QUESTION 2

1. Why would an economist say that the Ford Motor Company has never made a choice or a decision?
2. They're wrong; Ford answers to greedy shareholders.
3. To remind non-economists of methodological individualism; the concept that only individuals within an organization, rather than the organization itself, make choices
4. Ford doesn't make choices; only the U.S. automobile industry does.
5. Ford answers to the United Auto Workers union.

2 points

QUESTION 3

1. Which of the following is a fair summation of the "action axiom"?
2. Through the process of trial and error, people will take risks in the market to try to solve problems and make corrections over time.
3. Greed is good; greed will meet the need.
4. Humans employ means according to values and ideas to achieve ends.
5. People only act in groups, so majority rule represents the will of the people.

2 points

QUESTION 4

1. Why do individuals, left to their own devices, tend to trade with each other?
2. They place different values on their property.They expect to gain more than they give up.They expect to increase their own wealth as a result of the trade.All of the above are true.

2 points

QUESTION 5

1. What does the famous saying "There ain't no such thing as a free lunch!" mean?
2. We do not live in a free country.
3. The value of the dollar keeps declining.
4. People do not care about others enough.
5. People face trade-offs.

2 points

QUESTION 6

1. Which of the following is a fair characterization of Say's Law?
2. People can benefit mutually from specialization and trade.
3. Destruction of goods does not breed economic prosperity.
4. The value of goods and services anyone can purchase is equal to the market value of what they supply.
5. Supply creates its own demand.

2 points

QUESTION 7

1. Suppose cheeseburgers and hotdogs are substitute goods. If the price of hotdogs increases by 20% while the price of cheeseburgers remains the same, which is most likely to occur?
2. Demand for cheeseburgers would decrease.Demand for cheeseburgers would increase.Demand for hotdogs would decrease.Demand for hotdogs would increase.