Question 1

Economics is most importantly concerned with:

Accepted Answer

A) how to profit from trading in the stock market. 
B) government taxation and spending. 
C) studying how we allocate scarce resources to satisfy unlimited wants. 
D) how to reduce inflation. 
E) how to successfully launch a business. 
A) how to profit from trading in the stock market. 
B) government taxation and spending. 
C) studying how we allocate scarce resources to satisfy unlimited wants. 
D) how to reduce inflation. 
E) how to successfully launch a business.

Question 2

The branch of economics that focuses on the conduct of affairs within narrowly defined units, such as households or business firms, is called:

Accepted Answer

A) macroeconomics. 
B) microeconomics. 
C) socioeconomics. 
D) applied economics. 
E) market economics. 
A) macroeconomics. 
B) microeconomics. 
C) socioeconomics. 
D) applied economics. 
E) market economics.

Question 3

Economics is the study of how people cope with:

Accepted Answer

A) fluctuations in stock prices. 
B) greed. 
C) limited human wants. 
D) limited resources. 
A) fluctuations in stock prices. 
B) greed. 
C) limited human wants. 
D) limited resources.

Question 4

Macroeconomics primarily examines:

Accepted Answer

A) the behavior of individual households and firms. 
B) how prices are determined within individual markets. 
C) the output levels that maximize the profits of business firms. 
D) broad issues such as national output, employment and inflation. 
E) the consumption decisions of individual households. 
A) the behavior of individual households and firms. 
B) how prices are determined within individual markets. 
C) the output levels that maximize the profits of business firms. 
D) broad issues such as national output, employment and inflation. 
E) the consumption decisions of individual households.

Question 5

Which of the following is a positive statement?

Accepted Answer

A) Increased money supply growth will lead to a higher rate of inflation. 
B) The average distance between the earth and the moon is 100,000 miles. 
C) There are more millionaires in Uganda than in the United States. 
D) People watch more TV during finals week than during the rest of the term. 
E) All of the answers are positive statements. 
A) Increased money supply growth will lead to a higher rate of inflation. 
B) The average distance between the earth and the moon is 100,000 miles. 
C) There are more millionaires in Uganda than in the United States. 
D) People watch more TV during finals week than during the rest of the term. 
E) All of the answers are positive statements.

Question 6

Scarcity exists because of:

Accepted Answer

A) the allocation of goods by prices. 
B) specialization and division of labor. 
C) the market mechanism. 
D) unlimited wants and limited resources. 
A) the allocation of goods by prices. 
B) specialization and division of labor. 
C) the market mechanism. 
D) unlimited wants and limited resources.

Question 7

Which of the following is a normative statement?

Accepted Answer

A) An increase in taxes will cause higher unemployment. 
B) An increase in tariffs will increase the domestic prices paid by consumers. 
C) Income should be redistributed from the top 2% of wage earners to the lower income brackets. 
D) Running government budget deficits leads to higher market interest rates. 
E) Increasing the money supply will lead to inflation. 
A) An increase in taxes will cause higher unemployment. 
B) An increase in tariffs will increase the domestic prices paid by consumers. 
C) Income should be redistributed from the top 2% of wage earners to the lower income brackets. 
D) Running government budget deficits leads to higher market interest rates. 
E) Increasing the money supply will lead to inflation.

Question 8

An economist might hypothesize that people will buy less gasoline at a price of $3.00 per gallon than at $2.50 per gallon.In order for the hypothesis to become a theory, it would have to be tested.Which of the following observations would seem to support this hypothesis?

Accepted Answer

A) People in each region buy the same amount of gasoline regardless of the price. 
B) Gasoline consumption varies with the quantity of cars purchased in each region. 
C) Individuals line up to purchase more gasoline at higher prices with the expectation that the fuel will be of higher quality. 
D) Individuals in each region respond to an increase in price by purchasing less gasoline. 
A) People in each region buy the same amount of gasoline regardless of the price. 
B) Gasoline consumption varies with the quantity of cars purchased in each region. 
C) Individuals line up to purchase more gasoline at higher prices with the expectation that the fuel will be of higher quality. 
D) Individuals in each region respond to an increase in price by purchasing less gasoline.

Question 9

Which of the following would not be considered "capital" in economics?

Accepted Answer

A) A delivery van used by Federal Express. 
B) 1000 shares of General Electric stock. 
C) $500 in currency. 
D) A microprocessor factory 
E) both the delivery van the factory are considered capital. 
A) A delivery van used by Federal Express. 
B) 1000 shares of General Electric stock. 
C) $500 in currency. 
D) A microprocessor factory 
E) both the delivery van the factory are considered capital.

Question 10

The function of an entrepreneur is to:

Accepted Answer

A) bear the business risks. 
B) organize the other factors of production. 
C) innovate. 
D) do all of the tasks listed. 
A) bear the business risks. 
B) organize the other factors of production. 
C) innovate. 
D) do all of the tasks listed.

Question 11

Which of the following is an example of an individual motivated be self-interest?

Accepted Answer

A) a student volunteering at a soup kitchen 
B) an attorney providing free legal service to low income families 
C) a young person volunteering for the Peace Corps 
D) a man buying a new Camaro 
E) all of the answers are correct 
A) a student volunteering at a soup kitchen 
B) an attorney providing free legal service to low income families 
C) a young person volunteering for the Peace Corps 
D) a man buying a new Camaro 
E) all of the answers are correct

Question 12

Your mother tells you, "Watching ten hours of TV per day will make you stupid." This is a positive statement because:

Accepted Answer

A) your mother says it with a positive tone in her voice. 
B) it is your mother's opinion. 
C) it is a proposition that can be tested. 
D) your mother is only thinking of your best interest. 
A) your mother says it with a positive tone in her voice. 
B) it is your mother's opinion. 
C) it is a proposition that can be tested. 
D) your mother is only thinking of your best interest.

Question 13

Exhibit 1-A  
-Exhibit 1-A demonstrates that:

Accepted Answer

A) price and quantity purchased are positively related. 
B) there is an inverse relationship between price and quantity purchased. 
C) as the price increases, the quantity purchased increases. 
D) price and quantity purchased share a direct relationship. 
A) price and quantity purchased are positively related. 
B) there is an inverse relationship between price and quantity purchased. 
C) as the price increases, the quantity purchased increases. 
D) price and quantity purchased share a direct relationship.

Question 14

The similarity between all goods and services, whether tangible or intangible, is that they:

Accepted Answer

A) are not subject to economic analysis. 
B) require technical expertise. 
C) have no price tags. 
D) are made from scarce resources and are subject to economic analysis. 
A) are not subject to economic analysis. 
B) require technical expertise. 
C) have no price tags. 
D) are made from scarce resources and are subject to economic analysis.

Question 15

The branch of economics that studies the economy as a whole is:

Accepted Answer

A) normative economics. 
B) positive economics. 
C) microeconomics. 
D) macroeconomics. 
E) global economics. 
A) normative economics. 
B) positive economics. 
C) microeconomics. 
D) macroeconomics. 
E) global economics.

Question 16

Scarcity means that:

Accepted Answer

A) human desires are limited. 
B) resources are insufficient to satisfy all human desires. 
C) choices are unnecessary. 
D) all but the very wealthy must face choices. 
E) market prices are too low. 
A) human desires are limited. 
B) resources are insufficient to satisfy all human desires. 
C) choices are unnecessary. 
D) all but the very wealthy must face choices. 
E) market prices are too low.

Question 17

"When one basketball team spends a large sum of money acquiring better players, it is better off.If all teams do the same thing, all of them are better off." These statements demonstrate:

Accepted Answer

A) the fallacy of composition. 
B) confusing association with causation. 
C) a misunderstanding of the direction of causality. 
D) the ceteris paribus condition. 
A) the fallacy of composition. 
B) confusing association with causation. 
C) a misunderstanding of the direction of causality. 
D) the ceteris paribus condition.

Question 18

Economists need to develop abstractions in order to:

Accepted Answer

A) avoid analyzing real-world economic interactions, which are too complicated to understand. 
B) distinguish normative economic behavior from positive economic behavior. 
C) avoid committing the fallacy of composition. 
D) understand and explain economic behavior. 
E) justify their salaries, much in the way lawyers speak and write in "legalese." 
A) avoid analyzing real-world economic interactions, which are too complicated to understand. 
B) distinguish normative economic behavior from positive economic behavior. 
C) avoid committing the fallacy of composition. 
D) understand and explain economic behavior. 
E) justify their salaries, much in the way lawyers speak and write in "legalese."

Question 19

Entrepreneurship is:

Accepted Answer

A) human capital. 
B) another word for the financial capital that can be used to start a business. 
C) the resource that organizes the other factors of production in order to produce goods and/or services. 
D) another word for physical capital that is used to produce goods and services. 
A) human capital. 
B) another word for the financial capital that can be used to start a business. 
C) the resource that organizes the other factors of production in order to produce goods and/or services. 
D) another word for physical capital that is used to produce goods and services.

Question 20

In the circular flow model:

Accepted Answer

A) households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses. 
B) businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households. 
C) households receive revenue for selling goods and services to businesses, and use that revenue to buy inputs from businesses. 
D) Households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses AND businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households. 
A) households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses. 
B) businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households. 
C) households receive revenue for selling goods and services to businesses, and use that revenue to buy inputs from businesses. 
D) Households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses AND businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households.

Economics is most importantly concerned with:

The branch of economics that focuses on the conduct of affairs within narrowly defined units, such as households or business firms, is called:

Economics is the study of how people cope with:

Macroeconomics primarily examines:

Which of the following is a positive statement?

Scarcity exists because of:

Which of the following is a normative statement?

An economist might hypothesize that people will buy less gasoline at a price of $3.00 per gallon than at $2.50 per gallon.In order for the hypothesis to become a theory, it would have to be tested.Which of the following observations would seem to support this hypothesis?

Which of the following would not be considered "capital" in economics?

The function of an entrepreneur is to:

Which of the following is an example of an individual motivated be self-interest?

Your mother tells you, "Watching ten hours of TV per day will make you stupid." This is a positive statement because:

Exhibit 1-A -Exhibit 1-A demonstrates that:

The similarity between all goods and services, whether tangible or intangible, is that they:

The branch of economics that studies the economy as a whole is:

Scarcity means that:

"When one basketball team spends a large sum of money acquiring better players, it is better off.If all teams do the same thing, all of them are better off." These statements demonstrate:

Economists need to develop abstractions in order to:

Entrepreneurship is:

In the circular flow model:

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

Economics is most importantly concerned with:

The branch of economics that focuses on the conduct of affairs within narrowly defined units, such as households or business firms, is called:

Economics is the study of how people cope with:

Macroeconomics primarily examines:

Which of the following is a positive statement?

Scarcity exists because of:

Which of the following is a normative statement?

An economist might hypothesize that people will buy less gasoline at a price of $3.00 per gallon than at $2.50 per gallon.In order for the hypothesis to become a theory, it would have to be tested.Which of the following observations would seem to support this hypothesis?

Which of the following would not be considered "capital" in economics?

The function of an entrepreneur is to:

Which of the following is an example of an individual motivated be self-interest?

Your mother tells you, "Watching ten hours of TV per day will make you stupid." This is a positive statement because:

Exhibit 1-A -Exhibit 1-A demonstrates that:

The similarity between all goods and services, whether tangible or intangible, is that they:

The branch of economics that studies the economy as a whole is:

Scarcity means that:

"When one basketball team spends a large sum of money acquiring better players, it is better off.If all teams do the same thing, all of them are better off." These statements demonstrate:

Economists need to develop abstractions in order to:

Entrepreneurship is:

In the circular flow model:

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