Question 1

Scarcity:

Accepted Answer

A) exists because basic human survival needs cannot be satisfied with available resources. 
B) occurs only in centrally planned economies. 
C) will likely be eliminated by technological progress. 
D) exists only in poor nations. 
E) occurs if there are insufficient resources to provide for human wants. 
A) exists because basic human survival needs cannot be satisfied with available resources. 
B) occurs only in centrally planned economies. 
C) will likely be eliminated by technological progress. 
D) exists only in poor nations. 
E) occurs if there are insufficient resources to provide for human wants.

Question 2

Which of the following involves the fallacy of composition?

Accepted Answer

A) Because sitting in the back of classrooms is correlated with getting lower grades in the class, students should always sit closer to the front of the classroom. 
B) Historically, the stock market rises in years the NFC team wins the Super Bowl and falls when the AFC wins the Super Bowl, I am rooting for the NFC team to win for the sake of my investment portfolio. 
C) When a basketball team spends more to get better players, it is more successful, which proves that all the teams should spend more to get better players. 
D) An increase in the amount of money I have will make me better off, so an increase in the supply of money in the economy will make Americans as a group better off. 
E) Both the basketball and the money supply scenarios involve the fallacy of composition. 
A) Because sitting in the back of classrooms is correlated with getting lower grades in the class, students should always sit closer to the front of the classroom. 
B) Historically, the stock market rises in years the NFC team wins the Super Bowl and falls when the AFC wins the Super Bowl, I am rooting for the NFC team to win for the sake of my investment portfolio. 
C) When a basketball team spends more to get better players, it is more successful, which proves that all the teams should spend more to get better players. 
D) An increase in the amount of money I have will make me better off, so an increase in the supply of money in the economy will make Americans as a group better off. 
E) Both the basketball and the money supply scenarios involve the fallacy of composition.

Question 3

Which of the following statements most likely lies within the realm of microeconomics?

Accepted Answer

A) Unemployment rises during a recession and falls during an expansion. 
B) A rapid acceleration of the supply of money may create inflation. 
C) An increase in government spending will increase the aggregate demand for goods and services in the economy. 
D) An increase in labor costs will increase the additional cost of producing another airplane. 
E) A decrease in federal income tax rates will stimulate increased consumer spending. 
A) Unemployment rises during a recession and falls during an expansion. 
B) A rapid acceleration of the supply of money may create inflation. 
C) An increase in government spending will increase the aggregate demand for goods and services in the economy. 
D) An increase in labor costs will increase the additional cost of producing another airplane. 
E) A decrease in federal income tax rates will stimulate increased consumer spending.

Question 4

Economics is a science that:

Accepted Answer

A) typically uses controlled experiments to learn about consumer and firm behavior. 
B) uses models that cannot be tested empirically due to the complex nature of the economy. 
C) explores how choices are made between conflicting wants and desires in a world of scarcity. 
D) relies entirely upon normative analysis. 
E) primarily focuses on budgetary decisions made by political leaders. 
A) typically uses controlled experiments to learn about consumer and firm behavior. 
B) uses models that cannot be tested empirically due to the complex nature of the economy. 
C) explores how choices are made between conflicting wants and desires in a world of scarcity. 
D) relies entirely upon normative analysis. 
E) primarily focuses on budgetary decisions made by political leaders.

Question 5

An economy's resources:

Accepted Answer

A) consist of land, labor, capital, and entrepreneurial skills. 
B) are unlimited in a country like the United States. 
C) are always efficiently utilized in wealthy nations. 
D) consist of land, labor, and entrepreneurial skills but not capital. 
A) consist of land, labor, capital, and entrepreneurial skills. 
B) are unlimited in a country like the United States. 
C) are always efficiently utilized in wealthy nations. 
D) consist of land, labor, and entrepreneurial skills but not capital.

Question 6

Economics:

Accepted Answer

A) is a narrowly focused discipline. 
B) is a broad-ranging, problem-solving discipline. 
C) concerns itself only with monetary decisions. 
D) says very little about "everyday life." 
E) deals strictly with business management decisions. 
A) is a narrowly focused discipline. 
B) is a broad-ranging, problem-solving discipline. 
C) concerns itself only with monetary decisions. 
D) says very little about "everyday life." 
E) deals strictly with business management decisions.

Question 7

A good economic theory:

Accepted Answer

A) rests on realistic assumptions. 
B) explains economic behavior and predicts well. 
C) can best be expressed mathematically. 
D) always provides a highly detailed analysis of an economic sector. 
A) rests on realistic assumptions. 
B) explains economic behavior and predicts well. 
C) can best be expressed mathematically. 
D) always provides a highly detailed analysis of an economic sector.

Question 8

The most essential economic problem is the existence of:

Accepted Answer

A) both an increasing population and the depletion of natural resources. 
B) both limited economic resources and unlimited desires. 
C) both inflation and unemployment. 
D) income inequality and economic freedom. 
A) both an increasing population and the depletion of natural resources. 
B) both limited economic resources and unlimited desires. 
C) both inflation and unemployment. 
D) income inequality and economic freedom.

Question 9

If two variables appear to be causally related, it is possible that:

Accepted Answer

A) they are indeed related. 
B) the two variables appear related by sheer coincidence. 
C) causation may run in the opposite direction. 
D) an additional correlated factor may be the source of the causality. 
E) all of the reasons given are possible answers. 
A) they are indeed related. 
B) the two variables appear related by sheer coincidence. 
C) causation may run in the opposite direction. 
D) an additional correlated factor may be the source of the causality. 
E) all of the reasons given are possible answers.

Question 10

Most people consider economics a(n):

Accepted Answer

A) social science. 
B) physical science. 
C) accounting science. 
D) earth science. 
E) anthropological science. 
A) social science. 
B) physical science. 
C) accounting science. 
D) earth science. 
E) anthropological science.

Question 11

A "scarce" good is a good:

Accepted Answer

A) for which it is impossible to increase production any further given the available resources and technology. 
B) for which there is a shortage at the current market price. 
C) that is always in demand at any price. 
D) for which available resources are insufficient to satisfy unlimited human desires for it. 
E) that cannot be produced using mass production techniques. 
A) for which it is impossible to increase production any further given the available resources and technology. 
B) for which there is a shortage at the current market price. 
C) that is always in demand at any price. 
D) for which available resources are insufficient to satisfy unlimited human desires for it. 
E) that cannot be produced using mass production techniques.

Question 12

An economic study concludes that an investment tax credit would increase business investment next year.This is an example of:

Accepted Answer

A) normative analysis. 
B) positive analysis. 
C) negative economic analysis. 
D) the fallacy of composition. 
E) generalizing from the whole to the individual. 
A) normative analysis. 
B) positive analysis. 
C) negative economic analysis. 
D) the fallacy of composition. 
E) generalizing from the whole to the individual.

Question 13

Positive incentives:

Accepted Answer

A) increase benefits or reduce costs. 
B) decrease behaviors. 
C) decrease benefits or increase costs. 
D) create additional taxes on behaviors. 
A) increase benefits or reduce costs. 
B) decrease behaviors. 
C) decrease benefits or increase costs. 
D) create additional taxes on behaviors.

Question 14

Economists believe that individuals act as if they are motivated by self-interest and:

Accepted Answer

A) respond selfishly. 
B) respond in predictable ways to changing circumstances. 
C) it leads to inconsistent and unpredictable behavior. 
D) all of the above. 
A) respond selfishly. 
B) respond in predictable ways to changing circumstances. 
C) it leads to inconsistent and unpredictable behavior. 
D) all of the above.

Question 15

Which of the following statements can explain why an association between Event A and Event B may not imply causality from A to B?

Accepted Answer

A) The observed association may be coincidental. 
B) There may be a third variable that is responsible for causing both events. 
C) Causality may run from Event B to Event A instead of in the opposite direction. 
D) All of the answers can explain why an association between Event A and Event B may not imply causality from A to B. 
A) The observed association may be coincidental. 
B) There may be a third variable that is responsible for causing both events. 
C) Causality may run from Event B to Event A instead of in the opposite direction. 
D) All of the answers can explain why an association between Event A and Event B may not imply causality from A to B.

Question 16

Which of the following is true?

Accepted Answer

A) Poverty could be eliminated but scarcity could not. 
B) Scarcity could be eliminated but poverty could not. 
C) Both scarcity and poverty could be eliminated. 
D) Neither scarcity nor poverty could be eliminated. 
A) Poverty could be eliminated but scarcity could not. 
B) Scarcity could be eliminated but poverty could not. 
C) Both scarcity and poverty could be eliminated. 
D) Neither scarcity nor poverty could be eliminated.

Question 17

Considering a linear curve, which of the following is not a correct observation?

Accepted Answer

A) Its slope can be measured as a ratio of the change in the Y value to the change in the X value. 
B) It is also called a straight-line curve. 
C) Its slope can be measured as a ratio of the rise over the run. 
D) It should have a positive slope. 
A) Its slope can be measured as a ratio of the change in the Y value to the change in the X value. 
B) It is also called a straight-line curve. 
C) Its slope can be measured as a ratio of the rise over the run. 
D) It should have a positive slope.

Question 18

In a market system, decisions about how to allocate resources are made:

Accepted Answer

A) by central planning boards in each industry. 
B) by a lottery system. 
C) by individuals and firms interacting in markets coordinated by market prices. 
D) by large conglomerates working cooperatively with the government. 
E) based upon tradition. 
A) by central planning boards in each industry. 
B) by a lottery system. 
C) by individuals and firms interacting in markets coordinated by market prices. 
D) by large conglomerates working cooperatively with the government. 
E) based upon tradition.

Question 19

Macroeconomic topics do not usually include:

Accepted Answer

A) the rate of inflation. 
B) the rate of unemployment. 
C) economic growth. 
D) the profit maximizing decisions of an individual manufacturer. 
E) the control of the money supply by the central bank. 
A) the rate of inflation. 
B) the rate of unemployment. 
C) economic growth. 
D) the profit maximizing decisions of an individual manufacturer. 
E) the control of the money supply by the central bank.

Question 20

The beginning point of a graph (the 0,0 point) is known as:

Accepted Answer

A) ground zero. 
B) the quadrant. 
C) the origin. 
D) variable one. 
E) the beginning. 
A) ground zero. 
B) the quadrant. 
C) the origin. 
D) variable one. 
E) the beginning.

Scarcity:

Which of the following involves the fallacy of composition?

Which of the following statements most likely lies within the realm of microeconomics?

Economics is a science that:

An economy's resources:

Economics:

A good economic theory:

The most essential economic problem is the existence of:

If two variables appear to be causally related, it is possible that:

Most people consider economics a(n):

A "scarce" good is a good:

An economic study concludes that an investment tax credit would increase business investment next year.This is an example of:

Positive incentives:

Economists believe that individuals act as if they are motivated by self-interest and:

Which of the following statements can explain why an association between Event A and Event B may not imply causality from A to B?

Which of the following is true?

Considering a linear curve, which of the following is not a correct observation?

In a market system, decisions about how to allocate resources are made:

Macroeconomic topics do not usually include:

The beginning point of a graph (the 0,0 point) is known as:

The Economic Way of Thinking

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 1: The Role and Method of Economics

Scarcity:

Which of the following involves the fallacy of composition?

Which of the following statements most likely lies within the realm of microeconomics?

Economics is a science that:

An economy's resources:

Economics:

A good economic theory:

The most essential economic problem is the existence of:

If two variables appear to be causally related, it is possible that:

Most people consider economics a(n):

A "scarce" good is a good:

An economic study concludes that an investment tax credit would increase business investment next year.This is an example of:

Positive incentives:

Economists believe that individuals act as if they are motivated by self-interest and:

Which of the following statements can explain why an association between Event A and Event B may not imply causality from A to B?

Which of the following is true?

Considering a linear curve, which of the following is not a correct observation?

In a market system, decisions about how to allocate resources are made:

Macroeconomic topics do not usually include:

The beginning point of a graph (the 0,0 point) is known as:

The Economic Way of Thinking

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