Question 1

Economics is best defined as the

Accepted Answer

Study of how people make choices to satisfy their wants.

Question 2

In economic analysis, people\'s resources are

Accepted Answer

Limited and their wants are unlimited.

Question 3

In economics, items that are used to produce goods and services are known as

Accepted Answer

Resources

Question 4

Economics is a part of the

Accepted Answer

Social sciences.

Question 5

Microeconomics is defined as that part of economic analysis that

Accepted Answer

Studies individual decision making by households and firms.

Question 6

Macroeconomics is the study of

Accepted Answer

Aggregate economic variable.

Question 7

One topic of study for a microeconomist would be the

Accepted Answer

Effects of a gasoline price increase on consumer behavior.

Question 8

Which of the following would likely be studied in a macroeconomics course?

Accepted Answer

All of the above (the unemployment rate, total output for an economy, the inflation rate)

Question 9

Another word for \"aggregate\" is

Accepted Answer

Total.

Question 10

An economic system is

Accepted Answer

A mechanism to allocate scarce resources.

Question 11

Which of the following is NOT one of the basic questions that an economic system attempts to answer?

Accepted Answer

How to eliminate choices?

Question 12

What is the type of economic system that relies on one central authority to make economic decisions?

Accepted Answer

Command system.

Question 13

A mixed economic system is best described an economy with a mix of

Accepted Answer

Free markets and government control.

Question 14

In a market system, _____provide signals about whether resources are relatively scarce or abundant.

Accepted Answer

Prices

Question 15

Economists assume that people are motivated by

Accepted Answer

Rational self-interest

Question 16

The potential rewards that are available if a particular activity is undertaken are known as

Accepted Answer

Incentives.

Question 17

If the government offers to reduce your property taxes by 10% if you install solar heating for your home, this would be an example of

Accepted Answer

Incentives

Question 18

A simplified representation of the real world that is used to explain economic phenomena is a(n)

Accepted Answer

Model

Question 19

Holding all variables constant but one assessing the impact of the one variable that has changed is an example of

Accepted Answer

The ceteris paribus assumption

Question 20

Why is economics called an empirical science?

Accepted Answer

because economics relies on real-world data to determine the usefulness of a model.

Question 21

In the production of goods and services, trade-offs exist because

Accepted Answer

society has only a limited amount of productive resources.

Question 22

The difference between scarcity and a shortage is that

Accepted Answer

scarcity always is a part of human life while shortage s usually are temporary.

Question 23

In 2006, hurricanes damaged many parts of Texas, destroying homes, businesses, schools, and infrastructure. In strictly economic terminology, these hurricanes are said to have caused

Accepted Answer

shortages, because supplies were cut off and goods were destroyed.

Question 24

Human resources that perform the functions of organizing, managing, and assembling the other factors of production are called

Accepted Answer

entrepreneurs.

Question 25

In economic terminology, when a resource is used to produce is used to produce output it is referred to as

Accepted Answer

a factor of production.

Question 26

Physical capital is distinguished from a human capital because

Accepted Answer

physical capital rears to equipment and machinery, whereas human capital refers to trained people.

Question 27

Human capital is

Accepted Answer

the accumulation of skills, training and education of workers.

Question 28

Economic goods are defined as

Accepted Answer

anything from which an individual derives satisfaction.

Question 29

A tractor used to prepare land for planting is called

Accepted Answer

physical capital.

Question 30

Naturally occurring diamonds are an example of

Accepted Answer

land.

Question 31

Opportunity cost is defined as

Accepted Answer

the value of the next-best alternative that must be sacrificed to attain a want.

Question 32

Opportunity costs arise from

Accepted Answer

choices.

Question 33

The production possibilities curve represents

Accepted Answer

the maximum combination of goods and services that can be produced with fixed resources and technology, given efficient use of the resources.

Question 34

A country operates inside its production possibilities curve, this may be caused by

Accepted Answer

unemployment resources.

Question 35

How is economic growth shown by the production possibilities curve?

Accepted Answer

by shifting the curve to the right.

Question 36

Generally, if a nation produces more consumer goods than capital goods

Accepted Answer

less of all goods may be produced in the future.

Question 37

Comparative advantage is

Accepted Answer

when a country can produce a good at a lower opportunity cost compared to other countries.

Question 38

Which is the best example of specialization?

Accepted Answer

a high school math teacher who teaches only calculus.

Question 39

Absolute advantage is

Accepted Answer

producing a good using the fewest inputs.

Question 40

A person has a comparative advantage in an activity whenever she

Accepted Answer

can perform the activity at a lower opportunity cost than another person can.

Question 41

In economics, \"demand\" refers to

Accepted Answer

the quantities of a good that people will buy at various prices.

Question 42

The law of demand states that

Accepted Answer

quantity demanded will vary inversely with the price of the good.

Question 43

A fundamental principle in demand analysis is that a change in price leads to

Accepted Answer

a movement along the demand curve.

Question 44

The money price of a good is that price

Accepted Answer

expressed in today\'s dollars.

Question 45

The relative price of a good is that price

Accepted Answer

expressed in terms of the price of another good.

Question 46

Markets are

Accepted Answer

a mechanism through which prices of goods and services are determined by the forces of supply and demand.

Question 47

Ceteris paribus, as the price of a good or service increases,

Accepted Answer

people will buy less of it.

Question 48

The demand curve shows the relationship between quantity demanded and

Accepted Answer

price.

Question 49

A demand curve

Accepted Answer

slopes down because of the inverse relationship between price and quantity demanded.

Question 50

Adding the quantities demanded by all consumers at every price will yield

Accepted Answer

the market demand curve.

Question 51

If a decrease in the price of good A causes a decrease in demand for good B, the two goods are

Accepted Answer

substitutes.

Question 52

Assuming that turkey, chicken, pork, and beef are substitutes, suppose that the price of turkey has fallen. This will, other things being equal

Accepted Answer

reduce demand for chicken, pork, and beef.

Question 53

The quantity supplied of a particular good is the amount of the good that

Accepted Answer

firms are willing to sell at each price during a particular time period.

Question 54

According to the law of supply,

Accepted Answer

producers provide less of a good when the price decreases

Question 55

A given supply curve illustrates

Accepted Answer

the relationship between price and quantity supplied.

Question 56

For typical goods, supply curves are

Accepted Answer

upward sloping

Question 57

Total market supply can be derived by

Accepted Answer

horizontally summing individual supply curves at each and every price level.

Question 58

Other things being equal, an increase in wages paid to workers in the steel industry will cause

Accepted Answer

the supply to decrease.

Question 59

An improvement in technology in the production of computers would

Accepted Answer

increase the supply of computers.

Question 60

There will be an increase in supply when

Accepted Answer

there is an improvement in technology.

Question 61

A country\'s labor force is equal to

Accepted Answer

the total number of employed and unemployed people.

Question 62

The term \"unemployment\" is best described as the total number of

Accepted Answer

adults who are looking for work but have not found a job.

Question 63

Individuals who have stopped looking for work because they are convinced that they will not find a job are considered

Accepted Answer

discouraged workers.

Question 64

The rate of unemployment is calculated as the number of

Accepted Answer

unemployment divided by the number of people in the civilian labor force.

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