1.2.4Test (CST): What Is Economics?

The scientific method:

All of these. It's a four-step process; it requires certain assumptions and simplifications; and it's used in economics.

Which of the following is not one of the four goals typically pursued by policy makers in economic systems?

Zero poverty

Which of the following is not true about markets?

The product market is also called the resource market.

Resources are typically divided into three types. These are:

land, labor, and capital.

The basic assumption in economics is that _____ are limited and _____ are unlimited.

resources, wants

Which of the following is an economist's definition of economics?

A social science that examines human behavior in the face of scarcity.

When developing theories, a scientist:

thinks logically and collects evidence.

People pursuing their own self-interest are:

perhaps selfish, but perhaps not, depending on their values and point of view.

The human resource involved in the production of any good is called:

labor.

Some economists believe there should be four categories of resources, in addition to land, labor, and capital. What is the name of that category?

Entrepreneurship

Traditional economies:

base their economic decisions on the customs or religious practices of ancestors.

Which of the following would a government operating in a laissez-faire economy not do?

Set prices

Taxes are an example of _____ elements in our economic system.

command

The force that Adam Smith felt drove any economic system was:

the invisible hand.

Money acts as a rationing device for goods and services in a market economy. This means:

consumers who are willing and able to pay for a good are usually able to get the good.

Which of the following is true?

Something is scarce if the quantity people want exceeds the resources available to make that amount.

In the Wealth of Nations, Adam Smith advocated all of the following except:

abolishing laissez-faire policies.

A line that rises as it moves from left to right has a:

slope greater than 0.

Which of the following is not a variable?

The number of hydrogen atoms in a molecule of water

One thing goods and services have in common is:

they both satisfy wants.

Capitalist economies depend on which of the following to allocate resources and finished goods and services?

The price system

In the factor market, resource owners receive:

rent for their land, wages for their labor, and interest for their capital.

A theory is not:

something that models every aspect of reality at once.

Which of the following would be the focus of a macroeconomic study?

The economy as a whole

An economic system characterized by choices based on the decisions of central planners is:

a command economy.

A country with a pure capitalist economy is:

None of these.

Every economy must face three basic questions. Which of the following is not one of these questions?

How long will it take to produce the good or service?

Which of the following falls into the category of microeconomics?

Timber regulations

If I value a cookie at $1.50 and you value it at $2.00, this is an indication that:

the cookie is relatively more scarce to you than it is to me.

When we talk about the slope of a line we mean:

the rise over the run.