Question 1

What is the term for the beginning point of a graph (the 0,0 point) ?

Accepted Answer

A)  the basis point
B)  variable one
C)  the origin
D)  the quadrant

Question 2

What is economics primarily the study of?

Accepted Answer

A)  how firms compete for profits in the marketplace
B)  how limited resources are allocated to satisfy unlimited wants
C)  how we deal with unemployed resources
D)  how prices are set in the marketplace

Question 3

Economics has much in common with sociology because it is concerned with how societies organize themselves.However,economics shares little in common with political science,psychology or anthropology.

Accepted Answer

A) True 
 B)False

Question 4

What does microeconomics primarily examine?

Accepted Answer

A)  the behaviour of firms and how they interact with each other in the marketplace
B)  the overall economy, especially fiscal and monetary policy
C)  the behaviour of households but not firms
D)  the behaviour of both firms and households and how they interact in the marketplace

Question 5

"The minimum wage should be increased so that low-income workers can afford to feed their families." What is this statement an example of?

Accepted Answer

A)  a positive economic statement
B)  a negative economic statement
C)  a normative economic statement
D)  the fallacy of composition

Question 6

What is the opportunity cost of attending a university basketball game?

Accepted Answer

A)  the sum of the value of all the alternative uses of your time while at the game
B)  the price of the admission to the game
C)  the value of the highest alternative use of your time and money sacrificed as a result of attending the game
D)  zero if your favourite team wins

Question 7

On what basis is the best test of an economic theory?

Accepted Answer

A)  on the accuracy of its assumptions
B)  on the rigour of its mathematical formulation
C)  on the ability of it to explain and predict
D)  on the level of real-world detail it captures

Question 8

What is a time-series graph and what does it show?

Accepted Answer

A time-series graph shows chan...

Question 9

Which of the following statements most likely lies within the realm of microeconomics?

Accepted Answer

A)  An increase in government spending will increase the aggregate demand for goods and services in the economy.
B)  An increase in labour costs will increase the cost of producing another airplane.
C)  Unemployment rises during a recession and falls during an expansion.
D)  A rapid acceleration of the supply of money may create inflation.

Question 10

Microeconomics is the branch of economics in which you study inflation and unemployment in the economy.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is likely to provide teenagers with the greatest incentive NOT to smoke?

Accepted Answer

A)  a law prohibiting anyone from smoking in public buildings
B)  a $2.00 per-pack tax on cigarettes
C)  a public service television advertisement featuring singer Jennifer Lopez urging kids to refrain from smoking
D)  a refusal by actor Leonardo DiCaprio to play any part in which he will be seen smoking

Question 12

When considering whether or not to consume a second slice of cake,an individual is following marginal thinking if she compares the total cost of consuming both the first and second slices with their total benefit before making a decision.

Accepted Answer

A) True 
 B)False

Question 13

Ceteris paribus is a Latin expression that means "holding everything else constant."

Accepted Answer

A) True 
 B)False

Question 14

Economic theories are of limited use since they cannot be tested empirically.

Accepted Answer

A) True 
 B)False

Question 15

In a market economy,what groups decide the amount of a good that is produced?

Accepted Answer

A)  buyers and sellers
B)  producers and input suppliers
C)  all consumers
D)  producers and government planning committees

Question 16

Which of the following best illustrates the fallacy of composition?

Accepted Answer

A)  If Mr. Ahmad had more money, he would buy a new car; if he had a new car, he would have less money.
B)  If Mr. Mua had more money, he could buy more goods; if the Mua family had more money, it could buy additional goods.
C)  If Ms. Smith had more money, she would buy her children more gifts; if her children had more gifts, they would be happier.
D)  If Ms. Shiflet had more money, she could buy more scarce goods; if the nation had more money, everyone could buy more scarce goods.

Question 17

Which of following statements about economics is the most accurate?

Accepted Answer

A)  It explores how choices are made between conflicting wants and desires in a world of scarcity.
B)  It relies entirely upon normative analysis.
C)  It typically uses controlled experiments to learn about consumer and firm behaviour.
D)  It uses models that cannot be tested empirically due to the complex nature of the economy.

Question 18

Which of the following descriptions of normative statements is the most accurate?

Accepted Answer

A)  They are prescriptive, making claims about how the world ought to be.
B)  They are descriptive, making claims about how the world is.
C)  They are affirmative, justifying existing economic policy.
D)  They are optimistic, putting the best possible interpretation on things.

Question 19

The marginal benefit to you of drinking bottled iced tea is $1.50.If the price of a bottle of iced tea is $1.25,what will you do?

Accepted Answer

A)  If you purchase iced tea you will suffer a net loss of 25 cents per bottle.
B)  You will not purchase iced tea if you are acting rationally.
C)  If you purchase a bottle of iced tea, the net gain to you from doing so is 25 cents.
D)  If you are acting rationally, you will purchase iced tea until the marginal benefit falls to 25 cents.

Question 20

What type of science do most people consider economics to be?

Accepted Answer

A)  a social science
B)  an accounting science
C)  a physical science
D)  an earth science

Exam 1: The Role and Method of Economics

What does microeconomics primarily examine?

Correct AnswerverifiedShow Answer

Economic theories are of limited use since they cannot be tested empirically.

Correct AnswerverifiedShow Answer

What type of science do most people consider economics to be?

Correct AnswerverifiedShow Answer

"The minimum wage should be increased so that low-income workers can afford to feed their families." What is this statement an example of?

Correct AnswerverifiedShow Answer

In a market economy,what groups decide the amount of a good that is produced?

Correct AnswerverifiedShow Answer

What is the opportunity cost of attending a university basketball game?

Correct AnswerverifiedShow Answer

Ceteris paribus is a Latin expression that means "holding everything else constant."

Correct AnswerverifiedShow Answer

Which of the following best illustrates the fallacy of composition?

Correct AnswerverifiedShow Answer

Which of following statements about economics is the most accurate?

Correct AnswerverifiedShow Answer

Which of the following statements most likely lies within the realm of microeconomics?

Correct AnswerverifiedShow Answer

The marginal benefit to you of drinking bottled iced tea is $1.50.If the price of a bottle of iced tea is $1.25,what will you do?

Correct AnswerverifiedShow Answer

Which of the following descriptions of normative statements is the most accurate?

Correct AnswerverifiedShow Answer

What is the term for the beginning point of a graph (the 0,0 point) ?

Correct AnswerverifiedShow Answer

When considering whether or not to consume a second slice of cake,an individual is following marginal thinking if she compares the total cost of consuming both the first and second slices with their total benefit before making a decision.

Correct AnswerverifiedShow Answer

What is a time-series graph and what does it show?

Correct AnswerverifiedA time-series graph shows chan...View AnswerShow Answer

Which of the following is likely to provide teenagers with the greatest incentive NOT to smoke?

Correct AnswerverifiedShow Answer

What is economics primarily the study of?

Correct AnswerverifiedShow Answer

Microeconomics is the branch of economics in which you study inflation and unemployment in the economy.

Correct AnswerverifiedShow Answer

On what basis is the best test of an economic theory?

Correct AnswerverifiedShow Answer

Economics has much in common with sociology because it is concerned with how societies organize themselves.However,economics shares little in common with political science,psychology or anthropology.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A time-series graph shows chan...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified