Introduction to Economics

1. Each day you have $5 for lunch. Today, you decided to save $2 and buy the chicken salad tomorrow for $6.50. How is money being used in this case?

• As an indicator of debt
• As a store of value
• As a medium of exchange
• As a unit of accounting

2. Due to heavy lobbying by the Cake Makers of America, the government issues a new regulation that requires people who sell cakes to purchase a license. Given this scenario, it can be said that government is creating:

• A safer workplace
• A more competitive market
• A barrier to market entry
• A better product

3. Bartering is defined as:

• The value placed on a product
• Taking a product with the promise to return it
• Trading a product for another product
• An object used as payment for a product

4. An object used as payment for a product

• Barriers to market entry exist
• Buyers are familiar with the product
• Many buyers and sellers
• No seller or buy has control of the market

5. What is meant by scarcity?

• Limited resources and limited wants and needs
• Unlimited resources and limited wants and needs
• Limited resources and unlimited wants and needs
• Unlimited resources and unlimited wants and needs

6. Which type of market has a few major sellers, where a price action by one seller can cause the other sellers to follow?

• Oligopoly
• Pure competition
• Monopoly

7. Which concept is NOT basic to definition of economics?

• Scarcity
• Rational self-interest
• Choice
• Bartering

8. Which market structure requires a large number of suppliers?

• Pure competition
• Oligopoly
• Monopoly

9. When money is used to compare the value of different products it is used:

• As an indicator of debt
• As a unit of accounting
• As a store of value
• As a medium of exchange

10. What is the main purpose of a market?

• To provide jobs for sellers
• To allow for the exchange of products
• To provide a method to raise government taxes
• To provide a place for buyers to spend time