Question 1

Which of the following questions would not be studied by a microeconomist but would be studied by a macroeconomist?

Accepted Answer

A)   Why do national economies grow?
B)   What percentage of consumer income is spent on entertainment?
C)   Why do workers prefer a four-day working week?
D)   What happens to worker productivity when a job shifts to a four-day working week?
E)   How is the electricity industry harmed by the passage of new clean-air legislation?

Question 2

Consider the statement: 'The increase in money supply will push the prices downwards'. This is a statement of a:

Accepted Answer

A)   microeconomist.
B)   both resource economist and microeconomist.
C)   macroeconomist.
D)   resource economist.
E)   social science economist.

Question 3

The most fundamental concepts underlying the discipline of economics are:

Accepted Answer

A)   scarcity and making an efficient choice.
B)   supply and demand.
C)   money, stocks and bonds.
D)   inflation and unemployment.

Question 4

The statement: 'A tax cut means that people will work harder to earn more income', is an example of positive economic analysis.

Accepted Answer

A) True 
 B)False

Question 5

Inflation is a concern of:

Accepted Answer

A)   macroeconomics.
B)   microeconomics.
C)   both political science and philosophy.
D)   neither macroeconomics or microeconomics.

Question 6

An economic model is:

Accepted Answer

A)   focused on all variables in the economy.
B)   based on unrealistic assumptions.
C)   a pursuit of parsimony.
D)   designed to highlight minor details of the reality.

Question 7

The central question in economics is how to:

Accepted Answer

A)   deal with the problem of scarcity.
B)   change government economic policy.
C)   change people's wants to match their needs.
D)   manage money and become wealthy.

Question 8

Economists:

Accepted Answer

A)   never use data and tables.
B)   never use equations or diagrams.
C)   sometimes use diagrams and equations.
D)   have to use unrealistic assumptions all the time.

Question 9

An economist builds a model to:

Accepted Answer

A)   define the value judgment.
B)   capture all the complexities of reality.
C)   collect data.
D)   test the hypothesis.

Question 10

Scarcity means that rich people are able to have as much as they would like to have.

Accepted Answer

A) True 
 B)False

Question 11

Which one of the following is the most accurate definition of economics?

Accepted Answer

A)   Economics is the study of stocks and bonds.
B)   Economics is the study of how people allocate unlimited resources.
C)   Economics is the study of how consumers choose to spend their unlimited income.
D)   Economics is the study of how an individual agent/entity chooses to allocate scarceResources.

Question 12

The perpetual state of insufficiency of resources to satisfy people's unlimited wants is:

Accepted Answer

A)   not a problem in developed countries.
B)   a contradiction that cannot be solved.
C)   completely unrealistic.
D)   present in the modern economies but not in the past.
E)   the definition of scarcity.

Question 13

The statement: 'A tax hike for the rich is the fairest way to raise tax collection', is an example of positive economic analysis.

Accepted Answer

A) True 
 B)False

Question 14

The statement: 'When buyers and sellers interact in the market, the equilibrium price is $50 per unit', is an example of normative economic analysis.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a microeconomics topic?

Accepted Answer

A)   Changes in the economy's price levels.
B)   Issues of Gross Domestic Product.
C)   The reasons why industries employ different levels of resources.
D)   Effect of government taxation on aggregate consumption level.
E)   Issues of inflation and unemployment rates.

Question 16

The finite nature of the economy's resource base:

Accepted Answer

A)   would be solved if only we would learn to conserve.
B)   arises out of the insatiable appetite of consumers.
C)   is only a problem in developing countries.
D)   will be solved as technology advances.
E)   will always be with us.

Question 17

Which of the following is the best example of a normative economic statement?

Accepted Answer

A)   The unemployment rate for women has been two times lower than the overall rate.
B)   Increase in competition in the car manufacturing industry will result in a price reduction for cars.
C)   A monopolist is a price maker.
D)   Stronger regulation should be applied to polluting companies.

Question 18

Which of the following is capital?

Accepted Answer

A)   Fresh air.
B)   Money.
C)   Photocopier.
D)   Pastoral land.
E)   Lake.

Question 19

Which of the following is not an example of a factor of production?

Accepted Answer

A)   A lake.
B)   A cow.
C)   A union leader.
D)   Dollars.

Question 20

Economists most often disagree over positive rather than normative economic issues.

Accepted Answer

A) True 
 B)False

Exam 1: Thinking Like an Economist

An economist builds a model to:

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Which of the following is the best example of a normative economic statement?

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The most fundamental concepts underlying the discipline of economics are:

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Scarcity means that rich people are able to have as much as they would like to have.

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An economic model is:

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Economists most often disagree over positive rather than normative economic issues.

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The perpetual state of insufficiency of resources to satisfy people's unlimited wants is:

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The central question in economics is how to:

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Which one of the following is the most accurate definition of economics?

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Consider the statement: 'The increase in money supply will push the prices downwards'. This is a statement of a:

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The statement: 'A tax hike for the rich is the fairest way to raise tax collection', is an example of positive economic analysis.

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The finite nature of the economy's resource base:

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Which of the following questions would not be studied by a microeconomist but would be studied by a macroeconomist?

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Which of the following is capital?

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The statement: 'A tax cut means that people will work harder to earn more income', is an example of positive economic analysis.

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Which of the following is not an example of a factor of production?

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The statement: 'When buyers and sellers interact in the market, the equilibrium price is $50 per unit', is an example of normative economic analysis.

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Economists:

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Which of the following is a microeconomics topic?

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Inflation is a concern of:

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