WorksheetsMacroeconomics Test Questions
Total questions: 130
Worksheet time: 4hrs 20mins
the fairness with which an economy distributes its resources and wealth
Communism
Economic equity
Mixed Economy
Capitalism
a society’s way of coordinating the production and consumption of goods and services
Human capital
Mixed economy
Command economy
Economic System
an economic system in which decisions about production and consumption are based on custom and tradition
Socialist economy
Traditional Economy
Command economy
Mixed economy
an economic system in which decisions about production and consumption are made by a powerful ruler or government
Mixed economy
Free Market Economy
Command economy
Democratic economy
an economic system in which economic decisions are left up to individual producers and consumers
Market economy
Command economy
Mixed economy
Monopolistic economy
an economic system in which both the government and individuals play important roles in production and consumption
Mixed society
Democratic society
Mixed economy
Command economy
The ability to make our own economic decisions without interference from the government is called
Economic growth
Economic stability
Economic freedom
Economic loss
When Adam Smith wrote about "the invisible hand," he was referring to the power of
Supply and demand issues
goods and services at prices people will not pay.
Human Capital investment
goods and services at prices people will pay.
Which economic goals are emphasized in a modern command economy?
economic efficiency and freedom
economic security and equity
economic stability and growth
economic stability and security
The most significant driving force of the free enterprise system is
Factor payments
the circular flow model.
The profit motive
The investor motive
Why is competition important to a free enterprise system?
It limits the number of sellers in the market.
It results in more choices for consumers.
It results in higher costs to producers.
It raises prices in the marketplace.
Which statement about natural resources is true?
Water is renewable because it can be reproduced.
Lumber is not renewable because it takes a long time to grow new trees.
Coal is renewable because there is so much of it still in the ground.
Agricultural products are renewable because new crops can be grown each season
Goods made by people to be used specifically to produce goods and services: Tools, office equipment, roads, factories, etc.
Labor
Land
Entrepreneurship
Capital
Economic efficiency in a market occurs when
consumer surplus is equal to producer surplus
total surplus is at a maximum
equity is maximised
consumer surplus is greater than producer surplus
If you lose your job in this country you can claim unemployment and collect money to help you until you can find another job. This is because of economic
security
freedom
equity
growth
In the U.S. we have a calm assurance that we can get consistent access to energy resources and food, which is representative of economic
innovation
growth
predictability
equity
Improving the standard of living and overall production from quarter to quarter, year to year and generation to generation in the economy is the focus of economic
growth
equity
freedom
equality
a measure of how well people live, how much "stuff" people have
installment buying
standard of living
mass advertising
assembly lines
What type of worker would have a college qualification and training such as a plumber, hairdresser?
professional
skilled
semi-skilled
unskilled/manual
Coal, iron ore, petroleum, diesel etc. are the examples of
Biotic resources
Abiotic resources
Renewable resources
Non -Renewable resources
Which is an example of a RENEWABLE resource?
silver
iron
water
gold
Which is an example of a RENEWABLE resource?
natural gas
coal
oil
sun
Which is an example of a NON-RENEWABLE resource?
fossil fuels
soil
animals
trees
natural resources that can replenish themselves with proper management and care
non-renewable
renewable
automatic
voluntary
What is productivity?
The ability to produce more output, per worker, per hour
The ability to stay awake longer than anyone else
A byproduct of excessive coffee
Making more money with less resources
Who was the father of Communism?
Adolf Hitler
Karl Marx
Adam Smith
Archduke Ferdinand
An economic and political system in which a country's trade and industry are controlled by private owners for profit,
communism
socialism
fascism
capitalism
Who was the father of Capitalism?
Karl Marx
Adolf Hitler
Adam Smith
Franz Ferdinand
In a Capitalist system the prices of a good are based on
whatever the owner wants
whatever the people decide
supply and demand
what is fair and just
Which of the following would be most interested in a study of supply and demand?
a historian studying the origins of communist
an economist looking at the effectiveness of socialist programs
a historian studying life on the medieval manor
an economist studying capitalist forces
A present-day example of laissez-faire economics would be
minimun wage laws
farm subsidies
deregulation of the airline industry
Which of these is a correct description for one of the ways in which a command economy differs from a market economy?
Market economies discourage free enterprise.
In a market economy, the government sets prices.
Command economies tend to have a higher per capita GDP
In a command economy, individuals have less economic freedom.
Which of these is found MORE often in command economies than in market economies?
consumer sovereignty
competition
regulations
private ownership
Economics growth is often tied to investment in machinery, new technology, and education of the population. This is because
the only way to measure economics growth is to observe changes in these factors
investment in these items are the sole determinant of output
all of these items improve capital
these items lead to a greater productivity of inputs
What two qualities that work together to regulate the marketplace are present in this photo of two cellphone service providers?
innovation and specialization
efficiency and underutilization
competition and self-interest
opportunity and efficiency
A disadvantage of a command economy
Items are produced only for profit.
It cannot “change direction” easily
It does little to help the less advantaged obtain what they need
The government may produce things people don't need or want
Since there is no financial incentive to work in a command economy, workers
often create poor quality products
have to manage production on their own
are forced to use old-fashioned manufacturing techniques
have to meet high standards for product safety
The level of wealth achieved by a society
Standard of Living
Safety Net
Factors of Production
Intellectual Property
Ideas rose to power in the 1930s. Believed that government should do something to spark economic activity.
Friedrich Hayek
John Maynard Keynes
Milton Friedman
Who controls fiscal policy?
The Federal Reserve
The Federal Government
The FBI
Federal Income Tax
What is the purpose of Fiscal Policy?
contribute to economic growth and stability
keep rich people from getting too rich
functions exactly like Fiscal Policy
give Congress and the political parties more control of the economy
Keynesian economics emphasize a key role in the economy for
Free market forces
Supply side management
Fiscal Policy (Gov't intervention)
Monetary Policy
Keynesian Theory
“Sticky Wages” prevents wages from falling. The government should deficit spend to close the gap.
Price levels effect purchasing power which effects spending
When U.S. price levels rise, then GDP decreases due to an increase in imports and a decrease in exports.
Price levels and economy will fix itself. No Government involvement required
When price levels increase, lenders need to charge higher interest rates which decreases consumer and business investment spending.
How does operating at a deficit impact future federal budgets?
It increases the amount of money needed for healthcare
It decreases the amount of future interest owed
It increases the amount of interest owed
It increases the amount of taxes owed by citizens
A deficit is
when the government spends more than it collects in taxes and borrows to cover the difference.
the sum of all of the money owed by the government.
a very, very, very bad thing to have in government
okay to have.
under-developed nations is the definition for which term
Platt Amendment
Third World
Superpower
Despotic rule
What do households provide to the resource market?
land, labor, capital, and entrepreneurship
money
people
income
According to the Circular Flow chart, which of the following statements is true?
Government receives its revenues only from the factor market
Government receives its revenues only from the product market
Government receives its revenues from transfer payments
Government receives its revenues from household and business taxes
Businesses provide government with...
taxes
sales
private goods & services
interest
Where do factors of production (land, labor, etc) come from in the circular flow model?
Factor Market
Product Market
Firms
Individuals
Where buyers and sellers learn information from one another and voluntarily exchange goods, services, & money
Market
Partnership
Specialization
Command Economy
The desire to have some good or service and the ability to pay for it
supply
equilibrium
demand
quantity demanded
Which of these best describes the law of demand?
if prices go up, quantity demanded will fall and if prices go down, quantity demanded will go up
if prices go up, quantity demanded will also go up and if prices go down, quantity demanded will also go down
there is no law of demand, each situation is unique and demand and prices cannot be predicted
prices will go up for certain goods when quantity demanded goes up and vice versa
A change in the price of a good causes people to buy more or less of an item. This best describes the concept of
the demand curve
change in quantity demanded
change in demand
elasticity
The quantity demanded of a good or service changes at all price levels best describes the concept of
change in quantity demanded
elasticity
change in demand
demand curve
The more money that a person makes, the more they are willing to spend..
diminishing marginal utility
substitute effect
total revenue
income effect
When prices rise for a particular product, consumers will purchase lower-priced similar items..
income effect
substitute effect
diminishing marginal utility
law of demand
Which of the following represents the equation for finding elasticity of demand?
% change in price / % change in quantity
% change in price / % change in market demand
% change in substitutes / % change in value demanded
% change in quantity demanded / % change in price
When you buy a game system and games together, this is an example of which economic concept?
Complements
Substitutions
Elasticity
Economics
When you buy a PlayStation instead of an X-Box because the price of the PlayStation went up, this is an example of what?
Complements
Substitutions
Elasticity
Economics
When the demand curve shifts to the left, this suggests demand has
increased
decreased
Quantity demanded has increased
Quantity demanded has decreased
When the demand curve has shifted to the right, this suggests demand has
increased
decreased
quantity demanded has increased
quantity demanded has increased
If a wave of Peruvian immigrants migrated to south Florida, how might this affect the demand for Peruvian goods in the region?
Demand would increase
Demand would decrease
Demand would be unchanged
Quantity Demanded would increase
What is the difference between an individual and market demand schedule?
Price
Quantity
Supply
Quantity supplied
This image best represents a:
demand schedule
demand curve
supply schedule
supply curve
The "quantity demanded by all consumers in a market" is known as the:
Individual demand
Market demand
Market supply
Supply and demand
Ceteris Paribus, or "all other things held constant" is an assumption that has which of the following effects on a demand schedule.
It takes ONLY price into account
It considers the effects of all possible changes on demand
It is accurate no matter what changes occur
It is accurate only at one price level
What does it mean when the demand for a product is inelastic
Consumers will not buy any of the product when the price rises
A price increase does not have a significant impact on demand from the consumer
Consumers are sensitive to a change in the price of a product they consume
There are few acceptable substitutes for the product that the consumer wants to purchase
What kind of table lists the quantity of a good that the individual consumer will buy at different prices.
demand schedule
demand curve
market demand schedule
market demand curve
What shows the quantities of products demanded at each price by ALL consumers in the market
an elasticity and consumption list
a schedule of consumer prices
A market pricing lists
A market demand schedule
Which of the following is an example of inelastic demand?
Jason wants the most expensive cellphone. He decides to get a cheaper model.
Priya wants to go to the season-opening game. Tickets to another game cost less, but she still buys tickets for the opener.
Tianna wants to try out a new, expensive restaurant. She goes to another restaurant whose food is excellent and costs less.
Shawn wants to buy a house in one neighborhood. But after searching, he decides to buy a house elsewhere instead.
Elasticity is the measure of ___ .
responsiveness
change
price
need
Luxury goods tend to have an
elastic demand
inelastic demand
unitary demand
none of the above
What does it mean?
Ed < 1
Perfectly inelastic demand
Inelastic demand
Unitarily elastic demand
Elastic demand
Perfectly elastic demand
What does it mean?
Ed > 1
Perfectly inelastic demand
Inelastic demand
Unitarily elastic demand
Elastic demand
Perfectly elastic demand
What does it mean?
Ed = 1
Perfectly inelastic demand
Inelastic demand
Unitarily elastic demand
Elastic demand
Perfectly elastic demand
When producers offer more of a good as its price increases and less as its price falls, this defines the
law of demand
law of supply
change in demand
change in supply
The willingness and ability of a producer to make a product is referred to as
quantity supplied
quantity demanded
supply
demand
Movement along a supply curve demonstrates
a change in quantity supplied
a change in quantity demanded
a change in supply
a change in demand
A popular musical act announces a concert at a 10,000 seat venue. Prices for tickets skyrocket so the venue announces that there will be 500 standing room only tickets offered. What concept does this demonstrate?
elastic supply
inelastic supply
change in supply
change in quantity supplied
Which of the following is NOT one of the determinants of supply?
Change in cost of production/resources
Change in number of sellers
Substitutes
Change in technology
Identify the correct determinant of supply:
Example: If the cost of electricity used to power an automotive factories falls, the supply of cars in the market increases
Cost of production/resources
Number of sellers
Change in expectations
Change in technology
Identify the correct determinant of supply.
Example: If the government requires factories to reduce pollution, complying will initially increase costs of production in the market and reduce supply.
Government regulation
Cost of resources
Worker productivity/motivation
Change in technology
Example: As the demand for DVDs decreased due to consumer preference for streaming movies, the market price for DVDs fell. This lower market price caused sellers to leave the DVD market and supply decreased.
A shift in a supply curve demonstrates
a change in quantity supplied
a change in quantity demanded
a change in supply
a change in demand
Which of the following will cause a shift to the left in the supply of apples?
widespread early frost that damages apple trees
a new fertilizer that is used for growing apples
a tax incentive given by the government to apple growers
more farmers deciding to plant apple trees
The United Nations recently called for governments to stop the $5 trillion dollars they give to oil companies every year. This would likely cause a drop in the supply of oil products like gasoline. Which determinant of supply does this illustrate?
Worker productivity/ motivation
Government taxes/ subsidies
Change in technology
Complements
For Dunkin Donuts, what would their purchasing tea bags to make iced tea be considered?
taxes
wages
demand
input costs
A government payment that supports a business or market
Regulation
Subsidy
Excise Tax
Welfare
Price where quantity supplied equals quantity demanded.
Equilibrium price
Equilibrium quantity
Price floor
Price
The highest legal price that can be charged for a product:
Price
Price ceiling
Price floor
Target price
The lowest legal price that can be paid for a product:
Price
Price Ceiling
Price Floor
Surplus
A situation in which the quantity supplied is greater than the quantity demanded is
a shortage
a surplus
a price floor
a price ceiling
A situation in which quantity demanded is greater than quantity supplied is
a shortage
a surplus
a price floor
a price ceiling
When quantity supplied is not equal to quantity demanded means we have:
Equilibrium
Disequilibrium
Shortage
Surplus
