Basic Economic Questions

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Economics questions
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1.
Scarcity:
[pic]A) exists because resources are unlimited while human wants are limited. [pic]B) means we are unable to have as much as we would like to have. [pic]C) will likely be eliminated as technology continues to expand. [pic]D) is not an issue addressed in economics.

2.
Which of the following is true of resources?
[pic]A) Resources are inputs used to produce goods and services. [pic]B) Labor is the mental and physical capacity of workers to produce goods and services. [pic]C) Entrepreneurship organizes resources to produce goods and services. [pic]D) All of these are true.

3.
Which of the following is not an example of a factor of production? [pic]A) A forest.
[pic]B) A computer program.
[pic]C) A labor leader.
[pic]D) Dollars.
4.
The person who assumes the risks and uncertainties of starting a new business is considered to be: [pic]A) the manager.
[pic]B) the out-resourcer.
[pic]C) a sales representative.
[pic]D) an entrepreneur.
5.
Which one of the following is the most accurate definition of economics? [pic]A) Economics is the study of stocks and bonds.
[pic]B) Economics is the study of how people allocate unlimited resources. [pic]C) Economics is the study of how consumers choose to spend their income. [pic]D) Economics is the study of how society chooses to allocate scarce resources. 6.

The most fundamental concepts underlying the discipline of economics are: [pic]A) scarcity and choice.
[pic]B) supply and demand.
[pic]C) money, stocks, and bonds.
[pic]D) inflation and unemployment.
7.
Policies to create jobs in the nation are the concern of:
[pic]A) macroeconomics.
[pic]B) microeconomics.
[pic]C) both microeconomics and macroeconomics.
[pic]D) neither microeconomics nor macroeconomics.
8.
An economist at the University of Alaska at Anchorage has been asked to explain why the price of Alaskan crude oil has fallen recently. In order to develop a model, the professor should take which steps? [pic]A) Identify the problem, develop a model based on simplifying assumptions and test the model to formulate a conclusion. [pic]B) Gather data on crude oil prices and seemingly unrelated variables in order to look for associations, then formulate a hypothesis based on those unexpected associations. [pic]C) Ask people in Alaska why they are not purchasing oil. [pic]D) None of these. The oil industry is controlled by a cartel; therefore price changes in the industry cannot be explained using economic theories. | |

9.
Complete the following analogy: A criminal is to a police artist's sketch as the economy is to: [pic]A) money.
[pic]B) an economic model.
[pic]C) a resource.
[pic]D) Ceteris paribus.
[pic]E) scarcity.
10.
If individuals who sit in the back of the classroom receive lower grades on average than the rest of the class, does that mean that sitting in the back of a classroom causes one to perform poorly on exams? [pic]A) Not necessarily. The reoccurrence of a certain relationship between two variables does not necessarily imply causation. [pic]B) It is not possible for an economist to determine causation between variables. [pic]C) The reoccurrence of such a relationship is sufficient evidence that sitting in the back of a classroom will lead to lower grades. [pic]D) The reoccurrence of such a relationship is sufficient evidence that students who receive low grades prefer to keep a low profile and always sit in the back of the classroom. 1.

The Latin expression Ceteris paribus means:
[pic]A) everything else being equal.
[pic]B) economic model.
[pic]C) economists are partly right.
[pic]D) partial scarcity is certain.
2.
Which of the following is included in the study of macroeconomics? [pic]A) Salaries of college professors.
[pic]B) Computer prices.
[pic]C) Unemployment in the nation.
[pic]D) Silver prices.
3.
The term Ceteris paribus means that:
[pic]A) the model includes all important variables occurring in the...
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