Econ Quiz 1 Terms – Flashcards

Economics, according to its definition, studies how people: a.earn and spend money. b.invest in the stock and bond markets. c.make choices in the face of scarcity. d.supply goods in response to demand.

Scarcity is a problem: a.measured by the amount of goods available. b.of the poor, but not the rich. c.because human wants are unlimited while resources are limited. d.only in industrialized economies.

People are forced to make choices because of: a.unlimited wants and unlimited resources. b.limited wants and unlimited resources. c.unlimited wants and limited resources. d.limited wants and limited resources. e.irrational wants and limited resources.

Economists believe that scarcity forces everyone to: a.satisfy all their wants. b.abandon consumer sovereignty. c.lie about their wants. d.create unlimited resources. e.make choices.

The factors of production are which of the following? a.The outputs generated by the production process of transforming land, labor, and capital into goods and services. b.The land resources, such as natural resources, that are unimproved by human economic activity. c.Land (natural resources), labor (human capital, entrepreneurship), and capital (constructed inputs such as factories). d.Labor and capital in industrialized countries, where natural resources are no longer used to produce goods and services.

Which of the following is not an example of a factor of production? a.A forest. b.A computer program. c.A labor leader. d.Dollars.

Which of the following is the best example of an activity that would be undertaken by an entrepreneur? a.Buying and selling of stocks and bonds. b.Starting a new business. c.Working on an assembly line. d.Running for political office.

The basic difference between macroeconomics and microeconomics is: a.microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade. b.microeconomics concentrates on the behavior of individual consumers while macroeconomics focuses on the behavior of firms. c.microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy. d.microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment.

When economists use the term Ceteris paribus, they are indicating that: a.the relationship between two economic variables cannot be determined. b.the analysis is true for the individual but not for the economy as a whole. c.all other variables except the ones specified are assumed to be constant. d.their conclusions are based on normative economics rather than positive economic analysis.

Which of the following is a statement of positive economics? a.I hope unemployment comes down soon. b.President X's way of dealing with unemployment is better than President Y's. c.I think everyone should sacrifice to reduce the deficit. d.If taxes are reduced, unemployment will drop.