This study guide prepares you for the Final Examination you complete in the last week of the course. It contains practice questions, which are related to each week’s objectives. Highlight the correct response, and then refer to the answer key at the end of this Study Guide to check your answers.
Use each week’s questions as a self-test at the start of a new week to reflect on the previous week’s concepts. When you come across concepts that you are unfamiliar with, refer to the Student Guide for that particular week. The Student Guide provides a breakdown of the readings that align to the Final Examination questions.
Week One: Principles of Economics
Objective: Explain how the principles of economics relate to decision-making, interaction, and the workings of the economy as a whole.
1. Economists make use of assumptions, some of which are unrealistic, for the purpose of
a. teaching economics to people who have never before studied economics
b. advancing their political agendas
c. developing models when the scientific method cannot be used
d. focusing their thinking
Objective: Compare and contrast economic systems.
2. In a market economy,
a. supply determines demand and, in turn, demand determines prices
b. demand determines supply and, in turn, supply determines prices
c. the allocation of scarce resources determines prices and, in turn, prices determine supply and demand
d. supply and demand determine prices and, in turn, prices allocate scarce resources
3. Which of the following statements is correct in regards to market economies?
a. Buyers determine supply and sellers determine demand.
b. Buyers determine demand and sellers determine supply.
c. Buyers and sellers as one group determine supply, but only buyers determine demand.
d. Buyers and sellers as one group determine demand, but only sellers determine supply.
Objective: Determine how changes in supply and demand influence price,