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WorksheetsEconomics Quiz
Total questions: 80
Worksheet time: 40mins
Which of the following best describes opportunity cost in economics?
The value of the next best alternative you give up when making a choice
The total amount of money spent on a good or service
The effort put into making a decision
The benefit gained from the chosen option
Scarcity in economics means:
Limited resources and unlimited wants
Unlimited resources and limited wants
Always having enough of everything
Resources and wants are both unlimited
Microeconomics focuses on:
Inflation and unemployment
Individual decision-making by households and firms
Entire national economies
Government spending
Choosing to study instead of watching TV is an example of:
A subsidy
A trade-off
A monopoly
Market failure
The study of the entire economy, including inflation and growth, is:
Microeconomics
Macroeconomics
Accounting
Finance
Opportunity cost refers to:
Total cost of all choices
The value of the next best alternative foregone
Costs you don't see
The money you spend
Rational decision-makers:
Never make mistakes
Compare marginal benefits and marginal costs
Avoid trade-offs
Always choose cheaper options
Trade benefits people because it:
Forces self-sufficiency
Allows specialization and exchange
Eliminates competition
Increases government control
A country’s standard of living depends primarily on:
Government spending
Productivity
Population size
Natural resources only
Inflation occurs when:
Prices fall over time
The overall price level rises
Wages fall
There is no money supply
Printing too much money typically leads to:
Lower prices
Higher unemployment
Inflation
Higher productivity
In the short run, lowering inflation may:
Lower unemployment
Raise unemployment temporarily
Increase productivity
Have no effect
A student choosing work over travel after graduation illustrates:
Inflation
A trade-off
Market failure
A subsidy
People respond to incentives means:
People ignore costs and benefits
Changes in rewards or penalties change behavior
Prices never matter
Incentives only apply to businesses
Trade allows:
Self-sufficiency
Higher taxes
Specialization and efficiency
Government planning
A monopoly is a market where:
One seller controls most supply
Many firms compete
Consumers set all prices
Government owns all business
Pollution is an example of a(n):
Public good
Negative externality
Market surplus
Positive incentive
Street lighting is a:
Private good
Public good
Trade-off
Marginal cost
Economics is mainly about:
Money only
Choices under scarcity
Eliminating trade
Avoiding opportunity costs
Which is an example of a trade-off?
Free lunch
Buying a laptop instead of a phone
Unlimited time
Scarcity removed
Thinking at the margin means:
Considering small additional changes
Thinking about total costs only
Never changing behavior
Avoiding decisions
A reward for good grades is an example of:
Negative incentive
Positive incentive
Marginal cost
Inflation
When government regulates pollution, it:
Reduces productivity
Addresses externalities
Eliminates all costs
Controls wages
Higher productivity means:
Less output per worker
More output per worker
Higher inflation
No trade-offs
Reducing unemployment in the short run may:
Lower inflation automatically
Increase inflation risk
Eliminate scarcity
Remove trade-offs
Implicit cost refers to:
Money spent
Value of time or forgone alternatives
Government spending
Tax payments
Marginal benefit means:
Total benefit
Extra benefit from one more unit
Average price
Cost minus tax
Negative incentives:
Reward behavior
Discourage behavior
Eliminate scarcity
Raise productivity
Supply and demand interact in:
Command economies only
Markets
Inflation cycles
Public good systems
Money losing value over time is due to:
Productivity
Trade
Inflation
Marginal cost
Making decisions based on extra cost and benefit means using:
Total reasoning
Marginal thinking
Zero cost analysis
Incentive failure
A tax on cigarettes is meant to:
Encourage smoking
Reduce harmful behavior
Increase trade
Lower productivity
A positive externality example:
Pollution
Education helping society
Traffic congestion
Monopoly pricing
A production increase per worker means:
Higher inflation
Higher productivity
Lower living standards
Fewer choices
Economics helps us:
Remove scarcity
Make better decisions with limited resources
Avoid opportunity cost
Eliminate trade
A student choosing to work extra hours gives up:
Labor market
Inflation
Opportunity cost
Monopoly pricing
A rational business hires more workers only if:
Wages are high
Marginal revenue > marginal cost
Other firms do so
Productivity falls
Discounts that increase purchases show:
Trade-offs
Incentives working
Market failure
Externalities
GDP measures:
The market value of all final goods and services produced within a country in a given period
The total income of households only
Only goods, not services
The total value of all sales in markets
Which two values are always equal in macroeconomics?
Total income and total expenditure
Consumption and investment
Total income and total savings
Total expenditure and total savings
Gdp counts:
Only final goods and services
Only intermediate goods
Used goods
Illegal market transactions
Which is an example of a final good?
Bread purchased by a household
Flour purchased by a bakery
Steel purchased by a car company
Sugar purchased by a candy factory
Intermediate goods are excluded from gdp to avoid:
Double counting
Inflation
Depreciation
Trade deficits
Buying a used car contributes to:
Neither gdp nor current production
Gdp as consumption
Gdp as investment
Gdp as government spending
Household production (cooking your own meals) is:
Not included in GDP
Included as consumption
Included as investment
Included as government spending
In the circular-flow model, households supply:
Factors of production
Goods and services
Imports
Taxes only
Which item increases GDP?
A haircut
Illegal gambling
Cleaning your own house
Buying a used textbook
GDP counts production:
Within a country's borders
Only by domestic citizens anywhere
Only exports
Only government-approved goods
Gdp = C + I + G + NX. NX stands for:
Net exports
National expenditure
Net income
Net consumption
Consumption includes spending on:
Goods and services by households
Capital equipment
Government salaries
Exports
Investment in GDP refers to:
Business spending on capital and inventories
Stocks and bonds
Household groceries
Social security payments
Government purchases include:
Salaries of public workers
Transfer payments
Interest on debt
Household food purchases
Nominal GDP uses:
Current prices
Base-year prices
International prices
Fixed exchange rates
Real GDP uses:
Constant prices to adjust for inflation
Current prices
Household spending only
Base-year wages only
GDP deflator is calculated as:
(nominal gdp / real gdp) × 100
(real gdp / nominal gdp) × 100
Consumption + investment
Exports – imports
A rise in nominal GDP could be due to:
Higher prices or higher output
Lower prices only
Only more goods
Only population growth
If real GDP rises while prices stay constant, output has:
Increased
Decreased
Stayed constant
Doubled
The income method includes:
Wages, rent, interest, profit
Exports minus imports
Only wages
Only tax revenue
The largest component of income GDP is usually:
Wages
Rent
Interest
Depreciation
GDP excludes:
Black-market activity
New cars
Business inventory changes
Teacher salaries
Buying stock in a company counts as:
Not part of GDP
Consumption
Investment in GDP
Net exports
A U.S. factory in Mexico contributes to:
Mexico's GDP
U.S. GDP
Both countries’ GDP
Neither country's GDP
GDP does not measure:
Happiness or leisure
Final goods
Government spending
Business investment
Which increases measured GDP but not well-being?
Pollution cleanup
Higher literacy
Lower crime
Better health
Which activity is counted in GDP?
A paid babysitter
Babysitting your own child
Volunteer work
Illegal drug sales
GDP per capita measures:
Average income per person
Total exports per person
Median wage
Happiness directly
The human development index includes:
Income, education, and health
GDP only
Inflation and interest rates
Exports and imports
Illegal market activities are:
Excluded from GDP
Fully counted
Mostly counted
Counted only in consumption
Used goods resale contributes:
Nothing to current gdp
To consumption
To investment
To government spending
Real gdp growth means the economy:
Produces more goods and services
Imports more
Has higher prices only
Has a trade surplus
Nominal gdp increases if:
Price or quantity increases
Population falls
Wages fall
Taxes rise
A foreign firm producing inside a country counts toward:
That country's gdp
Foreign gdp only
Neither
Exports only
Gdp fails to include:
Volunteer work
New machinery
Salaries
Investment spending
The expenditure approach and income approach:
Produce the same gdp value
Are unrelated
Measure only households
Ignore business profits
Unemployment refers to people who are:
Without work but actively seeking employment
Not working and not seeking work
Working part-time but wanting full-time
Retired individuals
The labor force includes:
Employed and unemployed actively seeking work
Only employed individuals
Only unemployed individuals
Retired and unemployed individuals
People not in the labor force include:
Students and retirees
Unemployed individuals
Full-time workers
Part-time workers
The unemployment rate formula is:
Unemployed ÷ Labor force × 100
Labor force ÷ Population × 100
Employed ÷ Population × 100
Population ÷ Labor force × 100
A discouraged worker is someone who:
Has stopped looking for work
Is actively seeking work
Works part-time but wants full-time
Works overtime
A person who quits a job to search for a better one experiences:
Frictional unemployment
Structural unemployment
Cyclical unemployment
Seasonal unemployment
