Exam 1: The Art and Science of Economic Analysis

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 information.

Correct Answer

verified

Show Answer

A) Advertising is always harmful to consumers.
B) Information is scarce and therefore valuable.
C) Brand names offer no informational content.
D) Acquiring more information is always rational.
E) Marginal analysis does not apply to the acquisition of information.

Correct Answer

verified

Show Answer

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

Correct Answer

verified

Show Answer

A) the use of a mathematical model when solving a problem.
B) making decisions aimed at achieving some predetermined goal.
C) that only monetary costs and benefits are weighed.
D) that the individual will never regret any action taken.
E) that scarcity can be eliminated for that individual.

Correct Answer

verified

Show Answer

A) a key variable.
B) the hypothesis of the model.
C) a behavioral assumption.
D) a prediction of the model.
E) a method of testing the model.

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

A) not considered scarce because no one pays for them.
B) only desired for use in producing other goods.
C) included in the category of resources called gifts of nature.
D) available in unlimited quantities.
E) not considered scarce because they are not produced by society.

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

A) It facilitates the exchange of goods and services between buyers and sellers.
B) It facilitates the exchange of resources between buyers and sellers.
C) Firms are sellers in the resource market.
D) Households are buyers in the resource markets.
E) There is no flow of money in the resource market.

Correct Answer

verified

Show Answer

A) If I can get to work fastest by taking the interstate,so can everyone else.
B) If I can only get away from it all by going to Fairbanks,everyone who needs to get away should go to Fairbanks.
C) Every time I play with my dog,it rains,so playing with my dog brings rain.
D) If the best TV reception can be gotten with a Couch Potato antenna,then everyone should have a Couch Potato antenna.
E) If I can get a better view by standing up at the baseball game,then everyone can get a better view by standing up.

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

A) How can I get rich by playing the stock market?
B) What are the best ways to reduce people's wants,given the scarcity of resources?
C) How can government officials use scarce resources to become richer?
D) What is money?
E) How do people use limited resources to try to satisfy unlimited wants?

Correct Answer

verified

Show Answer

A) make economic models more complex than if these assumptions were removed.
B) pertain only to consumers.
C) hold all other things constant.
D) are ways to test a hypothesis.
E) describe how individuals are expected to behave.

Correct Answer

verified

Show Answer

A) Define variables; state assumptions; form a hypothesis; test
B) State assumptions; define variables; form a hypothesis; test
C) Identify variables; state assumptions; test; form a hypothesis
D) Identify variables; form a hypothesis; form behavioral assumptions; test
E) Define assumptions; form behavioral assumptions; form hypothesis; test

Correct Answer

verified

Show Answer