Mathematical economics - Quiz
  • 1. Mathematical economics is a branch of economics that utilizes mathematical methods to represent economic theories and analyze economic problems. It combines economic theory with mathematical tools to develop models that can help explain and predict economic behavior. By using mathematical equations and models, economists can quantify relationships between various economic variables and study the impact of different policies and factors on economic outcomes. Mathematical economics has applications in various fields, such as finance, game theory, decision theory, and microeconomics. It allows economists to formulate precise hypotheses, conduct rigorous analysis, and make informed policy recommendations based on data and evidence.

    In economics, what does the term 'equilibrium' refer to?
A) A state of maximum production
B) A state of constant change
C) A state where supply equals demand
D) A state of chaos in the market
  • 2. What does the concept of 'marginal utility' measure?
A) Price of the last unit of a good purchased
B) Total quantity of a good consumed
C) Additional satisfaction gained from consuming one more unit of a good
D) Total satisfaction gained from consuming a good
  • 3. Which economic theory focuses on the relationship between production capacity and inflation?
A) Phillips curve
B) Keynesian economics
C) Chicago school of economics
D) Austrian economics
  • 4. What is the purpose of game theory in economics?
A) To analyze strategic interactions between rational decision-makers
B) To predict market trends
C) To study historical economic data
D) To design economic policies
  • 5. What is the purpose of linear programming in economic analysis?
A) To analyze historical trends
B) To forecast future demand
C) To optimize resource allocation given constraints
D) To graph economic data
  • 6. What is 'opportunity cost' in economics?
A) Cost of resources used in production
B) Price of a good in a competitive market
C) Total cost of production
D) The value of the best alternative forgone in order to make a particular choice
  • 7. Which economic concept is used to measure the responsiveness of quantity demanded to a price change?
A) Income effect
B) Market equilibrium
C) Cross-price elasticity
D) Elasticity of demand
  • 8. What does 'Pareto efficiency' refer to in welfare economics?
A) Allocation of resources where no individual can be made better off without making another worse off
B) Elimination of poverty
C) Equal distribution of wealth
D) Maximum total utility for all individuals
  • 9. In utility theory, what does the 'indifference curve' represent?
A) Curve indicating increasing marginal utility
B) Curve showing only one optimal choice
C) Curve representing diminishing marginal utility
D) All combinations of goods that provide the same level of utility to a consumer
  • 10. Who is credited with coining the term 'statistics'?
A) John Maynard Keynes
B) Johann Heinrich von Thünen
C) Sir William Petty
D) Gottfried Achenwall
  • 11. What was the term used by a group of professors in England for reasoning with figures related to government?
A) Statistical Analysis
B) Political Arithmetick
C) Mathematical Economics
D) Economic Calculus
  • 12. Which economist's work is considered the first example of marginal analysis?
A) Sir William Petty
B) Johann Heinrich von Thünen
C) W.S. Jevons
D) John Maynard Keynes
  • 13. Who presented a paper on the 'general mathematical theory of political economy' in 1862?
A) W.S. Jevons
B) Robert Heilbroner
C) Gottfried Achenwall
D) Friedrich Hayek
  • 14. What did W.S. Jevons declare political economy must be, due to its dealing with quantities?
A) Qualitative
B) Mathematical
C) Theoretical
D) Empirical
  • 15. Who criticized the broad use of mathematical models for human behavior?
A) John Maynard Keynes, Robert Heilbroner, Friedrich Hayek
B) Johann Heinrich von Thünen, W.S. Jevons
C) Gottfried Achenwall, Sir William Petty
D) None of the above
  • 16. What was the main method used in economic analysis before the 19th century?
A) Game theory
B) Matrix algebra
C) Algebraic means
D) Differential calculus
  • 17. Which economist's work was largely ignored by English scholars despite its influence?
A) Gottfried Achenwall
B) W.S. Jevons
C) Johann Heinrich von Thünen
D) Sir William Petty
  • 18. Who are considered the precursors to modern mathematical economics?
A) Augustin Cournot, Léon Walras, and Francis Ysidro Edgeworth
B) John Maynard Keynes, Milton Friedman, and Paul Samuelson
C) Adam Smith, David Ricardo, and John Stuart Mill
D) Karl Marx, Friedrich Hayek, and Joseph Schumpeter
  • 19. How is the market price determined in Cournot's duopoly model?
A) By the cost of production for each seller
B) By the individual demand curve of each seller
C) By government regulation
D) By the total quantity supplied by both sellers
  • 20. What type of equilibrium can Cournot's solution be considered as in modern terms?
A) Kaldor-Hicks efficiency
B) Pareto efficiency
C) Nash equilibrium
D) Walrasian equilibrium
  • 21. What was the initial reception of Cournot's contributions to economics?
A) Implemented in policy immediately
B) Rejected entirely without consideration
C) Immediately accepted and celebrated
D) Neglected for decades
  • 22. How many separate models of exchange did Walras originally present?
A) Four
B) Three
C) Five
D) Two
  • 23. What does Walras' law state about markets reaching equilibrium?
A) Only one market needs to clear for all others to follow
B) If n-1 markets cleared, the nth market would clear as well
C) All markets must clear simultaneously
D) Markets cannot reach equilibrium independently
  • 24. How many markets does Walras use to illustrate his law most easily?
A) Four
B) Two
C) Three
D) Five
  • 25. In which year did Francis Ysidro Edgeworth publish 'Mathematical Psychics: An Essay on the Application of Mathematics to the Moral Sciences'?
A) 1924
B) 1905
C) 1881
D) 1878
  • 26. What concept did Edgeworth adopt from Jeremy Bentham in his economic model?
A) Felicific calculus
B) Opportunity cost
C) Marginal utility
D) Utilitarianism
  • 27. Who graphically developed the two-person solution to Edgeworth's problem in 1924?
A) Edwin Robert Anderson Seligman
B) Jeremy Bentham
C) Arthur Lyon Bowley
D) Harold Hotelling
  • 28. Who later confirmed Edgeworth's findings about the effect of taxes on prices?
A) Harold Hotelling
B) Edwin Robert Anderson Seligman
C) Jeremy Bentham
D) Arthur Lyon Bowley
  • 29. Who first applied differential calculus to analyze microeconomics by treating decisions as attempts to change allocations of goods?
A) Paul Samuelson
B) Vilfredo Pareto
C) Alfred Marshall
D) John von Neumann
  • 30. What term is used to describe sets of allocations where no exchanges can make at least one individual better off without making any other worse off?
A) Pareto efficient
B) Comparative statics
C) Invisible hand hypothesis
D) Walrasian equilibrium
  • 31. What mathematical concept did Paul Samuelson compare to tâtonnement?
A) Brouwer's fixed point theorem
B) Von Neumann's equilibrium model
C) Le Chatelier's principle
D) Pareto efficiency
  • 32. Which concept did von Neumann's model use only nonnegative matrices?
A) Differential calculus
B) Graph theory
C) Linear programming
D) Convex sets
  • 33. Who developed the model of input-output analysis in 1936?
A) Paul Samuelson
B) Von Neumann
C) Wassily Leontief
D) Leonid Kantorovich
  • 34. What type of technologies produce outputs using constant proportions of inputs?
A) Arrow–Debreu models
B) von Neumann technologies
C) Linear programming techniques
D) Leontief technologies
  • 35. Which economic theory posits that consumers maximize their utility subject to budget constraints?
A) Input-output economics
B) General equilibrium theory
C) Macroeconomics
D) Microeconomics
  • 36. In which decade was linear programming developed to aid resource allocation in Russia?
A) 1950s
B) 1960s
C) 1940s
D) 1930s
  • 37. During what event was linear programming used to plan the shipment of supplies to Berlin?
A) Cuban Missile Crisis
B) World War I
C) Cold War
D) Berlin airlift (1948)
  • 38. What is the primary objective in a nonlinear optimization problem?
A) Solve h_j(x)
B) Maximize f(x)
C) Minimize f(x)
D) Equalize g_i(x)
  • 39. What type of functions benefit most from convex duality?
A) Non-convex functions
B) Polyhedral convex functions
C) Linear functions
D) Quadratic functions
  • 40. In which field is Lagrangian duality and convex analysis used daily?
A) Pure mathematics
B) Operations research
C) Physics
D) Economics
  • 41. Which theory became more extensively used in economics after Richard Bellman's work on dynamic programming?
A) Optimal control theory
B) Functional analysis
C) Fixed-point theory
D) Variational calculus
  • 42. What did John von Neumann introduce to economic theory in his 1937 model?
A) Convex sets and fixed-point theory
B) Dynamic programming
C) Functional analytic methods including topology
D) Optimal control theory
  • 43. How did Kantorovich refer to prices in his models?
A) "Economic variables"
B) "Optimal functions"
C) "Objectively determined valuations"
D) "Market equilibria"
  • 44. Who worked with John von Neumann on the theory of games?
A) Oskar Morgenstern
B) John Nash
C) Reinhard Selten
D) John Harsanyi
  • 45. In what year did John von Neumann and Oskar Morgenstern make significant contributions to game theory?
A) 1994
B) 1944
C) 1951
D) 1965
  • 46. In which year did Nash, Harsanyi, and Selten receive the Nobel Memorial Prize in Economic Sciences?
A) 1994
B) 2001
C) 2010
D) 1985
  • 47. What does ACE stand for in economic modeling?
A) Applied calculus of economics
B) Advanced computational econometrics
C) Automated computational engineering
D) Agent-based computational economics
  • 48. When did the field of agent-based computational economics begin to emerge?
A) Mid-2000s
B) Early 1980s
C) About the 1990s
D) Late 1970s
  • 49. What paradigm does ACE fall under?
A) Complex adaptive systems
B) Behavioral finance
C) Quantum economics
D) Classical mechanics
  • 50. Who coined the term 'econometrics'?
A) Henry L. Moore
B) Trygve Haavelmo
C) Ragnar Frisch
D) Nicholas Kaldor
  • 51. Which journal was founded in 1933 to promote econometrics?
A) Journal of Political Economy
B) Quarterly Journal of Economics
C) Econometrica
D) The American Economic Review
  • 52. Who published 'The Probability Approach in Econometrics' in 1944?
A) Trygve Haavelmo
B) Ragnar Frisch
C) Nicholas Kaldor
D) Henry L. Moore
  • 53. What institution helped promote the linking of statistical analysis to economic theory in the 1930s and 1940s?
A) The Cowles Commission
B) National Bureau of Economic Research
C) Econometric Society
D) American Economic Association
  • 54. Who is credited with the formal derivation and exposition of the cobweb model?
A) Henry L. Moore
B) Nicholas Kaldor
C) Trygve Haavelmo
D) Ragnar Frisch
  • 55. What was the nature of Moore's first models of production?
A) Static
B) Dynamic
C) Empirical
D) Probabilistic
  • 56. In what year did Henry L. Moore publish his dynamic 'moving equilibrium' model?
A) 1892
B) 1925
C) 1933
D) 1944
  • 57. What percentage of articles in top economic journals in 2003 and 2004 lacked both statistical analysis and mathematical expressions?
A) 5.8%
B) 20%
C) 10%
D) 15%
  • 58. Who argued that economic problems which can be quantified should be treated by means of mathematical work?
A) Alfred Marshall
B) Adam Smith
C) John Maynard Keynes
D) Milton Friedman
  • 59. What has become increasingly important to professionals in economics and finance due to the sophistication of mathematical methods?
A) Econometrics
B) Mathematics
C) Programming
D) Statistics
  • 60. What type of problems often require the use of mathematical tools due to their complexity?
A) Basic economic theory
B) Economic problems with many variables
C) Simple arithmetic calculations
D) Qualitative research studies
  • 61. Which school of thought criticized the mathematization of economics?
A) Keynesian school
B) The Austrian school
C) Neoclassical schools
D) The Chicago school
  • 62. What did Milton Friedman say about economic model assumptions?
A) Assumptions are irrelevant to model performance.
B) 'All assumptions are unrealistic.'
C) Models should not be judged by their predictive performance.
D) Assumptions should always match reality.
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