affect society. An economic agent is an individual or a group that makes choices.
Difficulty: Easy
AACSB: Analytical Thinking
Topic: Economic Agents and Economic Resources
8) Economics is primarily the study of ________.
A) the mental functions and behavior of individuals and groups
B) the state, nation, government, and politics and policies of governments
C) the problems related to the existence and evolution of society
D) how agents choose to allocate scarce resources and how these choices affect society
Answer: D
Difficulty: Easy
AACSB: Analytical Thinking
Topic: Definition of Economics
9) Economics is primarily the study of ________.
A) the relationship between matter and its motion
B) agentsʹ choices and their impact on society
C) events of the past and how these events affect present human behavior
D) the different types of governments and the impact of their policies on a nation
Answer: B
Difficulty: Easy
AACSB: Analytical Thinking
Topic: Definition of Economics
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10) ________ is analysis that generates objective descriptions or predictions about the world that can be
verified with data.
A) Positive economics
B) Negative economics
C) Microeconomics
D) Normative economics
Answer: A
Difficulty: Easy
AACSB: Analytical Thinking
Topic: Positive Economics and Normative Economics
11) Which of the following is an example of a positive economic statement?
A) The pricing policies followed in single‐producer markets should be strictly supervised.
B) Unemployment is more harmful than inflation.
C) Higher interest rates will encourage more savings.
D) Pollution is one of the most serious economic problems.
Answer: C
Difficulty: Medium
AACSB: Application of Knowledge
Topic: Positive Economics and Normative Economics
12) Which of the following is an example of a positive economic statement?
A) The government should ideally work as a welfare state.
B) An increase in income causes an increase in savings.
C) Economics is the most useful social science.
D) Eliminating poverty is more important than reducing inflation.
Answer: B
Difficulty: Medium
AACSB: Application of Knowledge
Topic: Positive Economics and Normative Economics
13) ________ economics prescribes what an individual or society ought to do.
A) Positive
B) Negative
C) Behavioral
D) Normative
Answer: D
Difficulty: Easy
AACSB: Analytical Thinking
Topic: Positive Economics and Normative Economics
14) Which of the following is an example of a normative economic statement?
A) A cut in the tax rate will lead to an increase in consumption.
B) Relaxation of import duties will encourage imports.
C) An increase in subsidies to farmers will boost agricultural production.
D) An increase in social security benefits will increase the welfare of all economic agents.