1. The economic way of thinking has to do with:
a. analyzing benefits but not costs.
b. making choices at the margin.
c. analyzing costs but not benefits.
d. making the distinction between microeconomics and macroeconomics.
2. An increase in the demand for gasoline today caused by concerns that gasoline prices will be higher tomorrow is most likely attributable to which demand shifter?
a. consumer preferences
b. income
c. prices of other goods
d. consumer expectations
3. A basic assumption used in many economic models is
a. if the underlying theory doesn't represent reality, it is not useful
b. ceteris paribus, which means all other things remain unchanged.
c. as price goes up, the amount purchased will go up too.
d. as price goes up, less will be offered for sale on the market.
4. When economists study the behavior of buyers, they are studying
a. the role of government.
b. psychology.
c. supply.
d. demand.