Question 1

Which of the following best illustrates the fallacy of composition?

Accepted Answer

A) If I have more money, I will be better off; therefore if we all had more money, we all would be better off. 
B) If I buy more gas each week, my gas consumption increases; therefore, if all gas consumers buy more gas each week, total gas consumption will increase. 
C) If I spend more time studying, I will learn more; therefore, if all students spend more time studying, they will learn more. 
D) If women's hemlines are higher this year, the Dow Jones Industrials average will fall. 
A) If I have more money, I will be better off; therefore if we all had more money, we all would be better off. 
B) If I buy more gas each week, my gas consumption increases; therefore, if all gas consumers buy more gas each week, total gas consumption will increase. 
C) If I spend more time studying, I will learn more; therefore, if all students spend more time studying, they will learn more. 
D) If women's hemlines are higher this year, the Dow Jones Industrials average will fall.

Question 2

The branch of economics that studies the aggregate decisions of all households and all firms is called:

Accepted Answer

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

Question 3

"Ceteris paribus" means:

Accepted Answer

A) if events A and B occur together, one must cause the other. 
B) all relevant details are included. 
C) what is true for the individual must be true for the whole. 
D) holding other things constant. 
E) association does not imply causation. 
A) if events A and B occur together, one must cause the other. 
B) all relevant details are included. 
C) what is true for the individual must be true for the whole. 
D) holding other things constant. 
E) association does not imply causation.

Question 4

Which of the following is a statement of positive economics?

Accepted Answer

A) New tax laws are needed to help the poor. 
B) Teenage unemployment should be reduced. 
C) We should increase Social Security payments to the elderly. 
D) An increase in tax rates will reduce unemployment. 
E) It is only fair that firms that are protected from competition by government-granted monopolies pay higher corporate taxes. 
A) New tax laws are needed to help the poor. 
B) Teenage unemployment should be reduced. 
C) We should increase Social Security payments to the elderly. 
D) An increase in tax rates will reduce unemployment. 
E) It is only fair that firms that are protected from competition by government-granted monopolies pay higher corporate taxes.

Question 5

Microeconomics differs from macroeconomics in that:

Accepted Answer

A) microeconomics studies individual decision making while macroeconomics examines aggregate decision making. 
B) microeconomics studies aggregate decision making while macroeconomics examines individual decision making. 
C) microeconomics utilizes positive economic analysis while macroeconomics utilizes normative economic analysis. 
D) microeconomics is concerned with consumer behavior while macroeconomics is concerned with firm behavior. 
E) There is no difference between microeconomics and macroeconomics. 
A) microeconomics studies individual decision making while macroeconomics examines aggregate decision making. 
B) microeconomics studies aggregate decision making while macroeconomics examines individual decision making. 
C) microeconomics utilizes positive economic analysis while macroeconomics utilizes normative economic analysis. 
D) microeconomics is concerned with consumer behavior while macroeconomics is concerned with firm behavior. 
E) There is no difference between microeconomics and macroeconomics.

Question 6

When economists say goods are scarce, they mean that:

Accepted Answer

A) consumers do not have enough money to purchase the goods. 
B) the desire for goods and services exceeds our ability to produce them with limited resources. 
C) at the current price, consumers are willing to buy more of a good than suppliers are willing to produce. 
D) government programs are needed to lift families out of poverty. 
A) consumers do not have enough money to purchase the goods. 
B) the desire for goods and services exceeds our ability to produce them with limited resources. 
C) at the current price, consumers are willing to buy more of a good than suppliers are willing to produce. 
D) government programs are needed to lift families out of poverty.

Question 7

Scarcity means that:

Accepted Answer

A) there will always be families living below the poverty line. 
B) resources are unlimited. 
C) human wants are limited. 
D) limited resources cannot satisfy all of our unlimited human wants. 
E) choices are unnecessary. 
A) there will always be families living below the poverty line. 
B) resources are unlimited. 
C) human wants are limited. 
D) limited resources cannot satisfy all of our unlimited human wants. 
E) choices are unnecessary.

Question 8

Most of economic analysis assumes that people's actions are:

Accepted Answer

A) motivated by submerged emotional needs. 
B) driven by magnetic forces generated by planetary movements. 
C) motivated primarily by concern for the well-being of others. 
D) motivated by self-interest. 
E) motivated purely by money. 
A) motivated by submerged emotional needs. 
B) driven by magnetic forces generated by planetary movements. 
C) motivated primarily by concern for the well-being of others. 
D) motivated by self-interest. 
E) motivated purely by money.

Question 9

Which of the following is correct?

Accepted Answer

A) "Theory" and "hypothesis" are interchangeable terms meaning the same thing. 
B) A hypothesis may result from a tested and confirmed theory. 
C) A theory may result from a tested and confirmed hypothesis. 
D) A hypothesis is a theory whose formulation relies on mathematics. 
A) "Theory" and "hypothesis" are interchangeable terms meaning the same thing. 
B) A hypothesis may result from a tested and confirmed theory. 
C) A theory may result from a tested and confirmed hypothesis. 
D) A hypothesis is a theory whose formulation relies on mathematics.

Question 10

Measuring the rate of inflation is primarily a concern of:

Accepted Answer

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

Question 11

The term "ceteris paribus" means that:

Accepted Answer

A) everything is variable. 
B) all variables except those specified are constant. 
C) no one knows which variables will change and which will remain constant. 
D) what is true for the individual is not necessarily true for the whole. 
E) all variables are held constant. 
A) everything is variable. 
B) all variables except those specified are constant. 
C) no one knows which variables will change and which will remain constant. 
D) what is true for the individual is not necessarily true for the whole. 
E) all variables are held constant.

Question 12

Which of the following is an example of a positive incentive?

Accepted Answer

A) You expect to be grounded if your grades slip below a B average. 
B) You expect to receive a scholarship if your grades remain high. 
C) Desserts will be unavailable at the cafeteria if you arrive after 7:00 p.m. 
D) Campus police institute a policy of impounding cars parked in delivery zone spaces. 
A) You expect to be grounded if your grades slip below a B average. 
B) You expect to receive a scholarship if your grades remain high. 
C) Desserts will be unavailable at the cafeteria if you arrive after 7:00 p.m. 
D) Campus police institute a policy of impounding cars parked in delivery zone spaces.

Question 13

In a market economy, the amount of a good that is produced is primarily decided by the interaction of:

Accepted Answer

A) buyers and sellers. 
B) all consumers. 
C) producers and input suppliers. 
D) producers and government planning committees. 
E) all producers. 
A) buyers and sellers. 
B) all consumers. 
C) producers and input suppliers. 
D) producers and government planning committees. 
E) all producers.

Question 14

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:

Accepted Answer

A) more apples are purchased at each and every price. 
B) more apples are purchased as the price declines. 
C) fewer apples are purchased as the price declines. 
D) fewer apples are purchased at each and every price. 
A) more apples are purchased at each and every price. 
B) more apples are purchased as the price declines. 
C) fewer apples are purchased as the price declines. 
D) fewer apples are purchased at each and every price.

Question 15

All of the following are tangible goods except:

Accepted Answer

A) a skateboard. 
B) a desk. 
C) a train locomotive. 
D) fairness. 
E) a piano. 
A) a skateboard. 
B) a desk. 
C) a train locomotive. 
D) fairness. 
E) a piano.

Question 16

The fundamental economic problem is:

Accepted Answer

A) poverty. 
B) unemployment. 
C) scarcity. 
D) government intervention into markets. 
E) inflation. 
A) poverty. 
B) unemployment. 
C) scarcity. 
D) government intervention into markets. 
E) inflation.

Question 17

Which of the following is not true?

Accepted Answer

A) Economics is the study of the allocation of scarce resources to satisfy unlimited wants for goods and services. 
B) Scarcity is the problem that our wants exceed our limited resources. 
C) Economists assume that self-interest is the motivation behind economic behavior, and so respond in predictable ways to changing circumstances. 
D) Economists believe that it is rational for people to anticipate the likely future consequences of their behavior. 
E) All of the answers are true. 
A) Economics is the study of the allocation of scarce resources to satisfy unlimited wants for goods and services. 
B) Scarcity is the problem that our wants exceed our limited resources. 
C) Economists assume that self-interest is the motivation behind economic behavior, and so respond in predictable ways to changing circumstances. 
D) Economists believe that it is rational for people to anticipate the likely future consequences of their behavior. 
E) All of the answers are true.

Question 18

A scientist trying to test a theory about the relationship between people's consumption of alcohol and their longevity would want to hold all of the following variables constant except ____:

Accepted Answer

A) the amount of alcohol that people in the experimental group consumed. 
B) the amount of cigarettes that people in the experimental group smoked. 
C) the amount of dietary fat that people in the experimental group consumed. 
D) past histories of heart and lung disease. 
A) the amount of alcohol that people in the experimental group consumed. 
B) the amount of cigarettes that people in the experimental group smoked. 
C) the amount of dietary fat that people in the experimental group consumed. 
D) past histories of heart and lung disease.

Question 19

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

Accepted Answer

A) an office building 
B) a product's price 
C) the land plowed by a farmer in order to grow corn 
D) the chief executive officer of a large corporation 
E) a worker on an assembly line producing compact disc players 
A) an office building 
B) a product's price 
C) the land plowed by a farmer in order to grow corn 
D) the chief executive officer of a large corporation 
E) a worker on an assembly line producing compact disc players

Question 20

Which of the following best illustrates the fallacy of composition?

Accepted Answer

A) I hate driving to work when the traffic is so heavy, so I decide to leave 30 minutes earlier than in the past. If everyone were to leave 30 minutes earlier for work, we'd all get to work faster. 
B) A great many people have been immunized against polio because it can be such a devastating disease. As a result, I probably do not personally need to be immunized against polio. 
C) Whenever I attend a baseball game at the local stadium, the home team wins. Therefore, if I attend all of the team's local games, they will achieve a perfect winning record at home. 
D) The parking at Ohio State University is in short supply on the main campus. It would be better for more people to ride the bus to school. 
A) I hate driving to work when the traffic is so heavy, so I decide to leave 30 minutes earlier than in the past. If everyone were to leave 30 minutes earlier for work, we'd all get to work faster. 
B) A great many people have been immunized against polio because it can be such a devastating disease. As a result, I probably do not personally need to be immunized against polio. 
C) Whenever I attend a baseball game at the local stadium, the home team wins. Therefore, if I attend all of the team's local games, they will achieve a perfect winning record at home. 
D) The parking at Ohio State University is in short supply on the main campus. It would be better for more people to ride the bus to school.

Which of the following best illustrates the fallacy of composition?

The branch of economics that studies the aggregate decisions of all households and all firms is called:

"Ceteris paribus" means:

Which of the following is a statement of positive economics?

Microeconomics differs from macroeconomics in that:

When economists say goods are scarce, they mean that:

Scarcity means that:

Most of economic analysis assumes that people's actions are:

Which of the following is correct?

Measuring the rate of inflation is primarily a concern of:

The term "ceteris paribus" means that:

Which of the following is an example of a positive incentive?

In a market economy, the amount of a good that is produced is primarily decided by the interaction of:

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:

All of the following are tangible goods except:

The fundamental economic problem is:

Which of the following is not true?

A scientist trying to test a theory about the relationship between people's consumption of alcohol and their longevity would want to hold all of the following variables constant except ____:

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

Which of the following best illustrates the fallacy of composition?

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

Which of the following best illustrates the fallacy of composition?

The branch of economics that studies the aggregate decisions of all households and all firms is called:

"Ceteris paribus" means:

Which of the following is a statement of positive economics?

Microeconomics differs from macroeconomics in that:

When economists say goods are scarce, they mean that:

Scarcity means that:

Most of economic analysis assumes that people's actions are:

Which of the following is correct?

Measuring the rate of inflation is primarily a concern of:

The term "ceteris paribus" means that:

Which of the following is an example of a positive incentive?

In a market economy, the amount of a good that is produced is primarily decided by the interaction of:

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:

All of the following are tangible goods except:

The fundamental economic problem is:

Which of the following is not true?

A scientist trying to test a theory about the relationship between people's consumption of alcohol and their longevity would want to hold all of the following variables constant except ____:

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

Which of the following best illustrates the fallacy of composition?

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