Select the correct answer for the following:

1. Private ownership is a natural law. It gives private owners the incentive to

a. destroy assets and devalue investments

b. do anything they want with the things they own regardless of the damage it does to the property of neighbors, friends, and third parties

c. conserve and use their property in ways that are beneficial to others

d. destroy resources and use them unsustainably

2. The Federal Reserve states that the unemployment rate has risen to 20 percent last quarter. The Speaker of the House states that there should be a second wave of stimulus checks. The Federal Reserve's statement is a() ________ economic statement, and the Speaker of the House's statement is a(n) __________ economic statement.

a. normative, normative

b. positive, positive

c. positive, normative

d. normative, positive

3. Singapore is a developed city-state with high literacy rates, low crime, and advanced technology. It lacks natural resources but is abundant in physical resources or "Capital" goods. Physical resources is an economic term used to refer to

a. resources that are available in nature such as mineral deposits.

b. the value of the best alternative to an action.

c. money that is used to consume goods and services, to distinguish it from money that is saved.

d. man-made resources used to produce other goods and services.

4. Suppose the fictional country of Ceres cannot produce all the goods and services people wish to have. Then the Ceres economy is experiencing

a. high marginal cost

b. scarcity.

c. inequities.

d. inefficiencies.

5. In the United States, Prohibition made the manufacture, sale, and transportation of alcoholic beverages illegal. This led to a rise in black market trade in alcohol. In economic terms, the illegal activity that resulted from Prohibition was a(n)

a. tradeoff

b. taxable revenue

c. unintended consequence

d. opportunity cost

6. "We should make the first two years of college free," is a(n) _____________ economic statement.

a. positive

b. normative

7. "CEO of Facebook, Mark Zuckerberg, did not graduate from college, but is a billionaire. Therefore, nobody needs a college degree to be successful." This statement illustrates the fallacy of composition, which is the incorrect view that

a. everything else is always held constant when a change occurs.

b. a small change in an economic variable will have unrecognizable but significant consequences on the economy.

c. when two events are associated, the one observed first must have caused the second.

d. if something is true for an individual, then it must also be true for the group.

8. After Avengers movies are released during the winter months, the weather starts to turn warm, therefore Avengers movies cause warm weather. This statement

a. confuses positive and normative analysis.

b. confuses macroeconomics with microeconomics.

c. fails to recognize that association is not causation

d. commits the fallacy of composition.

9. Brothers Jonas, a popular music group, always sells out their concert tickets. Fans are willing to pay for higher prices for their concert tickets on the black market. This suggests that Brothers Jonas

a. is in market equilibrium.

b. should do less concerts.

c. can reduce the ticket shortage by raising prices.

d. can reduce the ticket surplus by lowering ticket prices.

10. Suppose that Super Tees, an exclusive supplier of t-shifts, sets the price of their t-shirts above the equilibrium price. Economic analysis suggests that

a. quantity demanded will be greater than quantity supplied, so there will be a shortage of t-shirts.

b. the market would adjust by further raising prices.

c. the government will allow Super Tees to exploit consumers, as long as it pays its taxes.

d. quantity supplied will be greater than quantity demanded, so there will be a surplus of t-shirts.