Quiz 01 for Microeconomics

What does the concept of scarcity imply in economics?

• Unlimited resources and unlimited wants

• Limited resources and limited wants

• Limited resources and unlimited wants

• Unlimited resources and limited wants

A statement that can be tested and verified is called a ______ statement, while a statement that is based on opinion or value judgments is called a ______ statement.

• Normative; positive

• Positive; normative

• Scientific; economic

• Theoretical; practical

What does a point inside the production possibility frontier (PPF) indicate?

• Efficient use of resources

• Unattainable production level

• Inefficient use of resources

• Maximum production capacity

Which of the following best defines economics?

• The study of money and finance

• The study of how people allocate scarce resources to satisfy unlimited wants

• The study of government policies and regulations

• The study of how businesses maximize profits

Which of the following topics is studied in microeconomics?

• National unemployment rate

• Government fiscal policy

• The pricing strategy of a single firm

• Inflation trends in an economy

What does a shift outward of the PPF represent?

• A decrease in available resources

• Economic growth or technological improvement

• An increase in unemployment

• A decrease in opportunity cost

Which of the following is a normative statement?

• A decrease in interest rates leads to increased borrowing

• Higher inflation reduces purchasing power

• The government should increase funding for public schools

• An increase in supply leads to a decrease in price

If an economy is operating at a point on its PPF, it means that all resources are being used ______.

• Inefficiently

• Without trade-offs

• With zero opportunity cost

• Efficiently

Microeconomics focuses on ______ decision-making, while macroeconomics focuses on ______ issues.

• National; business

• Individual; economy-wide

• Government; household

• Global; domestic

The opportunity cost of producing more of one good, while remaining on the PPF, is ______.

• The additional resources gained

• The reduction in the production of another good

• Zero if resources are abundant

• Determined by the government