Question 1

Which of the following is an example of a normative statement?

Accepted Answer

A)  Our country's defense budget should never be cut.
B)  Immigration should be limited in the United States.
C)  No person should have to live without basic health insurance.
D)  These are all normative statements.E) B) and C)
F) A) and D)

Question 2

Which of the following is a positive incentive?

Accepted Answer

A)  Discover credit cards offer 0 percent balance transfer rates for someone to open an account.
B)  McDonalds decides to offer a white chocolate mocha.
C)  A school teacher decides to retire and focus on gardening.
D)  A business decides to leave the industry.E) B) and D)
F) B) and C)

Question 3

Hardee's announces "buy one get one free" breakfast sandwiches.This is an example of:

Accepted Answer

A)  the use of incentives.
B)  a macroeconomic decision.
C)  hoarding scarce resources.
D)  this is not an example of any of these concepts.E) A) and B)
F) B) and D)

Question 4

The Bureau of Economic Analysis releases last quarter's growth rate in real GDP.This release would most likely have been written by what kind of an economist?

Accepted Answer

A)  A monetary economist
B)  A macroeconomist
C)  A microeconomist
D)  An labor economistE) None of the above
F) B) and C)

Question 5

Purchasing a smart phone data plan,premium movie channels,and University of Alabama football season tickets result in you having to drop your health insurance plan.This can be described as:

Accepted Answer

A)  home field advantage
B)  a trade-off
C)  irrational decision making
D)  healthy livingE) None of the above
F) B) and D)

Question 6

Opportunity Cost:

Accepted Answer

A)  only includes explicit,out of pocket expenses.
B)  is the value of your next best alternative.
C)  is never provided in dollar values.
D)  would not include the wages lost from working when deciding to take a vacation.E) All of the above
F) B) and C)

Question 7

Which actor in the circular flow model is on the supply side of the factor market?

Accepted Answer

A)  Firms
B)  Households
C)  Market for goods and services
D)  GovernmentE) B) and C)
F) C) and D)

Question 8

Muhammad Yunus was highly successful in his use of applying social incentives through group responsibility in order to maximize loan repayment rates.This success created an incentive for other banks to:

Accepted Answer

A)  offer similar loans to the poor.
B)  go out of business.
C)  seek government action to ban group responsibility lending.
D)  All of these.E) A) and C)
F) C) and D)

Question 9

When two variables have been observed to have a tendency to occur at the same time,we can say there is ____________ but not necessarily ____________.

Accepted Answer

A)  causation;correlation
B)  correlation;causation
C)  positivity;causation
D)  normality;correlationE) A) and C)
F) B) and D)

Question 10

The principles of economics can explain:

Accepted Answer

A)  why people choose to work or go to college.
B)  why a country might prosper.
C)  why the value of money changes over time.
D)  Economics can explain all of these things.E) None of the above
F) C) and D)

Question 11

Disney World decides to charge local residents a lower price than other park visitors.This would fall under which field of economics?

Accepted Answer

A)  Macroeconomics
B)  Public policy
C)  Customer service
D)  MicroeconomicsE) B) and C)
F) A) and B)

Question 12

Which of the following could be considered a macroeconomic issue?

Accepted Answer

A)  T-Mobile and MetroPCS finalize a merger.
B)  Twinkies goes bankrupt,and the entire snack industry experiences losses.
C)  The unemployment rate falls to 7.5 percent from 7.7 percent during the month of June.
D)  All of these are examples of macroeconomic issues.E) B) and D)
F) A) and C)

Question 13

The two most important actors of the economy are:

Accepted Answer

A)  land and capital.
B)  households and firms.
C)  firms and government.
D)  exports and imports.E) A) and D)
F) C) and D)

Question 14

The problem of having unlimited wants under the constraint of limited resources can describe the problem of:

Accepted Answer

A)  opportunity cost.
B)  sunk costs.
C)  scarcity.
D)  the marginal principle.E) A) and C)
F) C) and D)

Question 15

Alan could apply the principles of economic decision making to:

Accepted Answer

A)  decide how to spend his paycheck.
B)  which girl to marry.
C)  what to have for dinner.
D)  All of these are true.E) None of the above
F) A) and B)

Question 16

Correlation and causation can be confused in which of the following ways?

Accepted Answer

A)  Correlation without causation
B)  Omitted variables
C)  Reverse causality
D)  All of theseE) B) and D)
F) A) and B)

Question 17

The problem created by "scarcity":

Accepted Answer

A)  could be solved if more people worked overtime.
B)  is not a concern for the top income earners.
C)  is an individual concern but not a concern on the macro level.
D)  applies to everyone because it is a fact of life.E) B) and D)
F) A) and B)

Question 18

As monthly rain levels rise,golf course revenue falls because casual golfers prefer to stay dry.This is an example of:

Accepted Answer

A)  price elasticity.
B)  natural experiments.
C)  sunk costs.
D)  correlation and causation.E) C) and D)
F) A) and B)

Question 19

Something is valuable if:

Accepted Answer

A)  a reasonable amount of people want it.
B)  it is a good or a service.
C)  someone wants it.
D)  was made using resources.E) B) and C)
F) B) and D)

Question 20

"The United States should adopt more open trade policies because they historically have caused increased economic growth." This is an example of what kind of statement?

Accepted Answer

A)  Unequivocally true
B)  Normative
C)  Positive
D)  Unequivocally falseE) B) and D)
F) None of the above

Exam 1: Economics and Life

Which actor in the circular flow model is on the supply side of the factor market?

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Alan could apply the principles of economic decision making to:

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The problem of having unlimited wants under the constraint of limited resources can describe the problem of:

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Opportunity Cost:

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Something is valuable if:

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Hardee's announces "buy one get one free" breakfast sandwiches.This is an example of:

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As monthly rain levels rise,golf course revenue falls because casual golfers prefer to stay dry.This is an example of:

Correct AnswerverifiedShow Answer

Correlation and causation can be confused in which of the following ways?

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"The United States should adopt more open trade policies because they historically have caused increased economic growth." This is an example of what kind of statement?

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When two variables have been observed to have a tendency to occur at the same time,we can say there is ____________ but not necessarily ____________.

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The problem created by "scarcity":

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The two most important actors of the economy are:

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The principles of economics can explain:

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Which of the following could be considered a macroeconomic issue?

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Disney World decides to charge local residents a lower price than other park visitors.This would fall under which field of economics?

Correct AnswerverifiedShow Answer

Purchasing a smart phone data plan,premium movie channels,and University of Alabama football season tickets result in you having to drop your health insurance plan.This can be described as:

Correct AnswerverifiedShow Answer

Which of the following is an example of a normative statement?

Correct AnswerverifiedShow Answer

Which of the following is a positive incentive?

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The Bureau of Economic Analysis releases last quarter's growth rate in real GDP.This release would most likely have been written by what kind of an economist?

Correct AnswerverifiedShow Answer

Muhammad Yunus was highly successful in his use of applying social incentives through group responsibility in order to maximize loan repayment rates.This success created an incentive for other banks to:

Correct AnswerverifiedShow Answer

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When two variables have been observed to have a tendency to occur at the same time,we can say there is but not necessarily .

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