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Exam 1: The Scope and Method of Economics

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Question 1

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Resources are unlimited in a wealthy society.

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Question 2

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The study of economics

A) is a very narrow endeavor.
B) is a way of analyzing decision-making processes caused by scarcity.
C) is concerned with proving that capitalism is better than socialism.
D) focuses on how a business should function.

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Question 3

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To isolate the impact of one single factor,economists invoke the assumption of

Among the fundamental concepts in economics are

You have noticed that there is an increase in the number of homeless people in your city.At the same time you observe that there are also a number of vacant apartments.You believe that the government could reduce the number of homeless people if landlords were required to rent their apartments for less than they are currently charging.This policy recommendation would be motivated by concerns over

Which of the following is NOT listed in the book as a reason to study economics?

Economists often refer to risk-free ventures as

If you eat at a sushi restaurant that charges $20 for its all you can eat sushi special,then the marginal cost of your 10th piece of sushi is

The slope of a non-linear curve

Which of the following is the best definition of economics?

Positive economics seeks to understand behavior,but not make judgments.

Which of the following is an example of a positive statement?

If the slope of a straight line is 4 and if X (the variable on the horizontal axis) increases by 12,then Y (the variable on the vertical axis) will

If you can buy 9 DVDs for $126 or you could buy 10 DVDs for $130,then the marginal cost of the tenth DVD is:

There is a possibility that a national sales tax will be implemented.Many economists argue that items such as food and clothing should be exempt from such a tax because low-income people spend a greater percentage of their income on these goods than do high-income individuals.This argument is motivated by concerns over

Refer to the information provided in Figure 1.4 below to answer the questions that follow. Figure 1.4 -Refer to Figure 1.4.Which of the following curves or lines has a zero slope throughout?

At a political rally,you stand up to see better.Everyone else stands up,as well.This is an example of

The study of how benefits are determined for city employees would be considered

Which of the following statements is NOT correct?

Refer to Scenario 1.1 below to answer the questions that follow. SCENARIO 1.1: An economist wants to understand the relationship between minimum wages and the level of teenage unemployment.The economist collects data on the values of the minimum wage and the levels of teenage unemployment over time.The economist concludes that a 1% increase in minimum wage causes a 0.2% increase in teenage unemployment.From this information he concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers. -Refer to Scenario 1.1.The statement that a 1% increase in the minimum wage causes a 0.2% increase in teenage unemployment is an example of