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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

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

2. The horns of the black rhinoceros are used to make what for the Yemenese people, according to the author in Chapter 2?
(a) Daggers.
(b) Funnels.
(c) Necklaces.
(d) Paperweights.

3. According to Burton G. Malkiel in the Forward, economists often don't show a connection to what?
(a) Everyday life.
(b) Wall Street.
(c) Mathematics.
(d) Statistics.

4. What represents the original capital paid into or invested in the business by its founders?
(a) Collateral.
(b) Pork barrel.
(c) Bond.
(d) Stock.

5. What term was first used in the early 1990s to denote an organization's reputation as an employer?
(a) The Juche Idea.
(b) Futures contract.
(c) Employer branding.
(d) Trade-off.

Short Answer Questions

1. When did the Korean War end?

2. Gary Becker is a professor of economics, sociology at what institution?

3. Gary Becker received the United States Presidential Medal of Freedom in what year?

4. In Chapter 6, the author discusses poverty and income equality, using the example of what billionaire?

5. The Cuban Revolution deposed what dictator?

Short Essay Questions

1. How does the author describe the concept of maximizing profits in Chapter 1? What examples does he give?

2. What lessons can be learned from a monopoly situation according to the author in Chapter 4?

3. How do the resources of a country reflect its economic well-being, according to the author in Chapter 6?

4. What is the basic set of rules put forth by the author for those looking to invest in Chapter 7? How are risk and reward described?

5. What do economists assume about human nature and motivation, according to the author in Chapter 1?

6. How is adverse selection described in the example of Hope Scholarships in Chapter 4?

7. What example does the author give for the negative effect of incentives in Chapter 2?

8. How has the market economy contributed to a higher standard of living in America, according to the author in Chapter 1?

9. What examples does the author give for the uninformed relaying false information in the Introduction?

10. What is a "diversified portfolio"? What does the author state regarding this in Chapter 7?

(see the answer keys)

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