Ch. 1 Economics Quiz

29 Questions | Total Attempts: 160

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Ch. 1 Economics Quiz

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Questions and Answers
  • 1. 
    Macroeconomics is the study of individual decision making. 
    • A. 

      True

    • B. 

      False

  • 2. 
    Economists believe that the fundamental economic problem is that we have limited quantities to meet unlimited wants and that is the reason we have to make choices.  This is due to:
    • A. 

      Shortages in money

    • B. 

      Scarcity of resources

    • C. 

      Underutilization of resources

    • D. 

      High opportunity costs

  • 3. 
    Which of the following are considered factors of production?  (click all that apply)
    • A. 

      Production Possibilities frontiers

    • B. 

      Land

    • C. 

      Technology

    • D. 

      Labor

    • E. 

      Capital

    • F. 

      Time

    • G. 

      Money

  • 4. 
    Economists call the most important sacrifice as a result of a decision what?__________
    • A. 

      Trade-offs

    • B. 

      Money

    • C. 

      Guns or butter

    • D. 

      Opportunity cost

  • 5. 
    If you have nothing better to do when you make a choice about doing something, there is no opportunity cost of your decision. 
    • A. 

      True

    • B. 

      False

  • 6. 
    Economists consider individuals who combine the factors of production to open up a business the 4th factor of production.  What are these individuals called?
    • A. 

      Entrepreneurs

    • B. 

      Capitalists

    • C. 

      Wealth producers

    • D. 

      Opportunists

  • 7. 
    Which of the following would NOT be a possible opportunity cost of attending college?
    • A. 

      Other uses of the money used to pay college tuition.

    • B. 

      Other uses of the time used to study and attend classes.

    • C. 

      Other uses of the extra income that is earned because of the college education.

    • D. 

      Other uses of the money that is used to pay for books while going to college.

  • 8. 
    The opportunity cost of studying for an exam is probably different if you study for it on a Saturday or a Tuesday. 
    • A. 

      True

    • B. 

      False

  • 9. 
    Which of the following is the BEST definition of Economics
    • A. 

      Is the study of how people use their money to gain more skills and material things.

    • B. 

      The study of how people and societies make decisions about their resources to meet their unlimited wants.

    • C. 

      Is the study of how governments and organizations attempt to create incentives to manipulate the behavior of individuals.

    • D. 

      A social study that attempts to find the best ways to make people and societies richer.

  • 10. 
    The decision of going to college after graduating from high school or getting a job is a considered a micro economic decision. 
    • A. 

      True

    • B. 

      False

  • 11. 
    Which of the following individuals is likely to have the highest human capital?
    • A. 

      High school graduate

    • B. 

      Associate's degree

    • C. 

      Bachelor's degree

    • D. 

      High school drop out

  • 12. 
    According to the bar graph, what is a trade off of dropping out of high school?
    • A. 

      Time

    • B. 

      Money

    • C. 

      Physical capital

    • D. 

      Human capital

  • 13. 
    Which of the following would happen to a production possibilities curve (frontier) when economic growth occurs due to an increase in resources, technology, or population?
    • A. 

      The curve shifts to the left

    • B. 

      The curve becomes a straight line

    • C. 

      The curve shifts to the right

    • D. 

      The curve does not change at all

  • 14. 
    According to Economists, what was a major cause of the 2008 Great Recession?
    • A. 

      Not enough banks were loaning money.

    • B. 

      Subprime mortgages led to many people not paying off their debts.

    • C. 

      Subprime mortgages allowed too few people to buy a home.

    • D. 

      Too many people lost their jobs.

  • 15. 
    According to the ppf, what is the opportunity cost of producing 16 units of good Y?
    • A. 

      6 units of good X

    • B. 

      16 units of good Y

    • C. 

      The money you spent on producing the 16 units of Y

    • D. 

      0 units of good X

  • 16. 
    Which of the following points demonstrate efficient use of resources in an economy?  Click on all that apply
    • A. 

      A

    • B. 

      I

    • C. 

      E

    • D. 

      H

    • E. 

      G

    • F. 

      D

  • 17. 
    When a student receives a laptop from the school at no cost to the student, that means someone else had to pay for it.  WHat concept is this an example of?
    • A. 

      Shortage

    • B. 

      No free lunch

    • C. 

      Marginal benefit

    • D. 

      Marginal cost

  • 18. 
    Which of the following is an example of macroeconomics?
    • A. 

      People in Iowa purchase more ethanol gas than people in other states.

    • B. 

      Teenagers spend more money on clothes than the elderly

    • C. 

      The nations debt has exceeded more than $10 trillion

    • D. 

      Men are more likely to spend money on video games than women

  • 19. 
    Which of the following is an example of labor as a factor of production?
    • A. 

      FedEx delivery trucks

    • B. 

      Pizza oven at Black Market Pizza

    • C. 

      Iowa corn

    • D. 

      Cashier at Alco

  • 20. 
    What is physical capital?
    • A. 

      Human made goods used to produce other goods and services

    • B. 

      Gifts of nature used to make other goods and services

    • C. 

      Recycled goods that are used to make other goods and services

    • D. 

      The physical or mental skills used to make other goods and services

  • 21. 
    Which country has the comparative advantage in producing tv's
    • A. 

      A

    • B. 

      B

    • C. 

      Both

    • D. 

      Neither

  • 22. 
    The process in which individuals and societies compare the trade-offs before making an economic decision is called?
    • A. 

      Marginal benefit analysis

    • B. 

      Law of increasing costs

    • C. 

      Cost/Benefit analysis

    • D. 

      Marginal cost analysis

  • 23. 
    Which country has the absolute advantage in producing tv's
    • A. 

      A

    • B. 

      B

    • C. 

      Both

    • D. 

      Neither

  • 24. 
    In order to maximize their production of wheat and televisions, what would an economist recommend country A and country B do?
    • A. 

      Invade the other country and take their resources

    • B. 

      Trade with the other country and focus on producing the product in which the country has comparative advantage.

    • C. 

      Only produce wheat because you can live without televisions

    • D. 

      Only produce televisions because you can't live without television

  • 25. 
    Read the textbook excerpt Jamestown and the English Mercantile System and answer the following question.   What factor of production did John Rolfe obtain from Spanish colonies?
    • A. 

      Land

    • B. 

      Labor

    • C. 

      Physical Capital

    • D. 

      Human Capital

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