Economics Quiz

Economics may best be defined as the:

• interaction between macro and micro considerations.

• social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.

• empirical testing of value judgments through the use of logic.

• use of policy to refute facts and hypotheses.

For economists, the word "utility" means:

• versatility and flexibility.

• rationality.

• pleasure and satisfaction.

• purposefulness.

The word "economy" comes from the Greek word oikonomos, which means

• "environment"

• "production."

• "one who manages a household."

• "one who makes decisions."

The problems of aggregate inflation and unemployment are:

• major topics of macroeconomics.

• not relevant to the U.S. economy.

• major topics of microeconomics.

• peculiar to command economies.

Scarcity refers to

• the ability of society to employ all of its resources.

• the ability of society to consume all that it produces.

• the inability of society to satisfy all human wants because of limited resources.

• the inability of society to eliminate poverty.

In the production of goods and services, trade-offs exist because

• not all production is efficient.

• society has only a limited amount of productive resources.

• buyers and sellers often must negotiate prices.

• human wants and needs are limited at a particular point in time.

All of the following are examples of physical capital EXCEPT

• buildings.

• machinery.

• company stocks and bonds.

• a hydroelectric power plant.

The value of the best alternative sacrificed to obtain something you want is referred to as

• explicit cost.

• opportunity cost.

• marginal cost.

• sunk cost.

People always face trade-offs because

• they always have more than one use for their time and money.

• they buy goods with money.

• trading takes place in a market economy.

• they can make themselves better off through trade.

Economic scarcity:

• is peculiar to the United States economy.

• applies to all economies.

• is peculiar to command systems.

• is peculiar to market systems.