Question 1

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 2

Individuals will usually make choices to minimize the value of some objective.

Accepted Answer

A) True 
 B)False

Question 3

Economics is different from other social sciences because it gives special emphasis to the study of ______; it is similar to other social sciences because they are all concerned with the study of _______.

Accepted Answer

A)   unlimited resources; economic systems
B)   human interactions; limited resources
C)   opportunity costs; choices
D)   social behavior; scarcity

Question 4

Whenever a choice is made:

Accepted Answer

A)   the cost of that choice could be referred to as opportunity cost.
B)   the cost is easy to measure in dollar terms.
C)   a free good must be involved.
D)   scarcity is not the problem.

Question 5

An example of a normative statement is:

Accepted Answer

A)   The rate of unemployment is 4 percent.
B)   A high rate of economic growth is good for the country.
C)   The federal government spends half of its budget on national defense.
D)   People with health insurance tend to spend more on health care than those who are uninsured.

Question 6

An attempt should always be made to maximize opportunity cost.

Accepted Answer

A) True 
 B)False

Question 7

The economic way of thinking includes:

Accepted Answer

A)   attention paid to the opportunity costs involved in any choice.
B)   the assumption that individuals choose to average out some objective.
C)   concern with the biological make up of decision makers.
D)   emphasis on how choices affect total values rather than marginal values.

Question 8

The concept of scarcity indicates that:

Accepted Answer

A)   most goods have no alternative uses.
B)   almost all goods have alternative uses.
C)   most decisions can be made without sacrificing alternatives.
D)   certain societies are able to overcome the constraints imposed by alternative uses of resources.

Question 9

A variable that induces a change in another variable is a(n) :

Accepted Answer

A)   dependent variable.
B)   independent variable.
C)   codependent variable.
D)   constant variable.

Question 10

An example of a positive statement is:

Accepted Answer

A)   The rate of unemployment is 4 percent.
B)   A high rate of economic growth is good for the country.
C)   Everyone in the country needs to be covered by national health insurance.
D)   Baseball players should not be paid higher salaries than the president of the United States.

Question 11

The current rate of unemployment is 5 percent. This statement:

Accepted Answer

A)   is positive.
B)   is normative.
C)   involves a value judgment.
D)   is a personal reflection and has no value in economics.

Question 12

Distinguish between microeconomics and macroeconomics.

Accepted Answer

The answer of Distinguish between microeconomics and macroeconomics....

Question 13

Whenever a choice is made:

Accepted Answer

A)   the value of all the other choices that could have been made is called opportunity cost.
B)   normative economics is encountered.
C)   the problem of "all other things unchanged" results.
D)   the opportunity cost of that choice is the highest-valued other choice that could have been made.

Question 14

The primary emphasis in macroeconomics is on:

Accepted Answer

A)   how firms set prices.
B)   aggregates in the economy.
C)   marginal analysis and normative economics.
D)   international trade and environmental economics.

Question 15

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 16

A term that means "all other things unchanged" is:

Accepted Answer

A)   dependent variable.
B)   independent variable.
C)   quid pro quo.
D)   ceteris paribus.

Question 17

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 18

A(n)  _______ does not pose the problem of scarcity; one use of the good is not an alternative to another use.

Accepted Answer

A)   free good
B)   scarce good
C)   economic good
D)   monetary good

Question 19

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

Question 20

Anything that has alternative uses has an opportunity cost and is, therefore, scarce.

Accepted Answer

A) True 
 B)False

Exam 1: Economics: the Study of Choice

Whenever a choice is made:

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Anything that has alternative uses has an opportunity cost and is, therefore, scarce.

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Individuals will usually make choices to minimize the value of some objective.

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Economics, generally speaking, is primarily concerned with:

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A variable that induces a change in another variable is a(n) :

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Economics is different from other social sciences because it gives special emphasis to the study of ______; it is similar to other social sciences because they are all concerned with the study of _______.

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A term that means "all other things unchanged" is:

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The primary emphasis in macroeconomics is on:

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The economic way of thinking includes:

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

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Whenever a choice is made:

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

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An example of a positive statement is:

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The current rate of unemployment is 5 percent. This statement:

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An attempt should always be made to maximize opportunity cost.

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

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A(n) _______ does not pose the problem of scarcity; one use of the good is not an alternative to another use.

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Distinguish between microeconomics and macroeconomics.

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The concept of scarcity indicates that:

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An example of a normative statement is:

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Economics is different from other social sciences because it gives special emphasis to the study of ; it is similar to other social sciences because they are all concerned with the study of _.

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