Question 1

Identify the correct statement.

Accepted Answer

A) Positive economics deals with what ought to be. 
B) Positive economics is subjective. 
C) Normative economics is objective. 
D) Normative economics deals with what is. 
E) Normative economics expresses someone's opinion 
A) Positive economics deals with what ought to be. 
B) Positive economics is subjective. 
C) Normative economics is objective. 
D) Normative economics deals with what is. 
E) Normative economics expresses someone's opinion

Question 2

A good or service is said to be scarce when:

Accepted Answer

A) its price is too low. 
B) it is offered only to high income earners. 
C) no one wishes to purchase it. 
D) it cannot be transported easily. 
E) at a price of zero,there will not be enough to satisfy everyone's desire for it. 
A) its price is too low. 
B) it is offered only to high income earners. 
C) no one wishes to purchase it. 
D) it cannot be transported easily. 
E) at a price of zero,there will not be enough to satisfy everyone's desire for it.

Question 3

Goods are scarce when:

Accepted Answer

A) their price is too high. 
B) their price is too low. 
C) the amount people want is more than the amount available at a zero price. 
D) they are necessities. 
E) their price is controlled. 
A) their price is too high. 
B) their price is too low. 
C) the amount people want is more than the amount available at a zero price. 
D) they are necessities. 
E) their price is controlled.

Question 4

Which of the following can be categorized as financial capital?

Accepted Answer

A) Offices and warehouses 
B) Stocks and bonds 
C) Machinery 
D) Land 
E) Equipment 
A) Offices and warehouses 
B) Stocks and bonds 
C) Machinery 
D) Land 
E) Equipment

Question 5

A(n) _____ is anything that you would pay to get rid of.

Accepted Answer

A) economic good 
B) economic bad 
C) resource 
D) free good 
E) public good 
A) economic good 
B) economic bad 
C) resource 
D) free good 
E) public good

Question 6

Economics is probably best defined as the study of unintended consequences.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is considered a macroeconomic question?

Accepted Answer

A) How can one particular firm maximize profits? 
B) How does a family allocate income among various available goods and services? 
C) How can economic policy fight inflation? 
D) What factors determine the wage rate in a certain industry? 
E) What is the impact of competition on the profits of a business? 
A) How can one particular firm maximize profits? 
B) How does a family allocate income among various available goods and services? 
C) How can economic policy fight inflation? 
D) What factors determine the wage rate in a certain industry? 
E) What is the impact of competition on the profits of a business?

Question 8

The study of inflation and unemployment in East Timor is in the realm of microeconomics.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following in an example of an economic bad?

Accepted Answer

A) Corruption 
B) Bureaucracy 
C) Pollution 
D) A five year old car 
E) Life insurance 
A) Corruption 
B) Bureaucracy 
C) Pollution 
D) A five year old car 
E) Life insurance

Question 10

Microeconomics is the branch of economics that focuses on:

Accepted Answer

A) deficit spending. 
B) the problems of inflation and unemployment. 
C) state and local economic problems. 
D) the individual units that make up an economy. 
E) development in the absence of economic growth. 
A) deficit spending. 
B) the problems of inflation and unemployment. 
C) state and local economic problems. 
D) the individual units that make up an economy. 
E) development in the absence of economic growth.

Question 11

People can increase their wealth by:

Accepted Answer

A) increasing the value of the resources they own. 
B) selling the land they own. 
C) investing in risky ventures. 
D) purchasing shares of stock. 
E) trading bonds they own for stocks. 
A) increasing the value of the resources they own. 
B) selling the land they own. 
C) investing in risky ventures. 
D) purchasing shares of stock. 
E) trading bonds they own for stocks.

Question 12

People are compelled to make a choice because of the lack of time and money to buy everything they want.

Accepted Answer

A) True 
 B)False

Question 13

Economists use the term _____ to emphasize the point that people do not have perfect knowledge or perfect insight.

Accepted Answer

A) fallacy of composition 
B) rational self-interest 
C) cold call 
D) cognitive bias 
E) bounded rationality 
A) fallacy of composition 
B) rational self-interest 
C) cold call 
D) cognitive bias 
E) bounded rationality

Question 14

"Inflation is a more serious problem than education." This statement is an example of:

Accepted Answer

A) a microeconomic analysis. 
B) bounded rationality. 
C) the fallacy of composition. 
D) a positive statement. 
E) a normative statement. 
A) a microeconomic analysis. 
B) bounded rationality. 
C) the fallacy of composition. 
D) a positive statement. 
E) a normative statement.

Question 15

When an individual is behaving according to "rational self-interest," he/she:

Accepted Answer

A) is behaving out of greed. 
B) will always choose the path of least resistance. 
C) will always buy the cheapest product. 
D) is making choices that provide the greatest amount of satisfaction. 
E) is making a lot of money. 
A) is behaving out of greed. 
B) will always choose the path of least resistance. 
C) will always buy the cheapest product. 
D) is making choices that provide the greatest amount of satisfaction. 
E) is making a lot of money.

Question 16

Whether to have more or less government involvement in the overall economy:

Accepted Answer

A) is essentially a normative issue. 
B) is essentially a political issue,and therefore the techniques of economic analysis are not applicable. 
C) is essentially a positive issue. 
D) could be either a positive or a normative issue. 
E) is essentially a matter of personal opinion. 
A) is essentially a normative issue. 
B) is essentially a political issue,and therefore the techniques of economic analysis are not applicable. 
C) is essentially a positive issue. 
D) could be either a positive or a normative issue. 
E) is essentially a matter of personal opinion.

Question 17

A rational consumer:

Accepted Answer

A) never makes mistakes. 
B) is also a successful entrepreneur. 
C) always has perfect information. 
D) never acts until he or she has perfect information 
E) seeks to gain the greatest possible satisfaction from purchases,using the available information. 
A) never makes mistakes. 
B) is also a successful entrepreneur. 
C) always has perfect information. 
D) never acts until he or she has perfect information 
E) seeks to gain the greatest possible satisfaction from purchases,using the available information.

Question 18

Producers use the money received from selling their goods and services in the market to pay for the resource services.

Accepted Answer

A) True 
 B)False

Question 19

If two variables change,then it must mean that the change in one variable is caused by a change in the other variable.

Accepted Answer

A) True 
 B)False

Question 20

Scarcity impels an individual to make choices.

Accepted Answer

A) True 
 B)False

Exam 1: Economics: The World Around You

Identify the correct statement.

A good or service is said to be scarce when:

Goods are scarce when:

Which of the following can be categorized as financial capital?

A(n) _____ is anything that you would pay to get rid of.

Economics is probably best defined as the study of unintended consequences.

Which of the following is considered a macroeconomic question?

The study of inflation and unemployment in East Timor is in the realm of microeconomics.

Which of the following in an example of an economic bad?

Microeconomics is the branch of economics that focuses on:

People can increase their wealth by:

People are compelled to make a choice because of the lack of time and money to buy everything they want.

Economists use the term _____ to emphasize the point that people do not have perfect knowledge or perfect insight.

"Inflation is a more serious problem than education." This statement is an example of:

When an individual is behaving according to "rational self-interest," he/she:

Whether to have more or less government involvement in the overall economy:

A rational consumer:

Producers use the money received from selling their goods and services in the market to pay for the resource services.

If two variables change,then it must mean that the change in one variable is caused by a change in the other variable.

Scarcity impels an individual to make choices.

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