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| 1 | |
Scarcity: |
| | A) | is not a problem for the wealthy. |
| | B) | is found only in developing countries. |
| | C) | occurs as a result of unlimited wants and limited resources that are available to fulfill these wants. |
| | D) | occurs because there are too many people. |
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| 2 | |
Economics is the social science concerned with: |
| | A) | how scarcity can be eliminated. |
| | B) | how to make money in the stock market. |
| | C) | how individuals, institutions, and society make choices under conditions of scarcity. |
| | D) | supply and demand. |
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| 3 | |
Which of the following is not a factor of production? |
| | A) | The manager of the local Starbucks |
| | B) | $10,000 |
| | C) | 500 acres of farmland |
| | D) | The phones and computers found in a customer service call center |
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| 4 | |
A nation's production possibilities curve is "bowed out" from the origin because: |
| | A) | resources are not perfectly shiftable between production of the two goods. |
| | B) | capital goods and consumer goods utilize the same production technology. |
| | C) | resources are scarce relative to human wants. |
| | D) | opportunity costs are decreasing. |
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| 5 | |
A microeconomist would most likely study: |
| | A) | how consumers respond to a change in gasoline prices. |
| | B) | the effects of an income tax reduction on the size of the national budget deficit. |
| | C) | the effects of aggregate consumer debt on overall consumption spending. |
| | D) | the relationship between the size of the money supply and the rate of inflation. |
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| 6 | |
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Which of the points on the production possibilities curve in the diagram is currently unattainable given the economy's resources? |
| | A) | Point A |
| | B) | Point B |
| | C) | Point C |
| | D) | Point D |
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| 7 | |
The production possibilities curve: |
| | A) | shows attainable combinations of two products that may be produced with available resources. |
| | B) | indicates that any combination of goods lying outside the curve is attainable. |
| | C) | separates all combinations of two goods that can be produced from those that cannot. |
| | D) | shows all goods and services that can be produced in an economy now and in the future. |
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| 8 | |
You have a history and economics exam scheduled for tomorrow but find that you have time to study for only one of them. What are you facing? |
| | A) | A trade-off |
| | B) | A passing grade in one, but not the other |
| | C) | A nervous breakdown |
| | D) | None of these |
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| 9 | |
Suppose a firm can produce a combination of 100 units of X together with 50 units of Y, but to produce 120 units of X, the firm can only produce 20 units of Y. What is the firm's opportunity cost to produce 20 more units of X? |
| | A) | 20 units of X |
| | B) | 70 units of Y |
| | C) | 30 units of Y |
| | D) | 10 units of X |
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| 10 | |
Economists make the following assumption about humans: |
| | A) | Humans seek out a society that values equality and fairness. |
| | B) | People are greedy and irrational. |
| | C) | Humans are too complex and therefore economists accept their behavior as is. |
| | D) | People are rational and respond to economic incentives. |
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