Assignment 1

1.

1 point

The term "other things equal" means that:

the associated statement is normative.

many variables affect the variable under consideration.

a number of relevant variables are assumed to be constant.

when variable X increases so does related variable Y.

2.

1 point

A positive statement is one that is:

derived by induction.

derived by deduction.

subjective and is based on a value judgment.

objective and is based on facts.

3.

1 point

In economics, the pleasure, happiness, or satisfaction received from a product is called:

marginal cost.

rational outcome.

status fulfillment.

utility

4.

1 point

A person should consume more of something when its marginal

benefit exceeds its marginal cost.

cost exceeds its marginal benefit.

cost equals its marginal benefit.

benefit is still better.

5.

1 point

Opportunity costs exist because:

the decision to engage in one activity means forgoing some other activity.

wants are scarce relative to resources.

households and businesses make rational decisions.

most decisions do not involve sacrifices or trade-offs.

6.

1 point

Economics may best be defined as the:

interaction between macro and micro considerations.

social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.

empirical testing of value judgments through the use of logic.

study of why people are rational.

7.

1 point

Which one of the following expressions best states the idea of opportunity cost?

"A penny saved is a penny earned."

"He who hesitates is lost."

"There is no such thing as a free lunch."

"All that glitters is not gold."

8.

1 point

When economists say that people act rationally in their self-interest, they mean that individuals:

look for and pursue opportunities to increase their utility.

generally disregard the interests of others.

are mainly creatures of habit.

are usually impulsive and unpredictable.

9.

1 point

A normative statement is one that:

is based on the law of averages.

applies only to microeconomics.

applies only to macroeconomics.

is based on value judgments.

10.

1 point

Macroeconomics approaches the study of economics from the viewpoint of:

the entire economy.

governmental units.

the operation of specific product and resource markets.

individual firms.