Macroeconomics Practice Test
All you need to know for macroeconomics in college.
- 1.
All economic questions are about
- A.
How to make money
- B.
What to produce
- C.
How to cope with scarcity
- D.
How to satisfy all our wants
Correct Answer
C. How to cope with scarcity -
- 2.
An incentive
- A.
Could be a reward but could not be a penalty
- B.
Could be a penalty but could not be a reward
- C.
Could be either a reward or a penalty
- D.
Is the opposite of a tradeoff
Correct Answer
C. Could be either a reward or a penalty -
- 3.
Which of the following question is a topic that would be studied by microeconomics?
- A.
Why did production and the number of jobs shrink in 2008?
- B.
Will the current budget deficit affect the well-being of the next generation?
- C.
How will a lower price of digital cameras affect the quantity of cameras sold?
- D.
What is the current unemployment rate in the United States?
Correct Answer
C. How will a lower price of digital cameras affect the quantity of cameras sold? -
- 4.
Which of the following questions is a macroeconomic issue?
- A.
How many more pounds of cookies will a consumer purchase if the price of cookies decreases?
- B.
What effect would a cure for Mad Cow Disease have on the market for beef?
- C.
What is the future growth prospect for an economy?
- D.
How many workers should the owner of a business hire?
Correct Answer
C. What is the future growth prospect for an economy? -
- 5.
What are the four categories into which factors of production are grouped?
- A.
profit, wages, rent, and interest
- B.
land, labor, capital, and entrepreneurship
- C.
Capital, human capital, land, and labor
- D.
Entrepreneurship, profit, labor, and wages
Correct Answer
B. land, labor, capital, and entrepreneurship -
- 6.
Human capital is
- A.
All capital owned by individuals, but not by corporations or governments.
- B.
all capital owned by individuals or corporations, but not by governments.
- C.
Machinery that meets or exceeds federal safety standards for use by humans
- D.
The skill and knowledge of workers.
Correct Answer
D. The skill and knowledge of workers. -
- 7.
A person goes to college to become an engineer. This is an example of an
- A.
Investment in physical capital.
- B.
Investment in human capital.
- C.
increase in entrepreneurship.
- D.
Increase in labor.
Correct Answer
B. Investment in human capital. -
- 8.
Opportunity cost is defined as
- A.
all the possible alternatives given up
- B.
the amount of money spent to take part in the activity chosen.
- C.
the highest-valued alternative given up.
- D.
The top two alternatives given up.
Correct Answer
C. the highest-valued alternative given up. -
- 9.
Marginal benefit is the benefit
- A.
that your activity provides to someone else.
- B.
of an activity that exceeds its cost.
- C.
That arises from the secondary effects of an activity
- D.
That arises from an increase in an activity.
Correct Answer
D. That arises from an increase in an activity. -
- 10.
Your employer has asked you to start working overtime and has offered to pay $18 per hour for every hour you work beyond forty hours a week. The wage rate for each of the first forty hours will continue to be the usual $15 per hour. In terms of dollars, what is the marginal benefit of working each hour of overtime?
- A.
Zero
- B.
$3.00
- C.
$15.00
- D.
$18.00
Correct Answer
D. $18.00 -
- 11.
If the marginal cost of an activity exceeds the marginal benefit, then
- A.
the activity will occur because of the high marginal cost
- B.
the forgone alternatives' costs must be increased.
- C.
an alternative action will be selected.
- D.
the person must concentrate on the activity's total benefits.
Correct Answer
C. an alternative action will be selected. -
- 12.
Which of the following is a positive statement?
- A.
The United States should fight inflation even if it raises unemployment
- B.
What to do with Social Security is the most important economic issue today.
- C.
A 5 percent increase in income leads to a 3 percent increase in the consumption of orange juice
- D.
Because they decrease productivity, labor unions should be eliminated.
Correct Answer
C. A 5 percent increase in income leads to a 3 percent increase in the consumption of orange juice -
- 13.
Which of the following is NOT a normative statement?
- A.
People buy more of a good or service when its price falls.
- B.
The distribution of income is fair
- C.
The government ought to provide health care to everyone
- D.
Corporations should be more socially responsible.
Correct Answer
A. People buy more of a good or service when its price falls. -
- 14.
John has two hours of free time this evening. He ranked his alternatives, first go to a concert, second go to a movie, third study for an economics exam, and fourth answer his e-mail. What is the opportunity cost of attending the concert for John?
- A.
Attending a movie
- B.
studying for an economics exam
- C.
answering his e-mail
- D.
Attending a movie, studying for an economics exam, and answering his e-mail
Correct Answer
A. Attending a movie -
- 15.
Suppose the cost of 5 pencils is $1.50. The cost of 6 pencils is $1.75. The marginal cost of the sixth pencil is
- A.
$ .25.
- B.
$1.50.
- C.
$1.75.
- D.
$3.25.
Correct Answer
A. $ .25. -
- 16.
Which one do you like?
- A.
Option 1
- B.
Option 2
- C.
Option 3
- D.
Option 4
Correct Answer
A. Option 1 -
- 17.
Which one do you like?
- A.
Option 1
- B.
Option 2
- C.
Option 3
- D.
Option 4
Correct Answer
A. Option 1 -
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Current Version
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Nov 19, 2015Quiz Edited by
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Nov 19, 2015Quiz Created by
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