An Advance Level Test: What's Your Economic IQ?

72 Questions | Total Attempts: 9910

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An Advance Level Test: What

What is your economic IQ? The economy is based on what a country's growth in various aspects of the life of the population depends on. Do you know enough about economics? Well, if you think you have a strong IQ in this field, then take this Test and find out.


Questions and Answers
  • 1. 
    What is Economics?
    • A. 

      The study of how people try to satisfy what appears to be seemingly unlimited and competing for wants through the careful use of relatively scarce resources

    • B. 

      Employment, gross domestic product, inflation, economic growth, and the distribution of income

    • C. 

      Deals with behavior and decision making by small units, such as individuals and firms

    • D. 

      A rise in the general level of prices occurs, workers need more money to pay for good clothing and shelter

  • 2. 
    What is Scarcity?
    • A. 

      Giving something up to have something else

    • B. 

      Extra cost of producing one additional unit of production

    • C. 

      The condition that results from society not having enough resources to produce all the things people would like to have

    • D. 

      A rise in the general level of prices occurs, workers need more money to pay for good clothing and shelter

  • 3. 
    What are the three basic economic questions?
    • A. 

      What, where, whom

    • B. 

      What, how, whom

    • C. 

      How, whom, when

    • D. 

      What, why, whom

  • 4. 
    What are the four factors of production?
    • A. 

      Land, capital, money, entrepreneurs

    • B. 

      Land, capital, labor, entrepreneurs

    • C. 

      Capital, money, supply, demand

    • D. 

      Labor, capital, supply, demand

  • 5. 
    Definition of Land?
    • A. 

      Anything from the earth

    • B. 

      The space we occupy

    • C. 

      Gifts of nature

    • D. 

      All of the above

  • 6. 
    Definition of Capital?
    • A. 

      The tools, equipment used in the production of goods

    • B. 

      The machinery, and factories used in the production of goods

    • C. 

      The tools, and machinery used in the production of goods

    • D. 

      A and B

    • E. 

      B and C

  • 7. 
    Definition of Labor?
    • A. 

      People with all of the efforts, abilities, and skills

    • B. 

      The people who are for hire for work

    • C. 

      People with all of the workmanship, skills, and work

    • D. 

      The act of performing work at any given time

  • 8. 
    Definition of Entrepreneur?
    • A. 

      A risk taker in search of profits who's initial investment must be returned

    • B. 

      An investor in search of profits who does something new with existing resources

    • C. 

      A investor in search of profits who's initial investment must be returned

    • D. 

      A risk taker in search of profits who does something new with existing resources

  • 9. 
    What are the many payments for the factors of productions called?
    • A. 

      Land - wages, labor - interest, capital - rent, entrepreneurs - profit

    • B. 

      Land - rent, labor - wages, capital - interest, entrepreneurs - profit

    • C. 

      Land - profit, labor - rent, capital - wages, entrepreneurs - interest

    • D. 

      Land - interest, labor - rent, capital - profit, entrepreneurs - wages

  • 10. 
    What is opportunity cost?
    • A. 

      The cost assosiated with any opportunity

    • B. 

      Giving the cost in order to have the opportunity

    • C. 

      The cost required in order to succeed

    • D. 

      Giving something up to have something else

  • 11. 
    What is PPF?
    • A. 

      Possible Production Frontier

    • B. 

      Production Possibilities Frontier

    • C. 

      Probable Projection Frontier

    • D. 

      Projected Possibilities Frontier

  • 12. 
    What do the points along the frontier represent?
    • A. 

      A Maximum combination of output if all resources are fully employed

    • B. 

      A minimum combination of output if all resources are fully employed

    • C. 

      A Maximum combination of input if all resources are fully employed

    • D. 

      A Minimum combination of input if all resources are fully employed

  • 13. 
    On the PPF how can a nation achieve growth?
    • A. 

      By having more resources or increased productivity

    • B. 

      By having an increase in supply and demand

    • C. 

      By having less resources or declined productivity

    • D. 

      By having an increase in resources and decrease in productivity

  • 14. 
    What does a point inside the curve on a PPF represent?
    • A. 

      Production at greater than its minimum potential

    • B. 

      Production as less than its minimum potential

    • C. 

      Production at greater than its maximum potential

    • D. 

      Production as less than its maximum potential

  • 15. 
    • A. 

      A mythical country called omega producing two goods, guns:butter

    • B. 

      A mythical country called alpha producing two goods, bread:butter

    • C. 

      A mythical country called omega producing two goods, bread:butter

    • D. 

      A mythical country called alpha producing two goods, guns:butter

  • 16. 
    What is the circular flow model?
    • A. 

      A model which shows the wealth that an economy generates

    • B. 

      A model which shows the wealth that the world generates

    • C. 

      A model that shows the recirculation of money in an economy

    • D. 

      A model that shows the debt that an economy generates

  • 17. 
    What are the functions of the entrepreneur?
    • A. 

      They provide the money necessary for the resources of land, labor, and capital

    • B. 

      They provide the procedures that combine the resources of land, labor, and capital into new products

    • C. 

      They provide the initiative that combines the resources of land, labor, and capital into new products

    • D. 

      They provide the drive necessary for the resources of land, labor, and capital

  • 18. 
    Name three types of businesses
    • A. 

      Traditional, command, market

    • B. 

      Command, market, competitive

    • C. 

      Traditional, market, competitive

    • D. 

      Command, traditional, competitive

  • 19. 
    Name the types of businesses
    • A. 

      Proprietorship, corporation, industrial

    • B. 

      Partnership, industrial, commercial

    • C. 

      Corporation, proprietorship, commercial

    • D. 

      Proprietorship, partnership, corporation

  • 20. 
    Define paradox of value?
    • A. 

      The apparent contradiction between the low value of nonessentials and high value of essentials

    • B. 

      An Apparent agreement about the nonessentials being less needed and the essentials being greatly needed

    • C. 

      The apparent contradiction between the high value of nonessentials and low value of essentials

    • D. 

      Apparent agreement about the nonessentials being greatly needed and the essentials being less needed

  • 21. 
    • A. 

      Water in great excess being worth less than diamonds in scarce excess being worth more

    • B. 

      Water in scarce excess being worth more than diamonds in great excess being worth less

    • C. 

      Water in great excess being worth more than diamonds in scarce excess being worth less

    • D. 

      Water in scarce excess being worth less than diamonds in great excess being worth more

  • 22. 
    What are the goals of the American Free Enterprise?
    • A. 

      Economic freedom, voluntary exchange, private property rights, profit motive, and competition

    • B. 

      Economic freedom, lack on monopolies, private property rights, profit motive, and competition

    • C. 

      Economic freedom, voluntary exchange, prevailence of rights, profit motive, and competition

    • D. 

      Economic freedom, voluntary exchange, private property rights, profit margain reduction, and competition

  • 23. 
    What is the law of demand?
    • A. 

      Rule stating that the quantity demanded of a good or service does not vary with its availability

    • B. 

      Rule stating that the quantity demanded of a good or service does not vary with its price

    • C. 

      Rule stating that the quantity demanded of a good or service varies inversely with its availability

    • D. 

      Rule stating that the quantity demanded of a good or service varies inversely with its price

  • 24. 
    What is the law of supply?
    • A. 

      The principle that suppliers will normally offer less for sale at high prices and more at lower prices

    • B. 

      The principle that suppliers will normally offer more for sale at high prices and less at lower prices

  • 25. 
    • A. 

      The increase/decrease in need

    • B. 

      The increase/decrease in volume

    • C. 

      The increase/decrease in price

    • D. 

      The increase/decrease in production