Practice_Ch1_ - Chapter 1 Practice Test Limits,...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 1 Practice Test Limits, Alternatives, and Choices 1. Economics is primarily the study of: a. how scarcity can be eliminated b. how firms manipulate prices c. how government influence resource allocation decisions d. the problem of scarce resources relative to human wants Answer: d Feedback: The fundamental economic problem is one of scarce resources relative to human wants. Such scarcity can never be eliminated; it implies we must make choices. 2. Macroeconomics mainly focuses upon: a. the economy as a whole b. international trade and foreign exchange markets c. specific product and resource markets d. individual consumers and producers Answer: a Feedback: Macroeconomics is the study of the economy as a whole or its basic aggregates such as the business, household, and government sectors. 3. The production possibilities curve: a. shows all combinations of goods that society most desires b. indicates that any combination of goods lying outside the curve is attainable c. separates all combinations of two goods that can be produced from those that cannot d. is bowed in toward the origin Answer: c Feedback: The production possibilities curve is a frontier, indicating the maximum amount of one good achievable for a given amount of the other good. Combinations outside of this frontier are unattainable. 4. Moving from left to right, the typical production possibilities curve has: a. an increasingly steep negative slope b. a decreasingly steep negative slope c. an increasingly steep positive slope d. a constant and negative slope Answer: a Feedback: As resources are typically not perfectly adaptable to production of alternative goods, increased production of one good will require increasing sacrifices of the other. 5. According to economists, human wants will never be fulfilled completely because: a. people are greedy b. productive resources are scarce c. people are not capable of fully rational thought d. people’s wants are manipulated by advertising Answer: b Feedback: The fundamental economic problem is the scarcity of productive resources relative to human wants. The economic perspective assumes purposeful, self-interested behavior.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6. True or false: Economic theory suggests that purposeful behavior and economic growth will eventually solve the problem of scarcity. a. True b. False Answer: b Feedback: Because human wants always exceed available productive resources, scarcity will always be present. 7. In studying economic principles, economists make use of: a. both the economic perspective and the scientific method b. the economic perspective but not the scientific method c. the scientific method but not the economic perspective d. neither the scientific method nor the economic perspective Answer: a Feedback: Both the economic perspective and the scientific method are fundamental to the study of economics. 8. Suppose you have a $20 iTunes gift card with which you can buy (download) songs or videos.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/22/2011 for the course ECON 2023 taught by Professor Meier during the Spring '11 term at St. Petersburg College.

Page1 / 7

Practice_Ch1_ - Chapter 1 Practice Test Limits,...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online