Question 1. The Wall Street Journal carried a story on a type of grocery store that operates with few services and limited use of attractive displays, but with lower prices than its competitors. This decision of the owners is a way of answering a question that every society must face. Which of the following is that question? What goods and services will be produced?
How can we avoid inflation?
How can we avoid a recession?
Who will get the goods and services produced?
How will the goods and services be produced?
Question 2. Which of the following is true of scarcity?
It is a basic problem of microeconomics, not macroeconomics.
It applies to raw materials; manufactured goods are not scarce.
It affects all countries.
It affects only poor nations.
It is a basic problem of macroeconomics, not microeconomics.
Question 3. Which of the following would embody entrepreneurship as it is defined by an economist?
A doctor
A professor
The owner of a dry-cleaning business
A coal miner
Question 4. Ceteris paribus, as applied in demand theory, means accounting for all possible simultaneous changes.
holding constant all factors that affect demand except one.
observing the real world.
holding technology and resource prices constant.
holding one input constant while changing the other input.
Question 5. 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 6. Along with the other social sciences, economics is concerned with
the behavior of human beings as individuals.
the behavior of human beings in groups.
the activities of international agencies.
the laws of mathematics as they apply to decision making.
the behavior of human beings both as individuals and in groups.
Question 7. In what kind of economy is a central planning board or commission typically used to answer the basic economic questions?
Traditional
Supply
Command
Market
Question 8. In the simplified pure market economy described by the two-sector circular flow model, the participants are
domestic and foreign countries.
households and government
commercial institutions and government institutions
households and firms
Question 9. In what type of economic system are the basic economic questions answered in the same way as in the past?
A planned economy
A traditional economy
A command economy
A market economy
Question 10. Opportunity costs are
only dollar expenditures.
costs that never include dollar expenditures.
dollar expenditures plus time costs and other forgone activities.
not important.
only relevant for individuals and not for government.