Question 1

A hypothesis is an assertion that can be:

Accepted Answer

A)  proven to be false.
B)  proven to be true.
C)  proven to be true or false.
D)  tested only in the normative sense.

Question 2

According to the textbook, economics is a:

Accepted Answer

A)  social science.
B)  study of business decisions, not social decisions.
C)  part of operations and management science.
D)  part of humanities.

Question 3

A basic assumption used in many economic models is:

Accepted Answer

A)  as price goes up, the amount purchased will go up too.
B)  as price goes up, less will be offered for sale on the market.
C)  if the underlying theory doesn't represent reality, it is not useful.
D)  ceteris paribus, which means all other things remain unchanged.

Question 4

The answer to, "What goods are to be produced?" deals with:

Accepted Answer

A)  who gets the goods.
B)  how tastes and preferences are determined.
C)  how resources are combined to produce goods and services.
D)  the kinds and quantities of goods and services produced.

Question 5

Economics, generally speaking, is primarily concerned with:

Accepted Answer

A)  the operation of the bond and stock markets.
B)  the issues of income inequality or income equality.
C)  how people choose among the alternatives available to them.
D)  ceteris paribus, the scientific method, and the margin.

Question 6

The problem of determining what goods and services society should produce:

Accepted Answer

A)  exists because we can produce more than we need or want.
B)  exists because there are not enough resources to provide all the goods and services that people want to purchase.
C)  would not exist if all goods and services were scarce.
D)  would not exist if government owned all of the resources.

Question 7

One question that arises when determining for whom goods and services should be produced is:

Accepted Answer

A)  Who gets how much of the economic pie?
B)  How can we import more goods for domestic consumption?
C)  How can we reduce exports so as to leave more goods for domestic consumption?
D)  Should society outlaw child labor?

Question 8

The statement that the minimum wage needs to be increased is a:

Accepted Answer

A)  positive statement.
B)  normative statement.
C)  condition contained in the fallacy of false cause.
D)  scientific conclusion based on marginal analysis.

Question 9

The economic way of thinking includes:

Accepted Answer

A)  more attention paid to benefits rather than the costs involved in any choice.
B)  the assumption that individuals choose to maximize some objective.
C)  emphasis on how choices affect total values rather than marginal values.
D)  the notion that the world has solved the problem of scarcity.

Question 10

A simplified representation of a particular problem is a:

Accepted Answer

A)  model.
B)  constant.
C)  hypothesis.
D)  law.

Question 11

The scientific method is more difficult for economists than, say, chemists, because:

Accepted Answer

A)  controlled laboratory conditions are more problematic in economics.
B)  it is difficult to hold other factors that may affect the variables being studied constant in economics.
C)  economic conditions may change quickly and unexpectedly.
D)  all of the above.

Question 12

The current rate of unemployment of 5 percent is too high.This is a _______ statement.

Accepted Answer

A)  normative
B)  ceteris paribus
C)  positive
D)  fallacy of false cause

Question 13

In the 1930s, the federal government established the social security system to provide a minimum level of income to elderly and disabled people.This primarily addressed the economic question of:

Accepted Answer

A)  When will each good be produced?
B)  For whom shall the goods be produced?
C)  What goods and services should a society produce?
D)  How should the resources be organized for production?

Question 14

"Smokers are more likely to be murdered than nonsmokers." This statement is an example of:

Accepted Answer

A)  the fallacy of unintended consequences.
B)  a positive economic statement.
C)  a normative economic statement.
D)  a value judgment.

Question 15

A normative statement deals with:

Accepted Answer

A)  the facts.
B)  what was, is, or will be.
C)  what ought to be.
D)  the scientific method.

Question 16

The problem of scarcity is confronted by:

Accepted Answer

A)  industrialized societies.
B)  pre-industrialized societies.
C)  societies governed by communist philosophies.
D)  all societies.

Question 17

Economics is a:

Accepted Answer

A)  social science that studies goods with no alternative uses.
B)  natural science that studies goods with no alternative uses.
C)  social science concerned chiefly with how people choose among alternatives.
D)  social science concerned chiefly with reasons why society has unlimited resources.

Question 18

The questions of what goods to produce, how to produce them, and for whom to produce them are of concern only in advanced industrial economies.

Accepted Answer

A) True 
 B)False

Question 19

A good is scarce if we must sacrifice something to obtain it.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is most likely an example of a free good?

Accepted Answer

A)  Sand in aquarium
B)  Sand in the middle of a desert
C)  Sand in a children's sandbox
D)  Sand at the beach

Exam 1: Economics: the Study of Choice

A normative statement deals with:

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The current rate of unemployment of 5 percent is too high.This is a _______ statement.

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A basic assumption used in many economic models is:

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The statement that the minimum wage needs to be increased is a:

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Economics is a:

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The economic way of thinking includes:

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The questions of what goods to produce, how to produce them, and for whom to produce them are of concern only in advanced industrial economies.

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A hypothesis is an assertion that can be:

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According to the textbook, economics is a:

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"Smokers are more likely to be murdered than nonsmokers." This statement is an example of:

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Which of the following is most likely an example of a free good?

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A simplified representation of a particular problem is a:

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Economics, generally speaking, is primarily concerned with:

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A good is scarce if we must sacrifice something to obtain it.

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The answer to, "What goods are to be produced?" deals with:

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One question that arises when determining for whom goods and services should be produced is:

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The problem of determining what goods and services society should produce:

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The scientific method is more difficult for economists than, say, chemists, because:

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In the 1930s, the federal government established the social security system to provide a minimum level of income to elderly and disabled people.This primarily addressed the economic question of:

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The problem of scarcity is confronted by:

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