Quiz 6/25

Which of the following statements is an example of positive economic analysis?

• When people actually witness the inheritance tax they will scream and it will cause markets to go into a panic.

• The inheritance tax should be repealed because it’s unfair.

• The inheritance tax will decrease incomes by 2% based on statistical studies.

• The inheritance tax is a pile of rubbish and should never be considered.

• None of the Above

Why does scarcity exist?

• Each year workers tend to produce less than in previous years.

• Machines wear out with time.

• There are not sufficient resources to produce all the products people want.

• There is a limit to people’s wants.

• None of the Above

The crucial problem of economics is

• Establishing a fair tax system

• Providing social goods and services

• Developing a price mechanism that reflects the relative scarcities of products and resources

• Allocating scarce productive resources to satisfy wants

• None of the Above

Which asset is not part of the factor of production Land?

• A forest

• A natural harbor

• A desert

• A road

• None of the Above

An unemployed worker accepts a job.  Which of the following is the opportunity cost of this decision?

• The cost of travel to and from work

• The income earned from the new job

• The leisure time that is lost

• The training that occurs for the new job

• None of the Above

Which of the following is an example of physical capital?

• A truck

• A truck driver

• A truck driver's savings

• A truck driver's wages

• None of the Above

How are resources allocated in a command economy?

• By the price mechanism

• By government orders

• By each person producing for themselves

• By the government asking the people what should be done in a democratic way

• None of the Above

Which are some things Adam Smith accomplished during his lifetime?

• He was a wonderful inventor and came up with captivating inventions.

• He was the father of modern day economics and wrote the wealth of nations.

• He thought of economics as something simple and can be easily understood

• He won the Nobel Peace Prize in his lifetime.

• None of the Above

Which of the following would be described as a service?

• Producing bananas that look like smiley faces

• Trimming hedges

• Making telephones

• Creating playing cards

• None of the Above

What is the invisible hand theory?

• It is the theory that says leaving the market alone will benefit society as a whole because of people pursuing their own self-interest.

• When the stock market goes up or down suddenly it is known as the invisible hand.

• The invisible hand theory can be described as the fear from living under a command economic system.

• When resources are organized by the government it leads to the most efficient outcome known as the invisible hand.

• None of the Above