Econ 202 lateef chapter 1 practice questions

10. An economist claims that "the evidence suggests that high rates of inflation are associated with slow long-term economic growth." This is an example of a. positive economics b. normative economics c. negative economics d. a simplifying assumption e. microeconomic analysis

A

Suppose that the following headlines appeared in a newspaper. Which would most clearly represent a macroeconomic issue? a. "Central Bank Raises Interest Rates" b. "Auto Dealership to Cut Prices" c. "Fanny's Freeze Dried Prunes to Lay Off 50 Workers" d. "United Workers Union to Strike April 15" e. "Brazilian Coffee Bean Crop Falls by 10 Percent"

A

Economic models come in the form of a. three-dimensional objects b. all of the following c. words d. diagrams e. mathematical equations

B

Microeconomics is the branch of economics that concerns a. the overall health of the economy b. the behavior of individual households, firms, and governments c. the overall level of trade between nations d. local governments only e. the general level of output

B

Positive economics deals with a. value judgments b. how the economy does work c. how the economy should work d. how the federal government should operate e. what the price level should be

B

The opportunity cost of a particular activity a. is the same for everyone pursuing this activity b. may include both monetary costs and forgone income c. always decreases as more of that activity is pursued d. usually is known with certainty e. measures the direct benefits of that activity

B

The statement "The unemployment rate in the U.S. is 5 percent" is a.a statement of opinion b.a positive statement that can be falsified c.lacking proper microeconomic foundations d.a statistical anomaly e.a philosophical difference of opinions regarding the nature and significance of statistical inference

B

The statement that "at 10 percent, the interest rate is too high for families to buy the home they deserve," is a(n) a. positive statement b. normative statement c. morally ambiguous philosophical position d. affront to the American dream e. value judgment

B

"The Consumer Price Index increased by 4.2 percent in the first quarter of this year." What type of statement is this? a. normative b. negative c. positive d. subjective e. biased

C

3. All the problems studied in economics arise from a. the unequal distribution of income b. overpopulation c. the scarcity of resources d. inappropriate government action e. war

C

An economic model is a. a concrete representation of reality b. as close to reality as possible c. too abstract to be useful when assumptions are involved d. unrelated to reality e. an abstract representation of reality

C

Economics is the study of choice under conditions of a. demand b. supply c. scarcity d. opportunity e. abundance

C

Macroeconomics is the branch of economics that concerns a. the behavior of individual actors in the economy b. output in a specific industry c. the overall health of the economy d. the federal government only e. prices in a specific industry

C

Macroeconomics is the study of a. how wages are determined in a specific labor market b. how to use the fewest natural resources to produce public goods c. what is happening in the economy as a whole d. how consumers and producers interact in individual markets e. the price and the quantity exchanged in a market

C

Microeconomics deals with which of the following? a. the total output of an economy b. the measurement of a nation's inflation rate c. how producers and consumers interact in individual markets d. how tax policies influence economic growth e. whether wage growth will outpace inflation in the coming year

C

Individuals must make choices because a. resources are scarce and wants are limited b. resources and wants are unlimited c. assets and wealth are distributed unevenly d. resources are scarce and wants are unlimited e. inflation usually outpaces income growth

D

What an economic decision maker must give up when choosing one economic activity over others is known as the a. alternative cost b. decision cost c. foregone cost d. opportunity cost e. accounting cost

D

2. The study of economics would be superfluous if __________ did not exist. a. demand b. capital c. corporations d. profit e. scarcity

E

Positive economics deals with a.theories about improving people's self-esteem b.practical ways of improving people's self-esteem by making money c.opinions that affirm economists' theories d.statements about the way things ought to be e.statements of fact

E

Which of the following would be strictly a microeconomic topic? a. a general rise in interest rates b. a drop in inflation c. an increase in total production in the United States d. a drop in the nation's unemployment rate e. an increase in the price of the Ford Taurus

E