Question 1

Which of the following is true of positive economics?

Accepted Answer

A) It is concerned with what ought to be. 
B) It will usually indicate which economic policy is the best. 
C) It produces verifiable statements. 
D) It is strictly quantitative and so has little to say to those with philosophical goals to achieve in policymaking 
E) It is the same as normative economics. 
A) It is concerned with what ought to be. 
B) It will usually indicate which economic policy is the best. 
C) It produces verifiable statements. 
D) It is strictly quantitative and so has little to say to those with philosophical goals to achieve in policymaking 
E) It is the same as normative economics.

Question 2

Rational self-interest depends on:

Accepted Answer

A) the level of education attained by individuals. 
B) the general family background. 
C) the social status of an individual. 
D) the amount of information available with an individual. 
E) the financial status of the individual. 
A) the level of education attained by individuals. 
B) the general family background. 
C) the social status of an individual. 
D) the amount of information available with an individual. 
E) the financial status of the individual.

Question 3

Which of the following in an example of an economic bad?

Accepted Answer

A) Corruption 
B) Bureaucracy 
C) Pollution 
D) A five year old car 
E) Life insurance 
A) Corruption 
B) Bureaucracy 
C) Pollution 
D) A five year old car 
E) Life insurance

Question 4

"If a tax cut is good for me, it must be good for the whole economy." This statement is an example of the pitfall called the fallacy of composition.

Accepted Answer

A) True 
 B)False

Question 5

Goods are scarce when:

Accepted Answer

A) their price is too high. 
B) their price is too low. 
C) the amount people want is more than the amount available at a zero price. 
D) they are necessities. 
E) their price is controlled. 
A) their price is too high. 
B) their price is too low. 
C) the amount people want is more than the amount available at a zero price. 
D) they are necessities. 
E) their price is controlled.

Question 6

For an analysis to be considered positive, and not normative, it must include:

Accepted Answer

A) some consideration of what ought to be. 
B) conclusions based on opinion. 
C) the rigors of the scientific method. 
D) suggestions for laws designed to protect people from harming themselves. 
E) strict implementation of policy prescriptions. 
A) some consideration of what ought to be. 
B) conclusions based on opinion. 
C) the rigors of the scientific method. 
D) suggestions for laws designed to protect people from harming themselves. 
E) strict implementation of policy prescriptions.

Question 7

Oil found underground in Texas is an example of:

Accepted Answer

A) a labor resource. 
B) physical capital. 
C) financial capital. 
D) human capital. 
E) a land resource. 
A) a labor resource. 
B) physical capital. 
C) financial capital. 
D) human capital. 
E) a land resource.

Question 8

Microeconomics is concerned primarily with how individuals make their economic decisions.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is considered a macroeconomic question?

Accepted Answer

A) How can one particular firm maximize profits? 
B) How does a family allocate income among various available goods and services? 
C) How can economic policy fight inflation? 
D) What factors determine the wage rate in a certain industry? 
E) What is the impact of competition on the profits of a business? 
A) How can one particular firm maximize profits? 
B) How does a family allocate income among various available goods and services? 
C) How can economic policy fight inflation? 
D) What factors determine the wage rate in a certain industry? 
E) What is the impact of competition on the profits of a business?

Question 10

Microeconomics is the branch of economics that focuses on:

Accepted Answer

A) deficit spending. 
B) the problems of inflation and unemployment. 
C) state and local economic problems. 
D) the individual units that make up an economy. 
E) development in the absence of economic growth. 
A) deficit spending. 
B) the problems of inflation and unemployment. 
C) state and local economic problems. 
D) the individual units that make up an economy. 
E) development in the absence of economic growth.

Exam 1: Economics: The World Around You

Which of the following is true of positive economics?

Rational self-interest depends on:

Which of the following in an example of an economic bad?

"If a tax cut is good for me, it must be good for the whole economy." This statement is an example of the pitfall called the fallacy of composition.

Goods are scarce when:

For an analysis to be considered positive, and not normative, it must include:

Oil found underground in Texas is an example of:

Microeconomics is concerned primarily with how individuals make their economic decisions.

Which of the following is considered a macroeconomic question?

Microeconomics is the branch of economics that focuses on:

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Economic Growth

Development Economics

the Land Market and Natural Resources

Aging, Social Security and Health Care

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters