Question 1

A decision made by a rational person

Accepted Answer

A)  is intended to make the person worse off.
B)  would always make the person wealthier.
C)  is identical to a decision that would be made by any other person facing the same choices.
D)  is intended to make the person better off.E) A) and D)
F) None of the above

Question 2

A common approach that economists use to understand,explain and predict economic phenomena is to

Accepted Answer

A)  form a theory or model.
B)  conduct experiments in a science lab.
C)  ask what people think.
D)  examine people's thought processes.E) B) and C)
F) A) and C)

Question 3

Given a linear curve,the value on the y-axis changes from 100 to 120 when the value on the x-axis changes from 20 to 10,then the slope of that curve is

Accepted Answer

A)  -20.
B)  +20.
C)  -2.
D)  +2.E) All of the above
F) B) and D)

Question 4

The President's statement that "to encourage economic growth,taxes should be cut,"

Accepted Answer

A)  would be an example of a normative statement.
B)  would be an example of a positive statement.
C)  would be an example of a microeconomic statement.
D)  would be a statement of mercantilist economic philosophy.E) All of the above
F) A) and D)

Question 5

How could Adam Smith's comment about the butcher,the brewer,and the baker be accurately rephrased in modern terms?

Accepted Answer

A)  The butcher,the brewer,and the baker give us our dinner because they want to be well liked in the community.
B)  The butcher,the brewer,and the baker give us our dinner because they will be sued if they don't do so.
C)  The butcher,the brewer,and the baker give us our dinner because they each earn a living by doing so.
D)  The butcher,the brewer,and the baker give us our dinner because they view doing so as a public service.E) None of the above
F) All of the above

Question 6

If a teacher tells a student that those who attend the study session typically score higher on the final exam,

Accepted Answer

A)  the student has a positive incentive to attend the study session because she may get a higher grade.
B)  the student has a negative incentive to attend the study session because she will be punished if she does not go.
C)  the student has no greater incentive to attend because there is no guarantee she will get a higher grade on the exam.
D)  a "C" student will be making an irrational decision if she decides to skip the study session since she has plenty of time to go.E) A) and B)
F) B) and C)

Question 7

Macroeconomics is concerned with

Accepted Answer

A)  individual consumers.
B)  government decision making concerning farm price supports.
C)  aggregates.
D)  the effects on a corporation of a strike by the United Auto Workers.E) A) and B)
F) A) and C)

Question 8

Behavioral economics is an approach to the study of consumer behavior

Accepted Answer

A)  that emphasizes psychological limitations and complications that potentially interfere with rational decision making.
B)  that emphasizes the capabilities of individuals to succeed in attaining all their unlimited wants utilizing limited resources.
C)  that,in contrast to standard approaches in economics,utilizes the ceteris paribus assumption.
D)  that,in contrast to standard approaches in economics,relies on real-world data to evaluate the usefulness of economic models.E) B) and C)
F) All of the above

Question 9

One reason why economists often use models in their analysis is that

Accepted Answer

A)  a model helps us to understand,explain,and predict economic phenomena in the real world.
B)  a model accurately pictures every detail of the real world economy.
C)  a model relates to individual thought processes rather than behavior.
D)  it is relatively easy to perfectly specify a model.E) A) and B)
F) None of the above

Question 10

Economic models are used to

Accepted Answer

A)  simplify reality to predict outcomes.
B)  exactly replicate reality.
C)  predict all possible outcomes of a study.
D)  determine the thoughts of individuals.E) A) and D)
F) B) and C)

Question 11

If an increase in one variable causes a decrease in another variable,this is

Accepted Answer

A)  a direct relationship.
B)  a dependent relationship.
C)  an independent relationship.
D)  an inverse relationship.E) A) and C)
F) None of the above

Question 12

A characteristic of a good model is that

Accepted Answer

A)  its predictions can be tested using real-world data.
B)  it is useful for making irrefutable predictions.
C)  it applies to all situations.
D)  it predicts perfectly.E) B) and C)
F) A) and C)

Question 13

Economics is a study of

Accepted Answer

A)  how to make money in the stock market.
B)  how to run a business successfully.
C)  the allocation of scarce resources.
D)  personal finance.E) A) and B)
F) B) and C)

Question 14

Economic models are

Accepted Answer

A)  always based on laboratory methods similar to natural sciences.
B)  a simplified representations of the real world.
C)  used only in microeconomic analysis by households.
D)  used only in macroeconomic analysis by business firms.E) C) and D)
F) All of the above

Question 15

"Economists assume people are selfish." Do you agree with this statement or not? Explain.

Accepted Answer

Economists do not assume people are self...

Question 16

"No individual should have less than $20,000 income in the United States in 2010" is an example of

Accepted Answer

A)  a normative statement.
B)  a positive statement.
C)  an illogical and refutable statement.
D)  a truism.E) C) and D)
F) A) and B)

Question 17

Macroeconomics is the study of

Accepted Answer

A)  aggregate economic variables.
B)  output in particular industries.
C)  prices in particular industries.
D)  all of the above.E) A) and D)
F) A) and C)

Question 18

Analysis that involves value judgments about economic policies is

Accepted Answer

A)  positive economics.
B)  normative economics.
C)  microeconomics.
D)  macroeconomics.E) A) and C)
F) None of the above

Question 19

When studying individuals' economic behavior,economists assume that

Accepted Answer

A)  individuals understand the rationale for all their actions.
B)  individuals act as if they were rational.
C)  only educated people act as if they were rational.
D)  self-interest is of limited relevance in predicting an individual's actions.E) B) and C)
F) B) and D)

Question 20

A good economic model

Accepted Answer

A)  cannot be refuted.
B)  describes the real world completely and in detail.
C)  captures the essential relationships of the problem under consideration.
D)  captures all relationships about the problem under consideration.E) A) and B)
F) B) and D)

Exam 1: The Nature of Economics

"Economists assume people are selfish." Do you agree with this statement or not? Explain.

Correct AnswerverifiedEconomists do not assume people are self...View AnswerShow Answer

Macroeconomics is the study of

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A decision made by a rational person

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Macroeconomics is concerned with

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When studying individuals' economic behavior,economists assume that

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Economic models are used to

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If an increase in one variable causes a decrease in another variable,this is

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A characteristic of a good model is that

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Given a linear curve,the value on the y-axis changes from 100 to 120 when the value on the x-axis changes from 20 to 10,then the slope of that curve is

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The President's statement that "to encourage economic growth,taxes should be cut,"

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Behavioral economics is an approach to the study of consumer behavior

Correct AnswerverifiedShow Answer

Economic models are

Correct AnswerverifiedShow Answer

A common approach that economists use to understand,explain and predict economic phenomena is to

Correct AnswerverifiedShow Answer

Economics is a study of

Correct AnswerverifiedShow Answer

How could Adam Smith's comment about the butcher,the brewer,and the baker be accurately rephrased in modern terms?

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If a teacher tells a student that those who attend the study session typically score higher on the final exam,

Correct AnswerverifiedShow Answer

One reason why economists often use models in their analysis is that

Correct AnswerverifiedShow Answer

Analysis that involves value judgments about economic policies is

Correct AnswerverifiedShow Answer

A good economic model

Correct AnswerverifiedShow Answer

"No individual should have less than $20,000 income in the United States in 2010" is an example of

Correct AnswerverifiedShow Answer

Correct Answer
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Economists do not assume people are self...
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