Question 1

Ceteris paribus is a German phrase that means that everything is allowed to be changed.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an example of a positive economic statement?

Accepted Answer

A)  The economy's real output increased at about 3 per cent last year and the unemployment rate decreased. 
B)  A central bank should not print too much money because inflation could result. 
C)  Parliament should stabilise the social security system by raising taxes now. 
D)  A healthy economy should grow at about 5 per cent a year in order to provide enough goods for a growing population. 
E)  The government farm products surplus should be distributed to the needy. 
A)  The economy's real output increased at about 3 per cent last year and the unemployment rate decreased. 
B)  A central bank should not print too much money because inflation could result. 
C)  Parliament should stabilise the social security system by raising taxes now. 
D)  A healthy economy should grow at about 5 per cent a year in order to provide enough goods for a growing population. 
E)  The government farm products surplus should be distributed to the needy.

Question 3

Policies to increase the supply of money in the economy are primarily a concern of microeconomics.

Accepted Answer

A) True 
 B)False

Question 4

The study of microeconomics and macroeconomics differs in that:

Accepted Answer

A)  microeconomics is concerned with the domestic economy and macroeconomics is concerned only with the international economy. 
B)  microeconomics examines the individual markets of the economy while macroeconomics studies the whole economy. 
C)  microeconomics studies the actions of households and macroeconomics studies the actions of business firms. 
D)  microeconomics studies the economy in terms of private individuals and firms while macroeconomics includes the effect of an industry. 
E)  microeconomics examines the whole economy while macroeconomics studies the individual units of the economy. 
A)  microeconomics is concerned with the domestic economy and macroeconomics is concerned only with the international economy. 
B)  microeconomics examines the individual markets of the economy while macroeconomics studies the whole economy. 
C)  microeconomics studies the actions of households and macroeconomics studies the actions of business firms. 
D)  microeconomics studies the economy in terms of private individuals and firms while macroeconomics includes the effect of an industry. 
E)  microeconomics examines the whole economy while macroeconomics studies the individual units of the economy.

Question 5

An economic theory claims that a rise in petrol prices will cause petrol purchases to fall, ceteris paribus. The phrase 'ceteris paribus' means that:

Accepted Answer

A)  other relevant factors like consumers' incomes and preferences must be held constant. 
B)  the petrol prices must first be adjusted for inflation. 
C)  the theory is widely accepted but cannot be accurately tested. 
D)  consumers have no clues. 
A)  other relevant factors like consumers' incomes and preferences must be held constant. 
B)  the petrol prices must first be adjusted for inflation. 
C)  the theory is widely accepted but cannot be accurately tested. 
D)  consumers have no clues.

Question 6

Normative statements:

Accepted Answer

A)  are dealing with facts. 
B)  express a collective judgement. 
C)  can be tested. 
D)  are the only statements that are true. 
A)  are dealing with facts. 
B)  express a collective judgement. 
C)  can be tested. 
D)  are the only statements that are true.

Question 7

Microeconomics only looks at the behaviour of one consumer or one firm in a market, while macroeconomics looks at the behaviour of an entire industry or group of consumers.

Accepted Answer

A) True 
 B)False

Question 8

An entrepreneur is a motivated person who seeks profit by:

Accepted Answer

A)  economising. 
B)  undertaking risky activities, e.g. combing economic resources to produce goods and services. 
C)  winning in the lottery. 
D)  selling shares. 
A)  economising. 
B)  undertaking risky activities, e.g. combing economic resources to produce goods and services. 
C)  winning in the lottery. 
D)  selling shares.

Question 9

Which of the following words indicate the positive statement?

Accepted Answer

A)  good, bad. 
B)  should, need. 
C)  if, then. 
D)  ought, to. 
A)  good, bad. 
B)  should, need. 
C)  if, then. 
D)  ought, to.

Question 10

Macroeconomics is concerned with:

Accepted Answer

A)  the study of the whole economy. 
B)  the study of the economic behaviour of an industry. 
C)  the study of the issues of how individual prices are determined in markets. 
D)  the study of how firms determine output levels. 
A)  the study of the whole economy. 
B)  the study of the economic behaviour of an industry. 
C)  the study of the issues of how individual prices are determined in markets. 
D)  the study of how firms determine output levels.

Question 11

Scarcity:

Accepted Answer

A)  does not exist. 
B)  implies that people must make a choice. 
C)  exists only in developed countries. 
D)  exists only in developing countries. 
A)  does not exist. 
B)  implies that people must make a choice. 
C)  exists only in developed countries. 
D)  exists only in developing countries.

Question 12

Economics is the study of how people:

Accepted Answer

A)  vote for political leaders who decide what is to be produced. 
B)  make choices to produce and consume goods and services in the presence of scarcity. 
C)  establish social institutions that maximise wellbeing. 
D)  develop value systems that affect their consumption choices. 
E)  form customs and traditions that influence consumption. 
A)  vote for political leaders who decide what is to be produced. 
B)  make choices to produce and consume goods and services in the presence of scarcity. 
C)  establish social institutions that maximise wellbeing. 
D)  develop value systems that affect their consumption choices. 
E)  form customs and traditions that influence consumption.

Question 13

Which of the following is not a resource?

Accepted Answer

A)  Land. 
B)  Labour. 
C)  Money. 
D)  Capital. 
A)  Land. 
B)  Labour. 
C)  Money. 
D)  Capital.

Question 14

Economists use _____ economic analysis to understand an individual market. They then use _____ economic analysis to guide an appropriate national economic policy.

Accepted Answer

A)  macro, normative 
B)  micro, positive 
C)  micro, macro 
D)  normative, positive 
A)  macro, normative 
B)  micro, positive 
C)  micro, macro 
D)  normative, positive

Question 15

Which of the following is a statement of positive economics?

Accepted Answer

A)  Government control of rent is a fair way to help poor people afford housing. 
B)  Government control of rent keeps landlords from charging too much rent. 
C)  Government control of rent decreases the number of new apartments constructed. 
D)  Government control of rent is an injustice. 
A)  Government control of rent is a fair way to help poor people afford housing. 
B)  Government control of rent keeps landlords from charging too much rent. 
C)  Government control of rent decreases the number of new apartments constructed. 
D)  Government control of rent is an injustice.

Question 16

Which of the following would eliminate scarcity as an economic problem?

Accepted Answer

A)  Moderation of people's competitive instincts. 
B)  Discovery of sufficiently large new energy reserves. 
C)  Resumption of steady productivity growth. 
D)  Economic scarcity cannot be eliminated as long as the resources are limited. 
A)  Moderation of people's competitive instincts. 
B)  Discovery of sufficiently large new energy reserves. 
C)  Resumption of steady productivity growth. 
D)  Economic scarcity cannot be eliminated as long as the resources are limited.

Question 17

Abstracting from reality is an important element of all economic models.

Accepted Answer

A) True 
 B)False

Question 18

Labour, land and capital are called:

Accepted Answer

A)  goods and services. 
B)  entrepreneurship. 
C)  outputs. 
D)  factors of production. 
A)  goods and services. 
B)  entrepreneurship. 
C)  outputs. 
D)  factors of production.

Question 19

Positive economics is a/an:

Accepted Answer

A)  reflection of individual or collective values. 
B)  statement dealing with the facts. 
C)  statement about normative facts. 
D)  analysis of what ought to be. 
A)  reflection of individual or collective values. 
B)  statement dealing with the facts. 
C)  statement about normative facts. 
D)  analysis of what ought to be.

Question 20

Macroeconomics is concerned with the issue of how monetary policy can slow down inflation.

Accepted Answer

A) True 
 B)False

Ceteris paribus is a German phrase that means that everything is allowed to be changed.

Which of the following is an example of a positive economic statement?

Policies to increase the supply of money in the economy are primarily a concern of microeconomics.

The study of microeconomics and macroeconomics differs in that:

An economic theory claims that a rise in petrol prices will cause petrol purchases to fall, ceteris paribus. The phrase 'ceteris paribus' means that:

Normative statements:

Microeconomics only looks at the behaviour of one consumer or one firm in a market, while macroeconomics looks at the behaviour of an entire industry or group of consumers.

An entrepreneur is a motivated person who seeks profit by:

Which of the following words indicate the positive statement?

Macroeconomics is concerned with:

Scarcity:

Economics is the study of how people:

Which of the following is not a resource?

Economists use _ economic analysis to understand an individual market. They then use _ economic analysis to guide an appropriate national economic policy.

Which of the following is a statement of positive economics?

Which of the following would eliminate scarcity as an economic problem?

Abstracting from reality is an important element of all economic models.

Labour, land and capital are called:

Positive economics is a/an:

Macroeconomics is concerned with the issue of how monetary policy can slow down inflation.

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters

Exam 1: Thinking Like an Economist

Ceteris paribus is a German phrase that means that everything is allowed to be changed.

Which of the following is an example of a positive economic statement?

Policies to increase the supply of money in the economy are primarily a concern of microeconomics.

The study of microeconomics and macroeconomics differs in that:

An economic theory claims that a rise in petrol prices will cause petrol purchases to fall, ceteris paribus. The phrase 'ceteris paribus' means that:

Normative statements:

Microeconomics only looks at the behaviour of one consumer or one firm in a market, while macroeconomics looks at the behaviour of an entire industry or group of consumers.

An entrepreneur is a motivated person who seeks profit by:

Which of the following words indicate the positive statement?

Macroeconomics is concerned with:

Scarcity:

Economics is the study of how people:

Which of the following is not a resource?

Economists use _____ economic analysis to understand an individual market. They then use _____ economic analysis to guide an appropriate national economic policy.

Which of the following is a statement of positive economics?

Which of the following would eliminate scarcity as an economic problem?

Abstracting from reality is an important element of all economic models.

Labour, land and capital are called:

Positive economics is a/an:

Macroeconomics is concerned with the issue of how monetary policy can slow down inflation.

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters

Economists use _ economic analysis to understand an individual market. They then use _ economic analysis to guide an appropriate national economic policy.