Question 1

An economic model:

Accepted Answer

A)   omits critical elements.
B)   must be presented in mathematical terms.
C)   is used to make predictions about the real world.
D)   can never be proven wrong if its assumptions are realistic.
E)   produces poor predictions if it includes assumptions.F) A) and E)
G) C) and E)

Question 2

Your best friend buys you lunch on your birthday. You think this was not a free lunch because:

Accepted Answer

A)   even if you didn't pay in dollars for it, you paid for it in extra calories.
B)   the resources used to produce the lunch were not available to satisfy other wants.
C)   you disagree with the expression "the best things in life are free."
D)   you can eat only if you work out first.
E)   neither sea water nor air is free.F) B) and C)
G) B) and D)

Question 3

Labor is the physical and mental effort used to produce goods and services.

Accepted Answer

A) True 
 B)False

Question 4

The difference between a good and a service is that:

Accepted Answer

A)   a good helps satisfy unlimited wants, but a service does not.
B)   a service helps satisfy unlimited wants, but a good does not.
C)   a service is available in unlimited quantities, but a good is not.
D)   a good is available in unlimited quantities, but a service is not.
E)   a good is tangible, but a service is not.F) C) and D)
G) A) and D)

Question 5

Exhibit 1.3
 
-Refer to Exhibit 1.3 of the Scientific Method: Step-by-Step. If Box A is 'Reject the hypothesis,' then Box B is:

Accepted Answer

A)   Formulate a hypothesis.
B)   Modify the approach.
C)   Reject the hypothesis
D)   Use the hypothesis until a better one shows up.
E)   Test the hypothesis.F) A) and D)
G) C) and D)

Question 6

Economics is best described as the:

Accepted Answer

A)   study of choice when scarcity exists.
B)   study of the development of human society.
C)   study of the composition and structure of matter.
D)   branch of science that uses the principles of sociology.
E)   branch of science that is based on value judgments.F) A) and D)
G) C) and E)

Question 7

Scarcity:

Accepted Answer

A)   applies to a brain surgeon but not to a cab driver.
B)   is not a problem for politicians.
C)   exists only in rich countries.
D)   exists only in poor countries.
E)   exists to a greater or lesser extent for everybody.F) C) and D)
G) B) and E)

Question 8

The "other-things-constant" assumption is also known as:

Accepted Answer

A)   ceteris paribus.
B)   prediction.
C)   normative.
D)   variable.
E)   positive.F) B) and E)
G) A) and B)

Question 9

Table 1.1
 Table  1.11.11.1 
  Hours  Revenue 1$102$203$304$405$50\begin{array}{|l|l|}\hline 	ext { Hours } & 	ext { Revenue } \\hline 1 & \$ 10 \\hline 2 & \$ 20 \\hline 3 & \$ 30 \\hline 4 & \$ 40 \\hline 5 & \$ 50 \\hline\end{array} Hours 12345​ Revenue $10$20$30$40$50​​ 
Sergio tutors fellow students for  $10\$ 10$10  an hour.
-Refer to Table 1.1. Sergio hires an assistant for $5 per hour. What is his marginal cost if he tutors 5 hours a week and also pays his assistant?

Accepted Answer

A)   $25
B)   $20
C)   $15
D)   $10
E)   $5 F) B) and E)
G) D) and E)

Question 10

Sources of confusion in economic analysis include:

Accepted Answer

A)   fallacy of composition.
B)   rational self-interest.
C)   fallacy of segmentation.
D)   mistake of ignoring primary effects.
E)   making positive economic statements.F) B) and C)
G) All of the above

Question 11

A good or service is considered scarce if:

Accepted Answer

A)   any quantity of it can be consumed at a zero price.
B)   the amount people desire exceeds the amount available at a zero price.
C)   the amount people desire equals the amount available at any price.
D)   the amount people desire is less than the amount available at any price.
E)   the amount people desire is less than the amount available at a zero price.F) A) and E)
G) B) and D)

Question 12

Which of the following is the best definition of economics?

Accepted Answer

A)   An investigation of the evolutionary process of mankind
B)   A study of society as a system of interconnected parts
C)   A study of how people deal with the problem of scarcity
D)   An examination of the structure and the role of the government in an economy
E)   A study of how to conduct free and fair elections in a countryF) B) and D)
G) A) and E)

Question 13

Table 1.1
   Table 1.1 Hours  Revenue 110220330440550\begin{array}{l}	ext { Table } 1.1\\begin{array} { | l | l | } \hline 	ext { Hours } & 	ext { Revenue } \\hline 1 & 10 \\hline 2 & 20 \\hline 3 & 30 \\hline 4 & 40 \\hline 5 & 50 \\hline\end{array}\end{array} Table 1.1 Hours 12345​ Revenue 1020304050​​​ 
-Refer to Table 1.1. What is Sergio's marginal benefit if he tutors for four hours instead of two hours?

Accepted Answer

A)   $50
B)   $40
C)   $30
D)   $20
E)   $10 F) A) and C)
G) All of the above

Question 14

"There should be less discrimination against the elderly." This is an example of a:

Accepted Answer

A)   normative statement.
B)   positive statement.
C)   forecast.
D)   theory.
E)   prediction.F) A) and B)
G) A) and C)

Question 15

The simple circular-flow model for households and firms is an economic model that focuses on the interaction between households and firms. Which of the following statements regarding the model is correct?

Accepted Answer

A)   As the model does not include the interaction between firms and resource markets, it does not predict correctly.
B)   As the model does not include the interaction between households and product markets, it does not predict correctly.
C)   The model has too many simplifying assumptions, and it cannot be used to make predictions about the real world.
D)   The model is a simplification of the real world, and it can be used to make predictions about the real world.
E)   As the model does not include the interaction between firms and product markets, it does not predict correctly.F) B) and C)
G) A) and E)

Question 16

An economic model that sometimes makes incorrect predictions can be used by economic decision makers:

Accepted Answer

A)   under no circumstances.
B)   only if it assumes a positive correlation between the variables being analyzed.
C)   if it is mathematical.
D)   if it is simple enough for a child to understand.
E)   until a better model is developed.F) B) and E)
G) All of the above

Question 17

The incorrect idea that if two variables are associated in time, one must necessarily cause the other is known as:

Accepted Answer

A)   the association-is-causation fallacy.
B)   the fallacy of composition.
C)   a primary effect.
D)   a secondary effect.
E)   a behavioral assumption.F) A) and C)
G) C) and E)

Question 18

Which of the following would be a topic considered in the field of macroeconomics?

Accepted Answer

A)   The study of the growth of the Chinese economy
B)   The study of the causes of the relocation of U.S. manufacturing firms to China
C)   The study of the differences in wages between men and women in the United States
D)   The study of the effect of rent control on the housing market in New York City
E)   The study of the impact of environmental regulations on the production levels of firmsF) A) and D)
G) D) and E)

Question 19

One problem with rent control is that policymakers often ignore its secondary effects.

Accepted Answer

A) True 
 B)False

Question 20

Economics is best defined as the study of how:

Accepted Answer

A)   people make decisions in a world of scarcity.
B)   governments can influence the social structure.
C)   to separate the executive from the legislature and the judiciary.
D)   individuals can participate in electing their representatives to the government.
E)   to change the class structure of an economy.F) D) and E)
G) A) and C)

Exam 1: The Art and Science of Economic Analysis.

"There should be less discrimination against the elderly." This is an example of a:

Correct Answer
verified

The difference between a good and a service is that:

Correct Answer
verified

Your best friend buys you lunch on your birthday. You think this was not a free lunch because:

Correct Answer
verified

Economics is best described as the:

Correct Answer
verified

Economics is best defined as the study of how:

Correct Answer
verified

Correct Answer
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The simple circular-flow model for households and firms is an economic model that focuses on the interaction between households and firms. Which of the following statements regarding the model is correct?

Correct Answer
verified

An economic model that sometimes makes incorrect predictions can be used by economic decision makers:

Correct Answer
verified

Which of the following is the best definition of economics?

Correct Answer
verified

An economic model:

Correct Answer
verified

Sources of confusion in economic analysis include:

Correct Answer
verified

The incorrect idea that if two variables are associated in time, one must necessarily cause the other is known as:

Correct Answer
verified

Correct Answer
verified

One problem with rent control is that policymakers often ignore its secondary effects.

Correct Answer
verified

Labor is the physical and mental effort used to produce goods and services.

Correct Answer
verified

The "other-things-constant" assumption is also known as:

Correct Answer
verified

Exhibit 1.3 -Refer to Exhibit 1.3 of the Scientific Method: Step-by-Step. If Box A is 'Reject the hypothesis,' then Box B is:

Correct Answer
verified

A good or service is considered scarce if:

Correct Answer
verified

Which of the following would be a topic considered in the field of macroeconomics?

Correct Answer
verified

Scarcity:

Correct Answer
verified

Exam 1: The Art and Science of Economic Analysis.

"There should be less discrimination against the elderly." This is an example of a:

Correct AnswerverifiedShow Answer

The difference between a good and a service is that:

Correct AnswerverifiedShow Answer

Your best friend buys you lunch on your birthday. You think this was not a free lunch because:

Correct AnswerverifiedShow Answer

Economics is best described as the:

Correct AnswerverifiedShow Answer

Economics is best defined as the study of how:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The simple circular-flow model for households and firms is an economic model that focuses on the interaction between households and firms. Which of the following statements regarding the model is correct?

Correct AnswerverifiedShow Answer

An economic model that sometimes makes incorrect predictions can be used by economic decision makers:

Correct AnswerverifiedShow Answer

Which of the following is the best definition of economics?

Correct AnswerverifiedShow Answer

An economic model:

Correct AnswerverifiedShow Answer

Sources of confusion in economic analysis include:

Correct AnswerverifiedShow Answer

The incorrect idea that if two variables are associated in time, one must necessarily cause the other is known as:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One problem with rent control is that policymakers often ignore its secondary effects.

Correct AnswerverifiedShow Answer

Labor is the physical and mental effort used to produce goods and services.

Correct AnswerverifiedShow Answer

The "other-things-constant" assumption is also known as:

Correct AnswerverifiedShow Answer

Exhibit 1.3 -Refer to Exhibit 1.3 of the Scientific Method: Step-by-Step. If Box A is 'Reject the hypothesis,' then Box B is:

Correct AnswerverifiedShow Answer

A good or service is considered scarce if:

Correct AnswerverifiedShow Answer

Which of the following would be a topic considered in the field of macroeconomics?

Correct AnswerverifiedShow Answer

Scarcity:

Correct AnswerverifiedShow Answer

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