Question 1

In economics,which of the following is the best example of capital?

Accepted Answer

A)  Money held in a checking account. 
B)  A computer used by a lawyer to prepare legal documents. 
C)  Investment in training for employees in an accounting firm. 
D)  The executive producer of a new adventure movie. 
A)  Money held in a checking account. 
B)  A computer used by a lawyer to prepare legal documents. 
C)  Investment in training for employees in an accounting firm. 
D)  The executive producer of a new adventure movie.

Question 2

Ceteris paribus,if North Korea increases the size of its military,then:

Accepted Answer

A)  Its production possibilities curve will shift outward. 
B)  Its production possibilities curve will shift inward. 
C)  Its production of consumer goods will increase. 
D)  Its production of consumer goods will decrease. 
A)  Its production possibilities curve will shift outward. 
B)  Its production possibilities curve will shift inward. 
C)  Its production of consumer goods will increase. 
D)  Its production of consumer goods will decrease.

Question 3

Societies must address the question of WHAT to produce because:

Accepted Answer

A)  We can't produce all the goods and services we want. 
B)  The amount of money in an economy is limited. 
C)  We are wasteful and use resources inefficiently. 
D)  Our economy experiences market failures. 
A)  We can't produce all the goods and services we want. 
B)  The amount of money in an economy is limited. 
C)  We are wasteful and use resources inefficiently. 
D)  Our economy experiences market failures.

Question 4

Scarcity is not an issue in countries such as the United States since people live in nice homes and have plenty to eat.

Accepted Answer

A) True 
 B)False

Question 5

Because the economy is so complex,it is impossible to construct a theory about how it works.

Accepted Answer

A) True 
 B)False

Question 6

Pollution is an example of:

Accepted Answer

A)  Inefficiency by the polluting firm. 
B)  Market failure. 
C)  Government transfers. 
D)  Economic instability. 
A)  Inefficiency by the polluting firm. 
B)  Market failure. 
C)  Government transfers. 
D)  Economic instability.

Question 7

Macroeconomics focuses on:

Accepted Answer

A)  Government failure. 
B)  The behavior of individuals,firms,and government agencies. 
C)  Land,labor,and capital. 
D)  The economy as a whole. 
A)  Government failure. 
B)  The behavior of individuals,firms,and government agencies. 
C)  Land,labor,and capital. 
D)  The economy as a whole.

Question 8

The quantity of capital in an economy is unlimited since more can always be produced.

Accepted Answer

A) True 
 B)False

Question 9

In economics,capital refers to:

Accepted Answer

A)  Money. 
B)  Savings put aside for future investment. 
C)  Goods that can be used to produce other goods. 
D)  The value of a corporation's assets. 
A)  Money. 
B)  Savings put aside for future investment. 
C)  Goods that can be used to produce other goods. 
D)  The value of a corporation's assets.

Question 10

The study of economics focuses on:

Accepted Answer

A)  The behavior of successful businesses. 
B)  The role of money in our economy. 
C)  How best to allocate scarce resources. 
D)  The elimination of opportunity costs. 
A)  The behavior of successful businesses. 
B)  The role of money in our economy. 
C)  How best to allocate scarce resources. 
D)  The elimination of opportunity costs.

Question 11

A HEADLINE article in the text indicates that North Korea is expanding its missile programs,and at the same time it is running out of food.If North Korea is on its production possibilities curve and reduces food production so that it can increase the size of its military,this is an example of:

Accepted Answer

A)  Opportunity costs. 
B)  Laissez faire. 
C)  Externalities. 
D)  Ceteris paribus. 
A)  Opportunity costs. 
B)  Laissez faire. 
C)  Externalities. 
D)  Ceteris paribus.

Question 12

Scarcity means:

Accepted Answer

A)  Retail stores always run out of popular products. 
B)  The desire for goods exceeds our capacity to produce them. 
C)  Society will run out of the factors of production in the near future. 
D)  A surplus of unsold goods in a specific market will not occur. 
A)  Retail stores always run out of popular products. 
B)  The desire for goods exceeds our capacity to produce them. 
C)  Society will run out of the factors of production in the near future. 
D)  A surplus of unsold goods in a specific market will not occur.

Question 13

In attempting to answer the WHAT question,a society seeks to:

Accepted Answer

A)  Produce the optimal mix of output. 
B)  Exploit its workers in order to produce more output. 
C)  Produce more military goods so that the citizens will be safe. 
D)  Distribute an equal amount of goods to all citizens. 
A)  Produce the optimal mix of output. 
B)  Exploit its workers in order to produce more output. 
C)  Produce more military goods so that the citizens will be safe. 
D)  Distribute an equal amount of goods to all citizens.

Question 14

Explain opportunity cost.Give one example of an opportunity cost.

Accepted Answer

An opportunity cost is the val

Question 15

Which of the following is the best example of the "WHAT" economic question?

Accepted Answer

A)  Is the production process using an efficient amount of labor and capital machinery? 
B)  Who gets the goods once they are produced? 
C)  What is the most efficient method for producing goods? 
D)  What is the optimal mix of output? 
A)  Is the production process using an efficient amount of labor and capital machinery? 
B)  Who gets the goods once they are produced? 
C)  What is the most efficient method for producing goods? 
D)  What is the optimal mix of output?

Question 16

An externality is:

Accepted Answer

A)  A cost or benefit of a market activity that impacts a third party. 
B)  The private costs that are borne by an individual. 
C)  The cost of clean up paid for by the polluter. 
D)  A situation in which the government solution makes the outcome worse. 
A)  A cost or benefit of a market activity that impacts a third party. 
B)  The private costs that are borne by an individual. 
C)  The cost of clean up paid for by the polluter. 
D)  A situation in which the government solution makes the outcome worse.

Question 17

Define market mechanism and discuss Adam Smith's explanation of the "invisible hand."

Accepted Answer

The market mechanism is central in reshu

Question 18

The market mechanism:

Accepted Answer

A)  Works through central planning by the government. 
B)  Eliminates market failures created by the government. 
C)  Uses prices as a means of communication between consumers and producers. 
D)  Is very inefficient since consumers cannot communicate directly with producers. 
A)  Works through central planning by the government. 
B)  Eliminates market failures created by the government. 
C)  Uses prices as a means of communication between consumers and producers. 
D)  Is very inefficient since consumers cannot communicate directly with producers.

Question 19

Every economy faces the situation of scarcity of resources.

Accepted Answer

A) True 
 B)False

Question 20

Government failure occurs when government intervention fails to improve economic outcomes.

Accepted Answer

A) True 
 B)False

In economics,which of the following is the best example of capital?

Ceteris paribus,if North Korea increases the size of its military,then:

Societies must address the question of WHAT to produce because:

Scarcity is not an issue in countries such as the United States since people live in nice homes and have plenty to eat.

Because the economy is so complex,it is impossible to construct a theory about how it works.

Pollution is an example of:

Macroeconomics focuses on:

The quantity of capital in an economy is unlimited since more can always be produced.

In economics,capital refers to:

The study of economics focuses on:

A HEADLINE article in the text indicates that North Korea is expanding its missile programs,and at the same time it is running out of food.If North Korea is on its production possibilities curve and reduces food production so that it can increase the size of its military,this is an example of:

Scarcity means:

In attempting to answer the WHAT question,a society seeks to:

Explain opportunity cost.Give one example of an opportunity cost.

Which of the following is the best example of the "WHAT" economic question?

An externality is:

Define market mechanism and discuss Adam Smith's explanation of the "invisible hand."

The market mechanism:

Every economy faces the situation of scarcity of resources.

Government failure occurs when government intervention fails to improve economic outcomes.

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

Exam 1: The Challenge of Economics

In economics,which of the following is the best example of capital?

Ceteris paribus,if North Korea increases the size of its military,then:

Societies must address the question of WHAT to produce because:

Scarcity is not an issue in countries such as the United States since people live in nice homes and have plenty to eat.

Because the economy is so complex,it is impossible to construct a theory about how it works.

Pollution is an example of:

Macroeconomics focuses on:

The quantity of capital in an economy is unlimited since more can always be produced.

In economics,capital refers to:

The study of economics focuses on:

A HEADLINE article in the text indicates that North Korea is expanding its missile programs,and at the same time it is running out of food.If North Korea is on its production possibilities curve and reduces food production so that it can increase the size of its military,this is an example of:

Scarcity means:

In attempting to answer the WHAT question,a society seeks to:

Explain opportunity cost.Give one example of an opportunity cost.

Which of the following is the best example of the "WHAT" economic question?

An externality is:

Define market mechanism and discuss Adam Smith's explanation of the "invisible hand."

The market mechanism:

Every economy faces the situation of scarcity of resources.

Government failure occurs when government intervention fails to improve economic outcomes.

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters