Question 1. Economics is the study of increasing the level of productive resources so there is maximum output in society.
increasing the level of productive resources so there is a minimum level of income.
how people, institutions, and society make choices under conditions of scarcity.
the efficient use of scarce resources paid for at the minimum level of cost to consumers and businesses.
Question 2.The key economic concept that serves as the basis for the study of economics is
inflation.
unemployment.
money.
scarcity.
Question 3. James wants to buy a book. The economic perspective suggests that James will buy the book if
the book will give him utility.
his income is high.
the marginal cost of the book is greater than its marginal benefit.
the marginal benefit of the book is greater than its marginal cost.
Question 4. Which is not considered to be an economic resource?
Land (or natural resources)
Money
Labor
Tools and machinery
Question 5. A movement along the production possibilities curve would imply that
the labor force has grown.
productivity has increased.
productivity has declined.
society has chosen a different set of outputs.
Question 6. Which would not be characteristic of a capitalist economy?
Government ownership of the factors of production
Competition and unrestricted markets
Reliance on the market system
Free enterprise and choice
Question 7. The development of CDs and DVDs that significantly reduced the market for cassette tapes would be an example of
specialization.
derived demand.
roundabout production.
creative destruction.
Question 8.In the circular flow model, households
buy products and resources.
sell products and resources.
buy products and sell resources.
sell products and buy resources.
Question 9. Which is a major feature of the market system?
Government set prices in all markets
Reallocation of all resources from private to public uses
The right to own private property and control resource use
Central planning by government to provide goods and services
Question 10. Which is necessary to make a trade in a barter economy?
Money
Unlimited wants
A medium of exchange
A coincidence of wants
Question 11. Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to attend the concert of her favorite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50. What is the opportunity cost of Tammie's trip to the concert? Show your calculations
Question 12. Identify some intrinsic qualities of capitalist and command economic systems. Identify two countries that practice each.