Economics Practice Quiz (Chapter 1)

Scarcity exists because

• some people make bad economic decisions.

• people take too much leisure time.

• the costs of production are high.

• some individuals have low income.

• human wants exceed the resources available to satisfy them.

Scarcity requires that we

• produce efficiently.

• learn to limit our wants.

• make choices about what goods and services to produce.

• have the most rapid economic growth possible.

• have unlimited resources.

Which of the following statements BEST describes the study of economics? Economics studies how

• firms make profits.

• businesses reach decisions.

• to organize production so that scarcity does not occur.

• to create incentives so that scarcity does not exist.

• we make choices in the face of scarcity.

Microeconomics includes the study of the

• recessions and inflation in the global economy.

• choices made by individuals and businesses.

• reasons why the government changes interest rates.

• aggregate effects on the national economy.

• nationwide unemployment rate.

Which of the following is a microeconomic issue?

• The price of gasoline increases in the United States this year.

• The U.S. government cuts taxes to combat a recession.

• The unemployment rate soars in Spain.

• Inflation skyrockets in Russia.

• The Brazilian economy experiences rapid economic growth.

Which of the following is a microeconomic topic?

• K-Mart's decision to close stores that are not making a profit

• Home Depot's choice to hire more full-time employees because its sales increased

• Delta Airlines changes its fares.

Which of the following is a microeconomic issue?

• Why is the average income lower in Africa than in Latin America?

• Why has unemployment risen nationwide?

• What is the impact on the quantity of Pepsi purchased if consumers' tastes change in favor of non-carbonated drinks?

• Why has economic growth been rapid in China?

• Why did overall production increase within the United States last year?

Macroeconomics is the study of

• national or global economies.

• the actions of individual consumers.

• the actions of individual businesses.

• how ceteris paribus affects causation.

• the government.

Which of the following BEST describes macroeconomics?

• It examines how the choices that individuals affect governments.

• It analyzes the aggregate effects on the national economy of the choices made by individuals, firms, and governments.

• It studies the choices that individuals and businesses make when coping with scarcity.

• Proving causation is never a problem for macroeconomics.

• It is not a social science because its predictions cannot be tested.

Which of the following is a macroeconomic topic?

• China increases interest rates to slow its economic growth.

• Congress lowers tax rates to try and lower the unemployment rate.
  

• Nissan decides to produce more electric Leaf models and fewer Altima sedans.