economics midterm

According to the text, economics is

• 1. The principles describing how people, businesses, and governments ought to make financial choices

• 1. The science of how and why people, businesses, and government make the choices they do

• The description of systems man creates in order to produce, buy, and sell goods and services

• 1. The study of theories that guide nations' financial and monetary laws and systems

Which of the following examples falls into the sphere of economics?

• the rise and fall of the stock market

• a mothers trip to the supermarket

• a university class on business management

• all of the above

According to the text, which of the following is not a reason that economics is considered a science?

• economists being with observation

• economists deal with logical processes

• Economics use their findings to predict outcomes

• economists use their knowledge to control outcomes

Conservation of natural resources primarily shows a grasp of which economic concept?

• scarcity

• public good

• utility

• microeconomics

The economic cost of a good or service is

• 1. The price charged for it

• 1. The cumulative cost of making and marketing it

• 1. The regret a customer feels after choosing it

• 1. The value people place on it

According to the Austrian economist Carl Menger, what determines the value of an object?

• 1. The labor of the producer

• 1. The quality of the raw materials

• 1. The utility for the user

• 1. The public good accomplished

Your family decides to take a trip to Europe this summer instead of next because airline rates are currently low. What economic concept do the lower airline rates illustrate in your decision-making process?

• 1. Opportunity cost

• 1. Opportunity benefit

• 1. Hidden cost

• 1. Intrinsic value

What principle does Henry Hazlitt remind readers of in his story about the broken window?

• scarcity

• stewardship

• hidden cost

• the cost of labor

 Which of the following statements is an example of positive economics?

• 1. The unemployment rate is 6%

• 1. Unemployment is worse than inflation

• 1. The major economic goal of our nation should be a low level of unemployment

• 1. We need to pray every day that God will protect us from unemployment

What approach to economic study focuses on value judgments?

• 1. Microeconomics

• 1. Positive economics

• 1. Macroeconomics

• 1. Normative economics