Econ

Question 1

What issues does economics address and examine?
a. Money, what it is and its role in the economy
b. Goods and services provided by the government and how to pay for them
c. How goods and services are produced and how they are distributed
d. Measuring the standard of living and attempting to alleviate poverty
e. Economics addresses all these issues and many, many more

Answer 1

e. Economics addresses all these issues and many, many more?

Question 2

Economics primarily addresses the problems associated with…
a. poverty.
b. money.
c. scarcity.
d. government policies.
e. shortages or surpluses.

Answer 2

c. Scarcity

Question 3

Why can’t we have all the goods and services we want?a. Because humans wants are unlimited.
b. Because the resources used to make goods and services are limited.
c. Because humans make illogical or impractical decisions.
d. All of the above are true.
e. Both a and b are true.

Answer 3

a. Because humans wants are unlimited
b. Because the resources used to make goods and services are limited

Question 4

Physical capital is used by economists to mean…
a. man-made goods that are used to help make other goods and services.
b. the physical space (warehouse) where production occurs.
c. time allocated to producing goods and services.
d. the education and training of the workforce.
e. financial backing.

Answer 4

a. man-made goods that are used to help make other goods and services

Question 5

Human capital is used by economists to mean…
a. the education of the workforce.
b. man-made goods that are used to help make other goods.
c. Training and on the job experience.
d. financial backing.
e. Both a and c are correct.

Answer 5

a. The education of the workforce
c. Training and on the job experience

Question 6

Tradeoffs are required in any decision because wants are ____ while resources are ____.

Answer 6

unlimited; scarce

Question 7

Let’s suppose last night you decided to spend one extra hour studying for this exam. Which of the following IS NOT a potential opportunity cost of that decision?
a. The hour of work you could have completed during that time.
b. The slightly higher grade you will get on this test as a result.
c. The extra hour you could have watched Netflix and chilled.
d. An hour of not studying for another class.
e. The hour on the phone you could have spent reassuring your parents that yes, you are eating right and getting enough sleep.

Answer 7

b. The slightly higher grade you will get on this test as a result

Question 8

Suppose that Abby spends 4 hours fishing, paying license fees of $50, rather than working at her job that pays $10 per hour. What is the opportunity cost of her decision to fish?
a. $90
b. $60
c. $50
d. $40
e. nothing, since she enjoys fishing much more than working anyway

Answer 8

$90

Question 9

Which of the following issues are concerned with microeconomic issue?
a. Whether Home Depot hires 50 or 51 workers per shift.
b. How consumers respond to a 5% tax on gasoline.
c. How a 5% tax on gasoline affects the market for new cars.
d. How a firm responds to new pollution regulations on production.
e. All of the above are microeconomic in nature

Answer 9

e. All of the above are miroeconomic in nature

Question 10

An economic theory describes…
a. The government policies
b. A causal relationship between two variables
c. The truth for economic activities
d. Good news in the stock market
e. Findings in an important academic journal.

Answer 10

b. A causal relationship between two variables

Question 11

An economic model…
a. can never be proven wrong
b. often omits crucial elements
c. must simplify reality in order to focus on crucial elements
d. uses equations to understand normative economic phenomena
e. produces poor predictions since they include unrealistic assumptions

Answer 11

c. must simplify reality in order to focus on crucial elements

Question 12

Which of the following statements is considered a positive statement?
a. The retirement age should be increased to 75 to counter the effects of our aging population.
b. The minimum wage causes unemployment and should be removed.
c. A rise in consumer income will lead to an increase in the demand for new cars
d. The government ought to subsidize manufacturers of green houses.
e. None of the above

Answer 12

c. A rise in consumer income will lead to an increase in the demand for new cars

Question 13

Y = 50 – 3X; In the above equation, Y is the ________ and X is the _______.

Answer 13

dependent variable; independent variable

Question 14

Y = 50 – 3X…
From the equation above, we know that
a. X and Y are negatively related.
b. plotting Y on the vertical axis and X on the horizontal axis yields an upward sloping line.
c. the Y intercept is 3.
d. the slope of the line is 3.
e. Both b and d are correct.

Answer 14

a. X and Y are negatively related.

Question 15

Y = 50 – 3X…
The slope of the equation above
a. tells us how much X changes in response to changes in Y.
b. says that X and Y are negatively related.
c. says that if X increases by 1 unit, Y increases by 3 units.

Answer 15

a) tells us how much X changes in response to changes in Y
c) says that if X increases by 1 unit, Y increases by 3 units

Question 16

An economic system is the methods and organization that societies use to determine:
a. What goods and services are produced
b. How goods and services are produced
c. How goods and services are divided/allocated among its citizens
d. All of the above

Answer 16

D. all of the above

Question 17

The economic system that answers the Three Questions of society the way they have always been answered is a(n)
a. Traditional economy
b. Command economy
c. Soviet economy
d. Market economy
e. Outdated economy

Answer 17

a) Traditional economy

Question 18

The economic system that answers the Three Questions of society through a central authority is a(n)
a. Traditional economy
b. Command economy
c. Soviet economy
d. Market economy
e. Outdated economy

Answer 18

b) Command economy

Question 19

The economic system that answers the Three Questions of society through prices is a(n)
a. Traditional economy
b. Command economy
c. Soviet economy
d. Market economy
e. Mixed economy

Answer 19

d. Market economy

Question 20

The main strength of the capitalist system is that…
a. The government maintains strong control over production and distribution
b. It is considered the most efficient system (produces the most goods and services from available resources)
c. Society’s resources and incomes are equally distributed
d. There is little friction between members of society
e. It is very stable and predictable, with no large swings in production/output/employment

Answer 20

It is considered the most efficient system (produces the most goods and services from available resources)

Question 21

Which economist is generally credited as the father of modern economics?
a. Adam Smith
b. John Maynard Keynes
c. Paul Krugman
d. Karl Marx
e. Milton Friedman

Answer 21

a. Adam smith

Question 22

The capitalist economic system places a greater emphasis on __________ while the socialist system places a greater emphasis on ___________.
a. Self-interest; self-interest
b. Self-interest; collective interest
c. Collective interest; collective interest
d. Collective interest; self-interest

Answer 22

b) Self-interest; collective interest

Question 23

Which economist viewed capitalism as inherently unstable, and would ultimately crumble under the friction created between capitalists and workers?
a. Adam Smith
b. John Maynard Keynes
c. Paul Krugman
d. Karl Marx
e. Milton Friedman

Answer 23

Karl Marx

Question 24

What is generally considered true of the strengths and/or weaknesses of capitalism?
a. Capitalism is thought to produce the largest economic ‘pie’ as possible, and also yields the most equitable distribution
b. Capitalism is thought to produce a smaller economic ‘pie’, and is often split unevenly
c. Capitalism is thought to produce the largest economic ‘pie, and yields a very unequitable distribution
d. Capitalism is thought to produce a small economic ‘pie’, but is split more evenly
e. Capitalism is thought to produce the smallest ‘pie’ possible, and split exactly equally for everyone

Answer 24

c) Capitalism is thought to produce the largest economic ‘pie, and yields a very unequitable distribution

Question 25

What is generally considered true of the strengths and/or weaknesses of socialism?
a. Socialism is thought to produce the largest economic ‘pie’ as possible, and also yields the most equitable distribution
b. Socialism is thought to produce a smaller economic ‘pie’, and is often split unevenly
c. Socialism is thought to produce the largest economic ‘pie, and yields a very unequitable distribution
d. Socialism is thought to produce a small economic ‘pie’, but is split more evenly
e. Capitalism is thought to produce the smallest ‘pie’ possible, and split exactly equally for everyone

Answer 25

d) Socialism is thought to produce a small economic ‘pie’, but is split more evenly

Question 26

According to the idea of an ‘invisible hand’,

Answer 26

c) Individuals motivated by self-interest can be the best method to serve the interests of society

Question 27

Which of the following issues are concerned with microeconomic issues?
a. Whether Home Depot hires 50 or 51 workers per shift.
b. How consumers respond to a 5% tax on gasoline.
c. How a 5% tax on gasoline affects the market for new cars.
d. How a firm responds to new pollution regulations on production.
e.All of the above are microeconomic in nature.

Answer 27

e. all of the above are microeconmic in nature

Question 28

An economic theory describes…
a. The government policies
b. A causal relationship between two variables
c. The truth for economic activities
d. good news in the stock market
e. findings in an important academic journal.

Answer 28

b. a casual relationship bettween two varibles