CHOOSE LETTER, NO EXPLAINATION

Which of the following is the name given to simplified versions of theories that are expressed using stories, graphs, or equations?

a.

Forecasts

b.

Models

c.

Normative economics

d.

Assumptions

The overarching focus of economics is on:

a.

managing businesses.

b.

the flow of money.

c.

stock markets.

d.

decision-making.

Properly understood, "free markets" are:

a.

markets populated by free people.

b.

markets in which there are no prices.

c.

markets in which there are no rules.

d.

markets that are carefully regulated.

_______ economics makes value judgments about whether economic policies are good or bad; _______ economics is more interested in economic facts and the relationships between them.

a.

Positive; normative

b.

Normative; positive

c.

Spontaneous; hierarchical

d.

Hierarchical; spontaneous

What is the full meaning of the fundamental question "What?"

a.

What is an economy?

b.

What will be produced?

c.

What will the economy's goals be?

d.

What structure of government will we choose?

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 fall.

b.

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

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.

The conditions on which the forecast is based may not hold

c.

The theory behind the forecast may not be correct

d.

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

Because people are purposeful and self-interested, voluntary exchanges:

a.

must be mutually beneficial.

b.

are basically random.

c.

usually benefit one person and harm the other.

d.

should be viewed with suspicion.

If it is possible to make a change that satisfies one person's wants more fully but without causing someone else's wants to be satisfied less fully then:

a.

the economy has not achieved economic efficiency.

b.

the economy has not achieved productive efficiency.

c.

the economy has achieved economic efficiency.

d.

the economy has achieved productive efficiency.

What are the two broad approaches that an economy can take in trying to answer the four fundamental questions?

a.

Market or laissez-faire

b.

Normative or positive

c.

Hierarchy or spontaneous order

d.

Command or communism

What is the opportunity cost of showing up to the next class meeting of the 8 a.m. class that you are enrolled in this semester?

a.

The cost of the books and other materials for the class

b.

The sleep that you could get if you just slept in

c.

All of these are the opportunity cost of showing up to the next class meeting.

d.

The tuition that you paid to enroll in the class

When the economy is not in a recession, for many community college students, the greatest cost of a college education is:

a.

forgone earnings.

b.

room and board.

c.

tuition.

d.

textbooks.

There is NO opportunity cost associated with producing more automobiles when:

a.

the economy has not achieved productive efficiency.

b.

the economy has achieved productive efficiency.

c.

the economy has not achieved economic efficiency.

d.

the economy has achieved economic efficiency.

The value of the next best choice that you give up when you make a decision is called:

a.

the marginal benefit.

b.

the opportunity cost.

c.

the incentives.

d.

the power of trade.