Question 1

The current rate of unemployment of 5 percent is too high.This is a _______ statement.

Accepted Answer

A)  normative
B)  ceteris paribus
C)  positive
D)  fallacy of false cause

Question 2

Microeconomics is most likely to be concerned with the:

Accepted Answer

A)  economy as a whole.
B)  activity of large segments of the economy.
C)  economic behavior of specific parts or units of the economy.
D)  economy-wide trends in unemployment, prices, and production.

Question 3

The basic concern of economics is:

Accepted Answer

A)  to keep business firms from losing money.
B)  to prove that capitalism is better than socialism.
C)  to study the choices people make.
D)  to use unlimited resources to produce goods and services to satisfy limited wants.

Question 4

The opportunity cost of something is:

Accepted Answer

A)  greater during periods of rising prices.
B)  equal to the money cost.
C)  less during periods of falling prices.
D)  what is given up to acquire it.

Question 5

Macroeconomics is most likely to be concerned with the:

Accepted Answer

A)  amount of unemployment in a specific industry.
B)  economic behavior of a particular household.
C)  economic behavior of specific parts or units of the economy.
D)  aggregates in the economy.

Question 6

Water is considered a scarce good rather than a free good because:

Accepted Answer

A)  it has alternative uses.
B)  it does not have alternative uses.
C)  scarce goods are less expensive than free goods.
D)  free goods are more expensive than scarce goods.

Question 7

Margin suggests additional or incremental.

Accepted Answer

A) True 
 B)False

Question 8

An answer to the question "How are goods produced?" determines:

Accepted Answer

A)  who receives the goods that are produced.
B)  how tastes and preferences are determined.
C)  how resources are combined in the production of goods.
D)  the types and quantities of goods and services produced.

Question 9

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 10

A good is scarce if we must sacrifice something to obtain it.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  resources are plentiful.
B)  resources are scarce.
C)  most of our resources are privately rather than socially owned.
D)  most of our resources are socially rather than privately owned.

Question 12

The sacrifice of an alternative is called:

Accepted Answer

A)  revenue.
B)  benefit.
C)  opportunity cost.
D)  production.

Question 13

The Case in Point on the oil extraction suggests that one reason oil may become more costly is that :

Accepted Answer

A)  we will have to give up more and more valuable alternatives to extract oil.
B)  speculation is likely to drive up oil prices.
C)  oil producers are likely to become more greedy in the future.
D)  actually, the Case suggests that oil extraction is likely to become less costly and the future.

Question 14

A free good is:

Accepted Answer

A)  also a scarce good.
B)  a relatively abundant good.
C)  a good with no opportunity cost.
D)  a good with relatively low opportunity cost.

Question 15

The problem of scarcity is confronted by:

Accepted Answer

A)  industrialized societies.
B)  pre-industrialized societies.
C)  societies governed by communist philosophies.
D)  all societies.

Question 16

Microeconomics deals with:

Accepted Answer

A)  the working of the entire economy or large sectors of it.
B)  employment, growth, and inflation.
C)  individual units in the economy.
D)  normative economics for the most part.

Question 17

Economists concerned about economy-wide trends in the unemployment of labor, the rate of inflation, and the level of economic production are studying:

Accepted Answer

A)  microeconomics.
B)  macroeconomics.
C)  specific units or parts of the economy.
D)  the "trees" of economic behavior, rather than the "forest."

Question 18

Anything whose value can change is a:

Accepted Answer

A)  variable.
B)  constant.
C)  hypothesis.
D)  all of the above.

Question 19

The situation when we face alternative choices is called abundance.

Accepted Answer

A) True 
 B)False

Question 20

Something whose value does not change is a:

Accepted Answer

A)  variable.
B)  constant.
C)  hypothesis.
D)  all of the above.

Exam 1: Economics: the Study of Choice

An answer to the question "How are goods produced?" determines:

Correct AnswerverifiedShow Answer

Margin suggests additional or incremental.

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Something whose value does not change is a:

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The situation when we face alternative choices is called abundance.

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The sacrifice of an alternative is called:

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A good is scarce if we must sacrifice something to obtain it.

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A free good is:

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Economists concerned about economy-wide trends in the unemployment of labor, the rate of inflation, and the level of economic production are studying:

Correct AnswerverifiedShow Answer

The opportunity cost of something is:

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Microeconomics is most likely to be concerned with the:

Correct AnswerverifiedShow Answer

The Case in Point on the oil extraction suggests that one reason oil may become more costly is that :

Correct AnswerverifiedShow Answer

The current rate of unemployment of 5 percent is too high.This is a _______ statement.

Correct AnswerverifiedShow Answer

Anything whose value can change is a:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The basic concern of economics is:

Correct AnswerverifiedShow Answer

Macroeconomics is most likely to be concerned with the:

Correct AnswerverifiedShow Answer

The problem of scarcity is confronted by:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Water is considered a scarce good rather than a free good because:

Correct AnswerverifiedShow Answer

Microeconomics deals with:

Correct AnswerverifiedShow Answer

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