LSUS MHA 710 ECONOMICS EXAM 1
CERTIFICATION EVALUATION TEST 2026
QUESTIONS AND ANSWERS GRADED A+
●● Which of the following are identification strategies used by
researchers to reduce selection bias in an observational study?
A. Propensity score matching
B. Difference-in-difference
C. Synthetic control.
Answer: All -
A. Propensity score matching
B. Difference-in-difference
C. Synthetic control
●● Producing at a point at which average product is maximized and
average variable cost is minimized..
Answer: Economic efficiency
●● A situation that exist when the amount of good or service demanded
in the aggregate exceeds the amount available at a zero price..
Answer: Scarcity
,●● Opportunity Cost.
Answer: The cost of a decision based on the value of the foregone
opportunity
●● A metaphor introduced by Adam Smith describing the role that
markets play in promoting the efficient allocation of resources.
Answer: Invisible hand
●● A paradox in game theory where players acting in their own self-
interest choose their dominant strategies and do not achieve the optimal
outcome. In such cases, cooperation, not competition, will result in a
more profitable outcome..
Answer: Prisoner's delimma
●● A situation that emerges when all players in a noncooperative game
choose their dominant strategy and have nothing to gain (and can only
lose) by changing from their initial strategies..
Answer: Nash equilibrium
●● A key behavioral assumption in neoclassical economics that decision
makers act in a purposeful manner. In other words, their actions are
direct toward achieving an objective..
Answer: Rational behavior
, ●● Microeconomics is the study of....
Answer: individual decision making, pricing behavior, and market
organization
●● A state in which consumers stop seeking information on a
prospective purchase because the expected cost of the additional search
exceeds the expected benefits.
Answer: Rational ignorance
●● Incentives are....
Answer: anything that motivates individuals to take certain actions
●● When individuals choose to limit their demand for goods and
services voluntarily to save money.
Answer: Economizing behavior
●● Optimizing behavior or optimization is a technique used to
determine....
Answer: the best or most favorable outcome in a particular sitaution
●● A problem of resource allocation faced by all decision makers: what
to produce, how to produce it, and who receives it.
Answer: Economic problem
CERTIFICATION EVALUATION TEST 2026
QUESTIONS AND ANSWERS GRADED A+
●● Which of the following are identification strategies used by
researchers to reduce selection bias in an observational study?
A. Propensity score matching
B. Difference-in-difference
C. Synthetic control.
Answer: All -
A. Propensity score matching
B. Difference-in-difference
C. Synthetic control
●● Producing at a point at which average product is maximized and
average variable cost is minimized..
Answer: Economic efficiency
●● A situation that exist when the amount of good or service demanded
in the aggregate exceeds the amount available at a zero price..
Answer: Scarcity
,●● Opportunity Cost.
Answer: The cost of a decision based on the value of the foregone
opportunity
●● A metaphor introduced by Adam Smith describing the role that
markets play in promoting the efficient allocation of resources.
Answer: Invisible hand
●● A paradox in game theory where players acting in their own self-
interest choose their dominant strategies and do not achieve the optimal
outcome. In such cases, cooperation, not competition, will result in a
more profitable outcome..
Answer: Prisoner's delimma
●● A situation that emerges when all players in a noncooperative game
choose their dominant strategy and have nothing to gain (and can only
lose) by changing from their initial strategies..
Answer: Nash equilibrium
●● A key behavioral assumption in neoclassical economics that decision
makers act in a purposeful manner. In other words, their actions are
direct toward achieving an objective..
Answer: Rational behavior
, ●● Microeconomics is the study of....
Answer: individual decision making, pricing behavior, and market
organization
●● A state in which consumers stop seeking information on a
prospective purchase because the expected cost of the additional search
exceeds the expected benefits.
Answer: Rational ignorance
●● Incentives are....
Answer: anything that motivates individuals to take certain actions
●● When individuals choose to limit their demand for goods and
services voluntarily to save money.
Answer: Economizing behavior
●● Optimizing behavior or optimization is a technique used to
determine....
Answer: the best or most favorable outcome in a particular sitaution
●● A problem of resource allocation faced by all decision makers: what
to produce, how to produce it, and who receives it.
Answer: Economic problem
