ECON2301 Exam 1 Study Guide

Economics is best defined as the
A) study of how people make choices to satisfy their wants
B) study of individual self-interests
C) study of how government can most efficiently raise funds by taxation
D) process by which goods are sold in free markets
A) study of how people make choices to satisfy their wants

In economic analysis, people’s resources are
A) limited and their wants are unlimited
B) unlimited and their wants are alson unlimited
C) limted and their wants are also limited
D) unlimited and their wants are limited
A) limited and their wants are unlimited

In economics, items that are used to produce goods and services are known as
A) wants
B) aggregates
C) factors of need
D) resources
D) resources

Economics is a part of the
A) social sciences
B) natural sciences
C) biological sciences
D) organizational sciences
A) social sciences

Microeconomics is defined as that part of economic analysis that
A) studied the behavior of the economy as a whole
B) includes the problems of inflation and unemployment
C) studies individual decision making by households and firms
D) concerns aggregate production and consumption
C) studies individual decision making by households and firms

Marcoeconomics is the study of
A) aggregate economic variables
B) output in particular industries
C) prices in particular industries
D) all of the above
A) aggregate economic variables

One topic of study for a microeconomist would be the
A) causes of inflation
B) causes of aggregate unemployment
C) effects of a gasoline price increase on consumer behavior
D) effects of an increase in government spending on overall economic activity
C) effects of a gasoline price increase on consumer behavior

What of the following would likely be studied in a macroeconomics course?
A) the unemployment rate
B) total output for an economy
C) the inflation rate
D) all of the above
D) all of the above

Another word for “aggregate” is
A) government
B) partial
C) public
D) total
D) total

An economic system is
A) the universe of all resources
B) a way to create new resources
C) a mechanism to allocate scarce resources
D) an organization that generates profits
C) a mechanism to allocate scarce resources

Which of the following is NOT one of the basic questions that an economic system attempts to answer?
A) How to eliminate choices?
B) What to produce?
C) How much will goods and services be produced?
D) For whom will goods and services be produced?
A) How to eliminate choices?

What is the type of economic system that relies on one central authority to make economic decisions?
A) Free market
B) Price system
C) Command system
D) Mixed economic system
C) command system

A mixed economic system is best described an economy with a mix of
A) state and federal governments
B) domestic and foreign buyers
C) free markets and government control
D) for-profit organizations and not-for-profit organizations
C) free markets and government control

In a market system, ______ provide signals about whether resources are relatively scarce or abundant.
A) prices
B) economists
C) government officials
D) scientists and engineers
A) prices