When economists make normative statements, they are

b. speaking as policy advisers.

c. making claims about how the world is.

d. revealing that they are very liberal in their views of how the world works.

Communist countries worked on the premise that economic well-being could be best attained by

the actions of government central planners

a strong reliance on prices and individuals' self-interests

a system of large privately-owned firms

The invisible hand refers to

b. how the decisions of households and firms lead to desirable market outcomes.

a. how central planners made economic decisions.

c. the control that large firms have over the economy.

d. government regulations without which the economy would be less efficient.

The slope of a line is equal to

b. the change in the value of y divided by the change in the value of x.

a. the change in the value of x divided by the change in the value of y.

c. the horizontal distance divided by the vertical distance.

d. the value of y divided by the value of x.

Households and economies have each of the following in common EXCEPT both

d. must have a central decision maker.

a. must allocate scarce resources.

c. must allocate the goods and services they produce.

Senator Smart, who understands economic principles, is trying to convince workers in her district that trade with other countries is beneficial. Senator Smart should argue that trade can be beneficial

b. because it allows specialization, which increases total output.

a. only if it allows us to obtain things that we couldn't make for ourselves.

c. to us if we can gain and the others involved in the trade lose.

d. in only a limited number of circumstances because others are typically self-interested.

In considering how to allocate its scarce resources among its various members, a household considers

d. all of (i), (ii), and (iii).

a. (i) each member's abilities.

c. (iii) each member's desires.

Moira decides to spend two hours taking a nap rather than attending her classes. Her opportunity cost of napping is

a. the value of the knowledge she would have received had she attended class.

b. the $30 she could have earned if she had worked at her job for those two hours.

c. the value of her nap less the value of attending class.

d. nothing, since she would valued sleep more than attendance at class.

Which of the following is not correct?

b. Economics has its own language and its own way of thinking, but few other fields of study do.

a. Economists use some familiar words in specialized ways.

c. Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language.

d. The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live.

Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 50 units of food and 30 machines. This year it experienced a technological advance in its machine-making industry. As a result, this year the society wants to produce 55 units of food and 30 machines. Which of the following statements is correct?

d. The technological advance reduced the amount of resources needed to produce 30 machines, so these resources could be used to produce more food.

a. Because the technological advance occurred in the machine-making industry, it will not be possible to increase food production without reducing machine production below 30.

b. Because the technological advance occurred in the machine-making industry, increases in output can only occur in the machine industry.

c. In order to increase food production in these circumstances without reducing machine production, the economy must reduce inefficiencies.

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

d. scientific judgments and values.

c. scientific judgments and education.

A tradeoff exists between a clean environment and a higher level of income in that

laws that reduce pollution raise costs of production and reduce incomes

studies show that individuals with higher levels of income actually pollute less than low-income individuals

to pay for pollution clean-up, the government must increase taxes which lowers income

by employing individuals to clean up pollution, employment and income both rise

Productivity is defined as the

amount of goods and services produced from each unit of labor input

number of workers required to produce a given amount of goods and services

amount of labor that can be saved by replacing workers with machines

actual amount of effort workers put into an hour of working time

Suppose a typical worker in France can produce 32 units of product in an eight-hour day, while a typical worker in Germany can produce 30 units of product in a 10-hour day. We can conclude that

c. productivity is 4 units per hour for the German worker and 3 units per hour for the French worker.

a. worker productivity in Germany is higher than in France.

b. the standard of living will likely be higher in France than in Germany.

d. there will be no difference between the standard of living in France and Germany.

Trade between countries tends to

increase competition and reduce specialization.

reduce both competition and specialization.

reduce competition and increase specialization.

increase both competition and specialization.

Mitch has $100 to spend and wants to buy either a new amplifier for his guitar or a new mp3 player to listen to music while working out. Both the amplifier and the mp3 player cost $100, so he can only buy one. This illustrates the basic concept that

a. trade can make everyone better off.

c. rational people think at the margin.

d. people respond to incentives.

Factors of production are

a. used to produce goods and services.

d. assumed to be owned by firms in the circular-flow diagram.

The phenomenon of scarcity stems from the fact that

most economies' production methods are not very good.

in most economies, wealthy people consume disproportionate quantities of goods and services.

governments restrict production of too many goods and services.

If Japan chooses to engage in trade, it

will only benefit if it trades with countries that produce goods Japan cannot produce

cannot benefit if it trades with less developed countries

should first attempt to produce the good itself

can benefit by trading with any other country

Refer to Figure 2-7. In order to reach point C, the economy would have to

c. (iii) shift resources away from the production of ribeye steaks and toward production of books.

a. (i) acquire more resources or experience a technological advance.

b. (ii) begin using its available resources more efficiently than it is currently using them.

d. None of (i), (ii), and (iii) are correct; the economy will never be able to reach point C.

Which of the following principles is not one of the four principles of individual decision making?

Trade can make everyone better off

Rational people think at the margin

The business cycle is measured by the

(i) production of goods and services.

(ii) number of people employed.

A model can be accurately described as a

a. theoretical abstraction with very little value.

b. device that is useful only to the people who created it.

c. realistic and carefully constructed theory.

As a result of a successful attempt by government to cut the economic pie into more equal slices

it is easier to cut the pie, and therefore the economy can produce a larger pie

those who earn more income pay less in taxes

the pie gets smaller, and there will be less pie overall

government will spend too much time cutting and it causes the economy to lose the ability to produce enough pie for everyone

When two variables have a positive correlation,

(iii) when the x-variable increases, the y-variable increases.

(i) when the x-variable increases, the y-variable decreases.

(ii) when the x-variable decreases, the y-variable increases.

More than one of (i), (ii), and (iii) is correct.

Positive statements are

c. claims about how the world is.

b. claims about how the world should be.

d. made by economists speaking as policy advisers.

Which of the following statements best represents the principle represented by the adage, "There is no such thing as a free lunch"?

d. Kendra must decide between going to Colorado or Cancun for spring break.

a. Melissa can attend the concert only if she takes her sister with her.

b. Greg is hungry and homeless.

c. Brian must repair the tire on his bike before he can ride it to class.

To promote good economic outcomes, policymakers should strive to enact policies that

(ii) enhance individuals' market power

(iii) result in a rapidly-growing quantity of money

All of (i), (ii), and (iii) are correct

In an economy in which decisions are guided by prices and individual self-interest, there is

a. the potential to achieve efficiency in production.

d. more need for a strong legal system to control individual greed than would be needed in a centrally-planned economy.

b. a strong need for government intervention in the market.

c. less efficiency than would be observed in a centrally-planned economy.

The field of economics is traditionally divided into two broad subfields,

a. national economics and international economics.

b. consumer economics and producer economics.

c. private sector economics and public sector economics.

d. microeconomics and macroeconomics.

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

c. dollars spent on goods and services

Factors of production are

d. inputs into the production process.

a. the mathematical calculations firms make in determining their optimal production levels.

b. social and political conditions that affect production.

c. the physical relationships between economic inputs and outputs.

Most economists believe that an increase in the quantity of money results in

All of (i), (ii), and (iii) are correct

(i) an increase in the demand for goods and services

(ii) lower unemployment in the short run

(iii) higher inflation in the long run

When society requires that firms reduce pollution, there is

a tradeoff because of reduced incomes to the firms' owners and workers

a tradeoff only if some firms are forced to close

no tradeoff, since the cost of reducing pollution falls only on the firms affected by the requirements

no tradeoff, since everyone benefits from reduced pollution

A demand curve shows the relationship

c. between price and quantity demanded.

a. between income and quantity demanded.

d. among income, price, and quantity demanded.

Economics Quiz

Authored by Trang Minh

Business

12th Grade

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OPEN ENDED QUESTION

3 mins • 1 pt

The term used to describe a situation in which markets do not allocate resources efficiently is

Evaluate responses using AI:

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OPEN ENDED QUESTION

3 mins • 1 pt

Refer to Table 2-2. What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300?

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FILL IN THE BLANK QUESTION

30 sec • 1 pt

Which of the following would most likely serve as an example of a monopoly?

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The term used to describe a situation in which markets do not allocate resources efficiently is

economic meltdown

market failure

equilibrium

the effect of the invisible hand

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Prices direct economic activity in a market economy by

influencing the actions of buyers and sellers

reducing scarcity of the goods and services produced

eliminating the need for government intervention

allocating goods and services produced in the most equitable way

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The term market failure refers to

a. a situation in which the market on its own fails to allocate resources efficiently.

b. an unsuccessful advertising campaign which reduces demand for a product.

c. a situation in which competition among firms becomes ruthless.

d. a firm which is forced out of business because of losses.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The terms equality and efficiency are similar in that they both refer to benefits to society. However they are different in that

equality refers to uniform distribution of those benefits and efficiency refers to maximizing benefits from scarce resources

equality refers to maximizing benefits from scarce resources and efficiency refers to uniform distribution of those benefits

equality refers to everyone facing identical tradeoffs and efficiency refers to the opportunity cost of the benefits

equality refers to the opportunity cost of the benefits and efficiency refers to everyone facing identical tradeoffs

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Economics Quiz

The term used to describe a situation in which markets do not allocate resources efficiently is

Refer to Table 2-2. What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300?

Which of the following would most likely serve as an example of a monopoly?

The term used to describe a situation in which markets do not allocate resources efficiently is

Prices direct economic activity in a market economy by

The term market failure refers to

The terms equality and efficiency are similar in that they both refer to benefits to society. However they are different in that

When economists make normative statements, they are

An increase in the overall level of prices in an economy is referred to as

When economists attempt to simplify the real world and make it easier to understand they make

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