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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 constant change
B) A state of chaos in the market
C) A state of maximum production
D) A state where supply equals demand
  • 2. What does the concept of 'marginal utility' measure?
A) Total quantity of a good consumed
B) Total satisfaction gained from consuming a good
C) Additional satisfaction gained from consuming one more unit of a good
D) Price of the last unit of a good purchased
  • 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 predict market trends
B) To study historical economic data
C) To design economic policies
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 optimize resource allocation given constraints
C) To analyze historical trends
D) To graph economic data
  • 6. What is 'opportunity cost' in economics?
A) Cost of resources used in production
B) Total cost of production
C) The value of the best alternative forgone in order to make a particular choice
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) Elasticity of demand
C) Cross-price elasticity
D) Income effect
  • 8. What does 'Pareto efficiency' refer to in welfare economics?
A) Maximum total utility for all individuals
B) Equal distribution of wealth
C) Elimination of poverty
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 representing diminishing marginal utility
B) Curve showing only one optimal choice
C) Curve indicating increasing 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) Gottfried Achenwall
B) Johann Heinrich von Thünen
C) Sir William Petty
D) John Maynard Keynes
  • 11. What was the term used by a group of professors in England for reasoning with figures related to government?
A) Mathematical Economics
B) Economic Calculus
C) Statistical Analysis
D) Political Arithmetick
  • 12. Which economist's work is considered the first example of marginal analysis?
A) Johann Heinrich von Thünen
B) Sir William Petty
C) John Maynard Keynes
D) W.S. Jevons
  • 13. Who presented a paper on the 'general mathematical theory of political economy' in 1862?
A) Gottfried Achenwall
B) W.S. Jevons
C) Friedrich Hayek
D) Robert Heilbroner
  • 14. What did W.S. Jevons declare political economy must be, due to its dealing with quantities?
A) Theoretical
B) Empirical
C) Mathematical
D) Qualitative
  • 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) Algebraic means
C) Matrix algebra
D) Differential calculus
  • 17. Which economist's work was largely ignored by English scholars despite its influence?
A) Sir William Petty
B) Johann Heinrich von Thünen
C) W.S. Jevons
D) Gottfried Achenwall
  • 18. Who are considered the precursors to modern mathematical economics?
A) Augustin Cournot, Léon Walras, and Francis Ysidro Edgeworth
B) Adam Smith, David Ricardo, and John Stuart Mill
C) Karl Marx, Friedrich Hayek, and Joseph Schumpeter
D) John Maynard Keynes, Milton Friedman, and Paul Samuelson
  • 19. How is the market price determined in Cournot's duopoly model?
A) By government regulation
B) By the individual demand curve of each seller
C) By the cost of production for each seller
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) Nash equilibrium
C) Pareto efficiency
D) Walrasian equilibrium
  • 21. What was the initial reception of Cournot's contributions to economics?
A) Rejected entirely without consideration
B) Neglected for decades
C) Immediately accepted and celebrated
D) Implemented in policy immediately
  • 22. How many separate models of exchange did Walras originally present?
A) Two
B) Four
C) Five
D) Three
  • 23. What does Walras' law state about markets reaching equilibrium?
A) If n-1 markets cleared, the nth market would clear as well
B) Markets cannot reach equilibrium independently
C) All markets must clear simultaneously
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) Five
B) Four
C) Two
D) Three
  • 25. In which field is Lagrangian duality and convex analysis used daily?
A) Pure mathematics
B) Physics
C) Economics
D) Operations research
  • 26. Which journal was founded in 1933 to promote econometrics?
A) Journal of Political Economy
B) Econometrica
C) Quarterly Journal of Economics
D) The American Economic Review
  • 27. Which theory became more extensively used in economics after Richard Bellman's work on dynamic programming?
A) Variational calculus
B) Fixed-point theory
C) Optimal control theory
D) Functional analysis
  • 28. What does ACE stand for in economic modeling?
A) Agent-based computational economics
B) Advanced computational econometrics
C) Automated computational engineering
D) Applied calculus of economics
  • 29. What institution helped promote the linking of statistical analysis to economic theory in the 1930s and 1940s?
A) American Economic Association
B) The Cowles Commission
C) Econometric Society
D) National Bureau of Economic Research
  • 30. Who worked with John von Neumann on the theory of games?
A) John Harsanyi
B) John Nash
C) Oskar Morgenstern
D) Reinhard Selten
  • 31. When did the field of agent-based computational economics begin to emerge?
A) Late 1970s
B) Mid-2000s
C) Early 1980s
D) About the 1990s
  • 32. How did Kantorovich refer to prices in his models?
A) "Objectively determined valuations"
B) "Optimal functions"
C) "Market equilibria"
D) "Economic variables"
  • 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) Comparative statics
B) Walrasian equilibrium
C) Invisible hand hypothesis
D) Pareto efficient
  • 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) Von Neumann
B) Paul Samuelson
C) Wassily Leontief
D) Leonid Kantorovich
  • 37. During what event was linear programming used to plan the shipment of supplies to Berlin?
A) World War I
B) Cold War
C) Cuban Missile Crisis
D) Berlin airlift (1948)
  • 38. What type of technologies produce outputs using constant proportions of inputs?
A) von Neumann technologies
B) Arrow–Debreu models
C) Linear programming techniques
D) Leontief technologies
  • 39. What mathematical concept did Paul Samuelson compare to tâtonnement?
A) Pareto efficiency
B) Brouwer's fixed point theorem
C) Von Neumann's equilibrium model
D) Le Chatelier's principle
  • 40. Who first applied differential calculus to analyze microeconomics by treating decisions as attempts to change allocations of goods?
A) Vilfredo Pareto
B) Paul Samuelson
C) Alfred Marshall
D) John von Neumann
  • 41. Who graphically developed the two-person solution to Edgeworth's problem in 1924?
A) Arthur Lyon Bowley
B) Jeremy Bentham
C) Harold Hotelling
D) Edwin Robert Anderson Seligman
  • 42. In what year did John von Neumann and Oskar Morgenstern make significant contributions to game theory?
A) 1944
B) 1965
C) 1994
D) 1951
  • 43. Who is credited with the formal derivation and exposition of the cobweb model?
A) Nicholas Kaldor
B) Ragnar Frisch
C) Trygve Haavelmo
D) Henry L. Moore
  • 44. Which economic theory posits that consumers maximize their utility subject to budget constraints?
A) General equilibrium theory
B) Macroeconomics
C) Input-output economics
D) Microeconomics
  • 45. In which year did Francis Ysidro Edgeworth publish 'Mathematical Psychics: An Essay on the Application of Mathematics to the Moral Sciences'?
A) 1924
B) 1878
C) 1905
D) 1881
  • 46. What did John von Neumann introduce to economic theory in his 1937 model?
A) Optimal control theory
B) Functional analytic methods including topology
C) Convex sets and fixed-point theory
D) Dynamic programming
  • 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) Graph theory
C) Linear programming
D) Convex sets
  • 49. What was the nature of Moore's first models of production?
A) Empirical
B) Dynamic
C) Static
D) Probabilistic
  • 50. Who published 'The Probability Approach in Econometrics' in 1944?
A) Henry L. Moore
B) Nicholas Kaldor
C) Ragnar Frisch
D) Trygve Haavelmo
  • 51. What is the primary objective in a nonlinear optimization problem?
A) Solve h_j(x)
B) Maximize f(x)
C) Equalize g_i(x)
D) Minimize f(x)
  • 52. In what year did Henry L. Moore publish his dynamic 'moving equilibrium' model?
A) 1933
B) 1925
C) 1892
D) 1944
  • 53. What has become increasingly important to professionals in economics and finance due to the sophistication of mathematical methods?
A) Programming
B) Mathematics
C) Econometrics
D) Statistics
  • 54. What type of problems often require the use of mathematical tools due to their complexity?
A) Economic problems with many variables
B) Basic economic theory
C) Qualitative research studies
D) Simple arithmetic calculations
  • 55. What concept did Edgeworth adopt from Jeremy Bentham in his economic model?
A) Utilitarianism
B) Felicific calculus
C) Opportunity cost
D) Marginal utility
  • 56. What percentage of articles in top economic journals in 2003 and 2004 lacked both statistical analysis and mathematical expressions?
A) 10%
B) 20%
C) 15%
D) 5.8%
  • 57. What paradigm does ACE fall under?
A) Quantum economics
B) Classical mechanics
C) Complex adaptive systems
D) Behavioral finance
  • 58. Which school of thought criticized the mathematization of economics?
A) The Austrian school
B) Neoclassical schools
C) The Chicago school
D) Keynesian school
  • 59. What did Milton Friedman say about economic model assumptions?
A) 'All assumptions are unrealistic.'
B) Assumptions are irrelevant to model performance.
C) Models should not be judged by their predictive performance.
D) Assumptions should always match reality.
  • 60. Who coined the term 'econometrics'?
A) Ragnar Frisch
B) Nicholas Kaldor
C) Trygve Haavelmo
D) Henry L. Moore
  • 61. What type of functions benefit most from convex duality?
A) Quadratic functions
B) Non-convex functions
C) Linear functions
D) Polyhedral convex functions
  • 62. In which decade was linear programming developed to aid resource allocation in Russia?
A) 1950s
B) 1930s
C) 1940s
D) 1960s
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