Question 1

The fallacy of composition is:

Accepted Answer

A) the erroneous view that an economic activity can sometimes exceed the sum of its components. 
B) the erroneous view that what is true for the individual will also be true for the group. 
C) the view that the aggregation of economic activity will necessarily lead to an outcome that is different than the outcome generated by each individual in the group. 
D) the idea that association need not imply causation. 
E) the failure to hold other variables constant when analyzing the relationship between two particular variables. 
A) the erroneous view that an economic activity can sometimes exceed the sum of its components. 
B) the erroneous view that what is true for the individual will also be true for the group. 
C) the view that the aggregation of economic activity will necessarily lead to an outcome that is different than the outcome generated by each individual in the group. 
D) the idea that association need not imply causation. 
E) the failure to hold other variables constant when analyzing the relationship between two particular variables.

Question 2

The fallacy of composition is the erroneous view that:

Accepted Answer

A) an increase in the supply of money will cause a general increase in the level of prices. 
B) a small change in an economic variable will have an unrecognizable but significant effect on the economy. 
C) when two events are associated, the one observed first must have caused the second. 
D) if something is true for an individual, then it must also be true for a group. 
A) an increase in the supply of money will cause a general increase in the level of prices. 
B) a small change in an economic variable will have an unrecognizable but significant effect on the economy. 
C) when two events are associated, the one observed first must have caused the second. 
D) if something is true for an individual, then it must also be true for a group.

Question 3

The problem of scarcity:

Accepted Answer

A) exists because resources are limited relative to wants. 
B) exists because resources are unlimited relative to wants. 
C) is solved by economists using abstract models. 
D) can be eliminated through appropriate government intervention into markets. 
E) does not exist in communist societies. 
A) exists because resources are limited relative to wants. 
B) exists because resources are unlimited relative to wants. 
C) is solved by economists using abstract models. 
D) can be eliminated through appropriate government intervention into markets. 
E) does not exist in communist societies.

Question 4

Table 1-A
 $\begin{array} { | c | c | c | } 
\hline \text { Combination } & \begin{array} { c } 
\text { Price af Apples per Bushal } \
\text { in Dollars }
\end{array} & \begin{array} { c } 
\text { Quantity af Apples } \
\text { Purchased in Bushels }
\end{array} \
\hline \text { A } & 9 & 3 \
\hline B & 7 & 4 \
\hline \text { C } & 5 & 6 \
\hline \text { D } & 4 & 8 \
\hline \text { E } & 2 & 10 \
\hline
\end{array}$
-Table 1-A demonstrates that price and quantity at each combination:

Accepted Answer

A) are inversely related. 
B) are negatively related. 
C) are positively related. 
D) have no affect on each other. 
E) can be expressed as either inversely or negatively related. 
A) are inversely related. 
B) are negatively related. 
C) are positively related. 
D) have no affect on each other. 
E) can be expressed as either inversely or negatively related.

Question 5

An example of an intangible good is:

Accepted Answer

A) an automobile. 
B) a new house. 
C) a snowplow. 
D) friendship. 
E) a recliner chair. 
A) an automobile. 
B) a new house. 
C) a snowplow. 
D) friendship. 
E) a recliner chair.

Question 6

Which of the following is false?

Accepted Answer

A) Even intangible goods can be subjected to economic analysis. 
B) Wealthy individuals who decide to donate money to charity do not face the constraints of scarcity. 
C) Increases in production would not enable us to eliminate scarcity. 
D) If we had unlimited resources, we would not have to choose among our desires. 
E) Scarcity implies that "there is no such thing as a free lunch." 
A) Even intangible goods can be subjected to economic analysis. 
B) Wealthy individuals who decide to donate money to charity do not face the constraints of scarcity. 
C) Increases in production would not enable us to eliminate scarcity. 
D) If we had unlimited resources, we would not have to choose among our desires. 
E) Scarcity implies that "there is no such thing as a free lunch."

Question 7

All of the following are intangible except:

Accepted Answer

A) health. 
B) love. 
C) computer programming expertise. 
D) power. 
E) All of the answers are intangible goods. 
A) health. 
B) love. 
C) computer programming expertise. 
D) power. 
E) All of the answers are intangible goods.

Question 8

Macroeconomics:

Accepted Answer

A) is narrower in scope than microeconomics. 
B) analyzes mergers and acquisitions between firms. 
C) is concerned with the expansion and contraction of the overall economy. 
D) is concerned with the expansion of a small sole proprietorship into a large corporation. 
E) is primarily concerned with the decisions of individual households. 
A) is narrower in scope than microeconomics. 
B) analyzes mergers and acquisitions between firms. 
C) is concerned with the expansion and contraction of the overall economy. 
D) is concerned with the expansion of a small sole proprietorship into a large corporation. 
E) is primarily concerned with the decisions of individual households.

Question 9

The importance of the ceteris paribus assumption is that it:

Accepted Answer

A) allows one to separate normative economic issues from positive economic ones. 
B) allows one to generalize from the whole to the individual. 
C) allows one to analyze the relationship between two variables apart from the influence of other variables. 
D) allows one to hold all variables constant so the economy can be carefully observed in a suspended state. 
A) allows one to separate normative economic issues from positive economic ones. 
B) allows one to generalize from the whole to the individual. 
C) allows one to analyze the relationship between two variables apart from the influence of other variables. 
D) allows one to hold all variables constant so the economy can be carefully observed in a suspended state.

Question 10

Which of the following best illustrates the fallacy of composition?

Accepted Answer

A) If I stand up at a baseball game I will be able to see the game better; if all fans stood up at a baseball game they would all be able to see the game better. 
B) If I wore a jacket to a baseball game in October, I would be warmer; if all fans wore jackets they would all be warmer. 
C) If I purchase fewer concessions at a baseball game, I will save money; if all fans purchase fewer concessions then all can save money. 
D) If I yell more during a baseball game it will be louder if all fans yell more during the game it will be much louder. 
A) If I stand up at a baseball game I will be able to see the game better; if all fans stood up at a baseball game they would all be able to see the game better. 
B) If I wore a jacket to a baseball game in October, I would be warmer; if all fans wore jackets they would all be warmer. 
C) If I purchase fewer concessions at a baseball game, I will save money; if all fans purchase fewer concessions then all can save money. 
D) If I yell more during a baseball game it will be louder if all fans yell more during the game it will be much louder.

Question 11

Which of the following will not directly add to improvements in human capital?

Accepted Answer

A) increases in take home pay 
B) a low-level manager is sent back to college to acquire an MBA degree 
C) improved job training programs offered to employees 
D) an increase in the computer-proficiency requirements of all high school graduates 
A) increases in take home pay 
B) a low-level manager is sent back to college to acquire an MBA degree 
C) improved job training programs offered to employees 
D) an increase in the computer-proficiency requirements of all high school graduates

Question 12

The ceteris paribus assumption is used in economic analyses in order to:

Accepted Answer

A) cover special cases. 
B) include all relevant factors. 
C) add realism. 
D) simplify the analysis of a complex world. 
A) cover special cases. 
B) include all relevant factors. 
C) add realism. 
D) simplify the analysis of a complex world.

Question 13

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

Accepted Answer

A) An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. 
B) Due to process innovations in computer chip manufacturing, the market supply of computers increased. 
C) Due to an economic recession, manufacturing firms began implementing layoffs of their workforces. 
D) Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook. 
E) A consumer electronics firm found that it could minimize its losses by shutting down its operations altogether. 
A) An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. 
B) Due to process innovations in computer chip manufacturing, the market supply of computers increased. 
C) Due to an economic recession, manufacturing firms began implementing layoffs of their workforces. 
D) Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook. 
E) A consumer electronics firm found that it could minimize its losses by shutting down its operations altogether.

Question 14

Many people have heard that the stock market rises when a team from the National Football Conference (NFC) wins the Super Bowl, and falls when a team from the American Football Conference (AFC) is victorious.If you conclude that there is a causal relationship between the outcome of the Super Bowl and stock prices, you probably are:

Accepted Answer

A) confusing correlation with causation. 
B) violating the ceteris paribus assumption. 
C) committing the fallacy of composition. 
D) confusing the direction of causality, since everyone knows that stock prices determine which team wins the Super Bowl. 
A) confusing correlation with causation. 
B) violating the ceteris paribus assumption. 
C) committing the fallacy of composition. 
D) confusing the direction of causality, since everyone knows that stock prices determine which team wins the Super Bowl.

Question 15

Individuals:

Accepted Answer

A) respond to incentives in predictable ways. 
B) decrease the level of an activity in response to negative incentives. 
C) respond to positive incentives by increasing the level of activity. 
D) do all of the behaviors listed. 
A) respond to incentives in predictable ways. 
B) decrease the level of an activity in response to negative incentives. 
C) respond to positive incentives by increasing the level of activity. 
D) do all of the behaviors listed.

Question 16

"Mandating longer sentences for any criminal's third arrest will lead to a reduction in crime.Less crime will reduce the number of police officers cities will hire." This quotation:

Accepted Answer

A) contains positive statements only. 
B) contains normative statements only. 
C) contains both normative and positive statements. 
D) contains neither normative nor positive statements. 
A) contains positive statements only. 
B) contains normative statements only. 
C) contains both normative and positive statements. 
D) contains neither normative nor positive statements.

Question 17

Which of the following is not an example of a factor of production?

Accepted Answer

A) land 
B) labor 
C) capital 
D) entrepreneurship 
E) None of the answers is correct 
A) land 
B) labor 
C) capital 
D) entrepreneurship 
E) None of the answers is correct

Question 18

When collective decision making is utilized to resolve economic questions regarding the allocation of resources, then:

Accepted Answer

A) everyone will receive an equal share of the output produced. 
B) the preferences of individuals are of no importance. 
C) economic efficiency will be assured. 
D) the role of markets will be replaced by political decision making. 
A) everyone will receive an equal share of the output produced. 
B) the preferences of individuals are of no importance. 
C) economic efficiency will be assured. 
D) the role of markets will be replaced by political decision making.

Question 19

In order to determine if a hypothesis is valid we must utilize

Accepted Answer

A) qualitative analysis. 
B) empirical analysis. 
C) marginal analysis. 
D) average analysis. 
E) production analysis. 
A) qualitative analysis. 
B) empirical analysis. 
C) marginal analysis. 
D) average analysis. 
E) production analysis.

Question 20

In the graph of the circular flow model below, area B represents

Accepted Answer

A) product markets. 
B) firms. 
C) factor markets. 
D) households. 
A) product markets. 
B) firms. 
C) factor markets. 
D) households.

The fallacy of composition is:

The fallacy of composition is the erroneous view that:

The problem of scarcity:

Table 1-A Combination Price af Apples per Bushal in Dollars Quantity af Apples Purchased in Bushels A 9 3 B 7 4 C 5 6 D 4 8 E 2 10 -Table 1-A demonstrates that price and quantity at each combination:

An example of an intangible good is:

Which of the following is false?

All of the following are intangible except:

Macroeconomics:

The importance of the ceteris paribus assumption is that it:

Which of the following best illustrates the fallacy of composition?

Which of the following will not directly add to improvements in human capital?

The ceteris paribus assumption is used in economic analyses in order to:

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

Individuals:

"Mandating longer sentences for any criminal's third arrest will lead to a reduction in crime.Less crime will reduce the number of police officers cities will hire." This quotation:

Which of the following is not an example of a factor of production?

When collective decision making is utilized to resolve economic questions regarding the allocation of resources, then:

In order to determine if a hypothesis is valid we must utilize

In the graph of the circular flow model below, area B represents

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

Exam 1: The Role and Method of Economics

The fallacy of composition is:

The fallacy of composition is the erroneous view that:

The problem of scarcity:

Table 1-A Combination Price af Apples per Bushal in Dollars Quantity af Apples Purchased in Bushels A 9 3 B 7 4 C 5 6 D 4 8 E 2 10 -Table 1-A demonstrates that price and quantity at each combination:

An example of an intangible good is:

Which of the following is false?

All of the following are intangible except:

Macroeconomics:

The importance of the ceteris paribus assumption is that it:

Which of the following best illustrates the fallacy of composition?

Which of the following will not directly add to improvements in human capital?

The ceteris paribus assumption is used in economic analyses in order to:

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

Individuals:

"Mandating longer sentences for any criminal's third arrest will lead to a reduction in crime.Less crime will reduce the number of police officers cities will hire." This quotation:

Which of the following is not an example of a factor of production?

When collective decision making is utilized to resolve economic questions regarding the allocation of resources, then:

In order to determine if a hypothesis is valid we must utilize

In the graph of the circular flow model below, area B represents

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