Unit 1 MCQ Review

In which of the following situations is a good not scarce?

• There is a shortage of dumplings

• There is a surplus of iPhone 4s

• Large quantities of a good are available

• Buyers can purchase as much of a thing as they want

• Consumers give up nothing to obtain more of the good

The study of economics is primarily concerned with which of the following?

• The dynamics of group behavior

• The equal treatment of all consumers

• The allocation of scarce resources, given unlimited wants

• Providing conclusive answers to issues of public policy

• The testing of hypotheses under controlled conditions

The basic economic problem of all countries is the existence of:

• Tax increases and budget deficits

• Unemployment and inflation

• Public vs private goods

• Limited resources and unlimited wants

• Monopolistic power

As a factor of production, which 4 options are NOT considered capital? SELECT FOUR.

• Tools and machinery used to produce goods and services

• Currency in circulation

• Money to start a business

• Financial investments

• Stocks and bonds

Which of the following is necessary in a well-functioning capitalist economy but not in a command economy?

• Negative externalities

• Protection of property rights

• Centralized decision making

• Oligopolies

• Scarcity of resources

The fundamental difference between a market and command economy is:

• Taxes and subsidies

• Absolute and comparative advantage

• Specialization and trade

• Positive and negative externalities

• Property rights and protection of private property

What does a linear PPC indicate?

• Decreasing opportunity costs

• Increasing opportunity costs

• Diminishing marginal returns

• Capital-intensive production

• Constant opportunity costs

On a PPC, where would one locate a point showing an efficient use of resources?

• Inside the PPC

• Beyond the PPC

• On the y-axis

• On the PPC

• On the x-axis

How would improvements in technology affect the shape of a PPC?

• It will shift inward

• It will become flatter

• It will shift outward

• It will become steeper

• It will disappear

What explains the concave shape of a PPC?

• Increasing opportunity costs

• The law of supply

• Constant returns to scale

• The law of demand

• Decreasing opportunity costs