Econ101 quiz 1

Select the normative statement that completes the following sentence: If the minimum wage is raised:

workers will gain their rightful share of total income.

Which of the following is the best example of a microeconomic topic?

The reasons for increases in the price of soft drinks.

A normative economic statement is:

a statement of opinion which advocates a particular position.

A model (or theory):

all of the above.

Someone notices that sunspot activity is high just prior to recessions and concludes that sunspots cause recessions. This person has:

confused association and causation.

The creative ability of persons to combine and direct resources to produce new products is known as:

entrepreneurship

Economic models are of limited use since they cannot be tested empirically with actual data.

false

Factors which determine the price of corn would be studied in macroeconomics.

false

Microeconomics is the branch of economics in which you study inflation and unemployment in the economy.

false

Which of the following would an economist classify as capital?

lawyer's personal computer.

A sub-discipline of economics that looks at the economy as a whole is:

macroeconomics

Determining the price of compact discs is a concern of:

microeconomics

The study of microeconomics and macroeconomics differ in that:

microeconomics examines the individual markets of the economy while macroeconomics studies the whole economy.

Economics could be defined as the study of scarcity.

true

Financial capital by itself is not a factor of production; instead it is only a paper claim on economic capital.

true

The statement "It is better to suffer a little more unemployment than a little lower prices" is an example of normative economic analysis.

true