Econ Chapter 1 Quiz

Carl is considering attending a concert with a ticket price of $35....

$85

Kate takes a part time job and the sacrifice of study time causes her grade point average to fall from 3.5 to 2.9. Assume that the grade point average would have stayed at 3.5 if study time had not been reduced. The opportunity cost of having taken the job is

0.6 decrease in the grade point average

Who said that compound interest was the greatest discovery of their time?

Albert Einstein

Consider an economic model designed to analyze the behavior of business firms. An assumption that the goal of the firms is to maximize profit would be

a critical assumption

A newspaper headline announces "that more college graduates than ever are in this labor force". This is an example of

a positive statement

Due to resource scarcity,

all economic activities have an opportunity cost

What does economics have in common with sociology?

both are social sciences

A critical assumption assumption differs from a simplifying assumption in that a critical assumption

can affect the conclusions of the model

All of the following are examples of constraints faced by decision except one. Which is the exception?

consumer wants

The knowledge that students gain while in college is referred to by economists as human capital

false

A critical assumption

has an important impact on the conclusions of an economic model

Positive economics deals with

how the economy does work

A professional basketball players' union negotiates a contract that dramatically increases all players' salaries. How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?

it would increase the opportunity cost of becoming a broadcaster

Society's resources include

land, labor, and capital

Opportunity cost exists because

limited resources cannot satisfy all of the wants in society

Because economists have different values, like everyone else, they

may disagree, even though economic theory is based on positive statements

Company has a market capitalization of $10 billion, how might we categorize the company?

mid cap

Entrepreneurship is typically identified with which of the following?

risk-taking and creativity

Economics is the study of choice under conditions of

scarcity

The core problem faced by all economic systems is that

scarcity forces each of us to make choices

An economic model

simplifies reality in order to focus on crucial elements

In order to eliminate unnecessary details and highlight the essential features of an economic model, an economist makes

simplifying assumptions

Name the three rating agencies that offer ratings on bonds

standard and poor's, and Moody and Fitch

Risk in a portfolio is best measured using which of the following?

standard deviation

The best economic theory is the one

that yields the most accurate predictions

Which of the following is a normative statement?

the extent of income inequality in the United States is unjust

Individuals face opportunity costs because

time and funds are scarce

Macroeconomics studies the determination of

total output, total employment, the general price level, and the general level of interest rates

The ticker symbol for stock list on the New York Stock exchange have symbols of 4 letters or less

true

Normative economics deals with

value judgements