 
E) strict implementation of policy prescriptions.

Question 6

"If a tax cut is good for me,it must be good for the whole economy." This statement is an example of the pitfall called the fallacy of composition.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not physical capital,as economists use the term?

Accepted Answer

A) An office building 
B) Machinery on an assembly line 
C) An industrial robot 
D) Cash paid for raw materials 
E) A computer used by a business 
A) An office building 
B) Machinery on an assembly line 
C) An industrial robot 
D) Cash paid for raw materials 
E) A computer used by a business

Question 8

Oil found underground in Texas is an example of:

Accepted Answer

A) a labor resource. 
B) physical capital. 
C) financial capital. 
D) human capital. 
E) a land resource. 
A) a labor resource. 
B) physical capital. 
C) financial capital. 
D) human capital. 
E) a land resource.

Question 9

The statement "people have unlimited wants," implies that people:

Accepted Answer

A) always want more goods/services than they can purchase with their incomes. 
B) always have a desire to hold liquid money. 
C) always strive to be the best they can be. 
D) generally desire for goods and services which they can afford out of their income. 
E) try to earn more and more money as their experience at work increases. 
A) always want more goods/services than they can purchase with their incomes. 
B) always have a desire to hold liquid money. 
C) always strive to be the best they can be. 
D) generally desire for goods and services which they can afford out of their income. 
E) try to earn more and more money as their experience at work increases.

Question 10

People who choose to do voluntary work:

Accepted Answer

A) are not acting with rational self-interest. 
B) find it more satisfying than the alternatives. 
C) are not concerned with their own satisfaction. 
D) never consider the alternative options. 
E) are beyond the scope of economics. 
A) are not acting with rational self-interest. 
B) find it more satisfying than the alternatives. 
C) are not concerned with their own satisfaction. 
D) never consider the alternative options. 
E) are beyond the scope of economics.

Question 11

Identify the logic of economics that those who have not studied economics may fail to understand.

Accepted Answer

A) The implicit cost of a commodity is always higher than the explicit cost. 
B) Individual wants are limited by means. 
C) Private goods do not have a social cost. 
D) Public goods are available to us freely. 
E) There are costs to everything. 
A) The implicit cost of a commodity is always higher than the explicit cost. 
B) Individual wants are limited by means. 
C) Private goods do not have a social cost. 
D) Public goods are available to us freely. 
E) There are costs to everything.

Question 12

Which of the following is not an example of rational self-interest,as defined by economists?

Accepted Answer

A) A person risking his or her life to save someone else. 
B) A wealthy widow leaving a million dollars in her will to her cat. 
C) A farmer turning down an offer for his land that would make him independently wealthy. 
D) A collector paying $4 million for a particular painting,when other paintings by the same painter were available at a lower price. 
E) An individual paying a high price for an electronic widget at a store instead of buying it at the adjacent store offering the same widget at a lower price. 
A) A person risking his or her life to save someone else. 
B) A wealthy widow leaving a million dollars in her will to her cat. 
C) A farmer turning down an offer for his land that would make him independently wealthy. 
D) A collector paying $4 million for a particular painting,when other paintings by the same painter were available at a lower price. 
E) An individual paying a high price for an electronic widget at a store instead of buying it at the adjacent store offering the same widget at a lower price.

Question 13

The heart of the economic problem is to:

Accepted Answer

A) provide for full employment. 
B) stimulate GDP growth. 
C) improve the standard of living of people. 
D) allocate limited resources among unlimited uses. 
E) increase leisure. 
A) provide for full employment. 
B) stimulate GDP growth. 
C) improve the standard of living of people. 
D) allocate limited resources among unlimited uses. 
E) increase leisure.

Question 14

Which of the following is an example of capital as a factor of production?

Accepted Answer

A) Products such as machinery and equipment that are used in the production process 
B) The financial condition of a privately held corporation 
C) The value of a company's stock on the New York Stock Exchange 
D) A company's outstanding liabilities 
E) A business cash flow 
A) Products such as machinery and equipment that are used in the production process 
B) The financial condition of a privately held corporation 
C) The value of a company's stock on the New York Stock Exchange 
D) A company's outstanding liabilities 
E) A business cash flow

Question 15

When people make choices that (at the time and with the information they have at their disposal) give them the greatest amount of satisfaction,they are said to be:

Accepted Answer

A) behaving irrationally. 
B) applying econometric models to their everyday behavior. 
C) living under a communist dictator. 
D) acting in their own rational self-interest. 
E) showing no willingness to plan for the future. 
A) behaving irrationally. 
B) applying econometric models to their everyday behavior. 
C) living under a communist dictator. 
D) acting in their own rational self-interest. 
E) showing no willingness to plan for the future.

Question 16

It seems as if the Internet has made the number of choices individuals have infinite.This means that:

Accepted Answer

A) resources have become more plentiful. 
B) wants have become more limited. 
C) wants have become less limited. 
D) scarcity continues to exist because resources have not become unlimited. 
E) scarcity has been reduced. 
A) resources have become more plentiful. 
B) wants have become more limited. 
C) wants have become less limited. 
D) scarcity continues to exist because resources have not become unlimited. 
E) scarcity has been reduced.

Question 17

If unemployment rises when beer consumption rises,then the statement "Rising unemployment is the result of increased beer consumption" is an example of the ceteris paribusfallacy.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is true of resources?

Accepted Answer

A) Capital resources include unskilled labor. 
B) Natural resources are produced by nature and are available at a zero price. 
C) Labor includes the skills and training that people acquire to use in production. 
D) Technological know-how is an example of a natural resource. 
E) Stocks and bonds are referred to as capital. 
A) Capital resources include unskilled labor. 
B) Natural resources are produced by nature and are available at a zero price. 
C) Labor includes the skills and training that people acquire to use in production. 
D) Technological know-how is an example of a natural resource. 
E) Stocks and bonds are referred to as capital.

Question 19

Which of the following is a microeconomic concern?

Accepted Answer

A) The rate of economic growth in the United States 
B) The unemployment level for a country 
C) How to maintain or improve the profits of a particular firm 
D) Inflation 
E) The national output of the United States 
A) The rate of economic growth in the United States 
B) The unemployment level for a country 
C) How to maintain or improve the profits of a particular firm 
D) Inflation 
E) The national output of the United States

Question 20

A rational worker:

Accepted Answer

A) always works for the least number of hours. 
B) always works for the highest money wage,other things being equal. 
C) never acts under conditions of uncertainty. 
D) deals only with positive and never with normative issues. 
E) would never quit a job until he or she had a better one 
A) always works for the least number of hours. 
B) always works for the highest money wage,other things being equal. 
C) never acts under conditions of uncertainty. 
D) deals only with positive and never with normative issues. 
E) would never quit a job until he or she had a better one

Exam 1: Economics: The World Around You

When a presidential candidate with a Ph.D.in economics makes a statement about what should be done to balance the budget,he or she is making a:

According to the U.S.Census Bureau,what is the difference between the earnings of a high school diploma holder and a medical practitioner between the ages of 25 and 64?

Which of the following categories of educated workforce in the U.S.,aged between 25 and 64,usually receive the highest income?

Microeconomics is concerned primarily with how individuals make their economic decisions.

For an analysis to be considered positive,and not normative,it must include:

"If a tax cut is good for me,it must be good for the whole economy." This statement is an example of the pitfall called the fallacy of composition.

Which of the following is not physical capital,as economists use the term?

Oil found underground in Texas is an example of:

The statement "people have unlimited wants," implies that people:

People who choose to do voluntary work:

Identify the logic of economics that those who have not studied economics may fail to understand.

Which of the following is not an example of rational self-interest,as defined by economists?

The heart of the economic problem is to:

Which of the following is an example of capital as a factor of production?

When people make choices that (at the time and with the information they have at their disposal) give them the greatest amount of satisfaction,they are said to be:

It seems as if the Internet has made the number of choices individuals have infinite.This means that:

If unemployment rises when beer consumption rises,then the statement "Rising unemployment is the result of increased beer consumption" is an example of the ceteris paribusfallacy.

Which of the following statements is true of resources?

Which of the following is a microeconomic concern?

A rational worker:

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