Worksheetschap 1
Total questions: 15
Worksheet time: 8mins
The overriding reason why households and societies face many decisions is that
resources are scarce.
goods and services are not scarce.
incomes fluctuate with business cycles.
people, by nature, tend to disagree.
Economics is the study of
production methods
how society manages its scarce resources.
how households decide who performs which tasks.
the interaction of business and government.
Denise decides to spend three hours working overtime rather than watching a video with her friends. She earns $10 an hour. Her opportunity cost of working is :
the $30 she earns working.
the $30 minus the enjoyment she would have received from watching the video.
the enjoyment she would have received had she watched the video.
nothing, since she would have received less than $30 of enjoyment from the video.
The adage, "There is no such thing as a free lunch," means
even people on welfare have to pay for food.
the cost of living is always increasing.
people face tradeoffs.
all costs are included in the price of a product.
A rational decision maker takes an action only if the
marginal benefit is less than the marginal cost.
marginal benefit is greater than the marginal cost.
average benefit is greater than the average cost.
marginal benefit is greater than both the average cost and the marginal cost.
Economists are particularly adept at understanding that people respond to
laws.
incentives.
punishments more than rewards.
rewards more than punishments.
Which of the following is a principle concerning how people interact?
Markets are usually a good way to organize economic activity.
Rational people think at the margin.
People respond to incentives.
All of the above are correct.
Which of the following statements about trade is false?
Trade increases competition.
With trade, one country wins and one country loses.
Bulgaria can benefit, potentially, from trade with any other country.
Trade allows people to buy a greater variety of goods and services at lower cost.
Trade makes costs
higher and reduces the variety of goods and services available.
higher but raises the variety of goods and services available.
lower but reduces the variety of goods and services available.
lower and raises the variety of goods and services available.
The invisible hand refers to
how central planners made economic decisions.
how the decisions of households and firms lead to desirable market outcomes.
the control that large firms have over the economy.
government regulations without which the economy would be less efficient.
Causes of market failure include
externalities and market power.
market power and incorrect forecasts of consumer demand.
externalities and foreign competition.
incorrect forecasts of consumer demand and foreign competition.
What is the most important factor that explains differences in living standards across countries?
the quantity of money
the level of unemployment
productivity
equality
Productivity is defined as the
amount of goods and services produced from each unit of labor input.
number of workers required to produce a given amount of goods and services.
amount of labor that can be saved by replacing workers with machines.
actual amount of effort workers put into an hour of working time.
Which of the following is the most correct statement about the relationship between inflation and unemployment?
In the short run, falling inflation is associated with falling unemployment.
In the short run, falling inflation is associated with rising unemployment.
In the long run, falling inflation is associated with falling unemployment.
In the long run, falling inflation is associated with rising unemployment.
An increase in the overall level of prices in an economy is referred to as
the income effect.
inflation.
deflation.
the substitution effect.
