Which of the following is the study of “what is” rather than “what ought to be”?

Question 1Which of the following is the study of “what is” rather than “what ought to be”?

  normative theory

  institutionalism

  subjectivism

  positive theory

Question 2Along with the other social sciences, economics is specifically and primarily concerned with __________.

  the behavior of human beings both as individuals and in groups

  the actions of international monetary agencies

  the laws of mathematics as they apply to decision making

  the economic practices of international agencies

Question 3Irene, who is an economist, tells Ronald, who is a business columnist, that if interest rates remain this low, she expects next year’s inflation rate to be 7%. This statement is a(n) __________.

  positive theory

  microeconomic calculation

  prediction that derives from a model

  economic forecast

Question 4In a market economy system, who most often enforces property rights?

  the government

  consumers

  central planners

  businesses

Question 5Which of the following is LEAST likely to be a public good?

  a park

  an army

  a party

  a sunset

Question 6Which of the following would be described as capital by an economist?

  a corporation’s petroleum reserves

  the power lift in a service station

  common stocks

  government bonds

Question 7The directing function of prices ensures that __________.

  consumers and businesses participate in proper markets

  production will increase for goods with more intense demands

  consumers know how to get correct market information

  prices will always move in the right direction

Question 8Best Western University wants to increase the size of its student body by shifting the demand curve for its educational services to the right. Which of the following will most likely NOT shift its demand curve to the right?

  a “best buy” rating in a national magazine

  an improved record in student job placements

  really popular, winning sports teams

  lower tuition and lower prices on textbooks

 Question 9Following the law of demand, if the U.S. Postal Service raises the price of first-class mail, ceteris paribus, what will happen to the demand for postage stamps?

  Demand will increase.

  Demand will be unchanged, but quantity demanded will fall.

  Demand will decrease.

  Demand will be unchanged, but quantity demanded will rise.

Question 10What does an economist suggest that efficient allocation of resources by the market means?

  Producers determine what to produce, and consumers buy it.

  Adam Smith’s “invisible hand” has been circumvented.

  Every individual who wants a product gets it.

  The products desired by a society are produced.