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WorksheetsEcon Ch 1 Quiz
Total questions: 10
Worksheet time: 5mins
Why might some historians consider Adam Smith one of the most influential people in history?
He taught that all people should be economic equals.
He introduced a way of thinking about economic ideas.
He argued for a larger role for the government in the economy.
He wrote the economic argument for American independence.
Which of these statements is an example of normative economics
"Taxes ought to be lowered."
"Inflation is higher this year."
"The bond market is in decline."
Speculation caused a recession."
A limitation of using graphs to represent relationships is that they
must be presented in a small space.
typically show the less important variables.
omit factors other than those being graphed.
are hard for anyone but economists to interpret.
Which statement is the best example of thinking at the margin?
John has six shirts and is trying to decide whether to buy a seventh.
Mary observes that the average cost of shoes is higher than last year
David decides to volunteer this summer instead of working for pay.
Jane wants to buy a car but decides she cannot afford the insurance.
Economists assume people choose something when its expected costs are less than its...
satisfaction
risk and opportunity
anticipated benefits
wages, salaries, and profits
Why are tradeoffs necessary?
Resources are limited.
Every product has flaws.
People want different things.
Advertisers promote products.
What is the best test of an economic model?
High profits are made
Can predict future events and looks at past events
Shows negative and positive data
A great way to look at inflation
What does it mean to say that free markets are efficient?
to increase their self-sufficiency
people trade until both are satisfied
to allocate scarce resources fairly
to comply with state requirements
What is the Law of Unintended Consequences
It makes the item more expensive to buy.
It puts more different goods into competition.
Actions have unforeseen or unintended consequences
It transfers the item to someone who values it more.
Definition of markets?
Any place that brings buyers and sellers together
Trading stocks
trading bonds
getting a house loan
