Ch 01: Introduction: What is Economics?

Which of the following are not essential components of an economic model?

normative statements

Graphs are often used in economics because they:

can simplify complex topics

The stock of computers, factory buildings and machine tools used to produce goods is known as:

physical capital

Macroeconomics is concerned with all of the following except:

political party affiliation

What is the percentage change in price for a shirt that was marked down from $40 to $28?

-30%

Economic decisions are made at every level in society. When we try to decide which production method to use among several alternatives, which of the following key economic questions are we trying to answer?

How do we produce the products?

Which of the following is a positive economic statement?

If minimum wage rates rise, then unemployment will rise.

If the president of Columbia commented that "we should do something to reduce inflation in Columbia," this would be an example of:

a normative statement

The slope of a straight line equals the change in the value on the __________ axis __________ by the change in the value of the other axis measured between any two points on the line.

vertical , divided

The vertical axis on a graph is also known as the:

y-axis

Economic models often simplify the real world by holding all things equal and changing one variable to determine the impact of the change. The "all things equal" assumption is also known as:

ceteris paribus

Understanding economics can help policymakers devise strategies to do all of the following except

eliminate climate change

Macroeconomics can be used to understand all of the topics listed below, except:

how a consumer decides between the purchase of two different cars

Economics:

is concerned with how people respond to incentives

The resources provided by nature and used to produce goods and services are also known as:

natural resources

Economics is the study of choice under conditions of:

scarcity

Economic models are:

simplifications of reality that focus only on key relationships and ignore less relevant details