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| 1 | |
All of the following statements, except one, are valid examples of the way economists use the term scarcity. Which is the exception? |
| | A) | Households face a scarcity of income. |
| | B) | Individuals face a scarcity of time. |
| | C) | Economies face a scarcity of resources. |
| | D) | The world faces a scarcity of ideas. |
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| 2 | |
What is the definition of opportunity cost? |
| | A) | The amount of money spent on a good. |
| | B) | The value of the next best alternative that is given up as a result of making a particular decision. |
| | C) | The value of all the alternatives given up as a result of making a particular decision. |
| | D) | The cost incurred in producing a good. |
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| 3 | |
Meridith had only $16 to spend this last weekend. She was, at first, uncertain about whether to go to two movies she had been wanting to see or to buy a new CD she had recently heard. In the end, she went to the movies. Which of the following statements is correct? |
| | A) | The choice of the two movies and not the CD is an example of increasing costs. |
| | B) | The opportunity cost of the two movies is one CD. |
| | C) | The opportunity cost of the two movies is $16. |
| | D) | The choice of two movies rather than one CD was a bad one. |
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| 4 | |
In reference to voluntary trade, what was Adam Smith the first to recognize? |
| | A) | It does not happen very often. |
| | B) | It may or may not benefit one or both of the parties to the trade. |
| | C) | It benefits one party to the trade but only at the expense of the other. |
| | D) | It benefits both parties to the trade. |
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| 5 | |
What are the three fundamental questions in economics? |
| | A) | What to produce, how to produce it, and for whom to produce it. |
| | B) | Is it necessary, is it right, and is it valuable? |
| | C) | Who should produce, what is the right way to produce, and how should we decide? |
| | D) | What to produce, how to produce it, and who should produce it. |
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| 6 | |
What are the four basic ways that society can organize its economic affairs? |
| | A) | With consumer goods, capital goods, models, and positive statements |
| | B) | Using co-operation, command, custom, or competition |
| | C) | Using plentiful resources, opportunity costs, technology, and specialization |
| | D) | Using capitalism, communism, enterprise, and technology |
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| 7 | |
“Resources” is a term that can be used interchangeably with: |
| | A) | Models |
| | B) | Consumer goods |
| | C) | Either factors of production or inputs |
| | D) | Technologies |
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| 8 | |
What are the factors of production? |
| | A) | Land, labour, money, and enterprise |
| | B) | Land, labour, money, and capital |
| | C) | Land, labour, capital, and enterprise |
| | D) | Competition, command, custom, and co-operation |
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| 9 | |
What are the names of the factor payments? |
| | A) | Consumption spending and investment spending |
| | B) | Wages and profits |
| | C) | Wages, interest, and profits |
| | D) | Wages, interest, rent, and profits |
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| 10 | |
What is an example of an economic model? |
| | A) | Opportunity costs and comparative advantage |
| | B) | Scarcity of resources and unlimited wants |
| | C) | Positive statements and normative statements |
| | D) | The production possibilities curve |
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| 11 | |
All of the following, except one, are capital goods. Which is the exception? |
| | A) | An office building |
| | B) | A boiler in a pulp mill |
| | C) | A householder’s garden shed |
| | D) | An airport runway |
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| 12 | |
Which of the following is not a macroeconomic goal? |
| | A) | Improvements in the standard of living |
| | B) | Ensuring that the true needs of all people are met |
| | C) | Full employment |
| | D) | Stable prices |
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| 13 | |
All of the following, except one, are tools of macroeconomic policy. Which is the exception? |
| | A) | Direct controls |
| | B) | Fiscal policy |
| | C) | Destabilization policy |
| | D) | Monetary policy |
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