Question 1

Which of the following best describes the difference between microeconomics and macroeconomics?

Accepted Answer

Microeconomics analyzes decision-making by individual households and firms, while macroeconomics examines economy-wide phenomena such as inflation and unemployment.

Question 2

Which of the following is NOT one of the three basic economic questions every society must answer?

Accepted Answer

Who will produce the items?

Question 3

Suppose a government introduces a $100 debit card incentive for individuals who receive a COVID-19 vaccination. This is an example of:

Accepted Answer

A positive incentive

Question 4

Which statement is an example of positive economics?

Accepted Answer

If the price of admission to NHL hockey games is reduced, there will be an increase in attendance.

Question 5

The ceteris paribus assumption is used in economic analysis to:

Accepted Answer

Isolate the effect of one variable by holding other relevant factors constant.

Question 6

Which of the following best illustrates a trade-off in economics?

Accepted Answer

Choosing to spend more time studying means less time for leisure activities.

Question 7

Behavioral economics differs from traditional economics primarily because it:

Accepted Answer

Emphasizes psychological factors that may interfere with rational decision-making.

Question 8

Which of the following is a dependent variable in a graph showing the relationship between price and quantity purchased?

Accepted Answer

Quantity purchased

Question 9

If the slope of a line is calculated as $$\frac{\Delta y}{\Delta x}$$, what does a positive slope indicate?

Accepted Answer

As $$x$$ increases, $$y$$ increases.

Question 10

Which of the following statements about economic models is correct?

Accepted Answer

Economic models are simplified representations used to make predictions about the real world.

Question 11

A market system is characterized by:

Accepted Answer

Decentralized decisions where prices act as signals for exchanges.

Question 12

Which of the following is an example of a direct relationship between two variables?

Accepted Answer

As the number of hours studied increases, exam scores increase.

Question 13

Suppose the slope of a nonlinear curve is zero at a certain point. What does this indicate about the curve at that point?

Accepted Answer

The curve has reached a maximum or minimum at that point.

Question 14

Which of the following best describes the rationality assumption in microeconomics?

Accepted Answer

Individuals act as if motivated by self-interest and respond to opportunities for gain.

Question 15

Which of the following is a normative economic statement?

Accepted Answer

Society should provide free access to dental care.

Question 16

If a survey asks people if they would stop buying a product if its price doubled, but in reality most do not change their behavior, this illustrates:

Accepted Answer

The difference between declared and true preferences.

Question 17

Which formula correctly represents the slope of a line?

Accepted Answer

$$\frac{\Delta y}{\Delta x}$$

Question 18

Which of the following is NOT a feature of economics as an empirical science?

Accepted Answer

It ignores evidence and relies only on assumptions.

Question 19

A command and control (central planning) system is characterized by:

Accepted Answer

All economic decisions made by a central authority.

Question 20

Which of the following best describes bounded rationality in behavioral economics?

Accepted Answer

People seek satisfactory solutions and use rules of thumb, which may lead to suboptimal decisions.

Microeconomics Study Notes: The Nature of Economics (ECON1110, Chapter 1)

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