Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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1.
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Sir
Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an
example of a. | controlled
experiments that lead to the formulation of scientific theories. | b. | being in the
right place at the right time. | c. | an idea whose time had come. | d. | the interplay
between observation and theory in science. | | |
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2.
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For
economists, substitutes for laboratory experiments often come in the form of a. | natural
experiments offered by history. | b. | untested theories. | c. | “rules of
thumb” and other such conveniences. | d. | reliance upon the wisdom of elders in the economics
profession. | | |
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3.
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For
an economist, the idea of making assumptions is regarded generally as a a. | bad idea, since
doing so leads to the omission of important ideas and variables from economic
models. | b. | bad idea, since doing so invariably leads to data-collection
problems. | c. | good idea, since doing so helps to simplify the complex world
and make it easier to understand. | d. | good idea, since economic analysis without assumptions leads to
complicated results that the general public finds hard to understand. | | |
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4.
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Which
of these statements about economic models is correct? a. | For economists,
economic models provide insights about the world. | b. | Economic models
are built with assumptions. | c. | Economic models are often composed of equations and
diagrams. | d. | All of the above are correct. | | |
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5.
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In
the simple circular-flow diagram, the participants in the economy are a. | firms and
government. | b. | households and firms. | c. | households and
government. | d. | elected officials and ordinary
citizens. | | |
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6.
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Which
of the following transactions does not take place in a market for a factor of
production? a. | Karl provides
plumbing services for a plumbing company and receives an hourly wage from the company for his
services. | b. | Juanita works as a marriage counselor and her clients pay her
on a per-hour basis for her services. | c. | Trish owns several shopping malls and receives rent payments
from the companies that operate those malls. | d. | Ben sells
advertising for a newspaper and receives a commission from the newspaper company for each
advertisement that he sells. | | |
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Figure 2-4
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7.
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Refer to Figure 2-4. If the economy moves from point A to point D, the
opportunity cost is a. | 10 toasters. | b. | 20
toasters. | c. | 30 toasters. | d. | 30
toothbrushes. | | |
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8.
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In a
certain economy, peanuts and books are produced, and the economy currently operates on its
production possibilities frontier. Which of the following events would allow the economy to produce
more peanuts and more books, relative to the quantities of those goods that are being produced
now? a. | Unemployed labor
is put to work producing peanuts and books. | b. | The economy puts
its idle capital to work producing peanuts and books. | c. | The economy
experiences economic growth. | d. | All of the above are correct. | | |
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9.
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The
field of economics is traditionally divided into two broad subfields, a. | national
economics and international economics. | b. | consumer economics and producer
economics. | c. | private sector economics and public sector
economics. | d. | microeconomics and macroeconomics. | | |
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10.
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Which
of the following areas of study typifies macroeconomics as opposed to
microeconomics? a. | the effects of
rent control on the availability of housing in New York City | b. | the economic
impact of tornadoes on cities and towns in Oklahoma | c. | how tariffs on
shoes affects the shoe industry | d. | the effect on the economy of changes in the nation’s
unemployment rate | | |
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11.
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The
President of the United States receives tax policy advice from economists in the a. | Federal
Reserve. | b. | Department of Justice. | c. | Department of
Treasury. | d. | Congressional Budget Office. | | |
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12.
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Duties of the Council of Economic Advisers include a. | advising the
president and writing the annual Economic Report of the President. | b. | implementing the
president’s tax policies. | c. | tracking the behavior of the nation’s money
supply. | d. | All of the above are correct. | | |
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13.
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“If all economists were laid end to end, they would not reach a conclusion.”
Who made this whimsical observation? a. | Harry Truman | b. | George Bernard
Shaw | c. | John Maynard
Keynes | d. | Ronald Reagan | | |
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14.
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The
y-coordinate is the a. | first number of an ordered pair and represents the point's
horizontal location. | b. | second number of an ordered pair and represents the point's
horizontal location. | c. | first number of an ordered pair and represents the point's
vertical location. | d. | second number of an ordered pair and represents the point's
vertical location. | | |
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15.
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If
Steven’s income decreases and, as a result, he chooses to buy fewer bagels per month at each
price his demand curve will a. | shift inward. | b. | shift
outward. | c. | not shift; instead, Steven will move along his demand curve
downward and to the right. | d. | not shift; instead, Steven will move along his demand curve
upward and to the left. | | |
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