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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 are negative results which occur while trying to achieve a goal for the common good?
(a) Abstract incentives.
(b) Perverse incentives.
(c) Ghost incentives.
(d) Unknown incentives.

2. Douglas Ivester was appointed as Chairman and Chief Executive Officer of Coca-Cola Company after whose death?
(a) Mark Miringhoff.
(b) Roberto Goizueta.
(c) Ronald Coase.
(d) George Stigler.

3. When did Ross Perot found Electronic Data Systems?
(a) 1955.
(b) 1977.
(c) 1971.
(d) 1962.

4. In what year did Douglas Ivester tell his sales team to pass free Coca-Cola around as the Berlin Wall toppled?
(a) 1977.
(b) 1989.
(c) 1982.
(d) 1969.

5. What is an economic model of price determination in a market that concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers?
(a) Supply and demand.
(b) Money market.
(c) Floating exchange rate.
(d) Adverse selection.

Short Answer Questions

1. When was the Hope credit established?

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

3. According to the author in Chapter 1, companies want to profit, and consumers want what?

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

5. In what year did the French government try to address its unemployment rates with what the author calls the economic equivalent of fool's gold?

Short Essay Questions

1. How does the author describe the tactics used by OPEC in Chapter 1?

2. How does the author of the Foreword describe the focus the book of "Naked Economics: Undressing the Dismal Science"? Does he find it balanced? Why?

3. How does human capital relate to productivity? How does this in turn reflect the economic well-being of a nation, according to the author in Chapter 6?

4. What are the second through fourth of the basic needs the author boils down for investment markets in Chapter 7?

5. What investment tactic is recommended for the average investor without much expertise in the market in Chapter 7?

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

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

8. What human fallacies does the author address in the beginning of Chapter 7?

9. What is the difficulty of studying economics, according to the author of the Foreword? What is the role of economics in everyday activities?

10. What are the ramifications of decisions made in the world of finance and legislation, according to the author in the Introduction?

(see the answer keys)

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