These questions are meant to address goal 1 from the social science assessment for the principles of economics (ECON 2105 & 2106) classes. Goal 1 is stated as "Students effectively analyze contemporary issues within the context of diverse disciplinary contexts." These questions were selected from the Colander textbook electronic test generator; they represent the set of questions in the testbank from the required chapters of the text (as listed on the GSU economics department syllabi for ECON 2105 & 2106) that may be used to assess goal 1. ECON 2105 & 2106 instructors may select questions from this list to place on exams (if they choose not to use the webct quiz created by Shelby Frost) - they are NOT to share this website with students. If you have questions or comments about the economics department's social science assessment procedures, email Shelby Frost at sfrost@gsu.edu. This file is interactive; select your answers and click on the "grade the test" button at the bottom of the page to see the correct answers and get feedback on each question. If you have additional questions to contribute (from the required chapters of the Colander text), please email them to Shelby Frost. Check back to this link often, as the list of acceptable questions is meant to be edited over time.



1.
A generalization about the workings of an abstract economy is called:
A.
an economic theory.
B.
an economic institution.
C.
an economic policy.
D.
a cultural norm


2.
A social force is often:
A.
a generalization about the workings of an abstract economy.
B.
a physical or mental structure that significantly influences economic decisions.
C.
an action taken to influence the course of economic events.
D.
a cultural norm.


3.
According to the theory of the invisible hand, __________ direct people's selfish desires tempered by __________ to the common good.
A.
political forces; social and economic forces
B.
social forces; political and economic forces
C.
economic forces; political and social forces
D.
social and political forces; economic forces


4.
All of the following determine whether an economic force becomes a market force except:
A.
the strength of the invisible hand.
B.
political and legal forces
C.
the forces of scarcity.
D.
social and cultural forces.


5.
An action taken by a government to influence the course of economic events is:
A.
an economic theory.
B.
an economic institution.
C.
an economic policy.
D.
a cultural norm.


6.
An economic force cannot be prevented from becoming a market force by:
A.
the invisible hand.
B.
social forces.
C.
the legal system.
D.
political forces.


7.
An economic model is:
A.
a framework that places the generalized insights of the theory in a more specific context.
B.
a commonly held economic insight stated as a law or general assumption.
C.
a generalization about the workings of an abstract economy.
D.
an action taken to influence the course of economic events.


8.
An economic principle is:
A.
a framework that places the generalized insights of the theory in a more specific context.
B.
a commonly held economic insight stated as a law or general assumption.
C.
a generalization about the workings of an abstract economy.
D.
an action taken to influence the course of economic events.


9.
Antitrust laws are an example of:
A.
social forces.
B.
political forces.
C.
economic forces.
D.
the invisible hand.


10.
Economic reasoning can help you decide all of the following except:
A.
whether to sleep late tomorrow.
B.
whether to join the military.
C.
whether to get married.
D.
whether abortion is right or wrong.


11.
Economic reasoning is based on the premise that:
A.
all decisions or actions are costless.
B.
only non-economic decisions or actions have a cost associated with them.
C.
only economic decisions or actions have a cost associated with them.
D.
all decisions and actions have a cost associated with them.


12.
Economic reasoning:
A.
provides a framework with which to approach questions.
B.
provides correct answers to just about every question.
C.
is only used by economists.
D.
should only be applied to economic business matters.


13.
Economics is:
A.
both a laboratory science and an observational science.
B.
an observational science.
C.
a laboratory science.
D.
neither a laboratory science nor an observational science.


14.
Economics would be considered a science if:
A.
it relied entirely on normative analysis.
B.
it relied entirely upon positive analysis
C.
it blended positive and normative analyses.
D.
it relied more on the art of economics.


15.
Economists argue that:
A.
there is an opportunity cost associated with all decisions.
B.
economic decisions do not have opportunity costs but other decisions do.
C.
economic decisions have opportunity costs but other decisions do not.
D.
decisions do not have opportunity costs.


16.
Hunting permits are obtained from the government, not the market. It follows that the allocation of hunting permits is:
A.
not an economic problem.
B.
is nonetheless an economic problem.
C.
is a political problem but not an economic problem.
D.
is a social problem but not an economic problem.


17.
If course registration no longer occurs by rank but by who shows up first, then:
A.
it becomes an economic problem.
B.
it becomes a political problem but not an economic problem.
C.
it becomes a social problem but not an economic problem.
D.
the allocation problem is still an economic problem.


18.
If people behaved irrationally:
A.
market forces would dominate political and social forces.
B.
market forces would still produce efficient outcomes.
C.
the price mechanism would still function.
D.
the invisible hand wouldn't work.


19.
If we lived in a society where people were not selfish, then
A.
the three central economic problems would no longer exist.
B.
the three central economic problems would still exist.
C.
there would be a political problem but not an economic problem.
D.
there would be a social problem but not an economic problem.


20.
In some countries, it is illegal to own handguns. Despite these laws, handguns are usually available at a price many times higher than would be the case if they were legal. The high price of handguns in these cases is an example of:
A.
the invisible hand affecting political forces.
B.
political forces affecting the invisible hand.
C.
the failure of the invisible hand.
D.
the failure of political forces.


21.
In the U.S. economy, who is in charge of organizing and coordinating overall economic activities?
A.
Government.
B.
Corporations.
C.
No one.
D.
Consumers.


22.
Individuals are prohibited from practicing medicine without a license. This is an example of:
A.
the invisible hand.
B.
social forces.
C.
political forces.
D.
market forces.


23.
Jerry is sitting in an arcade playing a machine that costs $1 per game. According to the economic decision rule, Jerry will certainly quit playing when:
A.
the marginal benefit to him of an additional game falls below $1.
B.
the marginal cost to him of an additional game falls below the marginal benefit.
C.
the marginal cost to him of an additional game rises above $1.
D.
the average benefit to him of all games is $1.


24.
Many industries routinely contribute large amounts of money to the election campaigns of politicians. This is likely an example of an attempt to influence:
A.
economic forces.
B.
political forces.
C.
social forces.
D.
the price mechanism.


25.
Rationing devices that our society uses include:
A.
the invisible hand only.
B.
the invisible hand and social forces only.
C.
the invisible hand and political forces only.
D.
the invisible hand, social forces, and political forces.


26.
Scarcity exists because economies provide individuals with incentives to solve the three central coordination problems.
A. True
B. False


27.
Social and political forces do not affect the way in which the invisible hand works.
A. True
B. False


28.
Social forces:
A.
affect the price mechanism through cultural norms.
B.
affect the price mechanism through the legal system.
C.
affect the price mechanism through scarcity.
D.
do not affect the price mechanism.


29.
Suppose the marginal cost of dating Sandy is 40 while the marginal benefit is 30. Following economic reasoning you should:
A.
date Sandy.
B.
not date Sandy.
C.
determine what your sunk costs are.
D.
determine what your total benefits and total costs are.


30.
The cost of buying or selling stocks has fallen sharply over the last decade. This is likely an example of ________ at work.
A.
economic forces
B.
political forces
C.
social forces
D.
non-market forces


31.
The economy is the institutional structure through which:
A.
individuals in a society coordinate their wants and desires.
B.
governments allocate scarce resources.
C.
social and political forces allocate resources.
D.
economic forces are translated into political and social forces.


32.
The fact that the Internal Revenue Service collects income taxes is an example of
A.
social forces.
B.
political forces.
C.
the invisible hand.
D.
the price mechanism.


33.
The fact that the price of ice cream is likely to be more expensive at the beach than at a supermarket is an example of:
A.
market forces.
B.
political forces.
C.
social forces.
D.
normative economics.


34.
The invisible hand is:
A.
not affected by social and political forces.
B.
affected by social but not political forces.
C.
affected by political but not social forces.
D.
affected by both political and social forces.


35.
The invisible hand refers to:
A.
the role of government in a market economy.
B.
the price mechanism that guides economic actions.
C.
political forces.
D.
social forces.


36.
The marginal benefit of going to a movie during the week is currently $8 for you and the marginal cost is $6, which is just the price of admission. Following the economic decision rule, you will
A.
continue going to movies until the marginal benefit of doing so falls to zero.
B.
choose not to go to any movies during the week.
C.
continue going to movies until the marginal benefit falls below $6.
D.
not be able to enjoy a net gain from going to the movies during the week.


37.
The marginal benefit to June of attending a play is $50. The marginal cost of attending a play is $40. Assuming June uses economic reasoning, she will:
A.
enjoy a net loss by attending a play.
B.
not choose to attend a play.
C.
be indifferent about attending a play.
D.
choose to attend a play.


38.
To engage in economic reasoning, you must compare:
A.
total cost and marginal cost.
B.
sunk cost, total cost, and total benefit.
C.
total benefit and marginal benefit.
D.
marginal cost and marginal benefit.


39.
Which of the following is not an economic institution?
A.
A multinational corporation.
B.
Tax laws.
C.
Congress.
D.
All the options represent economic institutions.


40.
Which of the following statements is true?
A.
Economic forces are more powerful than social and political forces.
B.
Economic forces are more powerful than social forces but less powerful than political forces.
C.
Economic forces are less powerful than social and political forces.
D.
Economic forces can be more or less powerful than political and social forces depending on the circumstances.


41.
You're deciding whether to install a $800 moonroof and a $400 security system in your car. Suppose the marginal benefit from the moonroof is $650 while the marginal benefit from the security system is $500. The economic decision rule dictates that you should:
A.
purchase only the moonroof.
B.
purchase only the security system.
C.
purchase both options.
D.
purchase neither option.



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