1. Capital consists of
the assets of a firm.
the assets of the government.
the assets of upper-income groups.
aids to production created by humans.
stocks and bonds.
2. If the supply of coffee shifts to the right and the price has NOT yet changed to a new price, then
quantity demanded will be greater than quantity supplied at the old price.
there is still an equilibrium because quantity sold equals quantity bought.
the demand will also shift, so quantity demanded will increase but the price will not change.
market forces will tend to drive the price down. the quantity sold will fall.
3. If left alone, a market-directed economy will
invariably provide the correct economic choices.
provide the correct economic choice in many but not all cases.
protect consumers from monopoly.
avoid the production problems encountered in command economies.
disintegrate.
4. In what kind of economy is a central planning board or commission typically used to answer the basic economic questions?
traditional
supply
command
Market
5. An economy that does NOT engage in international trade is
an open economy.
a traditional economy.
a closed economy.
a mixed economy.
a command economy.
6. When the government redistributes income, it is answering a basic economic question. Which one?
What?
How?
When?
Why?
For whom?
7. In a market economy, what to produce is primarily decided by
the government.
producers.
consumers.
what resources are available.
comparative advantage.
8. A shift to the right (away from the origin) of a production possibilities curve is an illustration of
the law of increasing costs.
economic growth.
opportunity cost.
scarcity.
the macroeconomy.
9. An example of investment, as defined in economics, is
buying 100 shares of Apple stock.
buying U.S. government bonds.
building a new factory.
buying both stocks and bonds.
the use of natural resources in the production of a good.
10. Macroeconomics is the study of
individuals in an economy.
anything large.
the interaction of consumers and producers in markets for particular goods and services.
the overall price level and the levels of unemployment and output.
the small aspects of large entities.