Question 1

Which of the following statements about positive economic analysis is false?

Accepted Answer

A)  Positive analysis uses an economic model to estimate the costs and benefits of different courses of action. 
B)  There is much more disagreement among economists over normative economic analysis than over positive economic analysis. 
C)  There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D)  Unlike normative economic analysis, positive economic analysis can be tested. 
A)  Positive analysis uses an economic model to estimate the costs and benefits of different courses of action. 
B)  There is much more disagreement among economists over normative economic analysis than over positive economic analysis. 
C)  There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D)  Unlike normative economic analysis, positive economic analysis can be tested.

Question 2

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that________.

Accepted Answer

A)  people with health insurance will be less likely to be overweight than people without health insurance 
B)  people with health insurance will be more likely to be overweight than people without health insurance 
C)  people with health insurance will be equally likely to be overweight as people without health insurance 
D)  there is no correlation between having health insurance and being overweight 
A)  people with health insurance will be less likely to be overweight than people without health insurance 
B)  people with health insurance will be more likely to be overweight than people without health insurance 
C)  people with health insurance will be equally likely to be overweight as people without health insurance 
D)  there is no correlation between having health insurance and being overweight

Question 3

When is productive efficiency achieved?

Accepted Answer

A)  When firms add a low profit margin to the goods and services they produce 
B)  When firms produce the goods and services that consumers value most 
C)  When firms produce goods and services at the lowest cost 
D)  When there are no shortages or surpluses in the market 
A)  When firms add a low profit margin to the goods and services they produce 
B)  When firms produce the goods and services that consumers value most 
C)  When firms produce goods and services at the lowest cost 
D)  When there are no shortages or surpluses in the market

Question 4

Mr.Peabody chooses to invest in companies that produce goods and services based on consumer preferences.Mr.Peabody is investing in companies that are attempting to be __________.

Accepted Answer

A)  allocatively efficient 
B)  productively efficient 
C)  guaranteed to make a profit 
D)  all of the above 
A)  allocatively efficient 
B)  productively efficient 
C)  guaranteed to make a profit 
D)  all of the above

Question 5

In economics,what term means 'additional' or 'extra'?

Accepted Answer

A)  Allocative 
B)  Marginal 
C)  Equity 
D)  Optimal 
A)  Allocative 
B)  Marginal 
C)  Equity 
D)  Optimal

Question 6

Which of the following statements is true about scarcity?

Accepted Answer

A)  Scarcity refers to the situation in which unlimited wants exceed limited resources. 
B)  Scarcity is not a problem for the wealthy. 
C)  Scarcity is only a problem when a country has too large a population. 
D)  Scarcity arises when there is a wide disparity in income distribution. 
A)  Scarcity refers to the situation in which unlimited wants exceed limited resources. 
B)  Scarcity is not a problem for the wealthy. 
C)  Scarcity is only a problem when a country has too large a population. 
D)  Scarcity arises when there is a wide disparity in income distribution.

Question 7

Which of the following is a normative economic statement?

Accepted Answer

A)  The price of petrol is too high. 
B)  The current high price of petrol is the result of strong worldwide demand. 
C)  When the price of petrol rises, the quantity of petrol purchased falls. 
D)  When the price of petrol rises, transportation costs rise. 
A)  The price of petrol is too high. 
B)  The current high price of petrol is the result of strong worldwide demand. 
C)  When the price of petrol rises, the quantity of petrol purchased falls. 
D)  When the price of petrol rises, transportation costs rise.

Question 8

What does making 'how much' decisions involve?

Accepted Answer

A)  Calculating the total benefits of the activity and determining if you are satisfied with that amount 
B)  Calculating the total costs of the activity and determining if you can afford to incur that expenditure 
C)  Calculating the average benefit and the average cost of an activity to determine if it is worthwhile undertaking that activity 
D)  Determining the additional benefits and the additional costs of that activity 
A)  Calculating the total benefits of the activity and determining if you are satisfied with that amount 
B)  Calculating the total costs of the activity and determining if you can afford to incur that expenditure 
C)  Calculating the average benefit and the average cost of an activity to determine if it is worthwhile undertaking that activity 
D)  Determining the additional benefits and the additional costs of that activity

Question 9

What is voluntary exchange?
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

Voluntary exchange is a situat

Question 10

A university must decide if it wants to offer more Internet-based classes.This decision involves answering the economic question of 'what to produce'.

Accepted Answer

A) True 
 B)False

Question 11

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfil those wants.

Accepted Answer

A) True 
 B)False

Question 12

Economists assume that rational people do all of the following except _________.

Accepted Answer

A)  using all available information as they act to achieve their goals 
B)  undertaking activities that benefit others and hurt themselves 
C)  weighing the benefits and costs of all possible alternative actions 
D)  responding to economic incentives 
A)  using all available information as they act to achieve their goals 
B)  undertaking activities that benefit others and hurt themselves 
C)  weighing the benefits and costs of all possible alternative actions 
D)  responding to economic incentives

Question 13

Which of the following is a macroeconomics question?

Accepted Answer

A)  What determines the inflation rate? 
B)  What determines the production of DVDs? 
C)  What factors determine the price of carrots? 
D)  What determines the wage of auto workers? 
A)  What determines the inflation rate? 
B)  What determines the production of DVDs? 
C)  What factors determine the price of carrots? 
D)  What determines the wage of auto workers?

Question 14

The government makes all economic decisions in a mixed economy.

Accepted Answer

A) True 
 B)False

Question 15

By definition,economics is the study of __________.

Accepted Answer

A)  how to make money in the stock market 
B)  how to make money in a market economy 
C)  the choices people make to attain their goals, given their scarce resources 
D)  supply and demand 
A)  how to make money in the stock market 
B)  how to make money in a market economy 
C)  the choices people make to attain their goals, given their scarce resources 
D)  supply and demand

Question 16

What is an economic model?
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

An economic model is a simplif

Question 17

Economists assume that individuals________.

Accepted Answer

A)  behave in unpredictable ways 
B)  will never take action to help others 
C)  prefer to live in a society that values fairness above all else 
D)  are rational and respond to incentives 
A)  behave in unpredictable ways 
B)  will never take action to help others 
C)  prefer to live in a society that values fairness above all else 
D)  are rational and respond to incentives

Question 18

Allison's Auto Art is a company that applies pinstripes to vehicles.Allison's cost for a basic one-colour pinstriping job is $35,and she charges $95 for this service.For a total price of $175,Allison will apply a fancier three-colour pinstripe application to an automobile,a service that adds an additional $40 to the total cost of the package.Should Allison continue to offer the three-colour pinstripe application?

Accepted Answer

A)  Yes, she still makes a profit by selling the three-colour application. 
B)  Yes, but only if she lowers the price of the one-colour application. 
C)  No, her marginal benefit is less than her marginal cost. 
D)  More information is needed for Allison to make this decision. 
A)  Yes, she still makes a profit by selling the three-colour application. 
B)  Yes, but only if she lowers the price of the one-colour application. 
C)  No, her marginal benefit is less than her marginal cost. 
D)  More information is needed for Allison to make this decision.

Question 19

An example of a normative economic statement is:

Accepted Answer

A)  The price of wheat is too low. 
B)  The current low price of wheat is the result of increased worldwide supply. 
C)  When the price of wheat falls, the quantity of wheat purchased rises. 
D)  When the price of wheat falls, the cost of wheat-based products falls. 
A)  The price of wheat is too low. 
B)  The current low price of wheat is the result of increased worldwide supply. 
C)  When the price of wheat falls, the quantity of wheat purchased rises. 
D)  When the price of wheat falls, the cost of wheat-based products falls.

Question 20

Economists reason that the optimal decision is to continue any activity up to the point where the________.

Accepted Answer

A)  marginal benefit is zero 
B)  marginal benefit is greater than the marginal cost 
C)  marginal cost is zero 
D)  marginal benefit equals the marginal cost 
A)  marginal benefit is zero 
B)  marginal benefit is greater than the marginal cost 
C)  marginal cost is zero 
D)  marginal benefit equals the marginal cost

Which of the following statements about positive economic analysis is false?

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that________.

When is productive efficiency achieved?

Mr.Peabody chooses to invest in companies that produce goods and services based on consumer preferences.Mr.Peabody is investing in companies that are attempting to be __________.

In economics,what term means 'additional' or 'extra'?

Which of the following statements is true about scarcity?

Which of the following is a normative economic statement?

What does making 'how much' decisions involve?

What is voluntary exchange? __________________________________________________________________________________________________________________________________________________________________________________________

A university must decide if it wants to offer more Internet-based classes.This decision involves answering the economic question of 'what to produce'.

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfil those wants.

Economists assume that rational people do all of the following except _________.

Which of the following is a macroeconomics question?

The government makes all economic decisions in a mixed economy.

By definition,economics is the study of __________.

What is an economic model? __________________________________________________________________________________________________________________________________________________________________________________________

Economists assume that individuals________.

An example of a normative economic statement is:

Economists reason that the optimal decision is to continue any activity up to the point where the________.

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters

Exam 1: Economics: Foundations and Models

Which of the following statements about positive economic analysis is false?

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that________.

When is productive efficiency achieved?

Mr.Peabody chooses to invest in companies that produce goods and services based on consumer preferences.Mr.Peabody is investing in companies that are attempting to be __________.

In economics,what term means 'additional' or 'extra'?

Which of the following statements is true about scarcity?

Which of the following is a normative economic statement?

What does making 'how much' decisions involve?

What is voluntary exchange? __________________________________________________________________________________________________________________________________________________________________________________________

A university must decide if it wants to offer more Internet-based classes.This decision involves answering the economic question of 'what to produce'.

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfil those wants.

Economists assume that rational people do all of the following except _________.

Which of the following is a macroeconomics question?

The government makes all economic decisions in a mixed economy.

By definition,economics is the study of __________.

What is an economic model? __________________________________________________________________________________________________________________________________________________________________________________________

Economists assume that individuals________.

An example of a normative economic statement is:

Economists reason that the optimal decision is to continue any activity up to the point where the________.

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters