Quiz 1

A  determine the most appropriate economic goals for a society

B  objectively explain economic problems such as inflation and unemployment

C  determine how government policies affect the economy.

A  Affect the price mechanism through scarcity

B  affect the price mechanism through the legal system

C  affect the price mechanism through cultural norms

D  do not affect the price mechanism

A  normative economics

B  macroeconomics

C  microeconomics

D  classical economics

A  a proposition that is logically true based on the assumptions of 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 set of equations that define a model

A  How should the government deal with the next recession?

B  Should government allow two large companies to merge?

C  How are price and quantity demanded related?

D  Should the governmet reduce inflation?

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

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

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

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

A  total benefit from the activity exceeds the total cost

B  Additional benefit from the activity exceeds the additional cost

C  additional cost of the activity exceeds the additional benefit

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

A  will buy another T-shirt this month

B  will not buy a T-shirt this month

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

D  cannot gain by buying another T-shirt

A  an economic principle

B  The economic decision rule

C  simulation economics

D  a natural experiment

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  equals the total cost of consuming all prior units

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

A  normative economics

B  macroecnomics

C  microeconomics

D  supra-economics

A  can be used only to understand free markets

B  applies economic theory to understand real-world events

C  is an action to influence the course of economic events

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

A  theorem

B  insight

C  precept

D  policy

A  Marginal revenue should be equal to marginal cost

B  Economic forces always operate despite legal forces

C  The invisible hand is not always invisible

D  Legal and social forces can eliminate economic forces

A  are not related to scarcity

B  give rise to scarcity

C  are not related to rationing

D  are a reaction to scarcity