Questions:
Question 1In a market economic system, the productive resources are owned by the government.
individuals.
business firms only.
individuals, except for capital, which is owned by the government.
anyone; it does not matter who owns the resources in a market system.
Question 2.A production possibilities curve shows
that in order to acquire more of one good, none of the alternative good must be given up.
that in order to acquire more of one good, some of the alternative good must be given up.
that any amount of goods could be produced by society if people worked harder.
various combinations of guns, bullets, bread, and butter that can be produced under conditions of 6 percent unemployment.
Question 3. 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.
Question 4. Which of the following would be described as capital by an economist?
government bonds
corporate bonds
petroleum reserves owned by a corporation
common stocks traded on a national exchange
the power lift in a service station
Question 5. When price changes, there is an opposite change in the
quantity supplied.
demand.
supply.
quantity demanded.
level of technology and income.
Question 6. If an individual's income increases, then the demand for a normal good will
decrease.
increase.
remain constant.
rotate.
fall to zero.
Question 7.An economic system is said to be
a market system if there is substantial central planning.
a traditional system if it relies on simple market trading.
a market system if it relies on self-interested behavior and incentives.
a command system if it relies on long-standing practices.
Question 8. The self-interest assumption is made by economists because
there are no other human motives in economics.
economists believe that human behavior is influenced by costs and benefits.
it allows economists to predict the average of a group.
economists believe that human motives don't matter in economic decision making.
economists believe that human behavior is influenced by costs and benefits, and the assumption allows economists to predict the average behavior of a group.
it allows economist security of revenue.
Question 9. When a firm decides to replace some workers with robots in its production process, it is making a decision about one of the basic economic questions. Which one?
What?
How?
When?
Why?
For whom?
Question 10. In a market economy, what to produce is primarily decided by
the government.
producers.
consumers.
what resources are available.
comparative advantage.