Question 1

An economic model:

Accepted Answer

A)  should describe the real world accurately.
B)  should accurately predict cause and effect.
C)  should make clear assumptions.
D)  All of these are true.E) None of the above
F) B) and D)

Question 2

Which of the following is an example of a disincentive?

Accepted Answer

A)  Law enforcement creates a "Mug Shots" section to post all recent arrests online in order to discourage potential law breakers.
B)  You offer workers a bonus if they sell 100 widgets per month.
C)  A local gym offers a weight loss competition and the winner earns a free trip to Bermuda.
D)  Your professor offers to edit your paper before it's graded if you turn it in early.E) B) and D)
F) A) and D)

Question 3

When we believe the best result will come from the decision we have made,we are being:

Accepted Answer

A)  gullible.
B)  short-sighted.
C)  rational.
D)  considerate.E) A) and C)
F) B) and C)

Question 4

To provide an incentive for villagers to repay loans,Muhammad Yunus:

Accepted Answer

A)  forced villagers to offer collateral for loans.
B)  made loans using group responsibility.
C)  threatened to call the borrower's mother.
D)  would increase interest rates by 1 percent after each late payment.E) None of the above
F) A) and B)

Question 5

The extra benefit associated with producing or consuming the next unit is called the:

Accepted Answer

A)  revenue product.
B)  spillover.
C)  marginal benefit.
D)  economic benefit.E) A) and D)
F) All of the above

Question 6

When the price of milk rises,there is no change in the amount of dog food purchased.This is an example of:

Accepted Answer

A)  consumer indifference between the two goods.
B)  the interaction between one normal good and one inferior good.
C)  two items that are uncorrelated.
D)  the value people place on dogs versus milk.E) A) and B)
F) B) and D)

Question 7

Which of the following is a normative statement?

Accepted Answer

A)  College tuition rates are rising.
B)  28 percent of U.S.adults have a bachelor's degree.
C)  The average income of a college graduate exceeds that of the average high school graduate.
D)  State governments should pay for the first two years of college at public institutions.E) C) and D)
F) None of the above

Question 8

When the unemployment rate rises,college enrollment increases because workers seek to expand training.This is an example of:

Accepted Answer

A)  correlation and causation.
B)  a negative correlation.
C)  normative economics.
D)  macroeconomics.E) A) and B)
F) A) and C)

Question 9

You may incorrectly conclude that an idea no other person has implemented is highly profitable because:

Accepted Answer

A)  you misjudged people's wants and constraints.
B)  you miscalculated the trade-offs they face.
C)  you misunderstood how people would respond to incentives.
D)  All of these.E) A) and D)
F) A) and B)

Question 10

"Which came first,the chicken or the egg?" This question seeks to address which common source of confusion between correlation and causation?

Accepted Answer

A)  Reverse causality
B)  Omitted variables
C)  Linear relationships
D)  Comparative analysisE) None of the above
F) A) and C)

Question 11

Which of the following economic decisions would most likely be studied by a macroeconomist?

Accepted Answer

A)  Domino's Pizza decides to provide quantity discounts in order to increase revenue.
B)  A local entrepreneur decides to open a Waffle House in the local Walmart parking lot.
C)  The government of Estonia implements a flat rate personal income tax for all citizens.
D)  Prices for train fares rise as labor unions negotiate higher wage rates.E) B) and C)
F) A) and C)

Question 12

As corn prices rise,salsa sales tend to fall.This an example of:

Accepted Answer

A)  ingredients for an Italian dinner.
B)  inferior goods.
C)  two uncorrelated events.
D)  a negative correlation.E) All of the above
F) B) and D)

Question 13

Which of the following could be considered a macroeconomic topic?

Accepted Answer

A)  iTunes raises the price of all its music.
B)  iTunes raises the price of its pop artists music only.
C)  Jay-Z decides to sell his Brooklyn Nets minority ownership.
D)  The labor force participation rate fell by 1 percent in 2010.E) A) and C)
F) A) and B)

Question 14

Saturday afternoon you can either attend a street festival,work and earn $100,or study for your midterm exam.You flip a coin between the street festival and studying,but did not really consider working.The coin flip determined that you would stay home and study.The opportunity cost of the time spent studying includes:

Accepted Answer

A)  the loss of $100 worth of wages and going to the street festival.
B)  earning a high score on your midterm.
C)  the benefit that could have been received at the street festival.
D)  None of these.E) None of the above
F) B) and C)

Question 15

A rational choice is one that:

Accepted Answer

A)  allows individuals to reach their goals.
B)  involves the use of strategic decision making in an effort to reach a goal.
C)  does not involve self-interested behavior.
D)  is usually optimized when decision makers are poorly informed about alternatives.E) A) and B)
F) All of the above

Question 16

Which actor in the circular flow model is on the supply side of the goods market?

Accepted Answer

A)  Firms
B)  Households
C)  Markets for factors of production
D)  GovernmentE) A) and B)
F) B) and C)

Question 17

Which of the following is one of the basic questions used by economists to break down problems?

Accepted Answer

A)  What are the wants and constraints of those involved?
B)  How will individuals feel about the change?
C)  Why has the market failed?
D)  Economists don't ask any of these questions.E) A) and D)
F) B) and D)

Question 18

A movie costs you and your friend $15 each.After one hour of watching the movie,you have struggled to stay awake while your friend has been on Facebook and is also bored with the movie.You suggest that you and your friend leave the movie and go to the park.Your friend responds by stating that he is not going to waste his $15 that was previously spent on the movie.Your friend is considering:

Accepted Answer

A)  an opportunity cost of the movie.
B)  a sunk cost.
C)  the marginal benefit.
D)  depreciation.E) A) and C)
F) None of the above

Question 19

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

Accepted Answer

A)  NCAA Football should have adopted a playoff system 10 years ago.
B)  An increase in minimum wage results in higher teenage unemployment.
C)  Teachers should be allowed to carry guns into the classroom.
D)  Cats are better pets than dogs.E) All of the above
F) B) and C)

Question 20

Why wasn't everyone else already implementing group responsibility to lend to the poor?

Accepted Answer

A)  Governments of poor countries had regulations against group responsibility.
B)  The idea was genuinely new.
C)  It was not profitable.
D)  It was easy for groups to provide false social security numbers for members that did not exist.E) A) and B)
F) A) and C)

Exam 1: Economics and Life

Which of the following is an example of a disincentive?

Correct Answer
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Correct Answer
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The extra benefit associated with producing or consuming the next unit is called the:

Correct Answer
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Which of the following is a normative statement?

Correct Answer
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Correct Answer
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To provide an incentive for villagers to repay loans,Muhammad Yunus:

Correct Answer
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"Which came first,the chicken or the egg?" This question seeks to address which common source of confusion between correlation and causation?

Correct Answer
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A rational choice is one that:

Correct Answer
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Which of the following is one of the basic questions used by economists to break down problems?

Correct Answer
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Which of the following economic decisions would most likely be studied by a macroeconomist?

Correct Answer
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Which of the following could be considered a macroeconomic topic?

Correct Answer
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An economic model:

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

Correct Answer
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You may incorrectly conclude that an idea no other person has implemented is highly profitable because:

Correct Answer
verified

Why wasn't everyone else already implementing group responsibility to lend to the poor?

Correct Answer
verified

When the unemployment rate rises,college enrollment increases because workers seek to expand training.This is an example of:

Correct Answer
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Which actor in the circular flow model is on the supply side of the goods market?

Correct Answer
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When the price of milk rises,there is no change in the amount of dog food purchased.This is an example of:

Correct Answer
verified

As corn prices rise,salsa sales tend to fall.This an example of:

Correct Answer
verified

When we believe the best result will come from the decision we have made,we are being:

Correct Answer
verified

Exam 1: Economics and Life

Which of the following is an example of a disincentive?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The extra benefit associated with producing or consuming the next unit is called the:

Correct AnswerverifiedShow Answer

Which of the following is a normative statement?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

To provide an incentive for villagers to repay loans,Muhammad Yunus:

Correct AnswerverifiedShow Answer

"Which came first,the chicken or the egg?" This question seeks to address which common source of confusion between correlation and causation?

Correct AnswerverifiedShow Answer

A rational choice is one that:

Correct AnswerverifiedShow Answer

Which of the following is one of the basic questions used by economists to break down problems?

Correct AnswerverifiedShow Answer

Which of the following economic decisions would most likely be studied by a macroeconomist?

Correct AnswerverifiedShow Answer

Which of the following could be considered a macroeconomic topic?

Correct AnswerverifiedShow Answer

An economic model:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

You may incorrectly conclude that an idea no other person has implemented is highly profitable because:

Correct AnswerverifiedShow Answer

Why wasn't everyone else already implementing group responsibility to lend to the poor?

Correct AnswerverifiedShow Answer

When the unemployment rate rises,college enrollment increases because workers seek to expand training.This is an example of:

Correct AnswerverifiedShow Answer

Which actor in the circular flow model is on the supply side of the goods market?

Correct AnswerverifiedShow Answer

When the price of milk rises,there is no change in the amount of dog food purchased.This is an example of:

Correct AnswerverifiedShow Answer

As corn prices rise,salsa sales tend to fall.This an example of:

Correct AnswerverifiedShow Answer

When we believe the best result will come from the decision we have made,we are being:

Correct AnswerverifiedShow Answer

Correct Answer
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