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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) Additional satisfaction gained from consuming one more unit of a good
D) Total quantity of a good consumed
  • 3. Which economic theory focuses on the relationship between production capacity and inflation?
A) Keynesian economics
B) Phillips curve
C) Austrian economics
D) Chicago school of economics
  • 4. What is the purpose of game theory in economics?
A) To analyze strategic interactions between rational decision-makers
B) To design economic policies
C) To study historical economic data
D) To predict market trends
  • 5. What is the purpose of linear programming in economic analysis?
A) To graph economic data
B) To forecast future demand
C) To optimize resource allocation given constraints
D) To analyze historical trends
  • 6. What is 'opportunity cost' in economics?
A) Total cost of production
B) Price of a good in a competitive market
C) The value of the best alternative forgone in order to make a particular choice
D) Cost of resources used in production
  • 7. Which economic concept is used to measure the responsiveness of quantity demanded to a price change?
A) Elasticity of demand
B) Cross-price elasticity
C) Market equilibrium
D) Income effect
  • 8. What does 'Pareto efficiency' refer to in welfare economics?
A) Equal distribution of wealth
B) Elimination of poverty
C) Allocation of resources where no individual can be made better off without making another worse off
D) Maximum total utility for all individuals
  • 9. In utility theory, what does the 'indifference curve' represent?
A) Curve showing only one optimal choice
B) Curve representing diminishing marginal utility
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) 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) Economic Calculus
B) Statistical Analysis
C) Political Arithmetick
D) Mathematical Economics
  • 12. Which economist's work is considered the first example of marginal analysis?
A) W.S. Jevons
B) Johann Heinrich von Thünen
C) John Maynard Keynes
D) Sir William Petty
  • 13. Who presented a paper on the 'general mathematical theory of political economy' in 1862?
A) Friedrich Hayek
B) W.S. Jevons
C) Robert Heilbroner
D) Gottfried Achenwall
  • 14. What did W.S. Jevons declare political economy must be, due to its dealing with quantities?
A) Empirical
B) Mathematical
C) Theoretical
D) Qualitative
  • 15. Who criticized the broad use of mathematical models for human behavior?
A) Johann Heinrich von Thünen, W.S. Jevons
B) Gottfried Achenwall, Sir William Petty
C) None of the above
D) John Maynard Keynes, Robert Heilbroner, Friedrich Hayek
  • 16. What was the main method used in economic analysis before the 19th century?
A) Matrix algebra
B) Game theory
C) Differential calculus
D) Algebraic means
  • 17. Which economist's work was largely ignored by English scholars despite its influence?
A) W.S. Jevons
B) Gottfried Achenwall
C) Johann Heinrich von Thünen
D) Sir William Petty
  • 18. Who are considered the precursors to modern mathematical economics?
A) Karl Marx, Friedrich Hayek, and Joseph Schumpeter
B) Adam Smith, David Ricardo, and John Stuart Mill
C) John Maynard Keynes, Milton Friedman, and Paul Samuelson
D) Augustin Cournot, Léon Walras, and Francis Ysidro Edgeworth
  • 19. How is the market price determined in Cournot's duopoly model?
A) By government regulation
B) By the cost of production for each seller
C) By the individual demand curve of 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) Nash equilibrium
B) Kaldor-Hicks efficiency
C) Pareto efficiency
D) Walrasian equilibrium
  • 21. What was the initial reception of Cournot's contributions to economics?
A) Immediately accepted and celebrated
B) Rejected entirely without consideration
C) Implemented in policy immediately
D) Neglected for decades
  • 22. How many separate models of exchange did Walras originally present?
A) Five
B) Four
C) Two
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) Only one market needs to clear for all others to follow
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) Five
B) Four
C) Two
D) Three
  • 25. 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
  • 26. What concept did Edgeworth adopt from Jeremy Bentham in his economic model?
A) Felicific calculus
B) Utilitarianism
C) Marginal utility
D) Opportunity cost
  • 27. Who graphically developed the two-person solution to Edgeworth's problem in 1924?
A) Edwin Robert Anderson Seligman
B) Harold Hotelling
C) Jeremy Bentham
D) Arthur Lyon Bowley
  • 28. Who later confirmed Edgeworth's findings about the effect of taxes on prices?
A) Edwin Robert Anderson Seligman
B) Harold Hotelling
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) John von Neumann
B) Paul Samuelson
C) Vilfredo Pareto
D) Alfred Marshall
  • 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) Walrasian equilibrium
C) Invisible hand hypothesis
D) Comparative statics
  • 31. What mathematical concept did Paul Samuelson compare to tâtonnement?
A) Von Neumann's equilibrium model
B) Brouwer's fixed point theorem
C) Pareto efficiency
D) Le Chatelier's principle
  • 32. Which concept did von Neumann's model use only nonnegative matrices?
A) Linear programming
B) Convex sets
C) Differential calculus
D) Graph theory
  • 33. Who developed the model of input-output analysis in 1936?
A) Wassily Leontief
B) Leonid Kantorovich
C) Paul Samuelson
D) Von Neumann
  • 34. What type of technologies produce outputs using constant proportions of inputs?
A) Linear programming techniques
B) von Neumann technologies
C) Arrow–Debreu models
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) 1960s
B) 1940s
C) 1950s
D) 1930s
  • 37. During what event was linear programming used to plan the shipment of supplies to Berlin?
A) Cold War
B) World War I
C) Cuban Missile Crisis
D) Berlin airlift (1948)
  • 38. What is the primary objective in a nonlinear optimization problem?
A) Equalize g_i(x)
B) Solve h_j(x)
C) Minimize f(x)
D) Maximize f(x)
  • 39. What type of functions benefit most from convex duality?
A) Non-convex functions
B) Quadratic functions
C) Polyhedral convex functions
D) Linear 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) Variational calculus
B) Fixed-point theory
C) Functional analysis
D) Optimal control theory
  • 42. What did John von Neumann introduce to economic theory in his 1937 model?
A) Convex sets and fixed-point theory
B) Optimal control theory
C) Functional analytic methods including topology
D) Dynamic programming
  • 43. How did Kantorovich refer to prices in his models?
A) "Market equilibria"
B) "Optimal functions"
C) "Objectively determined valuations"
D) "Economic variables"
  • 44. Who worked with John von Neumann on the theory of games?
A) Oskar Morgenstern
B) Reinhard Selten
C) John Harsanyi
D) John Nash
  • 45. In what year did John von Neumann and Oskar Morgenstern make significant contributions to game theory?
A) 1994
B) 1944
C) 1965
D) 1951
  • 46. In which year did Nash, Harsanyi, and Selten receive the Nobel Memorial Prize in Economic Sciences?
A) 1994
B) 1985
C) 2010
D) 2001
  • 47. What does ACE stand for in economic modeling?
A) Agent-based computational economics
B) Automated computational engineering
C) Advanced computational econometrics
D) Applied calculus of economics
  • 48. When did the field of agent-based computational economics begin to emerge?
A) Late 1970s
B) Mid-2000s
C) About the 1990s
D) Early 1980s
  • 49. What paradigm does ACE fall under?
A) Quantum economics
B) Behavioral finance
C) Complex adaptive systems
D) Classical mechanics
  • 50. Who coined the term 'econometrics'?
A) Ragnar Frisch
B) Nicholas Kaldor
C) Trygve Haavelmo
D) Henry L. Moore
  • 51. Which journal was founded in 1933 to promote econometrics?
A) Econometrica
B) The American Economic Review
C) Quarterly Journal of Economics
D) Journal of Political Economy
  • 52. Who published 'The Probability Approach in Econometrics' in 1944?
A) Trygve Haavelmo
B) Henry L. Moore
C) Ragnar Frisch
D) Nicholas Kaldor
  • 53. What institution helped promote the linking of statistical analysis to economic theory in the 1930s and 1940s?
A) American Economic Association
B) National Bureau of Economic Research
C) The Cowles Commission
D) Econometric Society
  • 54. Who is credited with the formal derivation and exposition of the cobweb model?
A) Ragnar Frisch
B) Nicholas Kaldor
C) Trygve Haavelmo
D) Henry L. Moore
  • 55. What was the nature of Moore's first models of production?
A) Probabilistic
B) Static
C) Empirical
D) Dynamic
  • 56. In what year did Henry L. Moore publish his dynamic 'moving equilibrium' model?
A) 1892
B) 1933
C) 1944
D) 1925
  • 57. What percentage of articles in top economic journals in 2003 and 2004 lacked both statistical analysis and mathematical expressions?
A) 10%
B) 20%
C) 5.8%
D) 15%
  • 58. Who argued that economic problems which can be quantified should be treated by means of mathematical work?
A) Alfred Marshall
B) John Maynard Keynes
C) Adam Smith
D) Milton Friedman
  • 59. What has become increasingly important to professionals in economics and finance due to the sophistication of mathematical methods?
A) Statistics
B) Mathematics
C) Programming
D) Econometrics
  • 60. What type of problems often require the use of mathematical tools due to their complexity?
A) Qualitative research studies
B) Simple arithmetic calculations
C) Economic problems with many variables
D) Basic economic theory
  • 61. Which school of thought criticized the mathematization of economics?
A) The Austrian school
B) Keynesian 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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