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1 | |
Economics is the study of how societies use __________ resources to produce __________ and distribute them among different people. |
| | A) | abundant; tires |
| | B) | scarce; commodities |
| | C) | scarce; tires |
| | D) | abundant; commodities |
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2 | |
The situation in which there is not enough of something to satisfy all the desires for that thing is called: |
| | A) | abundance. |
| | B) | scarcity. |
| | C) | demand. |
| | D) | plethora. |
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3 | |
The situation in which limited resources are being used most effectively is called: |
| | A) | efficient. |
| | B) | economic. |
| | C) | abundant. |
| | D) | scarce. |
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4 | |
The study of the behavior of firms, individual markets, and households is called: |
| | A) | normative economics. |
| | B) | positive economics. |
| | C) | macroeconomics. |
| | D) | microeconomics. |
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5 | |
The study of the behavior of the overall economy is called: |
| | A) | normative economics. |
| | B) | positive economics. |
| | C) | macroeconomics. |
| | D) | microeconomics. |
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6 | |
Adam Smith wrote _______; John Maynard Keynes wrote _______. |
| | A) | The Wealth of Nations; The General Theory of Employment, Interest and Money. |
| | B) | The General Theory of Employment, Interest and Money; The Wealth of Nations. |
| | C) | The Wealth of Nations; How the Business Cycle Works. |
| | D) | The Invisible Hand; The General Theory of Employment, Interest and Money. |
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7 | |
If we believed that event b occurs simply because it follows event a, then we would be trapped by the: |
| | A) | failure to hold other things equal. |
| | B) | fallacy of composition. |
| | C) | post hoc fallacy. |
| | D) | Adam Smith syndrome. |
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8 | |
The three fundamental questions of economic organization are: |
| | A) | when, for whom, and how. |
| | B) | how, what, and for whom. |
| | C) | who, how, and when. |
| | D) | what, who, and why. |
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9 | |
Economic questions that can be answered by examining data and making observations are part of: |
| | A) | normative economics. |
| | B) | positive economics. |
| | C) | macroeconomics. |
| | D) | microeconomics. |
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10 | |
Economic questions that can be answered through political debate and decisions are part of: |
| | A) | normative economics. |
| | B) | positive economics. |
| | C) | macroeconomics. |
| | D) | microeconomics. |
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11 | |
An economy which allows firms and individuals to decide the answers to the three fundamental questions of economic organization is called a: |
| | A) | mixed economy. |
| | B) | market economy. |
| | C) | normative economy. |
| | D) | command economy. |
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12 | |
The extreme case of a market economy is one in which government does not intervene in economic decisions. This kind of market economy is called a _______ market. |
| | A) | command |
| | B) | mixed |
| | C) | weak |
| | D) | laissez-faire |
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13 | |
An economy in which government make all important economic decisions is called a: |
| | A) | mixed economy. |
| | B) | market economy. |
| | C) | normative economy. |
| | D) | command economy. |
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14 | |
Most economies are in fact: |
| | A) | mixed economies. |
| | B) | market economies. |
| | C) | normative economies. |
| | D) | command economies. |
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15 | |
The three broad categories of inputs to production are: |
| | A) | earth, wind, and fire. |
| | B) | earth, water, and fire. |
| | C) | land, labor, and capital. |
| | D) | land, labor, and money. |
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16 | |
The production-possibility frontier (PPF) shows the _______ of production that can be obtained by an economy, given _______. |
| | A) | minimum amounts; technology and inputs to production |
| | B) | minimum amounts; efficiency |
| | C) | maximum amounts; a command economy |
| | D) | maximum amounts; technology and inputs to production |
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17 | |
Points _______ the PPF are attainable, but inefficient. Points _______ the PPF are attainable and efficient. Points _______ the PPF are unattainable given available technology and resources. |
| | A) | outside; on; inside |
| | B) | inside; on; outside |
| | C) | inside; outside; on |
| | D) | on; inside; outside |
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18 | |
To show general economic growth on the PPF, one would: |
| | A) | shift the PPF inward. |
| | B) | shift the PPF outward. |
| | C) | leave the PPF alone, but draw a circle around the origin. |
| | D) | draw a line from the origin to the previous PPF. |
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19 | |
The _______ of a decision is the value of the good or service forgone. |
| | A) | opportunity cost |
| | B) | efficiency |
| | C) | economics |
| | D) | scarcity |
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20 | |
Productive _______ exists when an economy cannot produce more of one good without producing less of another good. |
| | A) | scarcity |
| | B) | economics |
| | C) | efficiency |
| | D) | opportunity cost |
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