ECN Macroeconomics - Ch 1 & 2 - Quiz #1

Scarcity means

• unlimited wants and unlimited available resources.

• unlimited wants and limited available resources

• limited wants and limited available resources.

• limited wants and unlimited available resources

The fundamental reason to study economics is to study

• how choices are made.

• how production is determined.

• how countries trade with each other

• how finances are determined

The main issues that macroeconomic studies are

• interest rates, jobs, and government policies

• production, costs, and benefits

• economic growth, unemployment, and inflation.

• choices made by household and businesses.

Which one is a macroeconomic topic?

• A business decides to buy new software.

• A person decides to return to college

• The central bank lowers interest rates to stimulate the economy.

• The government issues new environmental regulations

A theory is a(n)

• answer to a problem

• way to explain the result an economist wants

• tool to help determine the answer to a problem

• a graph.

The circular flow model primarily studies how decisions are made by what two groups?

• consumers and suppliers

• households and firms

• government and households

• government and firms

What are the three ways economies are organized?

• communism, socialism, free

• market, capitalism, mixed

• traditional, command, market

• traditional, market, mixed

Which of the following describes the idea that the work required to produce a good or service is divided into a number of tasks that are performed by different workers?

• division of labor

• interconnected economy

• task economy

• modern economy

What is a term referring to the fact that for many goods, as the level of production increases, the average cost of producing each individual unit declines?

• skill

• specialization

• economies of scale

• division of labor

Which of the following is the best definition of economics?

• Economics is the study of how humans make decisions in the face of scarcity

• Economics is the study of the division and specialization of labor

• Economics is the study of the production of goods and services.

• Economics is the study of markets.