Fish Economics Test #1, Chapters 1-5

15 Questions | Total Attempts: 203

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Economics Quizzes & Trivia

Economics Test for FISH Homeschool Group. Covers: How Economists Think, Division of Labor, Supply & Demand, Price Floors & Ceilings, and Elasticity.


Questions and Answers
  • 1. 
    What "miracle" is involved in the making of pencils, according to Leonard E. Read?
    • A. 

      Pencil lead is not really "lead".

    • B. 

      The efforts and knowledge of millions of people are brought together automatically, without force or a "master planner," in exactly the right way needed to produce pencils.

    • C. 

      The efforts and knowledge of one "master planner" is brought together, with force in exactly the right way needed to produce pencils.

    • D. 

      People work for their pay.

  • 2. 
    What are the three basic questions of economics?  Please check the correct three.
    • A. 

      What should be produced?

    • B. 

      How should it be produced?

    • C. 

      Who produces it?

    • D. 

      Who gets to consume what is produced?

  • 3. 
    Microeconomics is the study of how households and firms make decisions in goods, labor, and capital markets and the study of how and why these markets sometimes fail.  Macroeconomics takes an overall view of the economy, focusing on policies with regard to such issues as unemployment, inflation, economic growth, and the balance of trade and how the policies of government can affect outcomes in a global economy.
    • A. 

      True

    • B. 

      False

  • 4. 
    Division of labor refers to
    • A. 

      Labor union disagreements with the management.

    • B. 

      The process by which an economy divides the production of a certain good or service into unrelated groups of large tasks, with each worker focusing on a limited part of the overall process.

    • C. 

      An honor system which isn't a practical solution for a storehouse.

    • D. 

      The process by which an economy divides the production of a certain good or service into a related group of smaller tasks, with each worker focusing on a limited part of the overall process.

  • 5. 
    An economy that takes advantage of the division of labor will increase productivity per worker for three reasons.  What are they?  Please check the correct reasons.
    • A. 

      Specializing in a certain job allows workers with different characteristics to focus on the tastes of employers, so they they have an advantage in personality connection .

    • B. 

      Workers who specialize typically become more productive with learning, practice, and innovation.

    • C. 

      Specialization allows taking advantage of economies of scale; that is, the situation in which a larger firm can produce at a lower average cost of production than a smaller firm, at least up to some level of output.

    • D. 

      Specializing in a certain job allows workers with different characteristics to focus on the types of production in which they have an advantage.

  • 6. 
    In a market economy, the value of what goes into and comes out of the "storehouse" is determined by ________________.
  • 7. 
    Supply refers to the relationship between quantity of a good supplied and the price of a good.
    • A. 

      True

    • B. 

      False

  • 8. 
    Demand  refers to a specific amount demanded at a certain price.
    • A. 

      True

    • B. 

      False

  • 9. 
    What things are true of Adam Smith?  Please check true statements.
    • A. 

      He wrote "The High Lord of the Marketplace".

    • B. 

      He advocated price ceilings.

    • C. 

      He is considered the "Father of Economics".

    • D. 

      He wrote the "Wealth of Nations".

  • 10. 
    Elasticity refers to
    • A. 

      How much quantity demanded or supplied changes in response to change in price.

    • B. 

      The equilibrium price where quantity demanded is equal to quantity supplied.

    • C. 

      A response to changes in the short run.

    • D. 

      When the percent change in quantity equals the percentage of change in price.

  • 11. 
    A price ceiling is the minimum price for a product.
    • A. 

      True

    • B. 

      False

  • 12. 
    A shortage is most likely to happen when?  Check all that apply.
    • A. 

      When the government gives income or housing vouchers to the poor.

    • B. 

      When the government sets a price ceiling lower than the equilibrium price would have been.

    • C. 

      When quantity supplied exceeds the quantity demanded.

    • D. 

      Wehn quantity demanded is greater than quantity supplied.

  • 13. 
    Economists force themselves to acknowledge what in any scenario?
    • A. 

      Personal preferences

    • B. 

      Feelings and emotions

    • C. 

      Costs

    • D. 

      Trade-offs

  • 14. 
    It is possible for a government to damage an economy greatly by ignoring or trying to defy the laws of economics, and many governments have done so.
    • A. 

      True

    • B. 

      False

  • 15. 
    What is true of the debt ceiling?  Please check all that are correct.
    • A. 

      We are the only country in the world that has one.

    • B. 

      It is not in the Constitution.

    • C. 

      Congress is once again debating whether to raise it; this is one of the reasons for the "government shutdown."

    • D. 

      It is a legal limitation on how much the government can borrow to pay debts to which it has already committed.

    • E. 

      It has helped Congress spend less since it has been in place.

    • F. 

      We know excactly what will happen on Thursday if it is not raised.

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