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Economics Review Chap 1-2 Part 3

Total questions: 20

Worksheet time: 10mins

Name
Class
Date
1.

Which of the following accurately defines economics?

a)

The study of how people make money.

b)

The study of seeking profits and increasing resources.

c)

The study of the entrepreneur and his or her tactics.

d)

The study of how people use scarce resources to satisfy unlimited wants.

2.

Which of the following is a good?

a)

dry cleaning

b)

deli meat

c)

a taxi ride

d)

advertising

3.

Which of the following is a service?

a)

writing

b)

pens

c)

paper

d)

computer

4.

Which of the following is a renewable resource, if handled properly?

a)

wildlife

b)

oil

c)

copper ore

d)

coal

5.

____________ is a natural resource.

a)

Labor

b)

Factories

c)

Water

d)

A truck

6.

Which is an example of a capital good?

a)

rainwater

b)

a bulldozer

c)

coal

d)

a cow

7.

Which of the following statements best describes the economic problem?

a)

Too many countries are still poor and need more productive resources.

b)

We have not discovered how to utilize all the productive resources available to us.

c)

The productive resources needed to satisfy our unlimited wants are too scarce to do so.

d)

The productive resources are unlimited so all wants and needs can be satisfied.

8.

Which of the following is a positive economic statement?

a)

The economy should experience a recession by next year.

b)

The United States experienced its sharpest decrease in unemployment last year.

c)

More jobs should be created as a result of the current administration’s plans.

d)

The recession must be over by the end of this year.

9.

Which of the following would be a concern for a microeconomist?

a)

how the recession affected the unemployment rate

b)

how the stock market behaved during the last quarter

c)

how many people were hired throughout the country last year

d)

how a baby boom affected the number of diapers sold during the past year

10.

Which of the following would be a concern for macroeconomists?

a)

how the U.S. economy fared during 2018

b)

how Toyota car sales were affected by a recession

c)

how many nonfiction books were published last year

d)

how higher interest rates affected the ABC Home Construction Company

11.

Which of the following is a normative economic statement?

a)

Interest rates were raised twice last year.

b)

Cookies in the Jar, a fairly new baking company, nearly doubled its sales this year as compared to last year.

c)

The largest grocery store chains should begin hiring more workers because the economy has improved.

d)

The price of gasoline increased by 3 cents since yesterday afternoon.

12.

Which of the following plays the leading role in the economy?

a)

firms

b)

government

c)

households

d)

product markets

13.

Which of the following statements is true of opportunity costs?

a)

It is the value of all alternatives you pass up when you make a choice.

b)

It is the value of the best alternative you give up when you make a choice.

c)

It can only be measured in dollar terms.

d)

It is the same for all individuals.

14.

Which of the following would lead to a sunk cost?

a)

buying a new CD at an outlet store

b)

putting a non-refundable deposit at one college and then attending another

c)

deciding to study on a Friday night instead of going to a party

d)

paying the landscaper to cut your lawn

15.

If you decided to attend a concert instead of babysitting, which of the following did you need to consider?

a)

opportunity cost

b)

sunk cost

c)

scarcity

d)

economic theory

16.

Which of the following is a positive economic statement?

a)

The number of people in the workforce increased last year.

b)

Unemployment should decrease next year.

c)

A war in the Middle East should jumpstart the economy

d)

all of the previous

17.

What drives people to make economic decisions?

a)

concern for the environment

b)

rational self-interest

c)

concerns about scarcity

d)

the economic problems of other countries

18.

Tutoring is an example of a service.

a)

True

b)

False

19.

Macroeconomics focuses on the economy as a whole.

a)

True

b)

False

20.

Time and information are essential to making rational consumer choices.

a)

True

b)

False