PART ONE
Choose the correct answer:
1) Economics is the study of:
A) production technology.
B) consumption decisions.
C) how societies decide what, how, and for whom to
produce.
D) the best way to make individual choices.
2) The opportunity cost of a good is
A) the time lost in finding it.
B) the quantity of other goods sacrificed to get another unit of
that
C) the expenditure on the good.
D) is relatively higher than the money cost of the good.
3) In a free market system
A) governments intervene
B) governments plan production.
C) governments interfere
D) prices adjust to reconcile scarcity and desires
4) In the mixed economy
A) economic problems are solved by the government and
market.
B) economic decisions are made by the private sector and free
market.
C) economic allocation is achieved by the invisible hand.
D) economic questions are solved by government departments.
5. Microsconomics is concerned with
A) the economy as a whole.
8) the electronics industry.
C) the study of individual economic units and their behavior.
D) the interactions within the entire economy.
6. Which of the followings is a microeconomic statement?
A) the real domestic output increased by 2.5 percent last year.
B) Unemployment was 9.8 percent of the labor force last year
C) The price of wheat declined last year
D) The general price level increased by 4 percent last year
7. Which of the following statement is correct?
A) Economics is a natural science.
B) Economics is the study of how people and countries make
choices.
C) If poverty was eliminated there would be no reason to study
economics.
D) Economic analysis can be used to explain how societies, but
not individuals, make decisions.
8) The concept of opportunity cost can be applied to the
analysis of……..decision making process.
A) only economy wide.
B) only global.
C) only small-scale.
D) any.
9. Scarce resources give rise to the concept of
A) efficient market.
B) opportunity cost.
C) laissez-faire.
D) positive economics
10. If you own an apartment, and you decided to lease it.
A) There is no opportunity cost of leasing the apartment
because you own it.
B) There is an opportunity cost of leasing the apartment
because you could have chosen to live in it.
C) There is no opportunity cost of leasing the apartment
because you collect rent from your lessor.
D) The only cost relevant to this decision is the price you paid
for the apartment.
11. The most fundamental economic problem is
A) Security.
B) the fact the United states buys more goods from foreigners
than we well to foreigners.
C) health.
D) Scarcity.
12. Economists point out that scarcity confronts
A) the rich but not the poor.
B) the poor but not the rich.
C) both the poor and the rich.
D) neither the poor nor the rich.
13. Scarcity requires that people have to
A) Trade.
B) compete.
C) cooperate.
D) Make choices.
14. Which of the following topics would be studied in
microeconomics course?
A) how a tax rate increase will impact total production.
B) comparing inflation rates across countries.
C) how a trade agreement between the United States and
Mexico affects both nations'
unemployment rates.
D) how rent ceilings impact the supply of apartments.
15. Entrepreneurs do all of the following EXCEPT
A) bear risk from business decisions.
B) own all the other resources.
C) come up with new ideas about what, how, when and where
to produce.
D) organize labor, land, and capital.
16. Which of the following is NOT a factor of production?
A) A share of stock issued by a firm.
B) A new computer used by a small business owner.
C) A tractor used by a wheat farmer.
D) The time worked by elementary school teachers.
17. A lecturer is considered……..and earns……..
A) Al labor, wages.
B) labor, rent.
C) capital, rent.
D) entrepreneurship, wages.
18. Factors of production include all of the following EXCEPT
A) machines made in past years.
B) Income.
C) a wheat field that is not irrigated.
D) entrepreneurship.
19. The one who is responsible for the tasks that factors of
production are collected for is called…..and receive…….
A) entrepreneur; profit.
B) labor: wages.
C) land: rent.
D) capital; Interest
20. Microeconomics is best described as the study of
A) the choices made by individual households, firms and
governments
B) inflation, unemployment, gross national product, and the
nation's economy as a
whole.
C) how markets interact in the aggregate economy.
D) marginal changes in the economic indicators of an economy.
21. We can use macroeconomic analysis to
A) learn how to balance a checkbook.
B) study choices made by households.
C) understand marginal changes in firms profits.
D) understand why economies grow.
22. Goods and services of value to households are
A) inputs in the production process
B) Outputs in the production process
C) Both inputs and outputs in the production process
D)Unrelated to the production process.
23. If scarcity were eliminated
A) trade would become unnecessary,
B) opportunity costs would increase.
C) all nations would have an absolute advantage in producing
all products.
D) the concept of trade-off would become irrelevant.
24. The opportunity cost of investment in capital is forgone of
present consumption just
A) resources are scarce
8) resources are unlimited.
C) capital is in greater supply than labor.
D the public chooses consumption over investment.
25. Periods of full employment correspond to
A) Points outside the PPF.
B) Points Inside the PPF.
C) Points on the PPF.
D) Either points inside or outside the PPF.
26. When an economy is producing inside its production
frontier
A) A production inefficiency occurs.
B) only technological advances will allow it to increase
production.
C) it is efficient so long as it is producing what people want.
D) it must overcompensate by producing outside the curve to
achieve efficiency.
27. If a society is producing at a point along its production
possibility frontier, then the society
A) is fully employing its resources so it must be allocated
efficient.
B) is fully employing its resources, but not necessarily being
allocated efficient.
C) is under allocating resources so it must be efficient.
D) is over allocating resources so efficiency is in determined.
Part two
Choose the correct answer:
1. The quantity demanded is
A) Always equal to the equilibrium quantity.
B) Independent of the price of the good.
C) The amount of a good that consumers plan to purchase at a
particular price.
D) Independent of consumers' buying plans.
2. The law of demand states that, other things are constant,
the higher the price of a good, the
A) smaller is the demand for the good.
B) larger is the demand for the good.
C) smaller is the quantity of the good demanded.
D) larger is the quantity of the good demanded.
3. The law of demand implies that if nothing else changes,
there is
A) A positive relationship between the price of a good and the
quantity demanded.
B) A negative relationship between the price of a good and the
quantity demanded.
C) A linear relationship between price of a good and the
quantity demanded.
D) An exponential relationship between price of a good and the
quantity demanded.
4. A drop in the price of a compact disc shifts the demand
curve for prerecorded tapes leftward. From that you know
that compact discs and prerecorded tapes are
A)Complements.
B) Substitutes.
C) Inferior goods.
D) Normal goods.
5. The demand for a good increases when the price of a
substitute …….and also increases when the price of a
complement…….
A) rises; rises.
B) rises; falls.
C) falls; rises.
D) falls; falls.
6. Suppose people buy more of good 1, when the price of
good 2 falls. These goods are
A) Complements.
BI Substitutes.
C) Normal.
D) inferior.
7. The demand curve for a normal good shifts leftward if
income,……..or the expected future price,……
A) decreases; falls.
B) decreases; rises.
C) increases; falls.
D) increases; rises.
8. If income increases or the price of a complement falls.
A) the demand curve for a normal good shifts leftward.
B) the demand curve for a normal good shifts rightward.
C) the supply curve of a normal good shifts leftward.
D) the supply curve of a normal good shifts rightward,
9. An inferior good is a good for which demand
A) decreases when Income increases.
B) increases when income increases.
C) decreases when population Increases.
D) Increases when population increases.
10. In 2018, there were 200,000 gas grills demanded at a price
of $500. in 2019, there were more than 200,000 gas grills
demanded at the same price. This could be the result any of
the following.
A) An increase in the supply of gas grills.
B) An increase in income, if gas grills are a normal good.
C) A fall in the price of natural gas, a complement for a gas grill.
D) An increase in population.
11. A change in which of the following alerts buying plans for
cars, but does NOT shift the demand curve for cars ?.
A) A 5 percent increase in people's income.
B) A 10 percent decrease in the price of car insurance.
C) A 20 percent increase in the price of a car.
D) An increased preference for walking rather than driving.
product?
12. Which of the following is NOT one of the factors that
influences the supply of a product?
A) technology.
B) income.
C) number of suppliers.
D) expected future prices.
