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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 of chaos in the market
C) A state of constant change
D) A state where supply equals demand
  • 2. What does the concept of 'marginal utility' measure?
A) Total satisfaction gained from consuming a good
B) Additional satisfaction gained from consuming one more unit of a good
C) Price of the last unit of a good purchased
D) Total quantity of a good consumed
  • 3. Which economic theory focuses on the relationship between production capacity and inflation?
A) Austrian economics
B) Phillips curve
C) Keynesian economics
D) Chicago school of 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 analyze historical trends
B) To optimize resource allocation given constraints
C) To forecast future demand
D) To graph economic data
  • 6. What is 'opportunity cost' in economics?
A) Total cost of production
B) Cost of resources used in production
C) Price of a good in a competitive market
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) Elasticity of demand
B) Cross-price elasticity
C) Income effect
D) Market equilibrium
  • 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) Maximum total utility for all individuals
C) Equal distribution of wealth
D) Elimination of poverty
  • 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) 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) Mathematical Economics
B) Statistical Analysis
C) Economic Calculus
D) Political Arithmetick
  • 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) Gottfried Achenwall
C) W.S. Jevons
D) Robert Heilbroner
  • 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) Game theory
B) Differential calculus
C) Matrix algebra
D) Algebraic means
  • 17. Which economist's work was largely ignored by English scholars despite its influence?
A) Sir William Petty
B) W.S. Jevons
C) Johann Heinrich von Thünen
D) Gottfried Achenwall
  • 18. Who are considered the precursors to modern mathematical economics?
A) Karl Marx, Friedrich Hayek, and Joseph Schumpeter
B) Augustin Cournot, Léon Walras, and Francis Ysidro Edgeworth
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 the individual demand curve of each seller
B) By government regulation
C) By the total quantity supplied by both sellers
D) By the cost of production for each seller
  • 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) Immediately accepted and celebrated
C) Rejected entirely without consideration
D) Neglected for decades
  • 22. How many separate models of exchange did Walras originally present?
A) Five
B) Four
C) Three
D) Two
  • 23. What does Walras' law state about markets reaching equilibrium?
A) All markets must clear simultaneously
B) Only one market needs to clear for all others to follow
C) Markets cannot reach equilibrium independently
D) If n-1 markets cleared, the nth market would clear as well
  • 24. How many markets does Walras use to illustrate his law most easily?
A) Four
B) Five
C) Three
D) Two
  • 25. In which field is Lagrangian duality and convex analysis used daily?
A) Operations research
B) Pure mathematics
C) Economics
D) Physics
  • 26. Which journal was founded in 1933 to promote econometrics?
A) Quarterly Journal of Economics
B) Econometrica
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) Optimal control theory
B) Variational calculus
C) Fixed-point theory
D) Functional analysis
  • 28. What does ACE stand for in economic modeling?
A) Agent-based computational economics
B) Applied calculus of economics
C) Automated computational engineering
D) Advanced computational econometrics
  • 29. What institution helped promote the linking of statistical analysis to economic theory in the 1930s and 1940s?
A) National Bureau of Economic Research
B) The Cowles Commission
C) Econometric Society
D) American Economic Association
  • 30. Who worked with John von Neumann on the theory of games?
A) Oskar Morgenstern
B) John Nash
C) John Harsanyi
D) Reinhard Selten
  • 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) "Market equilibria"
B) "Economic variables"
C) "Optimal functions"
D) "Objectively determined valuations"
  • 33. Who argued that economic problems which can be quantified should be treated by means of mathematical work?
A) Milton Friedman
B) John Maynard Keynes
C) Adam Smith
D) Alfred Marshall
  • 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) Pareto efficient
B) Invisible hand hypothesis
C) Comparative statics
D) Walrasian equilibrium
  • 35. Who later confirmed Edgeworth's findings about the effect of taxes on prices?
A) Arthur Lyon Bowley
B) Jeremy Bentham
C) Harold Hotelling
D) Edwin Robert Anderson Seligman
  • 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) Cuban Missile Crisis
B) Berlin airlift (1948)
C) World War I
D) Cold War
  • 38. What type of technologies produce outputs using constant proportions of inputs?
A) Leontief technologies
B) von Neumann technologies
C) Arrow–Debreu models
D) Linear programming techniques
  • 39. What mathematical concept did Paul Samuelson compare to tâtonnement?
A) Le Chatelier's principle
B) Pareto efficiency
C) Von Neumann's equilibrium model
D) Brouwer's fixed point theorem
  • 40. 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
  • 41. Who graphically developed the two-person solution to Edgeworth's problem in 1924?
A) Arthur Lyon Bowley
B) Harold Hotelling
C) Jeremy Bentham
D) Edwin Robert Anderson Seligman
  • 42. In what year did John von Neumann and Oskar Morgenstern make significant contributions to game theory?
A) 1951
B) 1944
C) 1994
D) 1965
  • 43. Who is credited with the formal derivation and exposition of the cobweb model?
A) Nicholas Kaldor
B) Trygve Haavelmo
C) Henry L. Moore
D) Ragnar Frisch
  • 44. Which economic theory posits that consumers maximize their utility subject to budget constraints?
A) General equilibrium theory
B) Microeconomics
C) Macroeconomics
D) Input-output economics
  • 45. In which year did Francis Ysidro Edgeworth publish 'Mathematical Psychics: An Essay on the Application of Mathematics to the Moral Sciences'?
A) 1878
B) 1905
C) 1881
D) 1924
  • 46. What did John von Neumann introduce to economic theory in his 1937 model?
A) Optimal control theory
B) Dynamic programming
C) Functional analytic methods including topology
D) Convex sets and fixed-point theory
  • 47. In which year did Nash, Harsanyi, and Selten receive the Nobel Memorial Prize in Economic Sciences?
A) 2010
B) 1985
C) 1994
D) 2001
  • 48. Which concept did von Neumann's model use only nonnegative matrices?
A) Convex sets
B) Graph theory
C) Linear programming
D) Differential calculus
  • 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) Minimize f(x)
C) Maximize f(x)
D) Equalize g_i(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) Econometrics
B) Statistics
C) Mathematics
D) Programming
  • 54. What type of problems often require the use of mathematical tools due to their complexity?
A) Simple arithmetic calculations
B) Qualitative research studies
C) Economic problems with many variables
D) Basic economic theory
  • 55. What concept did Edgeworth adopt from Jeremy Bentham in his economic model?
A) Felicific calculus
B) Opportunity cost
C) Marginal utility
D) Utilitarianism
  • 56. What percentage of articles in top economic journals in 2003 and 2004 lacked both statistical analysis and mathematical expressions?
A) 5.8%
B) 10%
C) 20%
D) 15%
  • 57. What paradigm does ACE fall under?
A) Behavioral finance
B) Complex adaptive systems
C) Quantum economics
D) Classical mechanics
  • 58. Which school of thought criticized the mathematization of economics?
A) Neoclassical schools
B) The Chicago school
C) Keynesian school
D) The Austrian school
  • 59. What did Milton Friedman say about economic model assumptions?
A) Assumptions should always match reality.
B) Assumptions are irrelevant to model performance.
C) Models should not be judged by their predictive performance.
D) 'All assumptions are unrealistic.'
  • 60. Who coined the term 'econometrics'?
A) Nicholas Kaldor
B) Ragnar Frisch
C) Trygve Haavelmo
D) Henry L. Moore
  • 61. What type of functions benefit most from convex duality?
A) Polyhedral convex functions
B) Quadratic functions
C) Linear functions
D) Non-convex functions
  • 62. In which decade was linear programming developed to aid resource allocation in Russia?
A) 1960s
B) 1940s
C) 1950s
D) 1930s
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