34. A useful theory must
D. not be able to be refined.
35. Which of the following best exemplifies the theorizing step in the scientific process?
D. Drawing a graph of the relationship between gasoline prices and the amount of gasoline sold
at each price.
36. A model
D. cannot be qualitative in nature.
37. Which of the following is NOT a reason why economists usually work with mathematical
models?
A. Because most economic choices are quantitative in nature.
38. In order to explain how societies deal with the problem of scarcity, economists apply
simplified representations known as
A. simplifying assumptions.
39. The real test of a good model is
A. its degree of mathematical rigor.
40. Economists use assumptions in order to
D. avoid using mathematics.
41. In a natural experiment,
D. similar people face very similar circumstances.
42. The application of statistical methods to empirical questions in economics is known as
A. positive economic analysis.
43. The accumulation of scientific evidence can
D. always settle disputes over public policy.
44. A small adjustment in a choice is called
D. a net change.
45. Which of the following statements is false?
A. Recognizing tradeoffs is an essential part of good decision making.
46. Suppose you are thinking about spending an additional hour studying for your next
microeconomics exam. You should spend that extra hour studying as long as
A. the extra study time leads to a higher grade on the exam.
47. An increase in the price of a good
D. decreases both the incentive to buy the good and the incentive to sell the good.
48. Which of the following is NOT a beneficial aspect of trade?
A. Someone who owns a good of relatively little value can trade it for something they value more.
49. The competitive market price of a good
D. must be less than what consumers are willing to pay for an additional unit of the good.
50. In a situation where a market failure occurs,
A. any government intervention will improve on the market outcome.
51. According to the text, which of the following best describes the process the FCC used to
allocate spectrum licenses to telecommunications providers?
A. Licenses were auctioned one at a time, to the highest bidder.
Essay Questions
52. Scarcity forces society to confront three critical issues. List those issues and explain how
they are related to the problem of scarcity.
53. Compare and contrast the institutions of a capitalist economy with those of a communist
economy.
54. Contrast positive and normative economics. How can economists carry out normative
analysis?
55. What are the roles of markets and prices in an economy?
56. How does marriage fall within the scope of microeconomics?
57. How would you apply the scientific process to the question of why men typically earn
more than women?
58. Using the Themes of Microeconomics, provide an economic explanation of your decision
to attend college. How would you explain your decision to take your microeconomics class?