Question 1

Economists speak of using resources to satisfy wants,not needs.They do so because

Accepted Answer

A)  needs are most usefully viewed as wants an individual would give up large amounts of other desirable things to satisfy.
B)  only biologists and psychologists are qualified to talk about human needs.
C)  there are not enough resources to satisfy all wants of everyone in the world but there are enough to satisfy their needs.
D)  people never make choices between their different needs.E) None of the above
F) A) and B)

Question 2

"No Canadian should have to live on less than $30 000 annual income" is an example of

Accepted Answer

A)  a positive statement.
B)  a normative statement.
C)  an illogical statement.
D)  an incorrect statement.E) All of the above
F) A) and B)

Question 3

Which of the following statements about scarcity is TRUE?

Accepted Answer

A)  Scarcity is no longer a problem for industrialized countries.
B)  Scarcity is a problem only in countries that do not use markets to organize economic activity.
C)  Scarcity exists in all societies.
D)  Scarcity is a problem only in countries that use markets to organize economic activity.E) A) and C)
F) B) and D)

Question 4

Economics is a social science that involves the study of how individuals

Accepted Answer

A)  develop their tastes and preferences.
B)  maximize their wealth.
C)  achieve happiness.
D)  respond to scarcity.E) A) and D)
F) A) and C)

Question 5

In economics,normative statements

Accepted Answer

A)  do not use the ceteris paribus assumption.
B)  should always be tested before being included in a model.
C)  should always be clearly distinguished from positive statements.
D)  are statements of belief about the way the economy works.E) B) and D)
F) None of the above

Question 6

Whenever statements expressing value judgments are made,we enter the realm of

Accepted Answer

A)  normative economics.
B)  macroeconomics.
C)  microeconomics.
D)  positive economics.E) A) and B)
F) A) and C)

Question 7

Which of the following is a normative economic statement?

Accepted Answer

A)  Lower income tax rates would yield a larger federal government deficit.
B)  The federal budget deficit has increased every year for the last twenty years.
C)  Lower income tax rates will generate greater income tax revenue to the government.
D)  Income tax rates should be lower because that will increase government revenue.E) A) and C)
F) A) and B)

Question 8

Which of the following is a normative statement?

Accepted Answer

A)  Ceteris paribus,an increase in consumer income will lead to increased sales of beef.
B)  An increase in income tax will cause a greater reduction in savings than an increase in the sales tax.
C)  A decrease in the rate of unemployment will lead to upward pressure on consumer prices.
D)  Ceteris paribus,an economy with high unemployment is worse than an economy with high inflation.E) B) and D)
F) C) and D)

Question 9

Microeconomics is the part of economic analysis that studies ________.

Accepted Answer

the decision making ...

Question 10

Macroeconomists study the behaviour of

Accepted Answer

A)  individual business firms.
B)  industries.
C)  consumers.
D)  the overall economy.E) A) and C)
F) A) and B)

Question 11

When studying individuals' economic behaviour,economists make the assumption that

Accepted Answer

A)  only educated people act as if they were rational.
B)  individuals typically act as if they were rational.
C)  individuals fully understand the rationale for all of their actions.
D)  self-interest is of limited relevance in predicting an individual's actions.E) A) and B)
F) C) and D)

Question 12

Which of the following statements is TRUE?

Accepted Answer

A)  The usefulness of economic models depends on how well the models predict.
B)  An economic model should capture more than the relationships that are sufficient to analyse the problem being studied.
C)  Economists never empirically test their models.
D)  Economic models focus on individual thought processes rather than on behaviour.E) B) and C)
F) A) and D)

Question 13

When a political candidate tells a campaign crowd that "High inflation rates are a more serious economic problem than high unemployment rates," that statement is

Accepted Answer

A)  an empirically proven fact.
B)  a normative statement.
C)  a positive statement.
D)  a testable proposition.E) None of the above
F) A) and D)

Question 14

Production refers to

Accepted Answer

A)  physically producing material goods only.
B)  any activity carried on by a firm,whether a corporation,partnership,or sole proprietorship.
C)  any activity that results in the conversion of resources into goods and services that can be consumed.
D)  any activity that causes the material conversion of an object.E) B) and D)
F) None of the above

Question 15

A map is an example of a geographic model because a map

Accepted Answer

A)  is two-dimensional.
B)  is a simplified representation of reality.
C)  is always as complex as space will permit.
D)  realistically describes an area.E) B) and C)
F) None of the above

Question 16

Define "incentives" and explain how they are important in economics.

Accepted Answer

Incentives are rewards for engaging in p...

Question 17

The opportunity cost of attending college can best be described as

Accepted Answer

A)  the value of the best alternative use of the student's time.
B)  the money that must be paid in order to attend college.
C)  the value of the lowest-ranked alternative use of the student's time.
D)  the value that the student attaches to not working.E) A) and B)
F) A) and C)

Question 18

Economists typically assume people act as if they are motivated by ________.

Accepted Answer

The answer of Economists typically assume people act as if...

Question 19

Figure 1A-2 Slope 
-In Figure 1A-2,the slope of the solid line passing through point A is

Accepted Answer

A)  3 1/3
B)  1/2
C)  - 2
D)  2E) A) and D)
F) B) and C)

Question 20

Economists typically assume people act as if they are motivated by

Accepted Answer

A)  selfishness.
B)  pride.
C)  self-interest.
D)  social justice.E) None of the above
F) A) and D)

Exam 1: The Nature of Economics

Which of the following statements is TRUE?

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Macroeconomists study the behaviour of

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"No Canadian should have to live on less than $30 000 annual income" is an example of

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Economists typically assume people act as if they are motivated by ________.

Correct AnswerverifiedShow Answer

Figure 1A-2 Slope -In Figure 1A-2,the slope of the solid line passing through point A is

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Define "incentives" and explain how they are important in economics.

Correct AnswerverifiedIncentives are rewards for engaging in p...View AnswerShow Answer

Which of the following is a normative economic statement?

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Microeconomics is the part of economic analysis that studies ________.

Correct Answerverifiedthe decision making ...View AnswerShow Answer

Economists typically assume people act as if they are motivated by

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Economists speak of using resources to satisfy wants,not needs.They do so because

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A map is an example of a geographic model because a map

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Economics is a social science that involves the study of how individuals

Correct AnswerverifiedShow Answer

The opportunity cost of attending college can best be described as

Correct AnswerverifiedShow Answer

Whenever statements expressing value judgments are made,we enter the realm of

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When a political candidate tells a campaign crowd that "High inflation rates are a more serious economic problem than high unemployment rates," that statement is

Correct AnswerverifiedShow Answer

Production refers to

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Which of the following is a normative statement?

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Which of the following statements about scarcity is TRUE?

Correct AnswerverifiedShow Answer

When studying individuals' economic behaviour,economists make the assumption that

Correct AnswerverifiedShow Answer

In economics,normative statements

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Incentives are rewards for engaging in p...
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the decision making ...
View Answer

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