Question 1

The fallacy of composition states that even if something is true for an individual, it is not necessarily true for many individuals as a group.

Accepted Answer

A) True 
 B)False

Question 2

Bill says: "The imposition of a tax on tequila will increase its price." Bob says: "Taxes should be imposed on tequila because college students drink too much."

Accepted Answer

A) ​Both statements are normative. 
B) ​Both statements are positive. 
C) ​Bill's statement is normative, and Bob's statement is positive. 
D) ​Bill's statement is positive, and Bob's statement is normative. 
A) ​Both statements are normative. 
B) ​Both statements are positive. 
C) ​Bill's statement is normative, and Bob's statement is positive. 
D) ​Bill's statement is positive, and Bob's statement is normative.

Question 3

In the discussion of correlation and causation, correlation means:

Accepted Answer

A) ​two sets of phenomena may be related, but one does not necessarily cause the other. 
B) ​two sets of phenomena are not related and one may in fact cause the other. 
C) ​that when two phenomena are repeatedly observed together, one must cause the other. 
D) ​that if a groundhog sees his shadow in February, this phenomena causes there to be six more weeks of bad weather. 
A) ​two sets of phenomena may be related, but one does not necessarily cause the other. 
B) ​two sets of phenomena are not related and one may in fact cause the other. 
C) ​that when two phenomena are repeatedly observed together, one must cause the other. 
D) ​that if a groundhog sees his shadow in February, this phenomena causes there to be six more weeks of bad weather.

Question 4

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 above 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 above can explain why an association between Event A and Event B may not imply causality from A to B.

Question 5

Microeconomic topics do not usually include:

Accepted Answer

A) ​how wages are determined in the labor market. 
B) ​the magnitude of national income. 
C) ​how firms choose output to maximize profits. 
D) ​how consumers maximize utility subject to a budget constraint. 
A) ​how wages are determined in the labor market. 
B) ​the magnitude of national income. 
C) ​how firms choose output to maximize profits. 
D) ​how consumers maximize utility subject to a budget constraint.

Question 6

A theory asserts that consumers will purchase less of a good at higher prices than they will at lower prices, ceteris paribus. However, when the average price of cars increased throughout the 1990s, more cars were purchased. Which of the following best explains the apparent conflict between theory and data?

Accepted Answer

A) ​The ceteris paribus assumption is valid. 
B) ​It is likely that variables other than the price and quantity of cars demanded were changing. 
C) ​The theory is valid.However, the price and quantity data gathered by researchers was clearly measured incorrectly. 
D) ​The theory must be invalid. 
A) ​The ceteris paribus assumption is valid. 
B) ​It is likely that variables other than the price and quantity of cars demanded were changing. 
C) ​The theory is valid.However, the price and quantity data gathered by researchers was clearly measured incorrectly. 
D) ​The theory must be invalid.

Question 7

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. 
A) ​qualitative analysis. 
B) ​empirical analysis. 
C) ​marginal analysis. 
D) ​average analysis.

Question 8

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 9

Explain why economists believe that an individual who commits a crime does so acting in his/her own self-interest.

Accepted Answer

It is expected that the individual commi

Question 10

A leading game-console manufacturer slashes the price of its flagship product by ten percent. Holding other things such as income and preferences constant, which of the following is the most likely group behavior prediction?

Accepted Answer

A) ​Price reduction will have no impact on purchase patterns. 
B) ​Price reduction will be associated with a reduction in quality; thereby reducing sales. 
C) ​More game consoles will be sold at lower prices. 
D) ​Group behavior cannot be predicted. 
A) ​Price reduction will have no impact on purchase patterns. 
B) ​Price reduction will be associated with a reduction in quality; thereby reducing sales. 
C) ​More game consoles will be sold at lower prices. 
D) ​Group behavior cannot be predicted.

Question 11

The branch of economics that focuses on outcomes in highly aggregated markets, such as the markets for labor or consumption goods, is called:

Accepted Answer

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

Question 12

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

Question 13

Economists use theories to:

Accepted Answer

A) ​abstract from the complexities of the world. 
B) ​understand economic behavior. 
C) ​explain and help predict human behavior. 
D) ​do all of the above. 
A) ​abstract from the complexities of the world. 
B) ​understand economic behavior. 
C) ​explain and help predict human behavior. 
D) ​do all of the above.

Question 14

Economists prefer to look at declared preferences (how they say they behave) rather than revealed preferences (how people actually behave).

Accepted Answer

A) True 
 B)False

Question 15

Scarcity would cease to exist as an economic problem if:

Accepted Answer

A) ​we learned to cooperate and not compete with each other. 
B) ​there were new discoveries of an abundance of natural resources. 
C) ​output per worker increased. 
D) ​none of the above. 
A) ​we learned to cooperate and not compete with each other. 
B) ​there were new discoveries of an abundance of natural resources. 
C) ​output per worker increased. 
D) ​none of the above.

Question 16

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. 
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.

Question 17

"I woke up earlier today to beat other fishermen to the fish and yet I caught the same number of fish at 5 am.as I did at noon." Which of the following best explains this occurrence?

Accepted Answer

A) ​Many other fishermen also believe that they can catch a greater quantity of fish if they arrive earlier at the fishing area.So the area is crowded early in the day. 
B) ​The fish do not care when they eat, so they are likely to bite on the bait at any time during the day. 
C) ​The catching of fish is mostly luck, so timing is not important. 
D) ​The early bird catches the worm. 
A) ​Many other fishermen also believe that they can catch a greater quantity of fish if they arrive earlier at the fishing area.So the area is crowded early in the day. 
B) ​The fish do not care when they eat, so they are likely to bite on the bait at any time during the day. 
C) ​The catching of fish is mostly luck, so timing is not important. 
D) ​The early bird catches the worm.

Question 18

When making decisions, economists believe that individuals act rationally if they:

Accepted Answer

A) ​seek to improve their own situations and not try to anticipate future consequences of their actions. 
B) ​only pursue the goals of the community. 
C) ​people do the best they can, based on their values and information, under current and future circumstances. 
D) ​always choose alternatives that offer the greatest financial reward. 
A) ​seek to improve their own situations and not try to anticipate future consequences of their actions. 
B) ​only pursue the goals of the community. 
C) ​people do the best they can, based on their values and information, under current and future circumstances. 
D) ​always choose alternatives that offer the greatest financial reward.

Question 19

Self-interest could never include benevolence.

Accepted Answer

A) True 
 B)False

Question 20

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.

The fallacy of composition states that even if something is true for an individual, it is not necessarily true for many individuals as a group.

Bill says: "The imposition of a tax on tequila will increase its price." Bob says: "Taxes should be imposed on tequila because college students drink too much."

In the discussion of correlation and causation, correlation means:

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

Microeconomic topics do not usually include:

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

Scarcity exists because of:

Explain why economists believe that an individual who commits a crime does so acting in his/her own self-interest.

A leading game-console manufacturer slashes the price of its flagship product by ten percent. Holding other things such as income and preferences constant, which of the following is the most likely group behavior prediction?

The branch of economics that focuses on outcomes in highly aggregated markets, such as the markets for labor or consumption goods, is called:

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

Economists use theories to:

Economists prefer to look at declared preferences (how they say they behave) rather than revealed preferences (how people actually behave).

Scarcity would cease to exist as an economic problem if:

Economists need to develop abstractions in order to:

"I woke up earlier today to beat other fishermen to the fish and yet I caught the same number of fish at 5 am.as I did at noon." Which of the following best explains this occurrence?

When making decisions, economists believe that individuals act rationally if they:

Self-interest could never include benevolence.

The importance of the ceteris paribus assumption is that it:

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

Exam 1: The Role and Method of Economics

The fallacy of composition states that even if something is true for an individual, it is not necessarily true for many individuals as a group.

Bill says: "The imposition of a tax on tequila will increase its price." Bob says: "Taxes should be imposed on tequila because college students drink too much."

In the discussion of correlation and causation, correlation means:

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

Microeconomic topics do not usually include:

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

Scarcity exists because of:

Explain why economists believe that an individual who commits a crime does so acting in his/her own self-interest.

A leading game-console manufacturer slashes the price of its flagship product by ten percent. Holding other things such as income and preferences constant, which of the following is the most likely group behavior prediction?

The branch of economics that focuses on outcomes in highly aggregated markets, such as the markets for labor or consumption goods, is called:

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

Economists use theories to:

Economists prefer to look at declared preferences (how they say they behave) rather than revealed preferences (how people actually behave).

Scarcity would cease to exist as an economic problem if:

Economists need to develop abstractions in order to:

"I woke up earlier today to beat other fishermen to the fish and yet I caught the same number of fish at 5 am.as I did at noon." Which of the following best explains this occurrence?

When making decisions, economists believe that individuals act rationally if they:

Self-interest could never include benevolence.

The importance of the ceteris paribus assumption is that it:

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

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