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