Question 1

The sentence "The United States should adopt more open trade policies because they historically have caused increased economic growth." is an example of a(n)  ______ statement.

Accepted Answer

A)   unequivocally true
B)   normative
C)   positive
D)   unequivocally falseE) A) and B)
F) None of the above

Question 2

The classic conundrum, "Which came first, the chicken or the egg?" seeks to address the common fallacy of _________ in the context of correlation and causation.

Accepted Answer

A)   reverse causality
B)   omitted variables
C)   linear relationships
D)   comparative analysisE) A) and B)
F) None of the above

Question 3

Suppose Hassan wants to rent a house near the lake over a holiday weekend, but the only house available is out of his price range. This is an example of:

Accepted Answer

A)   a resource constraint.
B)   rising marginal benefits.
C)   changing incentives.
D)   sunk costs.E) B) and D)
F) B) and C)

Question 4

Thomas Malthus was an early 19th century economist who created a model describing the relationship between population growth and:

Accepted Answer

A)   war.
B)   birth control.
C)   crime.
D)   food production.E) None of the above
F) A) and D)

Question 5

Which of the following is considered a microeconomic issue?

Accepted Answer

A)   Chinese economic growth has declined.
B)   The Federal Reserve cuts key interest rates in order to stimulate lending.
C)   Walmart decides to add more self-checkout machines as the cost of labor rises.
D)   India experiences a reduction in unemployment after opening its borders to trade.E) A) and C)
F) A) and B)

Question 6

Economists have observed that economic growth generally leads to improved standards of living. This observation is most related to the field of:

Accepted Answer

A)   microeconomics.
B)   public policy.
C)   macroeconomics.
D)   financial economics.E) B) and C)
F) A) and D)

Question 7

The famous saying, "There is no such thing as a free lunch," is an example of which economic concept?

Accepted Answer

A)   Maximization
B)   Trade-offs
C)   Basic necessities
D)   The income effectE) All of the above
F) A) and D)

Question 8

Which of the following is an example of a disincentive?

Accepted Answer

A)   Law enforcement creates a "Mug Shots" webpage that publicizes law breakers.
B)   A technology company offers a bonus to any employee who sells more than 100 widgets per month.
C)   A local gym holds a weight loss competition, with the prize being a free trip to Bermuda.
D)   Your professor offers to give you feedback on your paper and allow a revision before grading it if you turn it in early.E) B) and C)
F) C) and D)

Question 9

Mimi gets a job twenty miles from her house and purchases a new car to commute. As a result of this new expense, Mimi decides to sell her season tickets to the local football stadium. Mimi's situation can be described as:

Accepted Answer

A)   ignoring sunk costs.
B)   a trade-off.
C)   irrational decision making.
D)   a normative choice.E) None of the above
F) A) and C)

Question 10

Suppose you have an idea that you believe offers substantial opportunity, but no one has ever implemented this idea before. What conclusion should you draw?I. People are irrational.II. You have come up with a new innovative idea.III. Your may have misevaluated how people will respond to new incentives.IV. You are being irrational.

Accepted Answer

A)   I only
B)   I and II only
C)   II and III only
D)   III onlyE) A) and B)
F) All of the above

Question 11

In the past, there was a strong correlation between ice cream consumption and polio diagnoses in children. However, this was shown not to be a causal relationship by:

Accepted Answer

A)   identifying a common underlying omitted variable.
B)   demonstrating reverse causality.
C)   correcting errors in data reporting.
D)   eliminating coincidences.E) B) and D)
F) C) and D)

Question 12

Which of the following is considered a microeconomic issue?

Accepted Answer

A)   The unemployment rate in the United States from 1980 to present day
B)   Apple's newest version of the iPhone
C)   France's growth rate over the last year
D)   All of these are examples of microeconomic issues.E) All of the above
F) A) and B)

Question 13

A local street festival that previously sold bracelets in exchange for unlimited alcohol consumption is now concerned about overconsumption. If the festival providers decide to instead sell tickets for each drink, will overall alcohol consumption at the next festival decrease?

Accepted Answer

A)   No, because the marginal cost per additional drink will decrease for consumers.
B)   No, because the marginal cost per additional drink will increase for consumers.
C)   Yes, because the marginal cost per additional drink will increase for consumers.
D)   Yes, because the marginal benefit per additional drink will increase for consumers.E) A) and B)
F) A) and C)

Question 14

One of the most basic models of the economy is:

Accepted Answer

A)   real GDP per capita.
B)   the current population survey.
C)   consumer expenditure.
D)   the circular flow diagram.E) None of the above
F) A) and B)

Question 15

Which of the following is an assumption that economists make?

Accepted Answer

A)   Most people possess entrepreneurial talent.
B)   People are very good at assessing the costs of decisions accurately.
C)   Individuals and firms will act to provide the things people want.
D)   Individuals usually fail to optimize the use of their resources because they think on the margin.E) B) and D)
F) B) and C)

Question 16

Which of the following is considered a microeconomic issue?

Accepted Answer

A)   The Bureau of Economic Analysis reviews quarterly national income accounting data.
B)   A firm decides to purchase pay-per-click online advertising.
C)   The Federal Reserve increases the discount rate.
D)   The CPI reports a rise in inflation during the month of July.E) B) and D)
F) A) and D)

Question 17

After paying $12 to enter an all-you-can-eat buffet, you can eat as much food as you desire. Which of the following statements is true?

Accepted Answer

A)   The marginal benefit of your first plate of food is larger than the marginal benefit of your third plate of food.
B)   The marginal cost of a plate of food is sunk.
C)   You should eat as much as possible to maximize your benefit.
D)   It is inefficient to eat at buffet restaurants.E) A) and B)
F) A) and C)

Question 18

A resource is:

Accepted Answer

A)   something that people respond to.
B)   anything that can be used to make something of value.
C)   a good or service.
D)   something of value.E) A) and B)
F) A) and C)

Question 19

The Widgetville County Wolfpack has won 90 percent of their last 20 games played under a full moon. What does this imply?

Accepted Answer

A)   The weather affects how they play.
B)   There is a positive correlation between their play and the occurrence of a full moon.
C)   Full moons cause the team to play better.
D)   Causation can be found between their play and a full moonE) A) and C)
F) B) and C)

Question 20

Which of the following is not a direct result of scarcity?

Accepted Answer

A)   Buildings in New York City are taller than buildings in Greenville, SC due to fewer acres of land per person.
B)   Due to high gas prices, Shana decides to trade her Chevy Tahoe for a Honda Accord.
C)   A college student misses a test review in order to get a few more hours of sleep.
D)   The energy industry is searching for a way to store the extra power generated by renewable energy.E) None of the above
F) A) and D)

Exam 1: Economicsand Life

The classic conundrum, "Which came first, the chicken or the egg?" seeks to address the common fallacy of _________ in the context of correlation and causation.

Correct Answer
verified

After paying $12 to enter an all-you-can-eat buffet, you can eat as much food as you desire. Which of the following statements is true?

Correct Answer
verified

A resource is:

Correct Answer
verified

The sentence "The United States should adopt more open trade policies because they historically have caused increased economic growth." is an example of a(n) ______ statement.

Correct Answer
verified

Which of the following is an assumption that economists make?

Correct Answer
verified

A local street festival that previously sold bracelets in exchange for unlimited alcohol consumption is now concerned about overconsumption. If the festival providers decide to instead sell tickets for each drink, will overall alcohol consumption at the next festival decrease?

Correct Answer
verified

Mimi gets a job twenty miles from her house and purchases a new car to commute. As a result of this new expense, Mimi decides to sell her season tickets to the local football stadium. Mimi's situation can be described as:

Correct Answer
verified

Which of the following is considered a microeconomic issue?

Correct Answer
verified

Economists have observed that economic growth generally leads to improved standards of living. This observation is most related to the field of:

Correct Answer
verified

Correct Answer
verified

One of the most basic models of the economy is:

Correct Answer
verified

Which of the following is considered a microeconomic issue?

Correct Answer
verified

In the past, there was a strong correlation between ice cream consumption and polio diagnoses in children. However, this was shown not to be a causal relationship by:

Correct Answer
verified

The famous saying, "There is no such thing as a free lunch," is an example of which economic concept?

Correct Answer
verified

Which of the following is an example of a disincentive?

Correct Answer
verified

Suppose Hassan wants to rent a house near the lake over a holiday weekend, but the only house available is out of his price range. This is an example of:

Correct Answer
verified

Which of the following is considered a microeconomic issue?

Correct Answer
verified

Thomas Malthus was an early 19th century economist who created a model describing the relationship between population growth and:

Correct Answer
verified

The Widgetville County Wolfpack has won 90 percent of their last 20 games played under a full moon. What does this imply?

Correct Answer
verified

Which of the following is not a direct result of scarcity?

Correct Answer
verified

Exam 1: Economicsand Life

The classic conundrum, "Which came first, the chicken or the egg?" seeks to address the common fallacy of _________ in the context of correlation and causation.

Correct AnswerverifiedShow Answer

After paying $12 to enter an all-you-can-eat buffet, you can eat as much food as you desire. Which of the following statements is true?

Correct AnswerverifiedShow Answer

A resource is:

Correct AnswerverifiedShow Answer

The sentence "The United States should adopt more open trade policies because they historically have caused increased economic growth." is an example of a(n) ______ statement.

Correct AnswerverifiedShow Answer

Which of the following is an assumption that economists make?

Correct AnswerverifiedShow Answer

A local street festival that previously sold bracelets in exchange for unlimited alcohol consumption is now concerned about overconsumption. If the festival providers decide to instead sell tickets for each drink, will overall alcohol consumption at the next festival decrease?

Correct AnswerverifiedShow Answer

Mimi gets a job twenty miles from her house and purchases a new car to commute. As a result of this new expense, Mimi decides to sell her season tickets to the local football stadium. Mimi's situation can be described as:

Correct AnswerverifiedShow Answer

Which of the following is considered a microeconomic issue?

Correct AnswerverifiedShow Answer

Economists have observed that economic growth generally leads to improved standards of living. This observation is most related to the field of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One of the most basic models of the economy is:

Correct AnswerverifiedShow Answer

Which of the following is considered a microeconomic issue?

Correct AnswerverifiedShow Answer

In the past, there was a strong correlation between ice cream consumption and polio diagnoses in children. However, this was shown not to be a causal relationship by:

Correct AnswerverifiedShow Answer

The famous saying, "There is no such thing as a free lunch," is an example of which economic concept?

Correct AnswerverifiedShow Answer

Which of the following is an example of a disincentive?

Correct AnswerverifiedShow Answer

Suppose Hassan wants to rent a house near the lake over a holiday weekend, but the only house available is out of his price range. This is an example of:

Correct AnswerverifiedShow Answer

Which of the following is considered a microeconomic issue?

Correct AnswerverifiedShow Answer

Thomas Malthus was an early 19th century economist who created a model describing the relationship between population growth and:

Correct AnswerverifiedShow Answer

The Widgetville County Wolfpack has won 90 percent of their last 20 games played under a full moon. What does this imply?

Correct AnswerverifiedShow Answer

Which of the following is not a direct result of scarcity?

Correct AnswerverifiedShow Answer

Correct Answer
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