Chapter 1 Practice Quiz

A  negative, positive

B  positive, negative

C  positive, positive

D    

E  negative, negative

A  premiums.

B    

C  gifts.

D  incentives.

E  intrinsic values.

A  respond predictably to a given incentive.

B  respond to a given incentive in a random manner.

C  respond irrationally to any incentive.

D  not respond to any incentive.

A  Milton Friedman.

B  Alan Greenspan.

C  Adam Smith.

D  Thorstein Veblen.

A  economics

B  psychology

C  sociology

D  psychiatry

A  how small changes in the money supply can have far-reaching effects.

B  how small changes in the unemployment rate can have far-reaching effects.

C  decisions made by individual consumers and firms.

D  the changes in economic theory brought about by real-world events.

A  Make better decisions concerning your education, make decisions in financing your home, and decide whether the U.S. government should encourage or discourage immigration.

B  decide whether the U.S. government should encourage or discourage immigration.

C  make decisions in financing your home.

D  make better decisions concerning your education

E  make better decisions concerning your education and make decisions in financing your home.

A  the price of apples

B  Gross Domestic Product

C  the effects of fiscal policy on the economy

D  a nation’s unemployment rate

A  Economists empirically test their models.

B  Economic models are not used to forecast.

C  Economic models relate to behavior rather than to individual thought processes.

D  An economic model should capture only the essential relationships that are sufficient to analyze the particular problem being studied.

A  market system

B  dictatorship

C  command and control

D  mixed economic system

A  only responds to rewards that involve money.

B  never makes a mistake in his life.

C  always uses a model or mathematical formula to help him make a decision.

D  does not intentionally make decisions that would leave him worse off.

A  macroeconomics

B  microeconomics

C  environmental economics

D  labor economics

A  choices.

B  money.

C  themselves worse off.

D  subjective judgments.

A  direct.

B  nonlinear.

C  constant.

D  inverse.

A  federal budget details.

B  foreign policy economic issues.

C  individual decision making.

D  aggregate measures of the economy.

A  the allocation of scarce resources.

B  how to run a business successfully.

C  personal finance.

D  how to make money in the stock market.

A  A good economic model is complex.

B  Economic models are designed to explain what people need.

C  Every model is based on a set of assumptions.

D  A good model does not rely on any assumptions.

A  is the same at all points along that line.

B  changes from one point to the next on that line.

C  is always equal to zero.

D  cannot be defined.

A  would be a statement of mercantilist economic philosophy.

B  would be an example of a microeconomic statement.

C  would be an example of a normative statement.

D  would be an example of a positive statement.

A  if-then statements.

B  positive analysis.

C  value judgments.

D  objective descriptions of the way things are.