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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. What refers to reasoning which constructs or evaluates deductive arguments?
(a) Decisive reasoning.
(b) Deductive reasoning.
(c) Critical reasoning.
(d) Constructive reasoning.

2. What is a mathematical equation for an unknown function of one or several variables that relates the values of the function itself and its derivatives of various orders?
(a) Differential equation.
(b) Derivative equation.
(c) Deductive equation.
(d) Depression equation.

3. Ross Perot ran for President of the United States in what year?
(a) 1988.
(b) 2000.
(c) 2002.
(d) 1992.

4. What does CEO stand for?
(a) Cheap Everpresent Oil.
(b) Continental Energy Options.
(c) Chief Executive Officer.
(d) Civil Engineer's Office.

5. In what political structure does the government set the price and decide what's on the shelves?
(a) Utopianism.
(b) Capitalism.
(c) Marxism.
(d) Communism.

6. Economists ignored signs of problems in what year because they didn't want to face what might happen in the future, according to the author in the Introduction?
(a) 1998.
(b) 2002.
(c) 2005.
(d) 1994.

7. According to the author in Chapter 2, the average annual income is what in the location where black rhinoceros horns are worth much on the black market?
(a) $6,000.
(b) $2,500.
(c) $8,700.
(d) $1,000.

8. What refers to the degree to which a correct forecast of a system's state can be made either qualitatively or quantitatively?
(a) Index.
(b) Predictability.
(c) Security.
(d) Recession.

9. What is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities?
(a) Asset allocation.
(b) Mutual fund.
(c) Index fund.
(d) Foreign Exchange Market.

10. What is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets?
(a) Subsidy.
(b) Derivative.
(c) Interest.
(d) Deductible.

11. What does OPEC stand for?
(a) Organization of Petroleum Exporting Countries.
(b) Oval Palace Executive Class.
(c) Oil and Petroleum Exclusion Clause.
(d) Original Plan Excluding Copyright.

12. Who led the Cuban Revolution?
(a) Roberto Goizueta.
(b) Fulgencio Batista.
(c) Fidel Castro.
(d) Nicholas Sarkozy.

13. According to the author, insurance companies want to save money while doctors want to help patients and avoid what?
(a) Spreading diseases.
(b) Losing their medical license.
(c) Getting sued.
(d) Unnecessary fatalities.

14. Gary Becker figured that the stock of skills, education, training and an individual's health constitutes about what percent of a modern economy's wealth?
(a) 35.
(b) 75.
(c) 42.
(d) 60.

15. Arab members of OPEC alarmed the developed world when they used the "oil weapon" during what war by implementing oil embargoes?
(a) The Jerusalem War.
(b) The Torah War.
(c) The Yom Kippur War.
(d) The Gaza War.

Short Answer Questions

1. Gary Becker was awarded the Nobel Memorial Prize in Economic Sciences in what year?

2. Michael Jensen refers to company stock options as what in Chapter 2?

3. What represents the original capital paid into or invested in the business by its founders?

4. Douglas Ivester was appointed as Chairman and Chief Executive Officer of Coca-Cola Company after whose death?

5. According to the author in Chapter 2, a horn from a black rhinoceros can fetch what amount on the black market?

(see the answer keys)

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