Question 1

The embarrassment theory suggests why shopping carts should be smaller.

Accepted Answer

A) True 
 B)False

Question 2

Economic models of markets generally treat prices as exogenous variables.

Accepted Answer

A) True 
 B)False

Question 3

Someone who is deemed irrational from an economic standpoint is someone who

Accepted Answer

A)   voluntarily partakes in actions contrary to his personal preferences.
B)   voluntarily partakes in actions contrary to what society deems acceptable.
C)   voluntarily partakes in actions that the majority of consumers would not.
D)   sets prices at ninety-nine cents.E) C) and D)
F) A) and D)

Question 4

The economic model of supply and demand is one that can be tested using data.

Accepted Answer

A) True 
 B)False

Question 5

When observing people making choices that do not at first appear to be rational,an economist will ask,

Accepted Answer

A)   "How might a psychologist explain this behavior?"
B)   "Why do we economists keep believing that people behave rationally?"
C)   "How might such behavior be serving someone's purposes?"
D)   "What is wrong with these people?"E) B) and D)
F) A) and D)

Question 6

Economic models

Accepted Answer

A)   may be insufficient to make numerical predictions.
B)   may have untestable conclusions.
C)   both of these are true.
D)   neither of these are true.E) A) and B)
F) A) and C)

Question 7

Which of the following is a problem of economic dynamics?

Accepted Answer

A)   Determining how an equilibrium changes when an exogenous variable changes.
B)   Finding the Nash equilibrium in the Prisoners' Dilemma.
C)   Solving a simple monopoly's profit-maximization problem.
D)   Modeling the process by which an equilibrium is achieved.E) A) and B)
F) None of the above

Question 8

Many economic models are not sufficiently detailed to make precise numerical predictions.What,then,is the value of such models?

Accepted Answer

Many economic models are qualitative,not...

Question 9

A model that is said to be robust is one that has many details and closely mimics reality.

Accepted Answer

A) True 
 B)False

Question 10

According to Gary Becker's "Rotten Kid theorem," a child will be deterred from stealing from his siblings

Accepted Answer

A)   as long as he fears that his parents will punish him.
B)   when parents are altruistic and treat their children equally.
C)   only if the probability of being caught is sufficiently large.
D)   if he inherits the "altruistic gene" from his parents.E) B) and C)
F) None of the above

Question 11

In the supply/demand model,prices and quantities are exogenous variables.

Accepted Answer

A) True 
 B)False

Question 12

In an analysis of an excise tax on soda,which of the following is an exogenous variable?

Accepted Answer

A)   The price received by sellers.
B)   The price paid by buyers.
C)   The quantity exchanged in the market.
D)   The tax.E) B) and D)
F) A) and C)

Question 13

Describe the three stages of economic analysis.

Accepted Answer

The three stages of economic analysis ar...

Question 14

Economists focus only on real world consumer choices.

Accepted Answer

A) True 
 B)False

Question 15

All of the following are true of models except:

Accepted Answer

A)   they simplify reality.
B)   they are good if they make predictions that align with real world observations.
C)   they are used exclusively by economists.
D)   supply/demand analysis is an example of a model.E) A) and D)
F) A) and C)

Question 16

Costs are forgone opportunities.

Accepted Answer

A) True 
 B)False

Question 17

The problem that economists consider is how an individual

Accepted Answer

A)   actor's preferences are formed.
B)   actor decides to allocate scarce resources among competing ends.
C)   firm decides on means for influencing its buyers preferences.
D)   firm grows.E) A) and B)
F) None of the above

Question 18

Which of the following economic models is untestable?

Accepted Answer

A)   Demand and supply model of a product market.
B)   Monopoly model of market power.
C)   Edgeworth box model of exchange.
D)   Capital asset pricing model.E) All of the above
F) C) and D)

Question 19

According to the law of one price,

Accepted Answer

A)   there exists only one price that will clear a competitive market.
B)   the long-run price of a commodity will equal the marginal cost of production.
C)   identical goods will sell for identical prices.
D)   the price of a good must equal the value of the labor used to produce it.E) A) and B)
F) A) and C)

Question 20

The fact that grocery stores and convenience stores sell physically identical products for different prices is a violation of the "law of one price."

Accepted Answer

A) True 
 B)False

Exam 19: What Is Economics

Economic models

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Costs are forgone opportunities.

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The economic model of supply and demand is one that can be tested using data.

Correct AnswerverifiedShow Answer

The problem that economists consider is how an individual

Correct AnswerverifiedShow Answer

All of the following are true of models except:

Correct AnswerverifiedShow Answer

Someone who is deemed irrational from an economic standpoint is someone who

Correct AnswerverifiedShow Answer

Which of the following is a problem of economic dynamics?

Correct AnswerverifiedShow Answer

Describe the three stages of economic analysis.

Correct AnswerverifiedThe three stages of economic analysis ar...View AnswerShow Answer

When observing people making choices that do not at first appear to be rational,an economist will ask,

Correct AnswerverifiedShow Answer

Many economic models are not sufficiently detailed to make precise numerical predictions.What,then,is the value of such models?

Correct AnswerverifiedMany economic models are qualitative,not...View AnswerShow Answer

Which of the following economic models is untestable?

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The embarrassment theory suggests why shopping carts should be smaller.

Correct AnswerverifiedShow Answer

In an analysis of an excise tax on soda,which of the following is an exogenous variable?

Correct AnswerverifiedShow Answer

The fact that grocery stores and convenience stores sell physically identical products for different prices is a violation of the "law of one price."

Correct AnswerverifiedShow Answer

Economic models of markets generally treat prices as exogenous variables.

Correct AnswerverifiedShow Answer

A model that is said to be robust is one that has many details and closely mimics reality.

Correct AnswerverifiedShow Answer

In the supply/demand model,prices and quantities are exogenous variables.

Correct AnswerverifiedShow Answer

Economists focus only on real world consumer choices.

Correct AnswerverifiedShow Answer

According to Gary Becker's "Rotten Kid theorem," a child will be deterred from stealing from his siblings

Correct AnswerverifiedShow Answer

According to the law of one price,

Correct AnswerverifiedShow Answer

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The three stages of economic analysis ar...
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Many economic models are qualitative,not...
View Answer

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Correct Answer
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