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THESE ARE SAMPLE QUESTIONS FROM ALL SIX (1 – 5) CHAPTERS. COVERS TEST-I CH 1: Limits Alternatives and Choices Multiple Choice Questions Economics; economic perspective 1. For economists, the word "utility" means: A) flexibility. B) rationality. C) pleasure and satisfaction. D) purposefulness. Answer: C 3. When economists say that people act in their self interest, they mean that individuals: A) look for and pursue opportunities to increase their utility. B) generally disregard the interests of others. C) are mainly creatures of habit. D) are unpredictable. Answer: A 7. Joe sold gold for $1000, he bought a year ago for $1000. He says, "I didn't lose money on investment." The economist tells him that he did, because he could have received a 3% if on a CD. This idea refers to A) opportunity costs C) imperfect information. B) marginal benefits that exceed marginal costs.D) normative economics. Answer: A 13. Rational behavior suggests that: A) everyone will make identical choices. B) resource availability exceeds economic wants. C) individuals will make different choices because their preferences and circumstances differ. D) an individual's economic goals cannot involve tradeoffs. Answer: C 14. Economics involves marginal analysis because: A) most decisions involve changes from the present situation. B) marginal benefits always exceed marginal costs. C) marginal costs always exceed marginal benefits. D) much economic behavior is irrational. Answer: A 15. You should decide to go to a movie: A) if the marginal cost of the movie exceeds its marginal benefit. B) if the marginal benefit of the movie exceeds its marginal cost. C) if your income will allow you to buy a ticket. D) because movies are enjoyable. Answer: B 16. Marginal costs exist because: A) the decision to produce more of some product means the sacrifice of other products. B) wants are scarce relative to resources. C) households and businesses make rational decisions. D) most decisions do not involve sacrifices or tradeoffs. Answer: A 17. The assertion that "There is no free lunch" means that: A) there are always tradeoffs between economic goals. B) production involves use of scarce resources and thus the sacrifice of alternative goods.
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C) marginal analysis is not used in economic reasoning. D) choices need not be made if behavior is rational. Answer: B 24. 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. Answer: C 27. A well-tested economic theory is often called: A) a hypothesis. B) a prototype. C) a principle. D) an anomaly. Answer: C
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This note was uploaded on 06/23/2011 for the course ECON 102 taught by Professor Soliz during the Spring '11 term at Northern Virginia Community College.

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