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1 | |
The central problem in economics is that of |
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| | A) | guaranteeing a minimum level of income for every citizen. |
| | B) | allocating scarce resources in such a manner that society's unlimited needs or wants are satisfied as well as possible. |
| | C) | comparing the success of command versus market economies. |
| | D) | guaranteeing that production occurs in the most efficient manner. |
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2 | |
A mixed economy is best described by the statement: |
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| | A) | In a mixed economy, society answers the 'what', 'how', and 'for whom' questions through a market system. |
| | B) | In a mixed economy, government policies determine the 'what', 'how', and 'for whom' questions. |
| | C) | In a mixed economy, the government and the private sectors interact in solving the basic economic questions. |
| | D) | In a mixed economy, the invisible hand solves the basic economic questions. |
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3 | |
Normative economics |
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| | A) | makes explanations based upon economic data about the workings of the economy. |
| | B) | prescribes policies for the economy based upon personal value judgements. |
| | C) | is a scientific approach to the study of economic events. |
| | D) | None of the above. |
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4 | |
Microeconomics best describes the study of the |
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| | A) | level of national unemployment. |
| | B) | growth rate of GNP. |
| | C) | effects of aggregate inflation. |
| | D) | behaviour of individual economic agents. |
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5 | |
The microeconomist studies all of the following except |
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| | A) | the consumption behaviour of an individual household. |
| | B) | why a dozen fresh eggs costs less than a dozen fresh shrimp. |
| | C) | the effect of price supports on the supply of milk. |
| | D) | the effect of a tax cut on the nation's spendable income. |
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6 | |
Macroeconomics is described best by which of the following statements? |
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| | A) | Macroeconomics is the study of the economy as a whole. |
| | B) | Macroeconomics is the study of how firms strive to maximize profits. |
| | C) | Macroeconomics is the study of the demand for labour by firms and the supply of labour by households. |
| | D) | Macroeconomics is the study of why some products cost more than others. |
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7 | |
If a society moves along its production possibilities frontier, then |
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| | A) | it is using its scarce resources less and less efficiently. |
| | B) | it must be giving up more and more of some goods. |
| | C) | more of all goods are being produced. |
| | D) | some of its resources are unemployed. |
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8 | |
The production possibilities frontier shows |
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| | A) | the level of output society should produce to satisfy most of its unlimited wants. |
| | B) | for each level of output of one good, the maximum amount of the other good that can be produced. |
| | C) | the different combinations of two goods that can be produced when some of society's resources are not fully employed. |
| | D) | the minimum amounts of two goods that can be produced when society uses its resources efficiently. |
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9 | |
When considering an economy producing only two goods, economic growth can be illustrated by |
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| | A) | a movement along its production possibilities frontier.
B.
a movement of its production possibilities frontier toward the origin.
C.
moving to a point beneath its production possibilities frontier.
D. |
| | B) | a movement of its production possibilities frontier toward the origin. |
| | C) | moving to a point beneath its production possibilities frontier. |
| | D) | an outward shift of its production possibilities frontier. |
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10 | |
The opportunity cost of producing an extra pizza is |
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| | A) | the price charged for the pizza. |
| | B) | what must be given up in order to produce the extra pizza. |
| | C) | the amount of time and ingredients that it takes to produce the pizza. |
| | D) | the difference in the price of the pizza last year and the price this year. |
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11 | |
Positive economics provides answers to questions by using and developing economic theory. |
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| | A) | TRUE |
| | B) | FALSE |
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12 | |
The production possibility frontier highlights the problem of infinite wants. |
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| | A) | TRUE |
| | B) | FALSE |
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13 | |
Taking this test now must be minimizing your opportunity costs. |
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| | A) | TRUE |
| | B) | FALSE |
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14 | |
The amount of available productive resources is fixed forever. |
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| | A) | TRUE |
| | B) | FALSE |
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15 | |
A policy of sustainable economy growth is concerned with how to move the production possibility frontier to the right. |
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| | A) | TRUE |
| | B) | FALSE |
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16 | |
The ability of a firm to grow and operate in more markets is constrained by access to _________ . |
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| | A) | Infinite wants |
| | B) | Finite resources |
| | C) | New markets |
| | D) | Market data |
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17 | |
Public sector provision of health care is an example of ________ provision. |
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| | A) | Planned |
| | B) | Market |
| | C) | Limited |
| | D) | Possible |
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18 | |
A change in the exchange rate is an example of a ________ issue for the economy and a _________ issue for an exporter. |
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| | A) | Macroeconomic, Macroeconomic |
| | B) | Microeconomic, Microeconomic |
| | C) | Microeconomic, Macroeconomic |
| | D) | Macroeconomic, Microeconomic |
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19 | |
If you do not own a Ferrari, the opportunity cost of not having a Ferrari must be ______ compared with the alternatives. |
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| | A) | Low |
| | B) | High |
| | C) | Difficult |
| | D) | Embarrassing |
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20 | |
An increase in the value of an index number from 100 to 110 equals a _______ change. |
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| | A) | 110% |
| | B) | 1% |
| | C) | 11% |
| | D) | 10% |