Chapter 1 Practice Quiz

A  positive, positive

B  negative, positive

C  positive, negative

D    

E  negative, negative

A  incentives.

B    

C  intrinsic values.

D  gifts.

E  premiums.

A  respond irrationally to any incentive.

B  respond predictably to a given incentive.

C  respond to a given incentive in a random manner.

D  not respond to any incentive.

A  Milton Friedman.

B  Thorstein Veblen.

C  Adam Smith.

D  Alan Greenspan.

A  economics

B  psychology

C  psychiatry

D  sociology

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

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

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

D  decisions made by individual consumers and firms.

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

B  make decisions in financing your home.

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

D  make better decisions concerning your education

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

A  a nation’s unemployment rate

B  the effects of fiscal policy on the economy

C  the price of apples

D  Gross Domestic Product

A  Economic models are not used to forecast.

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

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

D  Economists empirically test their models.

A  mixed economic system

B  dictatorship

C  market 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  labor economics

B  environmental economics

C  microeconomics

D  macroeconomics

A  subjective judgments.

B  themselves worse off.

C  choices.

D  money.

A  constant.

B  direct.

C  nonlinear.

D  inverse.

A  aggregate measures of the economy.

B  foreign policy economic issues.

C  individual decision making.

D  federal budget details.

A  the allocation of scarce resources.

B  how to make money in the stock market.

C  personal finance.

D  how to run a business successfully.

A  A good model does not rely on any assumptions.

B  Every model is based on a set of assumptions.

C  Economic models are designed to explain what people need.

D  A good economic model is complex.

A  cannot be defined.

B  is always equal to zero.

C  is the same at all points along that line.

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

A  would be an example of a normative statement.

B  would be an example of a microeconomic statement.

C  would be a statement of mercantilist economic philosophy.

D  would be an example of a positive statement.

A  value judgments.

B  positive analysis.

C  if-then statements.

D  objective descriptions of the way things are.