Basics of Economics_Exam Prep_#1

What is the degree to which resources are being used effectively to produce goods and services called?

• specialization
• productivity
• division of labor
• consumption

What is the fundamental economic problem faced by all societies?

• trade-offs
• productivity
• demand
• scarcity

All of the following are factors of production EXCEPT:

• land
• labor
• energy
• capital

The fundamental questions that every economic system must answer include all of the following EXCEPT:

• What goods and services will be produced?
• How will they goods be produced?
• When will goods be produced?
• For whom will goods be produced?

Macroeconomics deals with:

• the behavior of firms/business organizations
• economic aggregates/groups
• the activities of individual units
• the behavior of the electronics industry

The circular flow of goods and incomes shows the relationship between:

• income & money
• wages & salaries
• goods & services
• firms & households

Economics is..

• the study of the markets for stocks and bonds
• the study of choice under conditions of scarcity
• fundamentally the same as sociology
• applicable only when scarcity is not a problem

Microeconomics deals with which of the following?

• the total output of an economy
• the measurement of a nation's inflation rate
• how producers and consumers interact in individual markets
• how tax policies influence economic growth

When there is an improvement in technology, hold all else constant, 

• the production possibilities frontier will shift to the left
• society faces larger opportunity costs from shifting productive resources from one use to another
• the economy must have some idle/unused resources
• the production possibilities frontier will shift to the right

Along a society's production possibilities frontier (i.e. the curve of the line)

• the level of technology is changing
• more of one good can be produced without giving up some of the other good
• resources are not being fully utilized
• available resources are being used efficiently