Question 1

As a scientist,an economist's main professional objective is to

Accepted Answer

A)  become wealthy
B)  control the government's decision-making processes
C)  understand how the economy works
D)  discover which stock prices will decrease
E)  understand the psychology of participants in marketsF) C) and D)
G) C) and E)

Question 2

Economists believe that people respond in a predictable way to changes in costs and benefits.The term that best describes this phenomenon is

Accepted Answer

A)  opportunity cost
B)  scarcity
C)  innovation
D)  marginal analysis
E)  other things equal (or ceteris paribus) F) A) and B)
G) B) and D)

Question 3

Which of the following is true about entrepreneurs?

Accepted Answer

A)  They have the talent required to dream up a new product or find a better way to produce an existing one.
B)  They are rewarded by profits.
C)  They sometimes suffer losses.
D)  They benefit from what's left over after paying other resource suppliers.
E)  All of the answers are correct.F) B) and D)
G) C) and D)

Question 4

The other-things-constant assumption

Accepted Answer

A)  allows the economist to make useful predictions
B)  is a prediction
C)  applies only to consumers' decisions,not to those of firms
D)  forces the economist to ignore reality,where things are constantly changing
E)  implies rational self-interest on the part of all economic actorsF) A) and B)
G) All of the above

Question 5

Resources are divided into the following broad categories:

Accepted Answer

A)  people,money,and machines
B)  saving,spending,investment,and capital
C)  human,technological,and government
D)  natural resources,labor,capital,and entrepreneurial ability
E)  free,scarce,abundant,and unlimitedF) A) and E)
G) All of the above

Question 6

In economics,marginal means

Accepted Answer

A)  incremental or decremental
B)  unimportant
C)  level or size
D)  a border-line situation
E)  a bad alternativeF) A) and B)
G) C) and D)

Question 7

Which of the following is not a part of the scientific method in economics?

Accepted Answer

A)  normative statements
B)  comparing predictions to evidence
C)  formulating a hypothesis
D)  a hypothesis
E)  behavioral assumptionsF) B) and C)
G) A) and B)

Question 8

Economics is the study of

Accepted Answer

A)  how to get rich by playing the stock market
B)  the best ways to reduce people's wants,given the scarcity of resources
C)  how rational government officials determine what goods should be produced
D)  money and why it is good
E)  how people use limited resources to try to satisfy unlimited wantsF) C) and E)
G) C) and D)

Question 9

Economic theory

Accepted Answer

A)  expresses normative values
B)  invents imaginative and interesting stories
C)  predicts the behavior of a specific economic decision maker after an economic change
D)  predicts the average behavior of a group of similar economic decision makers after an economic change
E)  uses only perfect and complete informationF) B) and E)
G) A) and E)

Question 10

Which of the following would be an example of a resource market?

Accepted Answer

A)  the market for tires
B)  the market for baseball games
C)  the market for compact discs
D)  the market for economists
E)  the market for downloadable musicF) None of the above
G) B) and C)

Question 11

A model that sometimes makes incorrect predictions may be used by economic decision makers

Accepted Answer

A)  under no circumstances
B)  only if its assumptions are detailed and realistic
C)  if it is mathematical and computerized
D)  if it is simple enough for a child to understand
E)  until a better model is developedF) B) and D)
G) B) and C)

Question 12

Which of the following statements about economic methodology is correct?

Accepted Answer

A)  An economic law is a cause-and-effect relationship that has been verified by a controlled experiment.
B)  The test of a theory's validity is its usefulness in explaining reality.
C)  An economic law is a statement about group behavior that is based on the observed behavior of a single individual.
D)  An economic law,because it is based on probabilities,can only be expected to be true about half the time.
E)  Assumptions are ignored in the development of hypotheses.F) A) and B)
G) B) and D)

Question 13

According to a 2011 Payscale.com survey the highest paying college major is:

Accepted Answer

A)  Economics
B)  Management
C)  Finance
D)  Computer Engineering
E)  Political ScienceF) A) and E)
G) B) and C)

Question 14

Economics is best defined as the study of how

Accepted Answer

A)  individuals decide to use scarce resources in an attempt to satisfy their unlimited wants
B)  to make money
C)  the government should deal with unemployment and inflation
D)  to eliminate the problem of scarce resources
E)  to run a businessF) C) and E)
G) A) and E)

Question 15

Profit is the payment made for land resources.

Accepted Answer

A) True 
 B)False

Question 16

An entrepreneur is a(n)

Accepted Answer

A)  individual who has much education
B)  organizer who seeks profitable opportunities and is willing to accept risks
C)  business organization that uses inputs to produce output
D)  administrator who runs an enterprise without accepting any risk of financial loss
E)  depot or storehouse for commercial productsF) A) and E)
G) A) and D)

Question 17

The assumption that individuals act rationally implies that

Accepted Answer

A)  people think only of themselves and disregard the well-being of others
B)  people undertake all those activities that yield benefits to themselves
C)  people only consider the costs of an activity to decide whether it is worthwhile
D)  the greater the cost of a charitable deed to a benefactor,the more likely he or she is to perform that deed
E)  people implicitly calculate the costs and benefits of an activity to decide if it is worthwhileF) C) and D)
G) B) and E)

Question 18

Economists generally believe that

Accepted Answer

A)  buyers and sellers have all the information they can use
B)  additional information is costly to acquire
C)  decision makers have complete knowledge of all the alternatives available
D)  economic decisions result from random behavior
E)  decision makers never make mistakesF) C) and D)
G) B) and E)

Question 19

In a circular-flow model,firms demand all of the following except

Accepted Answer

A)  labor
B)  goods and services
C)  capital
D)  entrepreneurial ability
E)  natural resourcesF) A) and B)
G) A) and E)

Question 20

Economics is best described as the

Accepted Answer

A)  study of choice when scarcity exists
B)  study of the production of goods and services
C)  theory of consumer behavior
D)  science of money
E)  art of spending money wiselyF) A) and D)
G) A) and C)

Exam 1: The Art and Science of Economic Analysis

In economics,marginal means

Correct AnswerverifiedShow Answer

In a circular-flow model,firms demand all of the following except

Correct AnswerverifiedShow Answer

Resources are divided into the following broad categories:

Correct AnswerverifiedShow Answer

An entrepreneur is a(n)

Correct AnswerverifiedShow Answer

A model that sometimes makes incorrect predictions may be used by economic decision makers

Correct AnswerverifiedShow Answer

Economics is best defined as the study of how

Correct AnswerverifiedShow Answer

Which of the following is true about entrepreneurs?

Correct AnswerverifiedShow Answer

Which of the following would be an example of a resource market?

Correct AnswerverifiedShow Answer

Which of the following statements about economic methodology is correct?

Correct AnswerverifiedShow Answer

The assumption that individuals act rationally implies that

Correct AnswerverifiedShow Answer

Economics is best described as the

Correct AnswerverifiedShow Answer

According to a 2011 Payscale.com survey the highest paying college major is:

Correct AnswerverifiedShow Answer

As a scientist,an economist's main professional objective is to

Correct AnswerverifiedShow Answer

Profit is the payment made for land resources.

Correct AnswerverifiedShow Answer

The other-things-constant assumption

Correct AnswerverifiedShow Answer

Economics is the study of

Correct AnswerverifiedShow Answer

Economic theory

Correct AnswerverifiedShow Answer

Economists generally believe that

Correct AnswerverifiedShow Answer

Economists believe that people respond in a predictable way to changes in costs and benefits.The term that best describes this phenomenon is

Correct AnswerverifiedShow Answer

Which of the following is not a part of the scientific method in economics?

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified