Chapter 1 Practice Quiz

A  negative, negative

B  positive, positive

C  negative, positive

D    

E  positive, negative

A  incentives.

B    

C  intrinsic values.

D  gifts.

E  premiums.

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  Thorstein Veblen.

B  Alan Greenspan.

C  Milton Friedman.

D  Adam Smith.

A  psychiatry

B  sociology

C  psychology

D  economics

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

B  decisions made by individual consumers and firms.

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

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

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

D  make decisions in financing your home.

E  make better decisions concerning your education

A  the price of apples

B  the effects of fiscal policy on the economy

C  Gross Domestic Product

D  a nation’s unemployment rate

A  Economists empirically test their models.

B  Economic models are not used to forecast.

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

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

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  never makes a mistake in his life.

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

D  only responds to rewards that involve money.

A  labor economics

B  macroeconomics

C  microeconomics

D  environmental economics

A  themselves worse off.

B  choices.

C  money.

D  subjective judgments.

A  nonlinear.

B  direct.

C  inverse.

D  constant.

A  foreign policy economic issues.

B  individual decision making.

C  aggregate measures of the economy.

D  federal budget details.

A  how to run a business successfully.

B  personal finance.

C  the allocation of scarce resources.

D  how to make money in the stock market.

A  Economic models are designed to explain what people need.

B  A good model does not rely on any assumptions.

C  Every model is based on a set of assumptions.

D  A good economic model is complex.

A  is always equal to zero.

B  is the same at all points along that line.

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

D  cannot be defined.

A  would be an example of a normative statement.

B  would be a statement of mercantilist economic philosophy.

C  would be an example of a microeconomic statement.

D  would be an example of a positive statement.

A  if-then statements.

B  value judgments.

C  objective descriptions of the way things are.

D  positive analysis.