Chapter 1 Practice Quiz

A    

B  negative, positive

C  negative, negative

D  positive, positive

E  positive, negative

A  incentives.

B  intrinsic values.

C  premiums.

D    

E  gifts.

A  not respond to any incentive.

B  respond predictably to a given incentive.

C  respond irrationally to any incentive.

D  respond to a given incentive in a random manner.

A  Alan Greenspan.

B  Milton Friedman.

C  Adam Smith.

D  Thorstein Veblen.

A  psychiatry

B  sociology

C  psychology

D  economics

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

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

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

D  decisions made by individual consumers and firms.

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

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

C  make better decisions concerning your education

D  make decisions in financing your home.

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

A  Gross Domestic Product

B  the effects of fiscal policy on the economy

C  the price of apples

D  a nation’s unemployment rate

A  Economic models are not used to forecast.

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

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

D  Economists empirically test their models.

A  dictatorship

B  command and control

C  mixed economic system

D  market system

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

B  never makes a mistake in his life.

C  only responds to rewards that involve money.

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

A  macroeconomics

B  labor economics

C  environmental economics

D  microeconomics

A  choices.

B  money.

C  themselves worse off.

D  subjective judgments.

A  nonlinear.

B  constant.

C  inverse.

D  direct.

A  individual decision making.

B  foreign policy economic issues.

C  aggregate measures of the economy.

D  federal budget details.

A  personal finance.

B  how to make money in the stock market.

C  the allocation of scarce resources.

D  how to run a business successfully.

A  Economic models are designed to explain what people need.

B  Every model is based on a set of assumptions.

C  A good economic model is complex.

D  A good model does not rely on any assumptions.

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

B  cannot be defined.

C  is the same at all points along that line.

D  is always equal to zero.

A  would be a statement of mercantilist economic philosophy.

B  would be an example of a positive statement.

C  would be an example of a normative statement.

D  would be an example of a microeconomic statement.

A  value judgments.

B  positive analysis.

C  if-then statements.

D  objective descriptions of the way things are.