Macro-Practice Exam #1 - Ch 1,2.3.4

Macro-Practice Exam #1 - Ch 1,2.3.4 - Macro-Practice Exam...

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Macro-Practice Exam #1 - Ch 1, 2, 3, 4 Student: ___________________________________________________________________________ 1. For economists, the word "utility" means: A. versatility and flexibility. B. rationality. C. pleasure and satisfaction. D. purposefulness. 2. According to economists, economic self-interest: A. is a reality that underlies economic behavior. B. has the same meaning as selfishness. C. is more characteristic of men than of women. D. is usually self-defeating. 3. When entering a building, Sam diverts his path to go through an open door rather than make the physical effort to open the closed door that is directly in his path. This is an example of: A. irrational behavior. B. a lazy person. C. marginal benefit-marginal cost analysis. D. programmed learning. 4. Joe sold gold coins for $1000 that he bought a year ago for $1000. He says, "At least I didn't lose any money on my financial investment." His economist friend points out that in effect he did lose money, because he could have received a 3 percent return on the $1000 if he had bought a bank certificate of deposit instead of the coins. The economist's analysis in this case incorporates the idea of: A. opportunity costs B. marginal benefits that exceed marginal costs. C. imperfect information. D. normative economics. 5. Economics may best be defined as the: A. interaction between macro and micro considerations. B. social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity. C. empirical testing of value judgments through the use of logic. D. use of policy to refute facts and hypotheses.
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6. The economic perspective entails: A. irrational behavior by individuals and institutions. B. a comparison of marginal benefits and marginal costs in decision making. C. short-term but not long-term thinking. D. rejection of the scientific method. 7. Purposeful behavior suggests that: A. everyone will make identical choices. B. resource availability exceeds economic wants. C. individuals will make different choices because of different desired outcomes. D. an individual's economic goals cannot involve tradeoffs. 8. An economic hypothesis: A. has the same meaning as an economic principal or economic law. B. is usually a normative statement. C. is a possible explanation of cause and effect. D. is a stronger generalization than an economic law. 9. In constructing models, economists: A. make simplifying assumptions. B. include all available information. C. must use mathematical equations. D. attempt to duplicate the real world. 10. Economic models: A. are of limited use because they cannot be tested empirically. B. are limited to variables that are directly related to one another. C. emphasize basic economic relationships by purposefully simplifying the complexities of the real world.
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Macro-Practice Exam #1 - Ch 1,2.3.4 - Macro-Practice Exam...

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