Question 1

What is the difference between a hypothesis and a theory?

Accepted Answer

A hypothesis about behavior is the first

Question 2

The Environmental Protection Agency asks you to help them understand the causes of urban pollution.You develop the following two hypotheses.Test each hypothesis against the given facts, identify which fits the facts better, and offer a theory based on your observation. I. Air pollution will be a greater problem the higher the average temperature in an urban area.
II. Air pollution will be a greater problem the greater the population located in an urban area $\begin{array}{|l|c|c|c|}
\hline{\text { Urban Area }} & \begin{array}{c}
\text { Days with Polluted } \
\text { Air }
\end{array} & \begin{array}{c}
\text { Average Max } \
\text { Temperature }
\end{array} & \begin{array}{c}
\text { Population (in } \
\text { thousands) }
\end{array} \
\hline \text { Los Angeles, CA } & 104.3 & 70.4 & 15,302 \
\hline \text { Portland, ME } & 11.8 & 54.9 & 445 \
\hline \text { Cincinnati, OH } & 1.3 & 63.2 & 1,894 \
\hline \text { Milwaukee, WI } & 3.9 & 54.3 & 1,637 \
\hline \text { San Diego, CA } & 11.8 & 70.8 & 2,632 \
\hline \text { El Paso, TX } & 3.7 & 77.5 & 665 \
\hline \text { Atlanta, GA } & 4.2 & 71.2 & 3,331 \
\hline \text { Philadelphia, PA } & 10.3 & 63.4 & 5,957 \
\hline
\end{array}$

Accepted Answer

This data supports hypothesis II better

Question 3

Scarcity is a problem faced by all but the wealthiest of citizens.

Accepted Answer

A) True 
 B)False

Question 4

The opportunity cost of an action is:

Accepted Answer

A) the value of the best foregone alternative. 
B) the difference between the benefits that result and the expenses incurred as a result of the action. 
C) the same as the expected benefit of the action. 
D) the same for everyone who undertakes the action. 
A) the value of the best foregone alternative. 
B) the difference between the benefits that result and the expenses incurred as a result of the action. 
C) the same as the expected benefit of the action. 
D) the same for everyone who undertakes the action.

Question 5

If resources and goods are free to move across states, if Oregon producers choose to specialize in producing honey and California producers choose to specialize in growing almonds, then we could reasonable conclude that:

Accepted Answer

A) California has a comparative advantage in producing almonds. 
B) Oregon has a comparative advantage in producing honey. 
C) the opportunity cost of growing almonds is lower in California than in Oregon. 
D) the opportunity cost of producing honey is lower in Oregon than in California. 
E) all of the above are true. 
A) California has a comparative advantage in producing almonds. 
B) Oregon has a comparative advantage in producing honey. 
C) the opportunity cost of growing almonds is lower in California than in Oregon. 
D) the opportunity cost of producing honey is lower in Oregon than in California. 
E) all of the above are true.

Question 6

Rational choices:

Accepted Answer

A) are based on a comparison of total benefits and total costs. 
B) can only be made by those who are economists. 
C) are made based on expectations of the additional benefits and additional costs involved. 
D) measure benefits based on the past. 
E) are always motivated by concern for others. 
A) are based on a comparison of total benefits and total costs. 
B) can only be made by those who are economists. 
C) are made based on expectations of the additional benefits and additional costs involved. 
D) measure benefits based on the past. 
E) are always motivated by concern for others.

Question 7

Normative analysis focuses on statements that can be tested against real-world data.

Accepted Answer

A) True 
 B)False

Question 8

It is possible to completely eliminate scarcity.

Accepted Answer

A) True 
 B)False

Question 9

Table 2-A
 $\begin{array} { c c c } 
\text { Possibility A } & \text { Econamics } & \text { History } \
\text { I } & 94 & 76 \
\text { II } & 87 & 84 \
\text { III } & 77 & 9 !
\end{array}$
-Refer to Table 2-A.A student has only a few hours to prepare for two different exams tomorrow morning.The above table shows alternative possible exam outcomes with three alternative uses of the student's time.The opportunity cost of scoring an 84 on the history exam rather than 76 is:

Accepted Answer

A) 10 points on the economics exam. 
B) 7 points on the economics exam. 
C) 8 points on the history exam. 
D) 12 points on the economics exam. 
E) 94 points on the economics exam. 
A) 10 points on the economics exam. 
B) 7 points on the economics exam. 
C) 8 points on the history exam. 
D) 12 points on the economics exam. 
E) 94 points on the economics exam.

Question 10

To an economist, individuals are acting "rationally" if they are striving to do their best to achieve their goals.

Accepted Answer

A) True 
 B)False

Question 11

Economists believe that in regards to criminal behavior:

Accepted Answer

A) people engage in criminal activity because they are genetically predisposed to do so. 
B) those choosing to commit criminal acts weigh the expected marginal benefits versus the expected marginal costs. 
C) individuals are irrational and don't respond to incentives. 
D) economics can shed very little light on the subject. 
A) people engage in criminal activity because they are genetically predisposed to do so. 
B) those choosing to commit criminal acts weigh the expected marginal benefits versus the expected marginal costs. 
C) individuals are irrational and don't respond to incentives. 
D) economics can shed very little light on the subject.

Question 12

Farmer Fred could grow wheat and barley.He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on an acre of his land.The price of wheat is $2.00 per bushel and the price of barley $ 0.80.Show the benefits to Fred from specialization.What should he specialize in?

Accepted Answer

Farmer Fred could make $150 if he grew o

Question 13

Opportunity cost includes

Accepted Answer

A) monetary costs only. 
B) non-monetary costs only. 
C) both monetary and non-monetary costs. 
D) neither monetary nor non-monetary costs. 
A) monetary costs only. 
B) non-monetary costs only. 
C) both monetary and non-monetary costs. 
D) neither monetary nor non-monetary costs.

Question 14

Differentiate between positive and negative incentives.

Accepted Answer

Positive incentives either increase bene

Question 15

Tom is a castaway who washes up on a remote island.He can kill eight birds per hour or catch ten fish per day.The natives on the island can kill ten birds per day or catch twenty fish per day.Tom has a comparative advantage in:

Accepted Answer

A) hunting birds. 
B) fishing. 
C) both hunting birds and fishing 
D) neither hunting birds or fishing. 
A) hunting birds. 
B) fishing. 
C) both hunting birds and fishing 
D) neither hunting birds or fishing.

Question 16

Whom of the following would economists consider most likely to commit a crime?

Accepted Answer

A) An individual with a high paying job because he faces a lower opportunity cost if caught 
B) An individual with a high paying job because he faces a higher opportunity cost if caught 
C) An individual without a job because he faces a lower opportunity cost if caught 
D) An individual without a job because he faces a higher opportunity cost if caught 
A) An individual with a high paying job because he faces a lower opportunity cost if caught 
B) An individual with a high paying job because he faces a higher opportunity cost if caught 
C) An individual without a job because he faces a lower opportunity cost if caught 
D) An individual without a job because he faces a higher opportunity cost if caught

Question 17

Marginal analysis involves:

Accepted Answer

A) comparing the total benefits of all actions to the total costs incurred as a result of those actions. 
B) abstract thinking, which is never actually utilized by consumers when making purchasing decisions. 
C) holding all other variables constant when isolating the relationship between two variables. 
D) comparing the additional benefit from an action to the additional cost. 
A) comparing the total benefits of all actions to the total costs incurred as a result of those actions. 
B) abstract thinking, which is never actually utilized by consumers when making purchasing decisions. 
C) holding all other variables constant when isolating the relationship between two variables. 
D) comparing the additional benefit from an action to the additional cost.

Question 18

Two parties can capture gains from specialization and trade whenever:

Accepted Answer

A) One party is twice as good as producing all goods as the other. 
B) The opportunity costs of producing each good are the same for both parties. 
C) Both parties can produce equal amounts of both goods. 
D) None of these answers are true. 
A) One party is twice as good as producing all goods as the other. 
B) The opportunity costs of producing each good are the same for both parties. 
C) Both parties can produce equal amounts of both goods. 
D) None of these answers are true.

Question 19

"A tax cut will lead to higher inflation" is an example of a positive economic statement.

Accepted Answer

A) True 
 B)False

Question 20

Henry must choose between going to his psychology class this evening or going on a double date.If he chooses to go on the date, the expected value of the psychology lecture:

Accepted Answer

A) is impossible to compare to the expected enjoyment from going on a date. 
B) is likely greater than the expected marginal benefit from going on the date. 
C) is likely less than the expected marginal benefit from going on the date. 
D) is likely equal to the expected marginal benefit from going on the date. 
A) is impossible to compare to the expected enjoyment from going on a date. 
B) is likely greater than the expected marginal benefit from going on the date. 
C) is likely less than the expected marginal benefit from going on the date. 
D) is likely equal to the expected marginal benefit from going on the date.

What is the difference between a hypothesis and a theory?

Scarcity is a problem faced by all but the wealthiest of citizens.

The opportunity cost of an action is:

If resources and goods are free to move across states, if Oregon producers choose to specialize in producing honey and California producers choose to specialize in growing almonds, then we could reasonable conclude that:

Rational choices:

Normative analysis focuses on statements that can be tested against real-world data.

It is possible to completely eliminate scarcity.

To an economist, individuals are acting "rationally" if they are striving to do their best to achieve their goals.

Economists believe that in regards to criminal behavior:

Farmer Fred could grow wheat and barley.He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on an acre of his land.The price of wheat is $2.00 per bushel and the price of barley $ 0.80.Show the benefits to Fred from specialization.What should he specialize in?

Opportunity cost includes

Differentiate between positive and negative incentives.

Tom is a castaway who washes up on a remote island.He can kill eight birds per hour or catch ten fish per day.The natives on the island can kill ten birds per day or catch twenty fish per day.Tom has a comparative advantage in:

Whom of the following would economists consider most likely to commit a crime?

Marginal analysis involves:

Two parties can capture gains from specialization and trade whenever:

"A tax cut will lead to higher inflation" is an example of a positive economic statement.

Henry must choose between going to his psychology class this evening or going on a double date.If he chooses to go on the date, the expected value of the psychology lecture:

The Role and Method of Economics

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

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Exam 2: The Economic Way of Thinking

What is the difference between a hypothesis and a theory?

Scarcity is a problem faced by all but the wealthiest of citizens.

The opportunity cost of an action is:

If resources and goods are free to move across states, if Oregon producers choose to specialize in producing honey and California producers choose to specialize in growing almonds, then we could reasonable conclude that:

Rational choices:

Normative analysis focuses on statements that can be tested against real-world data.

It is possible to completely eliminate scarcity.

To an economist, individuals are acting "rationally" if they are striving to do their best to achieve their goals.

Economists believe that in regards to criminal behavior:

Farmer Fred could grow wheat and barley.He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on an acre of his land.The price of wheat is $2.00 per bushel and the price of barley $ 0.80.Show the benefits to Fred from specialization.What should he specialize in?

Opportunity cost includes

Differentiate between positive and negative incentives.

Tom is a castaway who washes up on a remote island.He can kill eight birds per hour or catch ten fish per day.The natives on the island can kill ten birds per day or catch twenty fish per day.Tom has a comparative advantage in:

Whom of the following would economists consider most likely to commit a crime?

Marginal analysis involves:

Two parties can capture gains from specialization and trade whenever:

"A tax cut will lead to higher inflation" is an example of a positive economic statement.

Henry must choose between going to his psychology class this evening or going on a double date.If he chooses to go on the date, the expected value of the psychology lecture:

The Role and Method of Economics

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters