Question 1

Economists use theories to:

Accepted Answer

A)  ​abstract from the complexities of the world.
B)  ​understand economic behavior.
C)  ​explain and help predict human behavior.
D)  ​do all of the above.E) A) and B)
F) All of the above

Question 2

When making decisions, economists believe that individuals act rationally if they:

Accepted Answer

A)  ​seek to improve their own situations and not try to anticipate future consequences of their actions.
B)  ​only pursue the goals of the community.
C)  ​people do the best they can, based on their values and information, under current and future circumstances.
D)  ​always choose alternatives that offer the greatest financial reward.E) B) and D)
F) All of the above

Question 3

The beginning point of a graph (the 0,0 point)  is known as:​

Accepted Answer

A)  ​ground zero.
B)  ​the quadrant.
C)  ​the origin.
D)  ​variable one.E) C) and D)
F) All of the above

Question 4

Bill says: "The imposition of a tax on tequila will increase its price." Bob says: "Taxes should be imposed on tequila because college students drink too much."

Accepted Answer

A)  ​Both statements are normative.
B)  ​Both statements are positive.
C)  ​Bill's statement is normative, and Bob's statement is positive.
D)  ​Bill's statement is positive, and Bob's statement is normative.E) A) and C)
F) B) and D)

Question 5

In order to determine if a hypothesis is valid we must utilize

Accepted Answer

A)  ​qualitative analysis.
B)  ​empirical analysis.
C)  ​marginal analysis.
D)  ​average analysis.E) All of the above
F) A) and B)

Question 6

A theory asserts that consumers will purchase less of a good at higher prices than they will at lower prices, ceteris paribus. However, when the average price of cars increased throughout the 1990s, more cars were purchased. Which of the following best explains the apparent conflict between theory and data?

Accepted Answer

A)  ​The ceteris paribus assumption is valid.
B)  ​It is likely that variables other than the price and quantity of cars demanded were changing.
C)  ​The theory is valid.However, the price and quantity data gathered by researchers was clearly measured incorrectly.
D)  ​The theory must be invalid.E) C) and D)
F) A) and D)

Question 7

The importance of the ceteris paribus assumption is that it:

Accepted Answer

A)  ​allows one to separate normative economic issues from positive economic ones.
B)  ​allows one to generalize from the whole to the individual.
C)  ​allows one to analyze the relationship between two variables apart from the influence of other variables.
D)  ​allows one to hold all variables constant so the economy can be carefully observed in a suspended state.E) C) and D)
F) All of the above

Question 8

Explain why economists believe that an individual who commits a crime does so acting in his/her own self-interest.

Accepted Answer

It is expected that the individual commi...

Question 9

Self-interest could never include benevolence.

Accepted Answer

A) True 
 B)False

Question 10

In the discussion of correlation and causation, correlation means:

Accepted Answer

A)  ​two sets of phenomena may be related, but one does not necessarily cause the other.
B)  ​two sets of phenomena are not related and one may in fact cause the other.
C)  ​that when two phenomena are repeatedly observed together, one must cause the other.
D)  ​that if a groundhog sees his shadow in February, this phenomena causes there to be six more weeks of bad weather.E) A) and B)
F) A) and C)

Question 11

The fallacy of composition states that even if something is true for an individual, it is not necessarily true for many individuals as a group.

Accepted Answer

A) True 
 B)False

Question 12

"I woke up earlier today to beat other fishermen to the fish and yet I caught the same number of fish at 5 am.as I did at noon." Which of the following best explains this occurrence?

Accepted Answer

A)  ​Many other fishermen also believe that they can catch a greater quantity of fish if they arrive earlier at the fishing area.So the area is crowded early in the day.
B)  ​The fish do not care when they eat, so they are likely to bite on the bait at any time during the day.
C)  ​The catching of fish is mostly luck, so timing is not important.
D)  ​The early bird catches the worm.E) All of the above
F) C) and D)

Question 13

Economists prefer to look at declared preferences (how they say they behave) rather than revealed preferences (how people actually behave).

Accepted Answer

A) True 
 B)False

Question 14

Scarcity would cease to exist as an economic problem if:

Accepted Answer

A)  ​we learned to cooperate and not compete with each other.
B)  ​there were new discoveries of an abundance of natural resources.
C)  ​output per worker increased.
D)  ​none of the above.E) A) and B)
F) A) and C)

Question 15

Economists need to develop abstractions in order to:

Accepted Answer

A)  ​avoid analyzing real-world economic interactions, which are too complicated to understand.
B)  ​distinguish normative economic behavior from positive economic behavior.
C)  ​avoid committing the fallacy of composition.
D)  ​understand and explain economic behavior.E) A) and B)
F) C) and D)

Question 16

A leading game-console manufacturer slashes the price of its flagship product by ten percent. Holding other things such as income and preferences constant, which of the following is the most likely group behavior prediction?

Accepted Answer

A)  ​Price reduction will have no impact on purchase patterns.
B)  ​Price reduction will be associated with a reduction in quality; thereby reducing sales.
C)  ​More game consoles will be sold at lower prices.
D)  ​Group behavior cannot be predicted.E) B) and C)
F) All of the above

Question 17

Scarcity exists because of:

Accepted Answer

A)  ​the allocation of goods by prices.
B)  ​specialization and division of labor.
C)  ​the market mechanism.
D)  ​unlimited wants and limited resources.E) A) and B)
F) A) and C)

Question 18

Which of the following statements can explain why an association between Event A and Event B may not imply causality from A to B?

Accepted Answer

A)  ​The observed association may be coincidental.
B)  ​There may be a third variable that is responsible for causing both events.
C)  ​Causality may run from Event B to Event A instead of in the opposite direction.
D)  ​All of the above can explain why an association between Event A and Event B may not imply causality from A to B.E) C) and D)
F) B) and D)

Question 19

The branch of economics that focuses on outcomes in highly aggregated markets, such as the markets for labor or consumption goods, is called:

Accepted Answer

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

Question 20

Microeconomic topics do not usually include:

Accepted Answer

A)  ​how wages are determined in the labor market.
B)  ​the magnitude of national income.
C)  ​how firms choose output to maximize profits.
D)  ​how consumers maximize utility subject to a budget constraint.E) C) and D)
F) B) and D)

Exam 1: The Role and Method of Economics

"I woke up earlier today to beat other fishermen to the fish and yet I caught the same number of fish at 5 am.as I did at noon." Which of the following best explains this occurrence?

Correct Answer
verified

Economists use theories to:

Correct Answer
verified

Which of the following statements can explain why an association between Event A and Event B may not imply causality from A to B?

Correct Answer
verified

Microeconomic topics do not usually include:

Correct Answer
verified

Self-interest could never include benevolence.

Correct Answer
verified

Scarcity exists because of:

Correct Answer
verified

When making decisions, economists believe that individuals act rationally if they:

Correct Answer
verified

The importance of the ceteris paribus assumption is that it:

Correct Answer
verified

Scarcity would cease to exist as an economic problem if:

Correct Answer
verified

The fallacy of composition states that even if something is true for an individual, it is not necessarily true for many individuals as a group.

Correct Answer
verified

In order to determine if a hypothesis is valid we must utilize

Correct Answer
verified

In the discussion of correlation and causation, correlation means:

Correct Answer
verified

Bill says: "The imposition of a tax on tequila will increase its price." Bob says: "Taxes should be imposed on tequila because college students drink too much."

Correct Answer
verified

A leading game-console manufacturer slashes the price of its flagship product by ten percent. Holding other things such as income and preferences constant, which of the following is the most likely group behavior prediction?

Correct Answer
verified

The beginning point of a graph (the 0,0 point) is known as:

Correct Answer
verified

Economists prefer to look at declared preferences (how they say they behave) rather than revealed preferences (how people actually behave).

Correct Answer
verified

Explain why economists believe that an individual who commits a crime does so acting in his/her own self-interest.

Correct Answer
verified
It is expected that the individual commi...
View Answer

Correct Answer
verified

The branch of economics that focuses on outcomes in highly aggregated markets, such as the markets for labor or consumption goods, is called:

Correct Answer
verified

Economists need to develop abstractions in order to:

Correct Answer
verified

Exam 1: The Role and Method of Economics

"I woke up earlier today to beat other fishermen to the fish and yet I caught the same number of fish at 5 am.as I did at noon." Which of the following best explains this occurrence?

Correct AnswerverifiedShow Answer

Economists use theories to:

Correct AnswerverifiedShow Answer

Which of the following statements can explain why an association between Event A and Event B may not imply causality from A to B?

Correct AnswerverifiedShow Answer

Microeconomic topics do not usually include:

Correct AnswerverifiedShow Answer

Self-interest could never include benevolence.

Correct AnswerverifiedShow Answer

Scarcity exists because of:

Correct AnswerverifiedShow Answer

When making decisions, economists believe that individuals act rationally if they:

Correct AnswerverifiedShow Answer

The importance of the ceteris paribus assumption is that it:

Correct AnswerverifiedShow Answer

Scarcity would cease to exist as an economic problem if:

Correct AnswerverifiedShow Answer

The fallacy of composition states that even if something is true for an individual, it is not necessarily true for many individuals as a group.

Correct AnswerverifiedShow Answer

In order to determine if a hypothesis is valid we must utilize

Correct AnswerverifiedShow Answer

In the discussion of correlation and causation, correlation means:

Correct AnswerverifiedShow Answer

Bill says: "The imposition of a tax on tequila will increase its price." Bob says: "Taxes should be imposed on tequila because college students drink too much."

Correct AnswerverifiedShow Answer

A leading game-console manufacturer slashes the price of its flagship product by ten percent. Holding other things such as income and preferences constant, which of the following is the most likely group behavior prediction?

Correct AnswerverifiedShow Answer

The beginning point of a graph (the 0,0 point) is known as:​

Correct AnswerverifiedShow Answer

Economists prefer to look at declared preferences (how they say they behave) rather than revealed preferences (how people actually behave).

Correct AnswerverifiedShow Answer

Explain why economists believe that an individual who commits a crime does so acting in his/her own self-interest.

Correct AnswerverifiedIt is expected that the individual commi...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The branch of economics that focuses on outcomes in highly aggregated markets, such as the markets for labor or consumption goods, is called:

Correct AnswerverifiedShow Answer

Economists need to develop abstractions in order to:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

The beginning point of a graph (the 0,0 point) is known as:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
It is expected that the individual commi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified