Chapter 1 Practice Quiz

A  positive, negative

B  negative, positive

C  negative, negative

D  positive, positive

E    

A    

B  premiums.

C  incentives.

D  gifts.

E  intrinsic values.

A  respond predictably to a given incentive.

B  not respond to any incentive.

C  respond to a given incentive in a random manner.

D  respond irrationally to any incentive.

A  Alan Greenspan.

B  Thorstein Veblen.

C  Milton Friedman.

D  Adam Smith.

A  psychiatry

B  psychology

C  sociology

D  economics

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

B  decisions made by individual consumers and firms.

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

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

A  make better decisions concerning your education

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

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

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

E  make decisions in financing your home.

A  a nation’s unemployment rate

B  the effects of fiscal policy on the economy

C  Gross Domestic Product

D  the price of apples

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

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

C  Economists empirically test their models.

D  Economic models are not used to forecast.

A  dictatorship

B  market system

C  mixed economic system

D  command and control

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

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

C  only responds to rewards that involve money.

D  never makes a mistake in his life.

A  macroeconomics

B  environmental economics

C  microeconomics

D  labor economics

A  money.

B  subjective judgments.

C  themselves worse off.

D  choices.

A  constant.

B  inverse.

C  nonlinear.

D  direct.

A  individual decision making.

B  aggregate measures of the economy.

C  federal budget details.

D  foreign policy economic issues.

A  how to make money in the stock market.

B  how to run a business successfully.

C  the allocation of scarce resources.

D  personal finance.

A  A good model does not rely on any assumptions.

B  Economic models are designed to explain what people need.

C  A good economic model is complex.

D  Every model is based on a set of assumptions.

A  is the same at all points along that line.

B  is always equal to zero.

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

D  cannot be defined.

A  would be an example of a microeconomic statement.

B  would be an example of a normative statement.

C  would be a statement of mercantilist economic philosophy.

D  would be an example of a positive statement.

A  value judgments.

B  objective descriptions of the way things are.

C  positive analysis.

D  if-then statements.