1 The overarching focus of economics is on:

a.

the flow of money.

b.

stock markets.

c.

decision-making.

d.

managing businesses.

2 Which of the following is NOT among the reasons why an economic forecast might end up being incorrect?

a.

Economists tend to perform only rudimentary statistical analysis

b.

Some variables, such as social attitudes, are very difficult to predict

c.

The conditions on which the forecast is based may not hold

d.

The theory behind the forecast may not be correct

3 When the economy is in a recession and unemployment rates are very high for workers without college degrees:

a.

the opportunity cost of going to college is higher, so college enrollments tend to rise.

b.

the opportunity cost of going to college is lower, so college enrollments tend to rise.

c.

the opportunity cost of going to college is lower, so college enrollments tend to fall.

d.

the opportunity cost of going to college is higher, so college enrollments tend to fall.

4 Which of the following is NOT one of the four fundamental questions?

a.

Who?

b.

What?

c.

Why?

d.

How?

5 A mother who tries to make her children happy:

a.

has decided to make her children's welfare part of her own self-interest.

b.

is not being self-interested since she is caring for someone else.

c.

is not behaving in a purely rational way.

d.

must be motivated primarily by the threat of having her children taken from her.