Quiz 1

A  determine the most appropriate economic goals for a society

B  determine how government policies affect the economy.

C  objectively explain economic problems such as inflation and unemployment

A  affect the price mechanism through cultural norms

B  do not affect the price mechanism

C  affect the price mechanism through the legal system

D  Affect the price mechanism through scarcity

A  microeconomics

B  classical economics

C  macroeconomics

D  normative economics

A  a policy rule that concludes that a particular course of action is preferable

B  a proposition that is logically true based on the assumptions of a model

C  the application of models combined with judgment

D  a set of equations that define a model

A  How should the government deal with the next recession?

B  How are price and quantity demanded related?

C  Should the governmet reduce inflation?

D  Should government allow two large companies to merge?

A  Markets direct people’s selfish desires (tempered by political and social forces) to the common good

B  Cultural norms direct people’s selfish desires (tempered by political and economic forces) to the common good.

C  Government policies direct people’s selfish desires (tempered by social and economic forces) to the common good.

D  Social, political, and economic forces act against people’s selfish desires to promote the common good.

A  additional cost of the activity exceeds the additional benefit

B  total benefit of the activity is less than the total cost

C  Additional benefit from the activity exceeds the additional cost

D  total benefit from the activity exceeds the total cost

A  will buy another T-shirt this month

B  will sell the T-shirts she has to others who are willing to pay $10

C  cannot gain by buying another T-shirt

D  will not buy a T-shirt this month

A  a natural experiment

B  an economic principle

C  The economic decision rule

D  simulation economics

A  equals the total cost of consuming all prior units

B  must equal the marginal benefit or the unit will not be consumed

C  equals the increase in total cost when another unit is consumed

D  must exceed the marginal benefit or the unit will not be consumed

A  macroecnomics

B  supra-economics

C  normative economics

D  microeconomics

A  applies economic theory to understand real-world events

B  is an action to influence the course of economic events

C  can be used only to understand free markets

D  is also abstract that it cannot be applied to real-world events

A  theorem

B  policy

C  precept

D  insight

A  The invisible hand is not always invisible

B  Legal and social forces can eliminate economic forces

C  Marginal revenue should be equal to marginal cost

D  Economic forces always operate despite legal forces

A  are not related to scarcity

B  are a reaction to scarcity

C  give rise to scarcity

D  are not related to rationing