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 scarcity

B  do not affect the price mechanism

C  affect the price mechanism through cultural norms

D  affect the price mechanism through the legal system

A  microeconomics

B  classical economics

C  macroeconomics

D  normative economics

A  a set of equations that define a model

B  the application of models combined with judgment

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

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

A  Should the governmet reduce inflation?

B  How should the government deal with the next recession?

C  How are price and quantity demanded related?

D  Should government allow two large companies to merge?

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

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

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

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

A  additional cost of the activity exceeds the additional benefit

B  total benefit from the activity exceeds the total cost

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

D  Additional benefit from the activity exceeds the additional cost

A  cannot gain by buying another T-shirt

B  will buy another T-shirt this month

C  will not buy a T-shirt this month

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

A  an economic principle

B  simulation economics

C  a natural experiment

D  The economic decision rule

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

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

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

D  equals the total cost of consuming all prior units

A  supra-economics

B  normative economics

C  macroecnomics

D  microeconomics

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

B  can be used only to understand free markets

C  applies economic theory to understand real-world events

D  is an action to influence the course of economic events

A  policy

B  theorem

C  precept

D  insight

A  Legal and social forces can eliminate economic forces

B  Economic forces always operate despite legal forces

C  The invisible hand is not always invisible

D  Marginal revenue should be equal to marginal cost

A  are a reaction to scarcity

B  give rise to scarcity

C  are not related to rationing

D  are not related to scarcity