Economics Quiz

What is the definition of economics?

• The social science that studies choices made under scarcity

• The analysis of government policies

• The examination of historical economic trends

• The study of wealth distribution

What is microeconomics primarily concerned with?

• Government fiscal policies

• Global trade relations

• National economic performance

• Individual and business choices

Which of the following is a key question of microeconomics?

• What are the balance of payments problems?

• What is the inflation rate?

• How are goods and services produced?

• What is the national unemployment rate?

What does opportunity cost refer to?

• The cost of production

• The benefits of a decision

• The total cost of goods

• What is given up to gain something else

In a free market economy, resources are allocated by:

• Community consensus

• Central planning

• Government decisions

• Supply and demand

What is the primary focus of macroeconomics?

• National and global economic performance

• Business competition

• Market structures

• Individual consumer behavior

Which of the following is NOT a key idea in the economic way of thinking?

• Choices respond to incentives

• People make rational choices

• All choices are free of cost

• Most choices are made at the margin

What is a positive statement in economics?

• An opinion about what should be

• A statement that can be tested against facts

• A subjective view of economic policies

• A normative judgment

What does the circular-flow diagram illustrate?

• The impact of government policies

• How dollars flow through markets

• The production possibilities frontier

• The relationship between supply and demand

What does the production possibilities frontier represent?

• The maximum output of an economy

• All of the above

• The efficiency of resource allocation

• The trade-offs between two goods