Lecture 1: QUIZ

5. Microeconomics:
A) is the basis for the "after this, therefore because of this" fallacy.
B) is not concerned with details, but only with the overall big picture of the economy.
C) is concerned with individual economic units and specific markets.
D) describes the aggregate flows of output and income.
Answer:

6. The study of economics exists because:

A) government interferes with the efficient allocation of scarce resources.
B) resources are scarce in relation to economic wants.
C) the market system is an obstacle to the efficient use of plentiful resources to satisfy
constrained wants.
D) resources are overly abundant as compared to wants; thus, an allocation problem
exists.
Answer:

7. The scarcity problem:

A) persists only because countries have failed to achieve continuous full employment.
B) persists because economic wants exceed available productive resources.
C) has been solved in all industrialized nations.
D) has been eliminated in affluent societies such as the United States and Canada.
Answer:
12. Economics is primarily the study of:
A) why resources are scarce.
B) how advertising and sales promotion shape consumer wants.
C) how to make profitable financial investments.
D) how to use scarce resources efficiently.
Answer:

13. Which of the following is a land resource?

A) a computer programmer C) silicon (sand) used to make computer chips
B) a computer D) a piece of software used by a firm
Answer:

14. Which of the following is a labor resource?

A) a computer programmer C) silicon (sand) used to make computer chips
B) a computer D) a piece of software used by a firm
Answer:

15. Which of the following is a capital resource?

A) a computer programmer
B) a corporate bond issued by a computer manufacturer
C) silicone (sand) used to make computer chips
D) a piece of software used by a firm
Answer:

16. The four factors of production are:

A) land, labor, capital, and money
B) land, labor, capital, and entrepreneurial ability
C) labor, capital, technology, and entrepreneurial ability
D) labor, capital, entrepreneurial ability, and money
Answer:

17. Which of the following is a land resource?

A) a farmer
B) an oil drilling rig
C) a machine for detecting earthquakes.
D) natural gas
Answer:

21. Economic resources are also called:

A) free gifts of nature.
B) consumption goods.
C) units of money capital.
D) factors of production.
Answer:

22. Which of the following is real capital?

A) a pair of stockings
B) a construction crane
C) a savings account
D) a share of IBM stock
Answer:

23. The main function of the entrepreneur is to:

A) make routine pricing decisions.
B) innovate.
C) purchase capital.
D) create market demand.
Answer:

2) The most fundamental economic problem is

A) security.
B) the fact the United States buys more goods from foreigners than we sell to foreigners.
C) health.
D) scarcity.
Answer:
3) Economics is best defined as the study of how people, businesses, governments,
and societies
A) make choices to cope with scarcity.
B) attain wealth.
C) choose abundance over scarcity.
D) use their infinite resources.
Answer:
4) Economists point out that scarcity confronts
A) the rich but not the poor.
B) the poor but not the rich.
C) both the poor and the rich.
D) neither the poor nor the rich.
Answer:
5) Scarcity requires that people must
A) trade. B) compete. C) cooperate. D) make choices.
Answer:
6) As an economic concept, scarcity applies to
A) neither time nor money.
B) both money and time.
C) time but not money.
D) money but not time.
Answer:
7) Which is the most accurate definition of the study of economics? Economics is the
study of
A) the distribution of surplus goods to those in need.
B) affluence in a morally bankrupt world.
C) ways to reduce wants to eliminate the problem of scarcity.
D) the choices we make because of scarcity.
Answer:
1. Which of the following is one of the major causes of economic problems?
a) One of the major causes of economic problems is unlimited human wants
b) One of the major causes of economic problems is the alternative usage of resources
c) One of the major causes of economic problems is the scarcity of economic resources
d) All of the above
Answer:

2. Which of the following statements is the actual meaning of scarcity?

a) The actual meaning of scarcity is that there is an increase in the resources
b) The actual meaning of scarcity is that there is a shortage in the resources
c) The actual meaning of scarcity is that there is no change in the resources
d) None of the above
Answer:
3. Which of the following is a microeconomic topic?
a) the reasons for a decline in average prices
b) the reasons why Kathy buys less orange juice
c) the cause of why total employment may decrease
d) the effect of the government budget deficit on inflation
Answer:

4. Studying the determination of prices in individual markets is primarily a concern

of
a) negative economics.
b) Microeconomics.
c) Positive economics.
d) Macroeconomics.
Answer:

5. When China builds a dam using few machines and a great deal of labor, it is
answering the ________ question.
a) "how"
b) "What"
c) "Where"
d) "For whom"
Answer:

6. Entrepreneurs do all of the following EXCEPT

a) Bear risk from business decisions.
b) Own all the other resources.
c) Come up with new ideas about what, how, when and where to produce.
 d) Organize labor, land, and capital.
Answer:
9) Which of the following is a microeconomic topic?
A) the reasons for a decline in average prices
B) the reasons why Kathy buys less orange juice
C) the cause of why total employment may decrease
D) the effect of the government budget deficit on inflation
Answer:
10) Microeconomics focuses on all of the following EXCEPT
A) the effect of increasing the money supply on inflation.
B) the purchasing decisions that an individual consumer makes.
C) the effect of an increase in the tax on cigarettes on cigarette sales.
D) the hiring decisions that a business makes.
Answer:
11) In broad terms the difference between microeconomics and macroeconomics is
that
A) microeconomics studies the effects of government taxes on the national
unemployment rate.
B) macroeconomics studies the effects of government regulation and taxes on the price of
individual goods and services whereas microeconomics does not.
C) they use different sets of tools and ideas.
D) microeconomics studies decisions of individual people and firms and macroeconomics
studies the entire national economy.
Answer:
13) The analysis of the behavior of individual decision-making units is the definition of
A) microeconomics. B) macroeconomics.
C) positive economics. D) normative economics.
Answer:

18) Macroeconomics is the branch of economics that studies

A) prices of individual goods.
B) important, as opposed to trivial, issues.
C) the way individual markets work.
D) the economy as a whole.
Answer:

19) When an economy produces more houses and fewer typewriters, it is

answering the ________question.
A) "where" B) "for whom" C) "how" D) "what"
Answer:
20) When firms in an economy start producing more computers and fewer
televisions, they are answering the ________ question.
A) "where" B) "when" C) "what" D) "for whom"
Answer:
21) U.S. producers decide to produce more compact cars and fewer SUVs as the
price of gasoline rises. Producers are answering the ________ question.
A) "what" B) "when" C) "how" D) "how many"
Answer:
27) Human capital is
A) machinery that meets or exceeds federal safety standards for use by humans.
B) all capital owned by individuals or corporations, but not by governments.
C) the skill and knowledge of workers.
D) all capital owned by individuals, but not by corporations or governments.
Answer:
28) Entrepreneurs do all of the following EXCEPT
A) bear risk from business decisions.
B) own all the other resources.
C) come up with new ideas about what, how, when and where to produce.
D) organize labor, land, and capital.
Answer:

133) When the government hires people to serve in the army, these people are no longer
available to do other work. This choice illustrates the concept of
A) opportunity cost.
B) a social interest/private interest conflict.
C) marginal benefit.
D) an incentive.
Answer:

141) Scarcity is a situation in which ________.

A) something is being wasted
B) long lines form at gas stations
C) some people are poor and others are rich
D) we are unable to satisfy all our wants
Answer:

142) Microeconomics is the study of ________.

A) the global economy
B) the choices that individuals and businesses make
C) the national economy
D) all aspects of scarcity
Answer:

143) Factors of production include all of the following EXCEPT ________.

A) machines made in past years
B) money
C) an wheat field that is not irrigated
D) entrepreneurship
Answer:

144) The income earned by the people who sell the services of the factor of production
________ is called ________.
A) entrepreneurship; profit
B) entrepreneurship; wages
C) land; profit
D) capital; rent
Answer: