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Worksheets

Macroeconomics Test Questions

Total questions: 130

Worksheet time: 4hrs 20mins

Name
Class
Date
1.
The term "factors of production" means:
a)
things or skills needed to produce goods or services
b)
how we spend our money
c)
the resources of the government
d)
how society creates jobs
2.
Each society must determine how to best use its_______
a)
People
b)
Land
c)
Natural Resources
d)
All of the above
3.
A garbage truck driver is an example of which Factor of Production?
a)
labor
b)
land
c)
entrepreneurship
d)
capital
4.
Iron, minerals, coal and plants are examples of which productive resource?
a)
land
b)
labor
c)
entrepreneurship
d)
capital
5.
The term, "land" means:
a)
The natural resources used to produce goods or services.
b)
Work the people do to produce goods and services.
c)
Goods not created for their own use, but to make other goods/services.
d)
Person who organizes the factors of production to produce goods/services; business owners.
6.
The term, "labor" means:
a)
Work the people do to produce goods and services.
b)
The natural resources used to produce goods or services.
c)
Person who organizes the factors of production to produce goods/services; business owners.
d)
Goods not created for their own use, but to make other goods/services.
7.
Which is an example of investment in human capital?
a)
trucks
b)
factories
c)
education
d)
highways
8.
What is an entrepreneur?
a)
A person who starts a new business.
b)
A leader of a country.
c)
A worker in a factory.
d)
A student in college.
9.
Of the three major economic questions, which of the following is the best example of a "How?" question?
a)
Should we produce more heavy fleece coats? 
b)
Should we collect tolls on turnpikes using human toll collectors or mechanized toll machines? 
c)
Should we build log homes or build factories from bricks? 
d)
Should we spend more on health care?
10.
Of the three major economic questions, which of the following is the best example of a "What?" question? 
a)
Should automobiles be produced using workers or robots? 
b)
Should higher-income or lower-income people buy SUVs?
c)
Should we make faster microprocessors or pest-resistant corn? 
d)
Should migrant workers or domestic workers be used to pick grapes?
11.
Canada has nationalized health care, so that everyone has some access to health care. Based on this, Canada has decided that "everyone, regardless of their ability to pay" is the answer to what microeconomic question? 
a)
What type of health care will be produced and in what quantity? 
b)
How will health care be produced?
c)
For whom will health care be produced?
d)
Why will we offer health care? 
12.

the fairness with which an economy distributes its resources and wealth

a)

Communism

b)

Economic equity

c)

Mixed Economy

d)

Capitalism

13.

a society’s way of coordinating the production and consumption of goods and services

a)

Human capital

b)

Mixed economy

c)

Command economy

d)

Economic System

14.

an economic system in which decisions about production and consumption are based on custom and tradition

a)

Socialist economy

b)

Traditional Economy

c)

Command economy

d)

Mixed economy

15.

an economic system in which decisions about production and consumption are made by a powerful ruler or government

a)

Mixed economy

b)

Free Market Economy

c)

Command economy

d)

Democratic economy

16.

an economic system in which economic decisions are left up to individual producers and consumers

a)

Market economy

b)

Command economy

c)

Mixed economy

d)

Monopolistic economy

17.

an economic system in which both the government and individuals play important roles in production and consumption

a)

Mixed society

b)

Democratic society

c)

Mixed economy

d)

Command economy

18.

The ability to make our own economic decisions without interference from the government is called

a)

Economic growth

b)

Economic stability

c)

Economic freedom

d)

Economic loss

19.

When Adam Smith wrote about "the invisible hand," he was referring to the power of

a)

Supply and demand issues

b)

goods and services at prices people will not pay.

c)

Human Capital investment

d)

goods and services at prices people will pay.

20.

Which economic goals are emphasized in a modern command economy?

a)

economic efficiency and freedom

b)

economic security and equity

c)

economic stability and growth

d)

economic stability and security

21.

The most significant driving force of the free enterprise system is

a)

Factor payments

b)

the circular flow model.

c)

The profit motive

d)

The investor motive

22.

Why is competition important to a free enterprise system?

a)

It limits the number of sellers in the market.

b)

It results in more choices for consumers.

c)

It results in higher costs to producers.

d)

It raises prices in the marketplace.

23.

Which statement about natural resources is true?

a)

Water is renewable because it can be reproduced.

b)

Lumber is not renewable because it takes a long time to grow new trees.

c)

Coal is renewable because there is so much of it still in the ground.

d)

Agricultural products are renewable because new crops can be grown each season

24.
In which type of society would we most likely find a traditional economic system?
a)
a major city
b)
an established country
c)
rural and under-developed territory
d)
all of the above
25.
This type of government typically goes with the Command Economy.  
a)
Democracy
b)
Republic
c)
Autocracy
d)
Communism
26.
The economic choices made by individuals, businesses, and governments and the interactions of those choices answer which three major economic questions?
a)
What?, How?, and Why?
b)
What?, How?, and For Whom?
c)
Why?, How much?, and At what price?
d)
At what price?, What?, and Why?
27.

Goods made by people to be used specifically to produce goods and services: Tools, office equipment, roads, factories, etc.

a)

Labor

b)

Land

c)

Entrepreneurship

d)

Capital

28.

Economic efficiency in a market occurs when

a)

consumer surplus is equal to producer surplus

b)

total surplus is at a maximum

c)

equity is maximised

d)

consumer surplus is greater than producer surplus

29.
Adam Smith's call for the restricting of government in the economy is called...
a)
The invisible hand
b)
Laissez Faire
c)
Consumer sovereignty 
d)
Competition
30.
What is the invisible hand?
a)
The self-regulating nature of the market place
b)
Self-interest motivating the market place
c)
Competition being the regulating force in the market place
d)
The equal distribution of wealth
31.

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

a)

security

b)

freedom

c)

equity

d)

growth

32.

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

a)

innovation

b)

growth

c)

predictability

d)

equity

33.

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

a)

growth

b)

equity

c)

freedom

d)

equality

34.
The concept that people may decide what and when they want to buy and sell goods & services
a)
voluntary exchange
b)
legal equality
c)
private property
d)
open opportunity
35.
Gross Domestic Product measures the 
a)
quantity of the goods and services produced in a given year, listed item by item, within a country.
b)
market value of the final goods and services produced in a given year within a country.
c)
measures the market value of the domestic labor in a given year within a country. 
d)
market value of the final goods and services consumed by households in a given year within a country.
36.

a measure of how well people live, how much "stuff" people have

a)

installment buying

b)

standard of living

c)

mass advertising

d)

assembly lines

37.

What type of worker would have a college qualification and training such as a plumber, hairdresser?

a)

professional

b)

skilled

c)

semi-skilled

d)

unskilled/manual

38.

Coal, iron ore, petroleum, diesel etc. are the examples of

a)

Biotic resources

b)

Abiotic resources

c)

Renewable resources

d)

Non -Renewable resources

39.

Which is an example of a RENEWABLE resource?

a)

silver

b)

iron

c)

water

d)

gold

40.

Which is an example of a RENEWABLE resource?

a)

natural gas

b)

coal

c)

oil

d)

sun

41.

Which is an example of a NON-RENEWABLE resource?

a)

fossil fuels

b)

soil

c)

animals

d)

trees

42.

natural resources that can replenish themselves with proper management and care

a)

non-renewable

b)

renewable

c)

automatic

d)

voluntary

43.

What is productivity?

a)

The ability to produce more output, per worker, per hour

b)

The ability to stay awake longer than anyone else

c)

A byproduct of excessive coffee

d)

Making more money with less resources

44.
What societal problem did Karl Marx attempt to address in his manifesto? Choose the best answer.
a)
The exploitation of the poor by the rich
b)
The low quality of good produced at large factories.
c)
The fact that poor people were not allowed to vote.
d)
Unfair laws that allow poor people to be sent to prison
45.
Who wrote the book The Wealth of Nations?
a)
John Hancock
b)
Adam Smith
c)
Alexander Bell
d)
John Hamilton
46.

Who was the father of Communism?

a)

Adolf Hitler

b)

Karl Marx

c)

Adam Smith

d)

Archduke Ferdinand

47.

An economic and political system in which a country's trade and industry are controlled by private owners for profit,

a)

communism

b)

socialism

c)

fascism

d)

capitalism

48.

Who was the father of Capitalism?

a)

Karl Marx

b)

Adolf Hitler

c)

Adam Smith

d)

Franz Ferdinand

49.

In a Capitalist system the prices of a good are based on

a)

whatever the owner wants

b)

whatever the people decide

c)

supply and demand

d)

what is fair and just

50.

Which of the following would be most interested in a study of supply and demand?

a)

a historian studying the origins of communist

b)

an economist looking at the effectiveness of socialist programs

c)

a historian studying life on the medieval manor

d)

an economist studying capitalist forces

51.

A present-day example of laissez-faire economics would be

a)

minimun wage laws

b)

farm subsidies

c)

deregulation of the airline industry

52.
Trading something for something else - no currency involved
a)
demand
b)
barter
c)
goods
d)
market
53.

Which of these is a correct description for one of the ways in which a command economy differs from a market economy?

a)

Market economies discourage free enterprise.

b)

In a market economy, the government sets prices.

c)

Command economies tend to have a higher per capita GDP

d)

In a command economy, individuals have less economic freedom.

54.

Which of these is found MORE often in command economies than in market economies?

a)

consumer sovereignty

b)

competition

c)

regulations

d)

private ownership

55.

Economics growth is often tied to investment in machinery, new technology, and education of the population. This is because

a)

the only way to measure economics growth is to observe changes in these factors

b)

investment in these items are the sole determinant of output

c)

all of these items improve capital

d)

these items lead to a greater productivity of inputs

56.

What two qualities that work together to regulate the marketplace are present in this photo of two cellphone service providers?

a)

innovation and specialization

b)

efficiency and underutilization

c)

competition and self-interest

d)

opportunity and efficiency

57.
How are economic transactions shaped in a traditional economy?
a)
Each community decides who will produce and who will buy
b)
The elders decide based on the way things have always been done
c)
The three basic questions of production do not arise in this type of economy.
d)
Individuals form networks to buy, sell and trade as they choose
58.
A major advantage of a market economy
a)
It can change direction quickly
b)
a high degree of individual freedom
c)
efficient government control of production and distribution
d)
People are likely to be offered goods and services they cannot afford
59.

A disadvantage of a command economy

a)

Items are produced only for profit.

b)

It cannot “change direction” easily

c)

It does little to help the less advantaged obtain what they need

d)

The government may produce things people don't need or want

60.
Which is a correct statement about mixed economies today
a)
There are more mixed economies in the world than any other kind.
b)
Very few economies today can be accurately described as “mixed.”
c)
Mixed economies exist mostly in nations with communist governments.
d)
Most nations that once had a mixed economy have evolved into command economies.
61.

Since there is no financial incentive to work in a command economy, workers

a)

often create poor quality products

b)

have to manage production on their own

c)

are forced to use old-fashioned manufacturing techniques

d)

have to meet high standards for product safety

62.

The level of wealth achieved by a society

a)

Standard of Living

b)

Safety Net

c)

Factors of Production

d)

Intellectual Property

63.

Ideas rose to power in the 1930s. Believed that government should do something to spark economic activity.

a)

Friedrich Hayek

b)

John Maynard Keynes

c)

Milton Friedman

64.

Who controls fiscal policy?

a)

The Federal Reserve

b)

The Federal Government

c)

The FBI

d)

Federal Income Tax

65.

What is the purpose of Fiscal Policy?

a)

contribute to economic growth and stability

b)

keep rich people from getting too rich

c)

functions exactly like Fiscal Policy

d)

give Congress and the political parties more control of the economy

66.

Keynesian economics emphasize a key role in the economy for

a)

Free market forces

b)

Supply side management

c)

Fiscal Policy (Gov't intervention)

d)

Monetary Policy

67.

Keynesian Theory

a)

“Sticky Wages” prevents wages from falling. The government should deficit spend to close the gap.

b)

Price levels effect purchasing power which effects spending

c)

When U.S. price levels rise, then GDP decreases due to an increase in imports and a decrease in exports.

d)

Price levels and economy will fix itself. No Government involvement required

e)

When price levels increase, lenders need to charge higher interest rates which decreases consumer and business investment spending.

68.

How does operating at a deficit impact future federal budgets?

a)

It increases the amount of money needed for healthcare

b)

It decreases the amount of future interest owed

c)

It increases the amount of interest owed

d)

It increases the amount of taxes owed by citizens

69.

A deficit is

a)

when the government spends more than it collects in taxes and borrows to cover the difference.

b)

the sum of all of the money owed by the government.

c)

a very, very, very bad thing to have in government

d)

okay to have.

70.

under-developed nations is the definition for which term

a)

Platt Amendment

b)

Third World

c)

Superpower

d)

Despotic rule

71.
In the circular flow model, the product market describes _____.
a)
stores that sell goods and services to households
b)
the government paying for public goods
c)
households selling their labor to businesses
d)
households receive income from businesses
72.
In this market, businesses buy resources they need to produce goods and services.
a)
factor market
b)
stores
c)
product market
d)
 businesses
73.
Which of the following is NOT a factor of production?
a)
land
b)
labor
c)
capital
d)
goods and services
74.

What do households provide to the resource market?

a)

land, labor, capital, and entrepreneurship

b)

money

c)

people

d)

income

75.
The circular flow model of a market economy shows
a)
how profits are made
b)
what inputs are required for what outputs
c)
how many firms can support the needs of how many households
d)
the interactions between households and  firms in the free market
76.
In the circular flow model, which of the following flows in the opposite direction from the flow of factors of production?
a)
finished goods and services
b)
wages, rent, interest, and profit 
c)
transfer payments from government
d)
firm's profit incentives
77.

According to the Circular Flow chart, which of the following statements is true?

a)

Government receives its revenues only from the factor market

b)

Government receives its revenues only from the product market

c)

Government receives its revenues from transfer payments

d)

Government receives its revenues from household and business taxes

78.

Businesses provide government with...

a)

taxes

b)

sales

c)

private goods & services

d)

interest

79.

Where do factors of production (land, labor, etc) come from in the circular flow model?

a)

Factor Market

b)

Product Market

c)

Firms

d)

Individuals

80.
When WalMart pays income taxes, what two parts of the circular flow model are involved?
a)
consumers and producers
b)
businesses and government
c)
consumers and government
d)
producers and consumers
81.
The Circular Flow model proves that the sectors of the economy are...
a)
independent
b)
dependent
c)
interdependent
d)
round
82.

Where buyers and sellers learn information from one another and voluntarily exchange goods, services, & money

a)

Market

b)

Partnership

c)

Specialization

d)

Command Economy

83.

The desire to have some good or service and the ability to pay for it

a)

supply

b)

equilibrium

c)

demand

d)

quantity demanded

84.

Which of these best describes the law of demand?

a)

if prices go up, quantity demanded will fall and if prices go down, quantity demanded will go up

b)

if prices go up, quantity demanded will also go up and if prices go down, quantity demanded will also go down

c)

there is no law of demand, each situation is unique and demand and prices cannot be predicted

d)

prices will go up for certain goods when quantity demanded goes up and vice versa

85.

A change in the price of a good causes people to buy more or less of an item. This best describes the concept of

a)

the demand curve

b)

change in quantity demanded

c)

change in demand

d)

elasticity

86.

The quantity demanded of a good or service changes at all price levels best describes the concept of

a)

change in quantity demanded

b)

elasticity

c)

change in demand

d)

demand curve

87.
The phrase "a change in demand" most directly implies a 
a)
movement along the curve
b)
movement along the price curve
c)
change in quantity demanded of a good
d)
shift in the demand curve
88.

The more money that a person makes, the more they are willing to spend..

a)

diminishing marginal utility

b)

substitute effect

c)

total revenue

d)

income effect

89.

When prices rise for a particular product, consumers will purchase lower-priced similar items..

a)

income effect

b)

substitute effect

c)

diminishing marginal utility

d)

law of demand

90.

Which of the following represents the equation for finding elasticity of demand?

a)

% change in price / % change in quantity

b)

% change in price / % change in market demand

c)

% change in substitutes / % change in value demanded

d)

% change in quantity demanded / % change in price

91.

When you buy a game system and games together, this is an example of which economic concept?

a)

Complements

b)

Substitutions

c)

Elasticity

d)

Economics

92.

When you buy a PlayStation instead of an X-Box because the price of the PlayStation went up, this is an example of what?

a)

Complements

b)

Substitutions

c)

Elasticity

d)

Economics

93.

When the demand curve shifts to the left, this suggests demand has

a)

increased

b)

decreased

c)

Quantity demanded has increased

d)

Quantity demanded has decreased

94.

When the demand curve has shifted to the right, this suggests demand has

a)

increased

b)

decreased

c)

quantity demanded has increased

d)

quantity demanded has increased

95.

If a wave of Peruvian immigrants migrated to south Florida, how might this affect the demand for Peruvian goods in the region?

a)

Demand would increase

b)

Demand would decrease

c)

Demand would be unchanged

d)

Quantity Demanded would increase

96.

What is the difference between an individual and market demand schedule?

a)

Price

b)

Quantity

c)

Supply

d)

Quantity supplied

97.

This image best represents a:

a)

demand schedule

b)

demand curve

c)

supply schedule

d)

supply curve

98.

The "quantity demanded by all consumers in a market" is known as the:

a)

Individual demand

b)

Market demand

c)

Market supply

d)

Supply and demand

99.

Ceteris Paribus, or "all other things held constant" is an assumption that has which of the following effects on a demand schedule.

a)

It takes ONLY price into account

b)

It considers the effects of all possible changes on demand

c)

It is accurate no matter what changes occur

d)

It is accurate only at one price level

100.

What does it mean when the demand for a product is inelastic

a)

Consumers will not buy any of the product when the price rises

b)

A price increase does not have a significant impact on demand from the consumer

c)

Consumers are sensitive to a change in the price of a product they consume

d)

There are few acceptable substitutes for the product that the consumer wants to purchase

101.

What kind of table lists the quantity of a good that the individual consumer will buy at different prices.

a)

demand schedule

b)

demand curve

c)

market demand schedule

d)

market demand curve

102.

What shows the quantities of products demanded at each price by ALL consumers in the market

a)

an elasticity and consumption list

b)

a schedule of consumer prices

c)

A market pricing lists

d)

A market demand schedule

103.

Which of the following is an example of inelastic demand?

a)

Jason wants the most expensive cellphone. He decides to get a cheaper model.

b)

Priya wants to go to the season-opening game. Tickets to another game cost less, but she still buys tickets for the opener.

c)

Tianna wants to try out a new, expensive restaurant. She goes to another restaurant whose food is excellent and costs less.

d)

Shawn wants to buy a house in one neighborhood. But after searching, he decides to buy a house elsewhere instead.

104.
A graph showing the quantity demanded 
a)
demand curve
b)
marginal utility 
c)
demand 
105.

Elasticity is the measure of ___ .

a)

responsiveness

b)

change

c)

price

d)

need

106.

Luxury goods tend to have an

a)

elastic demand

b)

inelastic demand

c)

unitary demand

d)

none of the above

107.

What does it mean?

Ed < 1

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

108.

What does it mean?

Ed > 1

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

109.

What does it mean?

Ed = 1

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

110.

When producers offer more of a good as its price increases and less as its price falls, this defines the

a)

law of demand

b)

law of supply

c)

change in demand

d)

change in supply

111.

The willingness and ability of a producer to make a product is referred to as

a)

quantity supplied

b)

quantity demanded

c)

supply

d)

demand

112.

Movement along a supply curve demonstrates

a)

a change in quantity supplied

b)

a change in quantity demanded

c)

a change in supply

d)

a change in demand

113.

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?

a)

elastic supply

b)

inelastic supply

c)

change in supply

d)

change in quantity supplied

114.

Which of the following is NOT one of the determinants of supply?

a)

Change in cost of production/resources

b)

Change in number of sellers

c)

Substitutes

d)

Change in technology

115.

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

a)

Cost of production/resources

b)

Number of sellers

c)

Change in expectations

d)

Change in technology

116.

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.

a)

Government regulation

b)

Cost of resources

c)

Worker productivity/motivation

d)

Change in technology

117.
Identify the correct determinant of supply.
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)
Government regulation
b)
Change in number of sellers
c)
Change in income
d)
Change in expectations
118.

A shift in a supply curve demonstrates

a)

a change in quantity supplied

b)

a change in quantity demanded

c)

a change in supply

d)

a change in demand

119.

Which of the following will cause a shift to the left in the supply of apples?

a)

widespread early frost that damages apple trees

b)

a new fertilizer that is used for growing apples

c)

a tax incentive given by the government to apple growers

d)

more farmers deciding to plant apple trees

120.

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?

a)

Worker productivity/ motivation

b)

Government taxes/ subsidies

c)

Change in technology

d)

Complements

121.

For Dunkin Donuts, what would their purchasing tea bags to make iced tea be considered?

a)

taxes

b)

wages

c)

demand

d)

input costs

122.
A graph that shows the quantities supplied at each and every possible price in the market.
a)
supply curve
b)
supply schedule
c)
market supply curve
d)
Law of Supply
123.
A table showing the quantities produced or offered for sale at each and every possible price in the market at a given point in time.
a)
supply schedule
b)
demand schedule
c)
supply curve
d)
market supply curve
124.

A government payment that supports a business or market

a)

Regulation

b)

Subsidy

c)

Excise Tax

d)

Welfare

125.

Price where quantity supplied equals quantity demanded.

a)

Equilibrium price

b)

Equilibrium quantity

c)

Price floor

d)

Price

126.

The highest legal price that can be charged for a product:

a)

Price

b)

Price ceiling

c)

Price floor

d)

Target price

127.

The lowest legal price that can be paid for a product:

a)

Price

b)

Price Ceiling

c)

Price Floor

d)

Surplus

128.

A situation in which the quantity supplied is greater than the quantity demanded is

a)

a shortage

b)

a surplus

c)

a price floor

d)

a price ceiling

129.

A situation in which quantity demanded is greater than quantity supplied is

a)

a shortage

b)

a surplus

c)

a price floor

d)

a price ceiling

130.

When quantity supplied is not equal to quantity demanded means we have:

a)

Equilibrium

b)

Disequilibrium

c)

Shortage

d)

Surplus