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1 | |
Economics is the study of |
| | A) | production technology |
| | B) | consumption decisions |
| | C) | how society decides what, how, and for whom to produce |
| | D) | the best way to run society |
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2 | |
A resource is scarce if supply exceeds demand at zero price |
| | A) | TRUE |
| | B) | FALSE |
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3 | |
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 |
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4 | |
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 the allocation of resources |
| | D) | a place where buyers and sellers meet |
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5 | |
A command economy decides resource allocation by government planning |
| | A) | TRUE |
| | B) | FALSE |
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6 | |
In a free market __________ ___________ |
| | A) | governments intervene |
| | B) | governments plan production |
| | C) | governments interfere |
| | D) | prices adjust to reconcile scarcity and desires |
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7 | |
In the mixed economy |
| | A) | economic problems are solved by the government and market |
| | B) | economic decisions are made by the private sector and free market |
| | C) | economic allocation is achieved by the invisible hand |
| | D) | economic questions are solved by government departments |
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8 | |
Positive economics studies objective explanations of the workings of the economy |
| | A) | TRUE |
| | B) | FALSE |
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9 | |
Normative economics forms ___________ based on _____________ |
| | A) | positive statements, facts |
| | B) | opinions, personal values |
| | C) | positive statements, values |
| | D) | opinions, facts |
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10 | |
Microeconomics is concerned with |
| | A) | the economy as a whole |
| | B) | the electronics industry |
| | C) | the study of individual economic behaviour |
| | D) | the interactions within the entire economy |
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11 | |
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 economy as a whole |
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12 | |
An economic model is a physical representation of an economy |
| | A) | TRUE |
| | B) | FALSE |
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13 | |
Data are important in economics because __________ and __________ |
| | A) | they suggest relationships for explanation, allow testing of hypotheses |
| | B) | they can be used for tables, they can be graphed |
| | C) | they can be used in computers, governments use them |
| | D) | they provide interesting information, can be summarised |
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14 | |
Time series data show information |
| | A) | about the same point in time over different places |
| | B) | about different points in time over the same variable |
| | C) | about different variables over different places |
| | D) | about different points in time over different places |
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15 | |
Index numbers express base data in relation to some relative value |
| | A) | TRUE |
| | B) | FALSE |
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16 | |
The retail price index is used to ______________ |
| | A) | construct price lists |
| | B) | compare shop prices |
| | C) | measure changes in the cost of living |
| | D) | none of the above |
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17 | |
A real value can be derived from a nominal value by |
| | A) | adjusting for changes over time |
| | B) | adjusting for data collection errors |
| | C) | adjusting for population changes |
| | D) | adjusting for changes in prices |
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18 | |
To find the percentage change in a number, divide the absolute change by the original number and multiply by 100 |
| | A) | TRUE |
| | B) | FALSE |
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19 | |
If your income during one year is £10,000 and the following year it is £12,000, then it has grown by |
| | A) | 20% |
| | B) | 2% |
| | C) | 12% |
| | D) | 16% |
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20 | |
A straight-line diagram can be drawn knowing the ______ and _________ |
| | A) | vertical axis and horizontal axis |
| | B) | intercept and slope |
| | C) | scale and slope |
| | D) | intercept and scale |
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21 | |
On a graph, a positive linear relationship |
| | A) | moves down to the right |
| | B) | moves up to the left |
| | C) | moves up to the right |
| | D) | moves down to the left |
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22 | |
If the diagram of a line shows that lower values on the vertical scale are associated with higher values on the horizontal scale, this is an example of _____________ |
| | A) | a nonlinear relationship |
| | B) | a positive linear relationship |
| | C) | a scatter diagram |
| | D) | a negative linear relationship |
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23 | |
When we know the quantity of a product that buyers wish to purchase at each possible price, we know |
| | A) | Demand |
| | B) | Supply |
| | C) | Excess demand |
| | D) | Excess supply |
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24 | |
Supply is the quantity of a good sellers wish to sell each time the market opens |
| | A) | TRUE |
| | B) | FALSE |
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25 | |
The equilibrium price clears the market; it is the price at which ________ _________ |
| | A) | Everything is sold |
| | B) | Buyers spend all their money |
| | C) | Quantity demanded equals quantity supplied |
| | D) | Excess demand is zero |
| | E) | c and d |
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26 | |
When a market is in equilibrium |
| | A) | Quantity demanded equals quantity supplied |
| | B) | Excess demand and excess supply are zero |
| | C) | The market is cleared by the equilibrium price |
| | D) | All of the above |
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27 | |
________ and ________ do not directly affect the demand curve |
| | A) | the price of related goods, consumer incomes |
| | B) | consumer incomes, tastes |
| | C) | the costs of production, bank opening hours |
| | D) | the price of related goods, preferences |
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28 | |
A change in price can cause a shift of a demand curve |
| | A) | TRUE |
| | B) | FALSE |
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29 | |
A demand curve can shift because of changing |
| | A) | incomes |
| | B) | prices of related goods |
| | C) | tastes |
| | D) | all of the above |
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30 | |
A supply curve is directly affected by |
| | A) | technology |
| | B) | input costs |
| | C) | government regulation |
| | D) | all of the above |
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31 | |
An increase in price will cause a supply curve to shift to the left |
| | A) | TRUE |
| | B) | FALSE |
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32 | |
If a price increase of good A increases the quantity demanded of good B, then good B is a |
| | A) | substitute good |
| | B) | complementary good |
| | C) | bargain |
| | D) | inferior good |
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33 | |
An increase in consumer income will increase demand for a _______ but decrease demand for a _________ |
| | A) | substitute good, inferior good |
| | B) | normal good, inferior good |
| | C) | inferior good, normal good |
| | D) | normal good, complementary good |
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34 | |
Price ceilings are imposed increase price above the free market equilibrium price |
| | A) | TRUE |
| | B) | FALSE |
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2003 A McGraw-Hill Online Learning Centre