Economics Introduction

What is the effect of leakages on the level of income in the circular flow of income?

• Leakages lower income.

• Leakages raise income.

• Leakages have no effect on income.

How do you define capital goods? SELECT 2.

• They are goods made by humans

• They are goods that people use to create more goods

• They are the natural things that we gather from the environment.

• They are rare goods like oil and some Earth metals.

Which 3 of the following are used by economists to provide information?

• concepts

• theories

• simple models

• tarot cards

Speaking of models, which of the following is an example of an economic model?

• Two-factor circular flow model

• Geological model

• Model of natural gravitation

• Fibonacci sequence model

Why is Economics under the scope of Social Science?

• because it studies human behavior

• because it studies the displacement properties of water

• because it studies photosynthesis that provides life to all living things on Earth

• because it considers the table of elements in its study

A person who purchases goods and services for personal use

• Consumer

• Producer

• Potato

• Service

Limited quantities of resources to meet unlimited wants

• Scarcity

• Abundance

• Resource

• Goods

What is the primary focus of microeconomics?

• A) The behavior of individual markets and consumers

• B) The overall performance of the national economy

• C) The study of international trade

• D) The impact of government policies on economic growth

Which of the following best describes opportunity cost?

• A) The money spent on a good or service

• B) The value of the next best alternative foregone

• C) The total cost of production

• D) The cost of labor

What is the law of demand?

• A) As price increases, demand increases

• B) As price decreases, demand decreases

• C) As price increases, demand decreases

• D) Demand is unaffected by price changes