Question 1

A good theory seeks to:​

Accepted Answer

A)  distort reality in order to improve forecasting ability.
B)  predict phenomena without explaining them.
C)  explain phenomena without predicting them.
D)  confront reality in all its complexity by focusing on the unique aspects of each phenomenon.
E)  simplify a complex reality.F) B) and C)
G) A) and E)

Question 2

To say that people make decisions at the margin means that:​

Accepted Answer

A)  they usually wait until the last minute before making a decision to buy.
B)  they weigh the additional costs and the additional benefits of various activities before they make a decision.
C)  most people just barely get by on the incomes they earn and live from day-to-day on the very edge of subsistence.
D)  if given a choice, most people would prefer to make their own decisions concerning the things that affect their lives.
E)  they consider the total cost and the total benefit of various activities before they make a purchase.F) All of the above
G) None of the above

Question 3

Economic information:​

Accepted Answer

A)  is usually scarce and costly to acquire.
B)  is usually available free to any decision maker.
C)  is usually not required for rational decision making.
D)  must be complete before any decision is made.
E)  is usually useful only to governments.F) B) and C)
G) None of the above

Question 4

Which of the following sentences is the best example of scarcity of time?​

Accepted Answer

A)  Peter buys a hamburger.
B)  John-Michael wants to spend his money on a new hover board.
C)  Alexander is doing homework instead of going to the movies with his friends.
D)  Amanda, a geography teacher, is retired.
E)  Bill is unemployed.F) A) and B)
G) A) and C)

Question 5

Which of the following is a positive statement?​

Accepted Answer

A)  The unemployment rate of 7 percent or higher is a national disgrace.
B)  Unemployment is a less important problem than inflation.
C)  When the national unemployment rate is 7 percent, the unemployment rate among inner-city youth is often close to 40 percent.
D)  Unemployment and inflation are equally important problems.
E)  An inflation rate of 7 percent is too high.F) A) and E)
G) B) and D)

Question 6

Rational economic decision makers will make a change only if:​

Accepted Answer

A)  the change is free of risk.
B)  there are no costs involved.
C)  their expectations are correct.
D)  there is no uncertainty about the results of the change.
E)  the expected marginal benefit exceeds expected marginal cost.F) A) and E)
G) D) and E)

Question 7

Behavioral assumptions:​

Accepted Answer

A)  make economic models more complex than if these assumptions were removed.
B)  pertain only to consumers.
C)  hold all other things constant.
D)  are ways to test a hypothesis.
E)  describe how individuals are expected to behave.F) B) and C)
G) A) and C)

Question 8

A good economic theory:​

Accepted Answer

A)  approaches reality in all its complexity.
B)  involves so much distortion of reality that it is worthless.
C)  focuses on the unique aspects of each situation.
D)  involves some simplification of reality.
E)  bears no relation to reality.F) A) and E)
G) C) and D)

Question 9

Labor and capital are exchanged in the resource market.

Accepted Answer

A) True 
 B)False

Question 10

Economists believe that individuals respond in a predictable way to changes in costs and benefits. The term that best describes this belief is:​

Accepted Answer

A)  opportunity cost.
B)  demand.
C)  supply.
D)  scarcity.
E)  rational behavior.F) B) and C)
G) A) and E)

Exam 1: The Art and Science of Economic Analysis

Economic information:

Correct Answer
verified

Which of the following is a positive statement?

Correct Answer
verified

Behavioral assumptions:

Correct Answer
verified

A good economic theory:

Correct Answer
verified

Economists believe that individuals respond in a predictable way to changes in costs and benefits. The term that best describes this belief is:

Correct Answer
verified

A good theory seeks to:

Correct Answer
verified

Which of the following sentences is the best example of scarcity of time?

Correct Answer
verified

To say that people make decisions at the margin means that:

Correct Answer
verified

Labor and capital are exchanged in the resource market.

Correct Answer
verified

Rational economic decision makers will make a change only if:

Correct Answer
verified

Exam 1: The Art and Science of Economic Analysis

Economic information:​

Correct AnswerverifiedShow Answer

Which of the following is a positive statement?​

Correct AnswerverifiedShow Answer

Behavioral assumptions:​

Correct AnswerverifiedShow Answer

A good economic theory:​

Correct AnswerverifiedShow Answer

Economists believe that individuals respond in a predictable way to changes in costs and benefits. The term that best describes this belief is:​

Correct AnswerverifiedShow Answer

A good theory seeks to:​

Correct AnswerverifiedShow Answer

Which of the following sentences is the best example of scarcity of time?​

Correct AnswerverifiedShow Answer

To say that people make decisions at the margin means that:​

Correct AnswerverifiedShow Answer

Labor and capital are exchanged in the resource market.

Correct AnswerverifiedShow Answer

Rational economic decision makers will make a change only if:​

Correct AnswerverifiedShow Answer

Economic information:

Correct Answer
verified

Which of the following is a positive statement?

Correct Answer
verified

Behavioral assumptions:

Correct Answer
verified

A good economic theory:

Correct Answer
verified

Economists believe that individuals respond in a predictable way to changes in costs and benefits. The term that best describes this belief is:

Correct Answer
verified

A good theory seeks to:

Correct Answer
verified

Which of the following sentences is the best example of scarcity of time?

Correct Answer
verified

To say that people make decisions at the margin means that:

Correct Answer
verified

Correct Answer
verified

Rational economic decision makers will make a change only if:

Correct Answer
verified