Chapter 1 Reading Quiz - ECON 2301. Questions and Answers. PDF

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Chapter 1 Reading Quiz - ECON 2301. Questions and Answers....

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ECON-2301

Reading Quiz – Chapter 1 Questions and Answers 1) Question: Ceteris Paribus means Answer: "other things constant."

2) Question: Economics is the study of how people allocate their ________ resources in an attempt to satisfy their ________ wants. As such, economics is the study of how people make choices. Answer: limited; unlimited

3) Question: The bounded rationality hypothesis assumes people are not fully rational and therefore use simple rules of thumb to sort among the alternatives that happen to occur to them. Answer: True 3.5) Question: Proponents of behavioral economics suggest that traditional economic models assume that people exhibit all of the following "unrealistic" characteristics except Answer: unbounded altruism.

4) Question: Positive economic statements ________, and normative economic statements ________. Answer: are concerned with "what is"; are concerned with "what ought to be"

5) Question: The rationality assumption of economics is the assumption that people do not intentionally make decisions that would leave them worse off. Answer: True

6) Question: Microeconomics is the part of economic analysis that studies decision making undertaken by ________. Macroeconomics is the part of economic analysis that studies the behavior of ________. Answer: individuals and firms; the economy as a whole

ECON-2301

7) Question: It is relatively easy for an author to keep all normative statements out of a textbook. Answer: False

8) Question: Much of human behavior can be explained in terms of how individuals respond to changing incentives over time. Answer: True

9) Question: The concept of self interest assumes that individuals can only further their goals at the expense of other individuals. Answer: False

10) Question: An economic model Answer: should capture only the essential relationships that are sufficient to analyze a particular problem or answer a particular question.

10) Question: An economic model Answer: should capture only the essential relationships that are sufficient to analyze a particular problem or answer a particular question

11) Question: The economic system in which individuals and families own all of the scarce resources used in production, decide how and what to produce, and how many products to produce, is best described as a price system. Answer: True 11.5) Question: The economic system in which a government establishes ownership of resources and issues rules for how to manage the production of products is best described as Answer: a command and control system.

12) Question: Economic models relate to the way people think rather than to the way people act. Answer: False

ECON-2301

13) Question: Which of the following is not one of the three fundamental questions of economics? Answer: Where will items be produced?

14) Question: A model is considered "good" if it yields usable predictions that are supported by real-world observations. Answer: True...