Question 1

Scarcity would cease to exist as an economic problem if:

Accepted Answer

A)   we learned to cooperate and not compete with each other.
B)   there were new discoveries of an abundance of natural resources.
C)   output per worker increased.
D)   none of the above.E) A) and D)
F) B) and C)

Question 2

"When one basketball team spends a large sum of money acquiring better players,it is better off.If all teams do the same thing,all of them are better off." These statements demonstrate:

Accepted Answer

A)   the fallacy of composition.
B)   confusing association with causation.
C)   a misunderstanding of the direction of causality.
D)   the ceteris paribus condition.E) A) and B)
F) C) and D)

Question 3

"Mandating longer sentences for any criminal's third arrest will lead to a reduction in crime.Less crime will reduce the number of police officers cities will hire." This quotation:

Accepted Answer

A)   contains positive statements only.
B)   contains normative statements only.
C)   contains both normative and positive statements.
D)   contains neither normative nor positive statements.E) B) and C)
F) A) and D)

Question 4

What is the difference between a hypothesis and a theory?

Accepted Answer

A hypothesis about behavior is the first...

Question 5

Most disagreements among economists stem from normative issues.

Accepted Answer

A) True 
 B)False

Question 6

Economics is concerned with:

Accepted Answer

A)   the choices people must make because resources are scarce.
B)   human decision makers and the factors that influence their choices.
C)   the allocation of limited resources to satisfy virtually unlimited desires.
D)   all of the above.E) A) and B)
F) None of the above

Question 7

Which of the following statements are true?

Accepted Answer

A)   Wealthy people face scarcity.
B)   As a result of scarcity, individuals must make choices and face trade-offs.
C)   It is impossible to satisfy unlimited human wants with limited resources.
D)   All of the above are true statements.E) A) and D)
F) None of the above

Question 8

A good economic theory should capture as many details about real-world behavior as possible.

Accepted Answer

A) True 
 B)False

Question 9

A theory asserts that consumers will purchase less of a good at higher prices than they will at lower prices,ceteris paribus.However,when the average price of cars increased throughout the 1990s,more cars were purchased.Which of the following best explains the apparent conflict between theory and data?

Accepted Answer

A)   The ceteris paribus assumption is valid.
B)   It is likely that variables other than the price and quantity of cars demanded were changing.
C)   The theory is valid. However, the price and quantity data gathered by researchers was clearly measured incorrectly.
D)   The theory must be invalid.E) A) and D)
F) All of the above

Question 10

Why is abstraction important in developing economic theories?

Accepted Answer

Economic theories cannot realistically i...

Question 11

Which of the following is a positive statement?

Accepted Answer

A)   The average high temperature in Miami, Florida in February is lower than the average high temperature in Chicago, Illinois.
B)   An increase in cigarette smoking will lead to a decrease in the likelihood of getting lung cancer.
C)   30 minutes of exercise three or more times per week will decrease the occurrence of heart disease.
D)   all of the aboveE) A) and B)
F) A) and C)

Question 12

Economists presume that when making a decision,individuals consider both the current action and the future consequences of that action.

Accepted Answer

A) True 
 B)False

Question 13

When economists disagree,it is often over what type of issues?

Accepted Answer

Economists generally disagree ...

Question 14

Suppose there are two members of the U.S.Congress who were once economics professors.Why is it important to be able to distinguish their positive from their normative statements about economic policy?

Accepted Answer

A)   Their positive statements help us understand the economy's response to a particular policy, while their normative statements reflect their value judgments.
B)   Their positive statements help us understand the good results of a policy change, and their normative statements help us understand the negative results.
C)   We really do not have to worry about them since trained economists never make normative statements.
D)   Economists are always making assumptions, and policy should not be based on assumptions.E) A) and C)
F) C) and D)

Question 15

If we choose more work we sacrifice leisure.

Accepted Answer

A) True 
 B)False

Question 16

Measuring the rate of inflation is primarily a concern of:

Accepted Answer

A)   positive economics.
B)   normative economics.
C)   microeconomics.
D)   macroeconomics.E) B) and D)
F) A) and B)

Question 17

Why is prediction in social sciences like economics more difficult than in physical sciences?

Accepted Answer

The major reason for the difference is t...

Question 18

An economic study concludes that an investment tax credit would increase business investment next year.This is an example of:

Accepted Answer

A)   normative analysis.
B)   positive analysis.
C)   negative economic analysis.
D)   the fallacy of composition.E) B) and C)
F) B) and D)

Question 19

The fallacy of composition states that even if something is true for an individual,it is not necessarily true for many individuals as a group.

Accepted Answer

A) True 
 B)False

Question 20

Bill says: "The imposition of a tax on tequila will increase its price." Bob says: "Taxes should be imposed on tequila because college students drink too much."

Accepted Answer

A)   Both statements are normative.
B)   Both statements are positive.
C)   Bill's statement is normative, and Bob's statement is positive.
D)   Bill's statement is positive, and Bob's statement is normative.E) None of the above
F) B) and C)

Exam 1: The Role and Method of Economics

When economists disagree,it is often over what type of issues?

Correct Answer
verified
Economists generally disagree ...
View Answer

Which of the following is a positive statement?

Correct Answer
verified

"When one basketball team spends a large sum of money acquiring better players,it is better off.If all teams do the same thing,all of them are better off." These statements demonstrate:

Correct Answer
verified

Economics is concerned with:

Correct Answer
verified

"Mandating longer sentences for any criminal's third arrest will lead to a reduction in crime.Less crime will reduce the number of police officers cities will hire." This quotation:

Correct Answer
verified

Why is abstraction important in developing economic theories?

Correct Answer
verified
Economic theories cannot realistically i...
View Answer

Scarcity would cease to exist as an economic problem if:

Correct Answer
verified

Economists presume that when making a decision,individuals consider both the current action and the future consequences of that action.

Correct Answer
verified

Which of the following statements are true?

Correct Answer
verified

Most disagreements among economists stem from normative issues.

Correct Answer
verified

The fallacy of composition states that even if something is true for an individual,it is not necessarily true for many individuals as a group.

Correct Answer
verified

Why is prediction in social sciences like economics more difficult than in physical sciences?

Correct Answer
verified
The major reason for the difference is t...
View Answer

Correct Answer
verified

An economic study concludes that an investment tax credit would increase business investment next year.This is an example of:

Correct Answer
verified

Measuring the rate of inflation is primarily a concern of:

Correct Answer
verified

What is the difference between a hypothesis and a theory?

Correct Answer
verified
A hypothesis about behavior is the first...
View Answer

If we choose more work we sacrifice leisure.

Correct Answer
verified

A good economic theory should capture as many details about real-world behavior as possible.

Correct Answer
verified

Suppose there are two members of the U.S.Congress who were once economics professors.Why is it important to be able to distinguish their positive from their normative statements about economic policy?

Correct Answer
verified

Bill says: "The imposition of a tax on tequila will increase its price." Bob says: "Taxes should be imposed on tequila because college students drink too much."

Correct Answer
verified

Exam 1: The Role and Method of Economics

When economists disagree,it is often over what type of issues?

Correct AnswerverifiedEconomists generally disagree ...View AnswerShow Answer

Which of the following is a positive statement?

Correct AnswerverifiedShow Answer

"When one basketball team spends a large sum of money acquiring better players,it is better off.If all teams do the same thing,all of them are better off." These statements demonstrate:

Correct AnswerverifiedShow Answer

Economics is concerned with:

Correct AnswerverifiedShow Answer

"Mandating longer sentences for any criminal's third arrest will lead to a reduction in crime.Less crime will reduce the number of police officers cities will hire." This quotation:

Correct AnswerverifiedShow Answer

Why is abstraction important in developing economic theories?

Correct AnswerverifiedEconomic theories cannot realistically i...View AnswerShow Answer

Scarcity would cease to exist as an economic problem if:

Correct AnswerverifiedShow Answer

Economists presume that when making a decision,individuals consider both the current action and the future consequences of that action.

Correct AnswerverifiedShow Answer

Which of the following statements are true?

Correct AnswerverifiedShow Answer

Most disagreements among economists stem from normative issues.

Correct AnswerverifiedShow Answer

The fallacy of composition states that even if something is true for an individual,it is not necessarily true for many individuals as a group.

Correct AnswerverifiedShow Answer

Why is prediction in social sciences like economics more difficult than in physical sciences?

Correct AnswerverifiedThe major reason for the difference is t...View AnswerShow Answer

Correct AnswerverifiedShow Answer

An economic study concludes that an investment tax credit would increase business investment next year.This is an example of:

Correct AnswerverifiedShow Answer

Measuring the rate of inflation is primarily a concern of:

Correct AnswerverifiedShow Answer

What is the difference between a hypothesis and a theory?

Correct AnswerverifiedA hypothesis about behavior is the first...View AnswerShow Answer

If we choose more work we sacrifice leisure.

Correct AnswerverifiedShow Answer

A good economic theory should capture as many details about real-world behavior as possible.

Correct AnswerverifiedShow Answer

Suppose there are two members of the U.S.Congress who were once economics professors.Why is it important to be able to distinguish their positive from their normative statements about economic policy?

Correct AnswerverifiedShow Answer

Bill says: "The imposition of a tax on tequila will increase its price." Bob says: "Taxes should be imposed on tequila because college students drink too much."

Correct AnswerverifiedShow Answer

Correct Answer
verified
Economists generally disagree ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Economic theories cannot realistically i...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The major reason for the difference is t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A hypothesis about behavior is the first...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified