CH 1 IN MACRO QUIZ

_______ is concerned with what ought to be

Normative analysis

_______ is concerned with what is

Positive analysis

Which of the following statements is true? a. All individuals face a scarcity of time and need to make choices how to allocate it b. Some individuals experience scarcity because they have not learned to live within their means c. While resources are scarce, most people don't own resources and therefore do not face a scarcity of them d. Most individuals face a scarcity of time, but few experience a scarcity of other resources

a. All individuals face a scarcity of time and need to make choices how to allocate it

Macroeconomics is the study of... a. the economy as a whole, including topics such as inflation, unemployment, and economic growth b. why the U.S. has spent so much money on wars and government surveillance of its own citizens c. how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices d. the economy on a state-by-state basis, covering areas affected by the Commerce Clause

a. the economy as a whole, including topics such as inflation, unemployment, and economic growth

How do market economies ultimately determine what goods and services are produced, how the good and services will be produced, and who will receive the goods and services? a. Firms determine what goods and services are produced, efficiency determines how to produce them, and consumers determine who will receive them b. Consumers determine what goods and services are produced, firms determine how to produce them, and markets determine who will receive them c. Firms determine what goods and services are produced and how to produce them, and markets determine who will receive them d. The government determines what goods and services are produced, how to produce them, and who will receive them e. Consumers determine what goods and services are produced, firms determine how to produce them, and equity determines who will receive them

b. Consumers determine what goods and services are produced, firms determine how to produce them, and markets determine who will receive them

A primary difference between macroeconomics and microeconomics is... a. Microeconomics is concerned with market economies while macroeconomics is concerned with centrally-planned economies b. Microeconomics examines individual markets while macroeconomics examines the economy as a whole c. There is no true differences between microeconomics and macroeconomics d. Microeconomics is concerned with present decisions while macroeconomics is concerned with future decisions

b. Microeconomics examines individual markets while macroeconomics examines the economy as a whole

Microeconomics is the study of... a. how individuals make good decisions for themselves but hurt society b. how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices c. how individuals and firms act altruistically to better society d. the economy as a whole, including topics such as inflation, unemployment, and economic growth

b. how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices

Economic data is used... a. only if all relevant data is available b. to test models c. to take the place of an economic model d. to prove that a model is true

b. to test models

Is Warren Buffet correct that it is the role of the federal government to make sure people who work will have enough income to live a "decent lifestyle"? a. He is correct because only the government can make sure people who work will have enough income to live a "decent lifestyle" b. He is incorrect because if the government provides, people will not have an incentive to support themselves c. This is a normative economic question, so the answer is a matter of the norms or values of the person answering d. This is a positive economic question, so the answer is a matter of the norms or values of the person answering

c. This is a normative economic question, so the answer is a matter of the norms or values of the person answering

Any model is based on making assumptions because... a. we cannot analyze an economic issue unless we reduce its complexity b. models have to be simplified to be useful c. both a. and b. d. neither a. or b.

c. both a. and b.

One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls... a. rationality b. economics c. scarcity d. the market

c. scarcity

According to Forbes magazine, in 2017 Bill Gates was the world's richest person with wealth of $86 billion Does Bill Gates face scarcity? a. No, because if a billionaire cannot get the goods and services they want, someone else can get it for them b. Yes, because there is a limit to the income even billionaires can earn c. No, because billionaires can have anything that money can buy d. Yes, because even though billionaires' financial resources enable them to afford a much greater array of goods and services than those less wealthy, their financial resources are not infinite

d. Yes, because even though billionaires' financial resources enable them to afford a much greater array of goods and services than those less wealthy, their financial resources are not infinite

Economists use models... a. to disprove economic data b. to describe the real world exactly c. to prove that theories are true d. to answer questions and analyze issues

d. to answer questions and analyze issues

The level of total investment by firms in new machinery and equipment helps to determine how rapidly the economy grows. This is a _________ issue.

macroeconomic

MICROECONOMIC OR MACROECONOMIC ISSUE? The effect of higher income taxes on the total amount of consumer spending

macroeconomic issue

MICROECONOMIC OR MACROECONOMIC ISSUE? The reasons for the economies of East Asian countries growing faster than the economies of sub-Saharan African countries

macroeconomic issue

To understand how much new machinery and equipment firms decide to purchase, one must analyze the incentives individual firms face, which is a ________ issue.

microeconomic

MICROECONOMIC OR MACROECONOMIC ISSUE? The effect of higher cigarette taxes on the quantity of cigarettes sold

microeconomic issue

MICROECONOMIC OR MACROECONOMIC ISSUE? The reasons for low rates of profit in the airline industry

microeconomic issue

Economics is about ________, which measures the costs and benefits of different courses of action

positive analysis