Economics Quiz

The study of economics arises due to

• money

• scarcity

• greed

• resources

By definition, economics is the study of

• how to make money in the stock market

• how to make money in a market economy

• the choices people make to attain their goals, given their scarce resources

• supply and demand

Economists assume that individuals

• behave in unpredictable ways

• will never take actions to help others

• prefer to live in a society that values fairness above all else

• are rational and respond to incentives

What does the term "marginal" mean in economics?

• the edge of a market

• an additional or extra

• illegal

• secondary

• trivial

Adam Smith's invisible hand refers to

• the government's unobtrusive role in ensuring that the economy functions efficiently.

• property ownership laws and the rule of the court system.

• the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole.

• the laws of nature that influence economics decisions.

Economics promote which of the following as the way to make the best decision?

• Continue an enjoyable activity as long as you do not have to pay for it.

• Continue an enjoyable activity until it is no longer enjoyable.

• Continue an enjoyable activity until you cannot afford to pursue it.

• Continue an enjoyable activity up to the point where its marginal benefit equals its marginal cost.

The production possibilities frontier shows

• the various products that can be produced now and in the future.

• the maximum attainable combinations of two products that may be produced in a particular time period with available resources.

• what an equitable distribution of products among citizens would be.

• what people want firms to produce in a particular time period.

The unattainable points in a production possibilities diagram are

• the points within the production possibilities frontier.

• the points along the production possibilities frontier.

• the points of the horizontal and vertical intercepts.

• the points outside the production possibilities frontier.

An outward shift of a nation's production possibilities frontier can occur due to

• a reduction in unemployment.

• a natural disaster like a hurricane or bad earthquake.

• a change in the amounts of one good desired.

• an increase in the labor force.

Refer to Figure 1-1. Point A is

• technically efficient.

• unattainable with current resources.

• inefficient in that not all resources are being used.

• the equilibrium output combination.