Economics is the study of:
|C)||how society decides what, how, and for whom to produce.|
|D)||the best way to run society.|
A resource is scarce if supply exceeds demand at zero price.
The income distribution (in a country or in the world) tells us:
|A)||How much people should be paid.|
|B)||How income is divided between different groups or individuals.|
|C)||The division of earnings between wages and salaries.|
|D)||The relationship between productivity and earnings.|
The law of diminishing returns says that each extra worker adds ___________ to output than the previous extra worker ___________.
The production possibility frontier (ppf) shows, for each output of one good, the maximum amount of the other good that can be produced.
The opportunity cost of a good is:
|A)||the time lost in finding it.|
|B)||the quantity of other goods sacrificed to get another unit of that good.|
|C)||the expenditure on the good.|
|D)||the loss of interest in using savings.|
The area to the right of the production possibility frontier is achievable.
The slope of the _____ tells us how much of one _____ we have to sacrifice to make more of another.
|A)||Income distribution, good|
|B)||Production possibility frontier, opportunity cost|
|C)||Production possibility frontier, good|
|D)||Income distribution, production possibility frontier|
Production efficiency is when ________ output of one good can be achieved for _________ of another.
A market can accurately be described as:
|A)||a place to buy things.|
|B)||a place to sell things.|
|C)||the process by which prices adjust to reconcile households’, firms and workers buying and selling decisions.|
|D)||a place where buyers and sellers meet.|
A command economy decides resource allocation by government planning.
In a free market __________ ___________.
|B)||governments plan production|
|D)||governments do not intervene|
When individuals’ pursuit of self-interest within free markets may allocate resources efficiently, this is known as:
|A)||The invisible boot.|
|B)||The visible hand.|
|C)||The invisible hand.|
|D)||The visible boot.|
In the mixed economy:
|A)||Economic problems are solved by the government and private sector.|
|B)||Economic decisions are made only by the private sector and free market.|
|C)||Economic allocation is achieved by the invisible hand.|
|D)||Economic questions are solved by government departments.|
Positive economics studies objective explanations of the workings of the economy.
Normative economics forms ___________ based on _____________.
|A)||positive statements, facts|
|B)||recommendations, personal value judgements|
|C)||positive statements, values|
Microeconomics is concerned with:
|A)||the economy as a whole.|
|B)||the electronics industry.|
|C)||individual decisions about particular commodities.|
|D)||the interactions within the entire economy.|
Macroeconomics is the study of:
|A)||Individual building blocks in the economy.|
|B)||The relationship between different sectors of the economy.|
|C)||Household purchase decisions.|
|D)||The complete interaction of the economy as a whole.|
Gross domestic product is the value of total output of an economy in a given period.
The unemployment rate is:
|A)||The fraction of the labour force without a job.|
|B)||The payments made to those without work.|
|C)||A measure of how long people have been unemployed.|
|D)||A measure of time wasted by people in work.|