Question 1

When society can not produce all the goods and services people want, it is faced with

Accepted Answer

A) ​scarcity. 
B) ​surpluses. 
C) ​inefficiencies. 
D) ​inequalities. 
A) ​scarcity. 
B) ​surpluses. 
C) ​inefficiencies. 
D) ​inequalities.

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. 
A) ​macroeconomics. 
B) ​microeconomics. 
C) ​socioeconomics. 
D) ​applied economics.

Question 3

Economists assume that most individuals act as if they are motivated by self-interest and respond in predictable ways to changing circumstances.

Accepted Answer

A) True 
 B)False

Question 4

"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. 
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.

Question 5

A microeconomist would most likely study the effect of a reduction in income tax rates on:

Accepted Answer

A) ​total output in the economy. 
B) ​the output of the steel industry. 
C) ​inflation. 
D) ​unemployment. 
A) ​total output in the economy. 
B) ​the output of the steel industry. 
C) ​inflation. 
D) ​unemployment.

Question 6

Which of the following is an example of microeconomic analysis?

Accepted Answer

A) ​impact of taxation on national income 
B) ​rate of increase in the national debt 
C) ​relationship between inflation and interest rates set by the Federal Reserve 
D) ​none of the above 
A) ​impact of taxation on national income 
B) ​rate of increase in the national debt 
C) ​relationship between inflation and interest rates set by the Federal Reserve 
D) ​none of the above

Question 7

Measuring the rate of inflation is primarily a concern of:

Accepted Answer

A) ​positive economics. 
B) ​normative economics. 
C) ​microeconomics. 
D) ​macroeconomics. 
A) ​positive economics. 
B) ​normative economics. 
C) ​microeconomics. 
D) ​macroeconomics.

Question 8

Economists believe that only a small part of human behavior can be explained and predicted by assuming that most people act as if they are motivated by their own self-interest in an effort to increase their expected personal satisfaction.

Accepted Answer

A) True 
 B)False

Question 9

Most of economic analysis assumes that most people act as if they 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. 
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.

Question 10

"Employment fell last month to its lowest level in the last six years" is an example of:

Accepted Answer

A) ​the fallacy of composition. 
B) ​positive economics. 
C) ​normative economics. 
D) ​none of the above 
A) ​the fallacy of composition. 
B) ​positive economics. 
C) ​normative economics. 
D) ​none of the above

Question 11

Macroeconomic topics do not generally include:

Accepted Answer

A) ​inflation. 
B) ​aggregate demand. 
C) ​government spending and taxation. 
D) ​the production decisions of individual firms. 
A) ​inflation. 
B) ​aggregate demand. 
C) ​government spending and taxation. 
D) ​the production decisions of individual firms.

Question 12

Economists believe that most people's actions are rational and purposeful, not random and chaotic.

Accepted Answer

A) True 
 B)False

Question 13

To be a positive economic statement, an assertion must be true.

Accepted Answer

A) True 
 B)False

Question 14

When economists disagree, it is often over what type of issues?

Accepted Answer

Economists generally disagree on policy

Question 15

From an economists' perspective, which of the following observations is not true?

Accepted Answer

A) ​Self-interest is purely monetary in nature. 
B) ​Self-interest can include benevolence. 
C) ​Self-interest is a good predictor of human behavior in most situations. 
D) ​Self-interest is not the same as selfishness. 
A) ​Self-interest is purely monetary in nature. 
B) ​Self-interest can include benevolence. 
C) ​Self-interest is a good predictor of human behavior in most situations. 
D) ​Self-interest is not the same as selfishness.

Question 16

Which of the following is a statement of positive economics?

Accepted Answer

A) ​Unemployment is a more severe problem in societies than inflation. 
B) ​Our current unemployment rate is a serious problem. 
C) ​If the overall unemployment rate is 6 percent, teenage unemployment rates will exceed 12 percent. 
D) ​An unemployment rate of 4 percent would be too low. 
A) ​Unemployment is a more severe problem in societies than inflation. 
B) ​Our current unemployment rate is a serious problem. 
C) ​If the overall unemployment rate is 6 percent, teenage unemployment rates will exceed 12 percent. 
D) ​An unemployment rate of 4 percent would be too low.

Question 17

​Exhibit 1-1
​  
-Referring to Exhibit 1-1, which point on the demand curve represents the maximum number of DVDs purchased?

Accepted Answer

A) ​A 
B) ​B 
C) ​D 
D) ​E 
A) ​A 
B) ​B 
C) ​D 
D) ​E

Question 18

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 19

Which of the following is most likely a topic of discussion in macroeconomics?

Accepted Answer

A) ​an increase in the price of a pizza 
B) ​a decrease in the production of DVD players by a consumer electronics company 
C) ​an increase in the wage rate paid to automobile workers 
D) ​a decrease in the unemployment rate 
A) ​an increase in the price of a pizza 
B) ​a decrease in the production of DVD players by a consumer electronics company 
C) ​an increase in the wage rate paid to automobile workers 
D) ​a decrease in the unemployment rate

Question 20

Economists use the term "ceteris paribus" to indicate that:

Accepted Answer

A) ​the analysis is true for the individual but not for the economy as a whole. 
B) ​supply and demand are in balance. 
C) ​their conclusions are based on normative rather than positive economic analysis. 
D) ​other things are assumed to remain constant. 
A) ​the analysis is true for the individual but not for the economy as a whole. 
B) ​supply and demand are in balance. 
C) ​their conclusions are based on normative rather than positive economic analysis. 
D) ​other things are assumed to remain constant.

Exam 1: The Role and Method of Economics

When society can not produce all the goods and services people want, it is faced with

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

Economists assume that most individuals act as if they are motivated by self-interest and respond in predictable ways to changing circumstances.

"Ceteris paribus" means:

A microeconomist would most likely study the effect of a reduction in income tax rates on:

Which of the following is an example of microeconomic analysis?

Measuring the rate of inflation is primarily a concern of:

Economists believe that only a small part of human behavior can be explained and predicted by assuming that most people act as if they are motivated by their own self-interest in an effort to increase their expected personal satisfaction.

Most of economic analysis assumes that most people act as if they are:

"Employment fell last month to its lowest level in the last six years" is an example of:

Macroeconomic topics do not generally include:

Economists believe that most people's actions are rational and purposeful, not random and chaotic.

To be a positive economic statement, an assertion must be true.

When economists disagree, it is often over what type of issues?

From an economists' perspective, which of the following observations is not true?

Which of the following is a statement of positive economics?

​Exhibit 1-1 ​ -Referring to Exhibit 1-1, which point on the demand curve represents the maximum number of DVDs purchased?

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

Which of the following is most likely a topic of discussion in macroeconomics?

Economists use the term "ceteris paribus" to indicate that:

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Exhibit 1-1 -Referring to Exhibit 1-1, which point on the demand curve represents the maximum number of DVDs purchased?