1. economists believe that scarcity forces everyone to :
a. satisfy all their wants
b. abandon consumer sovereignty
c. lie about their wants
d. create unlimited resource
e. make choice
2. they subjects of economics is primarily the study of :
a. the government decision-making process
b. how to operate a business successfully
c. decision making because of the problem of scarcity
d. how to make money in the stock market
3. when building a model, an economist must:
a. adjust for exceptional situations
b. provide a complete description of reality
c. make simplifying assumptions
d. develop a set of behavioral equations
4. if the price of a textbook rises and then students purchase fewer textbooks, an economic model can show a cause- and - effect relationship only if which of the following conditions hold:
a. students' income fall
b. tuition decreases
c. the number of students increase
d. everything else is constant
e. the bookstore no longer accepts used book trade-ins
5. someone notices that sunspot activity is high just prior to recessions and concludes that sunspots cause recessions. this person has:
a. confused association and causation
b. misunderstood the ceteris paribus assumption
c.used normative economics to answer a positive question
d. built an untestable model
6. which of the following is not true about a production possibilities curve? the curve:
a. indicates the combinations of goods and services that can be produced with a given technology
b. indicates the effcient productions points
c. indicates the noneffcient production points
d. indicates the feasible ( attainable) and non feasible production points
e. indicates which production point will be chosen
7. which of the following is true about the production possibilities curve when a technological progress occurs?
a. shifts inward to the left
b. becomes flatter in one end and steeper at the other end
c. shifts outward to the right
e. does not change
8. an outward shift of an economy's production possibilities curve is caused by
a. entrepreneurship
b. an increase in labor
c. an advance in technology
d. all of the above
9. which would be least likely to cause the production possibilities curve to shift to the right?
a. an increase in the labor force
b. improved methods of production
c. an increase in the eduction and training of the labor force
d. a decrease in unemployment
10. a nation can accelerate its economic growth by:
a. reducing the number of immigrants allowed into the country
b. adding to its stock of capital
c. printing more money
d. imposing tariffs and quotas on imported goods