Question 1

Economics is primarily concerned with the study of:

Accepted Answer

A)   problems such as poverty and unemployment.
B)   limited desires pursuing unlimited resources.
C)   production and distribution of goods in a world of unlimited resources.
D)   production and distribution of goods in a world of limited resources.E) A) and B)
F) All of the above

Question 2

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 indivi...

Question 3

The branch of economics that studies the economy as a whole is:

Accepted Answer

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

Question 4

Fundamentally,economics is concerned with:

Accepted Answer

A)   how scarce resources are allocated to satisfy limited wants.
B)   how limited resources are allocated to satisfy scarce wants.
C)   how limited resources are allocated to satisfy unlimited wants.
D)   how limited wants can be used to satisfy limited resources.E) A) and D)
F) B) and D)

Question 5

Why would economists disagree over positive analysis?

Accepted Answer

Economists might disagree over...

Question 6

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.E) A) and B)
F) None of the above

Question 7

When President Harry Truman said that he wanted to find a one-armed economist because his economic advisors always said,"On the one hand...and on the other hand..." he recognized that the advice of economists is often equivocal.Why is their advice often equivocal?

Accepted Answer

A)   Economists cannot make up their minds on policy matters.
B)   Economists always disagree with each other on policy issues.
C)   Economists are aware that tradeoffs are involved in most policy questions.
D)   Economists are often unable to identify the critical questions involved in policy issues.E) A) and C)
F) A) and D)

Question 8

Difficulty in prediction social sciences is the result of analyzing ____ but can be overcome by focusing on ____ groups.

Accepted Answer

A)   experiments; small groups
B)   experiments; large groups
C)   human behavior; small groups
D)   human behavior; large groupsE) All of the above
F) A) and D)

Question 9

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.E) B) and C)
F) None of the above

Question 10

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

Accepted Answer

A)   a decrease in the share of national income paid to the government in taxes
B)   an increase in the price of lumber used to construct houses
C)   an increase in the rate of inflation
D)   an increase in the number of jobless individuals filing unemployment claimsE) C) and D)
F) B) and C)

Question 11

"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 aboveE) None of the above
F) A) and D)

Question 12

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.E) B) and D)
F) A) and B)

Question 13

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 14

Economics is primarily the study of:

Accepted Answer

A)   how choices are made because of scarcity.
B)   corporate balance sheets and income statements.
C)   how to operate a business.
D)   how to make money in the stock market.E) A) and B)
F) C) and D)

Question 15

Which of the following represents a normative statement?

Accepted Answer

A)   A decrease in price leads to an increase in quantity demanded.
B)   The study of economics is more important than the study of history.
C)   People will buy less butter at $1.50 per pound then they will at $1.00 per pound.
D)   As an economy develops, the nation's birth rate tends to fall.E) All of the above
F) B) and C)

Question 16

Why are graphs such an important tool in economics?

Accepted Answer

Graphs allow us to express a s...

Question 17

Which of the following lies primarily within the realm of microeconomics?

Accepted Answer

A)   an empirical analysis of the relationship between the growth of the money supply and the rate of inflation
B)   an economic model forecasting the impact of a tax increase on consumer spending and national output
C)   a study of supply and demand conditions in the market for orange juice
D)   a model forecasting the impact of a change in interest rates on the level of investment in the economyE) All of the above
F) A) and B)

Question 18

What is the difference between dependent and independent variables?

Accepted Answer

A variable is a quantity that can take o...

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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) None of the above
F) B) and D)

Exam 1: The Role and Method of Economics

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

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

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Difficulty in prediction social sciences is the result of analyzing ____ but can be overcome by focusing on ____ groups.

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Which of the following lies primarily within the realm of microeconomics?

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

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The branch of economics that studies the economy as a whole is:

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

Correct AnswerverifiedShow Answer

Fundamentally,economics is concerned with:

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Why would economists disagree over positive analysis?

Correct AnswerverifiedEconomists might disagree over...View AnswerShow Answer

When President Harry Truman said that he wanted to find a one-armed economist because his economic advisors always said,"On the one hand...and on the other hand..." he recognized that the advice of economists is often equivocal.Why is their advice often equivocal?

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Economics is primarily concerned with the study of:

Correct AnswerverifiedShow Answer

Macroeconomic topics do not generally include:

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedIt is expected that the indivi...View AnswerShow Answer

Why are graphs such an important tool in economics?

Correct AnswerverifiedGraphs allow us to express a s...View AnswerShow Answer

Which of the following represents a normative statement?

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

Correct AnswerverifiedShow Answer

Economics is primarily the study of:

Correct AnswerverifiedShow Answer

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

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What is the difference between dependent and independent variables?

Correct AnswerverifiedA variable is a quantity that can take o...View AnswerShow Answer

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Difficulty in prediction social sciences is the result of analyzing but can be overcome by focusing on groups.

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Economists might disagree over...
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It is expected that the indivi...
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Graphs allow us to express a s...
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A variable is a quantity that can take o...
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