ECON 252 Chapter 1 Review Questions with Correct Answers
(Grade A+)
Question 1: The definition of economics states that it is the study of how:
A. businesses make decisions and how those decisions impact other firms, the government, and consumers
B. money influences the economy in the short run and the long run
C. agents choose to allocate scarce resources and the impact of those choices on society
D. the government determines policies, businesses set prices, and consumers choose how much to buy
Answer: C. agents choose to allocate scarce resources and the impact of those choices on society
Question 2: Microeconomics is studies ____________, while macroeconomics studies
________________.
A. a small piece of the overall economy; the economy as a whole
B. money; policy
C. economy-wide phenomena; decisions made by the government
D. issues relating to businesses; choices made by individuals and consumers
Answer: A. a small piece of the overall economy; the economy as a whole
Question 3: Policy decisions made by the government are analyzed by:
A. neither microeconomics nor macroeconomics
B. only macroeconomics
C. both microeconomics and macroeconomics
D. only microeconomics
Answer: C. both microeconomics and macroeconomics
Question 4: A policy such as taxes on cigarettes would be studied under _______________.
Answer: microeconomics
Question 5: Normative statements describe ___________________ but are not able to be
__________________.
Answer: what should be done; confirmed with data
Question 6: describes a situation where people weigh costs and benefits when making a decision
Answer: optimization
Question 7: describes a situation where no one could benefit from changing his or her behavior
Answer: equilibrium
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(Grade A+)
Question 1: The definition of economics states that it is the study of how:
A. businesses make decisions and how those decisions impact other firms, the government, and consumers
B. money influences the economy in the short run and the long run
C. agents choose to allocate scarce resources and the impact of those choices on society
D. the government determines policies, businesses set prices, and consumers choose how much to buy
Answer: C. agents choose to allocate scarce resources and the impact of those choices on society
Question 2: Microeconomics is studies ____________, while macroeconomics studies
________________.
A. a small piece of the overall economy; the economy as a whole
B. money; policy
C. economy-wide phenomena; decisions made by the government
D. issues relating to businesses; choices made by individuals and consumers
Answer: A. a small piece of the overall economy; the economy as a whole
Question 3: Policy decisions made by the government are analyzed by:
A. neither microeconomics nor macroeconomics
B. only macroeconomics
C. both microeconomics and macroeconomics
D. only microeconomics
Answer: C. both microeconomics and macroeconomics
Question 4: A policy such as taxes on cigarettes would be studied under _______________.
Answer: microeconomics
Question 5: Normative statements describe ___________________ but are not able to be
__________________.
Answer: what should be done; confirmed with data
Question 6: describes a situation where people weigh costs and benefits when making a decision
Answer: optimization
Question 7: describes a situation where no one could benefit from changing his or her behavior
Answer: equilibrium
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