Ch1_Practice_Test_Questions

Ch1_Practice_Test_Questions - 1 Cha WHAT IS p t e r...

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1 ECONOMICS? Definition of Economics Topic: Incentives Skill: Recognition 1) 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. Answer: C Topic: Definition of Economics Skill: Recognition 2) The most fundamental economic problem is A) security. B) scarcity. C) health. D) the fact the United States buys more goods from foreigners than we sell to foreigners. Answer: B Topic: Definition of Economics Skill: Conceptual 3) Economics is best defined as the study of how people, businesses, governments, and societies A) choose abundance over scarcity. B) make choices to cope with scarcity. C) use their infinite resources. D) attain wealth. Answer: B Topic: Definition of Economics Skill: Conceptual 4) Economists point out that scarcity confronts A) neither the poor nor the rich. B) the poor but not the rich. C) the rich but not the poor. D) both the poor and the rich. Answer: D Topic: Definition of Economics Skill: Conceptual 5) Scarcity requires that people must A) cooperate. B) compete. C) trade. D) make choices. Answer: D Topic: Definition of Economics Skill: Conceptual 6) As an economic concept, scarcity applies to A) both money and time. B) money but not time. C) time but not money. D) neither time nor money. Answer: A Topic: Definition of Economics Skill: Conceptual 7) Which is the most accurate definition of the study of economics? Economics is the study of A) the distribution of surplus goods to those in need. B) affluence in a morally bankrupt world. C) the choices we make because of scarcity. D) ways to reduce wants to eliminate the prob- lem of scarcity. Answer: C 1 C h a p t e r
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2 C H A P T E R 1 Topic: Microeconomics and Macroeconomics Skill: Recognition 8) Which of the following is a macroeconomic topic? A) The reasons for a rise in the price of orange juice. B) The reasons for the rise in average prices. C) Why plumbers earn more than janitors. D) Whether the army should buy more tanks or more rockets. Answer: B Topic: Microeconomics and Macroeconomics Skill: Recognition 9) Which of the following is a microeconomic topic? A) The reasons why Kathy buys less orange juice. B) The reasons for a decline in average prices. C) The cause of why total employment may de- crease. D) The effect of the government budget deficit on inflation. Answer: A Topic: Microeconomics and Macroeconomics Skill: Recognition 10) Microeconomics focuses on all of the follow- ing EXCEPT A) the purchasing decisions that an individual consumer makes. B) the effect of increasing the money supply on inflation. C) the hiring decisions that a business makes. D) the effect of an increase in the tax on cigar- ettes on cigarette sales. Answer: B Topic: Microeconomics and Macroeconomics Skill: Recognition 11) In broad terms the difference between microe- conomics and macroeconomics is that A) they use different sets of tools and ideas.
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Ch1_Practice_Test_Questions - 1 Cha WHAT IS p t e r...

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