ECON 2002.01 Study Guide - Quiz Guide: Ceteris Paribus, Opportunity Cost, Demand Curve

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Econ2002 Principles of Macroeconomics Quiz 1
1. Economics is the study of
A) how to own as many resources as possible.
B) ceteris paribus.
C) the way people think rather than the way they act.
D) how people allocate their limited resources to satisfy their unlimited wants.
Answer: D
2. Macroeconomics is best defined by which of the following statements?
A) Macroeconomics is the study of how firms strive to maximize their profits.
B) Macroeconomics is the study of the behavior of the economy as a whole.
C) Macroeconomics is the study of individual economic units.
D) Macroeconomics is the study of how the prices of individual goods are determined.
Answer: B
3. John has an economics test tomorrow. He must study and has planned the rest of his day so
that he can fit some study time in. He has decided to go to the gym and then study for several
hours. Which of the following statements is true?
A) John did not use the economic way of thinking because his decision on how to allocate his
time did not involve money.
B) Johnʹs decision on how to allocate his time is inconsistent with the rationality assumption
since he has decided to go to the gym.
C) Johnʹs decision on how to allocate his time is consistent with the rationality assumption
since the decision is intended to make him better off.
D) Johnʹs decision does not involve his pursuit of self-interest.
Answer: C
4. Which of the following is a normative economic statement?
A) An increase in corporate income taxes will cause the unemployment rate to increase.
B) The costs of medical care are increasing faster than the incomes of U.S. citizens.
C) Teenage unemployment is over ten percent.
D) Teenage unemployment is too high.
Answer: D
5. Suppose you have four choices: go to a movie, read a book, watch television, or go to a concert.
You choose to go to a movie. The opportunity cost of the movie is
A) the value of the book not read.
B) the value of the television program not watched.
C) the value of the concert that you didnʹt attend.
D) the value of the activity that you would have selected if you hadnʹt gone to the movie.
Answer: D
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