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Macro-Economics Multiple Choice Questions Quiz




Question;1. Which of the following statements is true about;scarcity?A) Scarcity refers to the situation in which unlimited wants exceed;limited resources.B) Scarcity is not a problem for the wealthy.C) Scarcity is;only a problem when a country has too large a population.D) Scarcity arises;when there is a wide disparity in income distribution.;2. By definition, economics is the study of A) how to make;money in the stock market. B) how to;make money in a market economy.C) the choices people make to attain their;goals, given their scarce resources.D) supply and demand.;3. The term ________ in economics refers to a group of;buyers and sellers of a product and the arrangement by which they come together;to trade. A) collectiveB) cooperativeC) marketD) trade-off;4. Economists reason that the optimal decision is to;continue any activity up to the point where theA) marginal benefit is zero.B);marginal benefit is greater than the marginal cost.C) marginal cost is zero.D);marginal benefit equals the marginal cost.;5. The three fundamental questions that any economy must;address are:A) What will be the prices of goods and services, how will these;goods and services beproduced, and who will receive them?B) What goods and;services to produce, how will these goods and services be produced, and who;receives them?C) Who gets jobs, what wages do workers earn, and who owns what;property?D) How much will be saved, what will be produced, and how can these;goods and services befairly distributed?;6. The idea that because of scarcity, producing more of one;good or service means producing less of another good or service refers to the;economic concept ofA) optimization.B) efficiency.C) trade-off.D) equity.;7. The highest valued alternative that must be given up to;engage in an activity is the definition ofA) economic equity.B) marginal;benefit.C) opportunity cost.D) marginal cost.;8. Arlene quits her $125,000-a-year job to take care of her;ailing parents. What is the opportunity cost of her decision?A) zero, since she;will no longer be earning a salaryB) It depends on the?going rate? for;home-care providers.C) at least $125,000D) the value she attributes to the;satisfaction she receives from taking care of her parents;9. Who, in a centrally planned economy, decides what goods;and services will be produced with the scarce resources available in that;economy?A) the governmentB) producersC) consumersD) consumers and producersE);the government, consumers and producers;10. The decision about what goods and services will be;produced made in a market economy is made byA) lawmakers in the government;voting on what will be produced.B) workers deciding to produce only what the;boss says must be produced.C) producers deciding what society wants most.D);consumers and firms choosing which goods and services to buy or produce.E);consumers dictating to firms what they need most.;11. How are the fundamental economic questions answered in a;market economy?A) The government alone decides the answers.B) Individuals;firms, and the government interact in MARKETS to decide the answers to these;questions.C) Households and firms interact in markets to decide the answers to;these questions.D) Large corporations alone decide the answers.;12. Which of the following is a positive economic;statement?A) The standard of living in the United States should be higher.B) If;the price of iPhones falls, a larger quantity of iPhones will be purchased.C);The government should revamp the health care system.D) The U.S. government;should not have bailed out U.S. auto manufacturers.;13. Which of the following is a normative economic;statement?A) Rising global demand for coal has led to increases in the price of;coal.B) With rising mortgage rates and rising unemployment rates, the number of;unsold homes has increased.C) The state of Texas is considering increasing;FUNDS for light-rail development to promote the use of public transportation.D);Pharmaceutical manufacturers should not be allowed to patent their products;soprescription drugs would be more affordable.;14. Microeconomics is the study ofA) how households and;firms make choices.B) the economy as a whole.C) the global economy.D) topics;such as unemployment, inflation, and economic growth.;15. Macroeconomics is the study ofA) how households make;choices.B) how firms make choices.C) how households and firms make choices.D);the economy as a whole.;16. Which of the following statements is true about;profit?A) Profit refers to the revenue received from the sale of a quantity of;goods.B) Profit is calculated by multiplying price and quantity sold.C) The;terms accounting profit and economic profit can be used interchangeably.D);Profit is the difference between revenue and cost.;17. Which of the following is an example of an activity;undertaken by an entrepreneur?A) designing your landscaping for your new homeB);holding a position as the president of a liberal arts collegeC) running for the;president of the United StatesD) starting your own pet sitting business;18. Which is NOT a factor of production:A) LaborB) Natural;ResourcesC) DollarsD) Capital;19 Positive analysis is concerned with "what ought to;be", while normative analysis is concerned with "what is".A);TRUE B) FALSE;20 The points outside the production possibilities frontier;areA) efficient.B) attainable.C) inefficient.D) unattainable.;21. The production possibilities frontier shows the;combinations of two products that may be produced in a particular time period;with available resources.A) minimum attainableB) maximum attainableC) onlyD);equitable;22. The production possibilities frontier model shows thatA);if consumers decide to buy more of a product its price will increase.B) a;market economy is more efficient in producing goods and services than is a;centrally planned economy.C) economic growth can only be achieved by free;market economies.D) if all resources are fully and efficiently utilized, more;of one good can be produced only by producing less of another good.;23. In a production possibilities frontier model, a point;the frontier is productively inefficient.A) alongB) insideC) outsideD);at either intercept of;24. An inward shift of a nation?s production possibilities;frontier can occur due toA) a reduction in unemployment.B) a natural disaster;like a hurricane or bad earthquake.C) a change in the amounts of one good;desired.D) an increase in the labor force.;25. Without an increase in the supplies of factors of;production, how can a nation achieve economic growth?A) by producing more;high-value goods and less of low-value goodsB) through technological;advancement which enables more output with the same quantity of resourcesC) by;lowering the prices of factors of productionD) by increasing the prices of;factors of production;26. Which of the following would shift a nation?s production;possibilities frontier outward?A) discovering a cheap way to convert sunshine;into electricityB) an increase in demand for the nation?s productsC) a decrease;in the unemployment rateD) a law requiring workers to retire at age 50;27. The Great Depression of the 1930s with a large number of;workers and factories unemployed would be represented in a production;possibilities frontier graph byA) a point inside the frontier.B) a point;outside the frontier.C) a point on the frontier.D) an intercept on either the;vertical or the horizontal axis.;28. An organization of producers that limits the amount of a;good produced is known as aA) free market organization.B) guild.C);collective.D) co-op.;29. The opportunity cost of taking a semester-long economics;class isA) the cost of tuition and fees only.B) the value of the time spent in;the classroom.C) zero because there is no admission charged if you are enrolled;in the course.D) equal to the highest value of an alternative use of the time;and money spent on the class.E) the knowledge and enjoyment you receive from;attending the class.;30. You have an absolute advantage whenever youA) are better;educated than someone else.B) can produce more of something than others with;the same resources.C) prefer to do one particular activity.D) can produce;something at a lower opportunity cost than others.;31. Comparative advantage means the ability to produce a;good or serviceA) at a lower selling price than any other producer.B) at a;lower opportunity cost than any other producer.C) of a higher quality than any;other producer.D) at a higher profit level than any other producer.;32. Which of the following is not a factor of production?A);an acre of farmlandB) a drill press in a machine shopC) the manager of the;local tire shopD) $1,000 in cash;33. ?An Inquiry into the Nature and Causes of the Wealth of;Nations? published in 1776 was written byA) John Maynard Keynes.B) Karl Marx.C);Alfred Marshall.D) Adam Smith.;34. Adam Smith?s behavioral assumption about humans was that;peopleA) typically act irrationally.B) usually act in a rational;self-interested way.C) are consistently greedy.D) typically act randomly.;35. Adam Smith?s invisible hand refers toA) the government?s;unobtrusive role in ensuring that the economy functions efficiently.B) property;ownership laws and the rule of the court system.C) the process by which individuals;acting in their own self-interest bring about a marketoutcome that benefits;society as a whole.D) the laws of nature that influence economics decisions.;36. In economics, the term ________ means ?additional? or;?extra?.A) allocativeB) marginalC) equityD) optimal;37. Marginal analysis involves undertaking an activityA);until its marginal costs start declining.B) only when its marginal benefits are;positive.C) until its marginal benefits equal marginal costs.D) only if its;marginal costs are greater than its marginal benefits.;38. Economists assume that individualsA) behave in;unpredictable ways.B) will never take actions to help others.C) prefer to live;in a society that values fairness above all else.D) are rational and respond to;incentives.;39. How are the fundamental economic decisions determined in;North Korea?A) Individuals, firms, and the government interact in a market to;make these economicdecisions.B) These decisions are made by the country?s;elders who have had much experience inanswering these questions.C) The;government decides because North Korea is a centrally planned economy.D) The;United Nations decides because North Korea is a developing economy.;40, The government makes all economic decisions in a mixed;economy.A) True B) False;41. In economics, choices must be made because we live in a;world ofA) unemployment.B) scarcity.C) greed.D) unlimited resources.;42. The natural resources used in production are made;available in theA) goods and services market.B) product market.C) government;market.D) factor market.;43. When you purchase a new pair of jeans you do so in theA);factor market.B) input marketC) product marketD) resource market;44. The ________ demonstrates the roles played by households;and firms in the market system.A) production possibilities frontierB) circular;flow modelC) theory of comparative advantageD) business cycle;45. Households ________ final goods and services in the;market.A) purchase, factorB) purchase, productC) sell, factorD) sell;product;46. In the circular flow model, producersA) sell goods and;services in the input market.B) and households spend earnings from resource;sales on goods and services in the factor market.C) hire resources sold by;households in the factor market.D) spend earnings from resource sales on goods;and services in the product market.;47. Which of the following statements about a simple;circular flow model is false?A) Producers are buyers in the factor market and;sellers in the product market.B) Households are neither buyers nor sellers in;the input market.C) Producers are buyers in the factor market.D) Households are;sellers in the product market.;48. All of the following are critical functions of the;government in facilitating the operation of a market economy exceptA);protecting private property.B) enforcing property rights.C) ensuring an equal;distribution of income to all citizens.D) enforcing contracts.;49. Entrepreneurs bring together the factors of production;to produce goods and services.A) TRUE B) FALSE;50. An economic ________ is a simplified version of some;aspect of economic life used to analyze an economic issue.A) marketB);trade-offC) variableD) model


Paper#56515 | Written in 18-Jul-2015

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