Question 1

Macroeconomics is the study of

Accepted Answer

A)   how wages are determined in a specific labor market
B)   how to use the fewest natural resources to produce public goods
C)   what is happening in the economy as a whole
D)   how consumers and producers interact in individual markets
E)   the price and the quantity exchanged in a marketF) B) and D)
G) A) and D)

Question 2

A microeconomist might study which of the following?

Accepted Answer

A)   how inflation changes over time for several countries
B)   how money supply aggregates are measured
C)   economic growth in less-developed countries in Africa
D)   the relationship between aggregate income and aggregate personal consumption
E)   why wages for females are lower than for males in a particular labor marketF) All of the above
G) B) and E)

Question 3

Which of the following would be studied in macroeconomics?

Accepted Answer

A)   a drop in the price of personal computers
B)   an individual household's decision on how to allocate its spending power
C)   a rise in employment in movie theaters across the nation
D)   total output in the nation
E)   a local bank's increase in the interest rate offered on savings depositsF) A) and B)
G) A) and C)

Question 4

The study of how firms interact in a market is a

Accepted Answer

A)   waste of time
B)   normative subject
C)   microeconomic topic
D)   topic in political science
E)   macroeconomic topicF) B) and D)
G) B) and C)

Question 5

The four main categories of resources are

Accepted Answer

A)   labor,money,capital,and inputs
B)   capital,land,raw materials,and entrepreneurship
C)   raw materials,money,labor,and capital
D)   land,capital,labor,natural resources,and entrepreneurship
E)   human capital,physical capital,labor,and natural resourcesF) A) and B)
G) D) and E)

Question 6

Which of the following is a characteristic of entrepreneurship?

Accepted Answer

A)   the ability to navigate bodies of water
B)   it is produced using physical capital
C)   it is used up quickly in the production process
D)   it is a pre-existing resource like land
E)   it is associated with risk taking and innovationF) D) and E)
G) A) and B)

Question 7

Microeconomics analyzes individual parts of the economy rather than broad economic aggregates.

Accepted Answer

A) True 
 B)False

Question 8

Physical capital differs from raw materials in the sense that raw materials

Accepted Answer

A)   have a longer useful life in production
B)   are considered human capital
C)   cannot be used to produce goods and services
D)   are used up in production
E)   are not a resource used in productionF) B) and D)
G) A) and B)

Question 9

A consultant who earns $100 per hour takes four hours off work to go to the movies.The
Out-of-pocket cost for the cab and the movie ticket are $12.The total cost of the movie to the consultant is

Accepted Answer

A)   $12
B)   $412
C)   $400
D)   $388
E)   $112F) A) and D)
G) B) and C)

Question 10

Due to resource scarcity,

Accepted Answer

A)   some economic activities have an opportunity cost
B)   all economic activities have an opportunity cost
C)   no economic activities have an opportunity cost
D)   economic activities have opportunity costs equal to their market prices
E)   economic activities have opportunity costs generally lower than their market pricesF) None of the above
G) B) and D)

Question 11

Carl is considering attending a concert with a ticket price of $35.He estimates that the cost of driving to the concert and parking there will total an additional $20.In order to attend the concert,Carl will have to take time off from his part-time job.He estimates that he will lose 5 hours at work,at a wage of $6 per hour.Carl's opportunity cost of attending the concert equals

Accepted Answer

A)   $35
B)   $55
C)   $30
D)   $65
E)   $85F) C) and D)
G) B) and C)

Question 12

The basic problem addressed in economics is

Accepted Answer

A)   scarce resources and unlimited wants
B)   scarce wants and unlimited resources
C)   cost minimization
D)   how to manage a financial portfolio
E)   unlimited time and unlimited potentialF) None of the above
G) A) and B)

Question 13

An economic model is a(n)

Accepted Answer

A)   philosophical inquiry
B)   set of numbers that describe a firm (e.g. ,profits and assets) 
C)   abstract representation of reality
D)   concrete representation of reality
E)   ideal to which economic entities are comparedF) B) and E)
G) A) and B)

Question 14

Which of the following would be strictly a microeconomic topic?

Accepted Answer

A)   a general rise in interest rates
B)   a drop in inflation
C)   an increase in total production in the United States
D)   a drop in the nation's unemployment rate
E)   an increase in the price of the Ford TaurusF) A) and D)
G) None of the above

Question 15

A statement of fact that can be verified by observation is

Accepted Answer

A)   an abstraction
B)   a positive statement
C)   a normative statement
D)   a philosophical conundrum
E)   the basis of an assumptionF) A) and B)
G) C) and E)

Question 16

Which of the following is most closely associated with positive economics?

Accepted Answer

A)   determining the impact of government spending on the actual level of total employment
B)   determining the best level of immigration into the country
C)   determining whether too many luxury goods are being produced
D)   determining whether the government should reduce poverty
E)   determining whether the government should alter income taxes in order to increase total employmentF) A) and D)
G) None of the above

Question 17

The opportunity cost of an economic action is

Accepted Answer

A)   the value of the next best alternative that must be sacrificed
B)   an issue in normative economic theory
C)   the expense for the resources used plus the firm's profit
D)   the out-of-pocket cost
E)   the option to pay a reduced fee for the actionF) B) and D)
G) B) and C)

Question 18

Individuals face opportunity costs because

Accepted Answer

A)   the minimum wage is too low
B)   technology is improving too quickly
C)   time and funds are scarce
D)   government cutbacks are widespread,except possibly among society's most affluent households
E)   welfare gives individuals an incentive to stay at homeF) A) and E)
G) A) and B)

Question 19

What does economics have in common with sociology?

Accepted Answer

A)   Economics and sociology ask fundamentally the same questions.
B)   Economics and sociology use the same tools to analyze issues.
C)   Both are social sciences.
D)   What and how economists study is very similar to what and how sociologists study.
E)   Explaining something about society is only a secondary purpose in both areas.F) B) and E)
G) A) and B)

Question 20

"Senior citizens deserve an income that will allow them to live in comfort for their remaining years." This is

Accepted Answer

A)   neither a normative nor a positive statement
B)   both a positive and a normative statement
C)   strictly a macroeconomic issue
D)   a positive statement
E)   a normative statementF) A) and B)
G) All of the above

Exam 1: What is Economics?

Physical capital differs from raw materials in the sense that raw materials

Correct Answer
verified

The four main categories of resources are

Correct Answer
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Which of the following is most closely associated with positive economics?

Correct Answer
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Due to resource scarcity,

Correct Answer
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The opportunity cost of an economic action is

Correct Answer
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The basic problem addressed in economics is

Correct Answer
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Macroeconomics is the study of

Correct Answer
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A consultant who earns $100 per hour takes four hours off work to go to the movies.The Out-of-pocket cost for the cab and the movie ticket are $12.The total cost of the movie to the consultant is

Correct Answer
verified

Which of the following is a characteristic of entrepreneurship?

Correct Answer
verified

What does economics have in common with sociology?

Correct Answer
verified

The study of how firms interact in a market is a

Correct Answer
verified

An economic model is a(n)

Correct Answer
verified

Microeconomics analyzes individual parts of the economy rather than broad economic aggregates.

Correct Answer
verified

Individuals face opportunity costs because

Correct Answer
verified

Correct Answer
verified

A microeconomist might study which of the following?

Correct Answer
verified

Which of the following would be strictly a microeconomic topic?

Correct Answer
verified

"Senior citizens deserve an income that will allow them to live in comfort for their remaining years." This is

Correct Answer
verified

Which of the following would be studied in macroeconomics?

Correct Answer
verified

A statement of fact that can be verified by observation is

Correct Answer
verified

Exam 1: What is Economics?

Physical capital differs from raw materials in the sense that raw materials

Correct AnswerverifiedShow Answer

The four main categories of resources are

Correct AnswerverifiedShow Answer

Which of the following is most closely associated with positive economics?

Correct AnswerverifiedShow Answer

Due to resource scarcity,

Correct AnswerverifiedShow Answer

The opportunity cost of an economic action is

Correct AnswerverifiedShow Answer

The basic problem addressed in economics is

Correct AnswerverifiedShow Answer

Macroeconomics is the study of

Correct AnswerverifiedShow Answer

A consultant who earns $100 per hour takes four hours off work to go to the movies.The Out-of-pocket cost for the cab and the movie ticket are $12.The total cost of the movie to the consultant is

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of entrepreneurship?

Correct AnswerverifiedShow Answer

What does economics have in common with sociology?

Correct AnswerverifiedShow Answer

The study of how firms interact in a market is a

Correct AnswerverifiedShow Answer

An economic model is a(n)

Correct AnswerverifiedShow Answer

Microeconomics analyzes individual parts of the economy rather than broad economic aggregates.

Correct AnswerverifiedShow Answer

Individuals face opportunity costs because

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A microeconomist might study which of the following?

Correct AnswerverifiedShow Answer

Which of the following would be strictly a microeconomic topic?

Correct AnswerverifiedShow Answer

"Senior citizens deserve an income that will allow them to live in comfort for their remaining years." This is

Correct AnswerverifiedShow Answer

Which of the following would be studied in macroeconomics?

Correct AnswerverifiedShow Answer

A statement of fact that can be verified by observation is

Correct AnswerverifiedShow Answer

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