Deck 1: Exploring Economics

Question 1

Macroeconomics is concerned with issues such as:

A) which orange juice to buy.
B) unemployment.
C) which job to take.
D) what price to charge for goods.

Answer 1

unemployment.

Question 2

The study of economics:

A) primarily considers the stock market.
B) is about people's decisions regarding their use of scarce resources.
C) doesn't apply to decisions made by businesses.
D) states efficiency and equity don't conflict.

Answer 2

is about people's decisions regarding their use of scarce resources.

Question 3

The main difference between macroeconomics and microeconomics is that:

A) microeconomics largely deals with the fallacy of composition,and macroeconomics does not deal with the fallacy of composition.
B) macroeconomics focuses on the aggregate economy,and microeconomics focuses on small components of that economy.
C) macroeconomics looks at how individuals make choices,and microeconomics looks at the aggregate of those choices.
D) macroeconomics is concerned with economic policy,and microeconomics is concerned with international policies.

Answer 3

macroeconomics focuses on the aggregate economy,and microeconomics focuses on small components of that economy.

Question 4

The field of economics that focuses on decision-making by individuals,businesses,industries,and government is called:

A) macroeconomics.
B) decision science.
C) mini-economics.
D) microeconomics.

Question 5

Economists understand that people respond to:

A) laws.
B) incentives.
C) threats more than rewards.
D) positives,but not negatives.

Question 6

To say that economics is a way of thinking about how people make rational decisions means that people:

A) don't consider the cost of their decisions.
B) consider only monetary terms in their decisions.
C) respond to incentives.
D) are irrational.

Question 7

Microeconomics is concerned with issues such as:

A) inflation.
B) unemployment.
C) which job to take.
D) interest rates.

Question 8

Which of the following statements about economics is correct?

A) Economists do not believe that criminals behave rationally.
B) Economics has little to say about social issues.
C) Economists consider how rational people respond to incentives.
D) Economists assume that people don't respond to incentives.

Question 9

Scarcity refers to the fact that:

A) some goods are scarce.
B) something is scarce.
C) one must make choices given the resource limitations he or she faces.
D) there is no long-term benefit to studying economics.

Question 10

Economists tend to look:

A) at costs but not at benefits.
B) at benefits but not at costs.
C) for rational responses to incentives.
D) only at macroeconomic topics.

Question 11

Scarcity is BEST defined as when:

A) the quantity demanded exceeds quantity supplied.
B) the quantity supplied exceeds quantity demanded.
C) unlimited resources exceed limited wants.
D) unlimited wants exceed limited resources.

Question 12

Paying a salesperson more for increased sales is an example of:

A) an incentive.
B) an opportunity cost.
C) efficiency.
D) equity.

Question 13

Reasons to study economics include all of the following,EXCEPT that you:

A) will always live in a world of scarcity and choices.
B) will understand more about how governments and businesses interact.
C) may become a better prepared voter.
D) will learn exactly how to invest your cash short-term for the highest return on investment.

Question 14

The field of economics that is concerned about the broader issues in the economy such as inflation,unemployment,and national output of goods and services is called:

A) macroeconomics.
B) microeconomics.
C) national economics.
D) labor force economics.

Question 15

Economics is a:

A) natural science.
B) physical science.
C) life science.
D) social science.

Question 16

Economics is a social science that involves the study of how individuals,firms,and societies:

A) maximum happiness.
B) maximize incomes.
C) choose among alternatives to satisfy their unlimited wants.
D) develop their tastes and preferences.

Question 17

Macroeconomics focuses on:

A) decisions made by individuals.
B) decisions made by firms.
C) the decision to purchase a new home for a family.
D) decisions for the entire economy.

Question 18

Because of scarcity:

A) resources are limitless.
B) wants are limited.
C) choices are unlimited.
D) we face tradeoffs in nearly every choice we make.

Question 19

Economics is BEST defined as the study of how:

A) to classify resources used to produce final goods and services.
B) resources are apportioned to satisfy human wants.
C) people make rational decisions.
D) technology can be used to change scarce resources into free resources.

Question 20

Why is it important for students to study economics?

A) Most students will work as professional economists.
B) It helps us reduce our personal income taxes.
C) It helps us make better and wiser decisions,given our limited resources.
D) There is no long-term benefit to studying economics.

Question 21

International finance is generally studied in:

A) microeconomics.
B) macroeconomics.
C) deductive logic.
D) inductive logic.

Question 22

Which is the BEST example of a microeconomic issue?

A) whether the Federal Reserve will raise interest rate this week
B) whether the unemployment rate will exceed 6% this month
C) whether the country's price level has increased last quarter
D) whether the production of automobiles decreased last year

Question 23

Economists like to use graphs and equations primarily because:

A) these tools efficiently express economic concepts.
B) economics should be difficult.
C) a mathematical aptitude is necessary to understand economics.
D) the use of mathematics reduces rigor.

Question 24

The economics of uranium mining would be studied in:

A) microeconomics.
B) macroeconomics.
C) deductive logic.
D) inductive logic.

Question 25

All of the following fall under the category of microeconomics,EXCEPT:

A) cooks at McDonalds supply labor in return for wages.
B) the cost of living has risen due to rising housing and food prices.
C) Jonathan decided to go to the movies instead of go to work.
D) Pepsi experienced an increase in revenue last quarter.

Question 26

Macroeconomics deals with all of the following,EXCEPT:

A) recession.
B) inflation.
C) job creation rates.
D) markets for semiconductor chips.

Question 27

Supply and demand analysis is used:

A) only in microeconomics.
B) only in macroeconomics.
C) in both microeconomics and macroeconomics.
D) in neither microeconomics nor macroeconomics.

Question 28

Which of the following is a macroeconomic topic?

A) a study of the business cycle
B) the price of a pair of Nike shoes
C) the total sales for GE in 2009
D) the labor market for computer analysts

Question 29

Which of the following is NOT true of economic model building?

A) There may be exceptions to economic models.
B) Adding more complexity to models does not always provide greater insights.
C) Economic models always reach verifiable results.
D) Economic models provide generalizations about economic behavior.

Question 30

Which of the following does NOT deal with macroeconomics?

A) the effect of the budget deficit on the economy
B) the effect of monetary policy on inflation
C) the effect of Walmart's pricing policies on consumers
D) the effect of the government policies on the country's unemployment rate

Question 31

Which of the following is NOT a macroeconomic issue?

A) whether the Federal Reserve will raise interest rate this week
B) whether the unemployment rate will exceed 6% this month
C) whether the country's price level has increased last quarter
D) whether the production of automobiles decreased last year

Question 32

Which is a characteristic of economic models?

A) They try to boil down an economic situation to its most basic elements.
B) They are always complex because the economy is complex.
C) They attempt to reproduce reality exactly.
D) They try to avoid invoking the ceteris paribus assumption.

Question 33

Which topic is MOST likely to be studied in a macroeconomics course?

A) taxation methods
B) recession
C) public utility regulation
D) game theory

Question 34

Which of the following is a microeconomic topic?

A) the U.S.inflation rate in 2009
B) the price of an iPad sold by Apple
C) the U.S.unemployment rate in March 2010
D) the U.S.rate of growth in GDP for the first quarter in 2010

Question 35

Which topic is MOST likely to be studied in a microeconomics course?

A) energy policy
B) unemployment
C) inflation
D) recession

Question 36

A theory composed of a number of assumptions and facts boiled down to their basic relevant elements is called a:

A) metaphor.
B) model.
C) conclusion.
D) practice.

Question 37

Which of the following statements regarding macroeconomics and microeconomics is TRUE?

A) Microeconomics examines consumer behavior,while macroeconomics studies business behavior.
B) Macroeconomics employs many of the same analytical tools as microeconomics.
C) Because it focuses on national economies,macroeconomics does not study international trade and finance.
D) Neither macroeconomics nor microeconomics is concerned with prices.

Question 38

Which of the following is a microeconomic statement?

A) The unemployment rate fell by 2%.
B) All businesses in the United States experienced a decrease in revenues of 5% due to the recession.
C) About 15% of the teachers were laid off last week.
D) GDP increased by 6% last quarter.

Question 39

Which of the following does NOT deal with microeconomics?

A) Profits for some manufacturing firms fell in 2009.
B) In 2009,the unemployment rate in the United States rose to nearly 10%.
C) Salaries of some top executives fell in 2009.
D) Competitive markets promote efficiency.

Question 40

Which of the following concepts would be addressed by microeconomics?

A) national unemployment rate
B) reasons for a decline in a country's total output
C) price of college tuition that an individual student pays
D) inflation rate in Brazil

Question 41

Allocative efficiency occurs when:

A) production is allocated equally among all citizens.
B) people who wants a product the most gets it.
C) goods are produced at the lowest possible cost.
D) resources are equally allocated between the private and public sectors of the economy.

Question 42

Allocative inefficiency implies that:

A) goods are produced at too high at cost.
B) the people who want a specific good the most cannot get it,while others can.
C) too many Twinkies and too few Ding Dongs were produced.
D) workers are lazy.

Question 43

Which of the following is NOT true?

A) There are often tradeoffs between efficiency and equity.
B) Both equity and efficiency are subjective concepts.
C) There are often disagreements over what is an equitable distribution of income.
D) Another term for equity is fairness.

Question 44

Production inefficiency implies that:

A) goods are produced at too high a cost.
B) people who want the specific goods cannot get them at any price.
C) too many Twinkies and too few Ding Dongs were produced.
D) workers are lazy.

Question 45

When goods are produced at the lowest possible cost,an economy is said to have achieved:

A) production efficiency.
B) allocative efficiency.
C) cheap production.
D) inferior quality goods.

Question 46

_____ occur(s)when goods are produced at the lowest possible cost,and _____ occur(s)when individuals who desire a product the most receive those goods and services.

A) Production efficiency;allocative efficiency
B) Production possibilities;allocative possibilities
C) Allocative possibilities;production possibilities
D) Allocative efficiency;production efficiency

Question 47

_____ is how well resources are used and allocated.

A) Equity
B) Efficiency
C) Choice
D) Scarcity

Question 48

An economy exhibits production efficiency if:

A) it produces more than enough clothes to clothe everyone.
B) economic growth increases every year.
C) it produces goods at the lowest cost possible.
D) it eliminates poverty.

Question 49

Economic models must:

A) be completely realistic to be useful.
B) include all relationships that exist in the relevant thing to be modeled.
C) completely represent the real world.
D) rely on the ceteris paribus assumption.

Question 50

A society that is able to produce goods and services at the lowest cost possible is experiencing:

A) allocative efficiency.
B) production efficiency.
C) opportunity costs.
D) scarcity.

Question 51

Economists generally have _________ to say about equity than efficiency.

A) less
B) a little bit more
C) about the same
D) much more

Question 52

Production efficiency occurs when goods are:

A) produced with the lowest possible resource cost.
B) allocated equally.
C) delivered to those who have the greatest willingness and ability to acquire them.
D) allocated to those with the greatest need.

Question 53

Production efficiency:

A) reflects how often economists make assumptions about important variables.
B) reflects how well resources are allocated.
C) reflects the fact that all labor is equally productive.
D) is an assumption used by economists that holds important variables constant.

Question 54

Stylized economic models must include:

A) assumptions.
B) inflation.
C) money.
D) complexity.

Question 55

In the study of economics,the goals of efficiency and equity are often:

A) compatible.
B) conflicting with one another.
C) objectively definable.
D) given equal emphasis.

Question 56

Which of the following statements does NOT describe model building in economics?

A) Models are developed to cover specific behaviors only.
B) Models are created and then tested.
C) Models are used to help understand the general economy.
D) Assumptions are used to analyze an economic issue.

Question 57

The purpose of an economic model is to:

A) be a complex,exact replica of reality.
B) demonstrate which values and beliefs are best for the economy.
C) explain the behavior of the issue being examined.
D) manage the economy like an automatic pilot.

Question 58

_____ is the fairness of various issues and policies.

A) Equity
B) Efficiency
C) Choice
D) Scarcity

Question 59

If society produces a pie at the lowest possible cost and then distributes the pie evenly among its population,then:

A) production and allocative efficiency are achieved.
B) only production efficiency is achieved.
C) neither production efficiency nor allocative efficiency is achieved.
D) only allocative efficiency is achieved.

Question 60

The main focus of efficiency is:

A) firms charging high prices for their goods.
B) firms earning the largest profits.
C) consumers getting the goods and services they want at the lowest possible resource cost.
D) consumers paying high prices.

Question 61

Which is an example of a normative question?

A) How do interest rates influence employment?
B) How should a society achieve full employment?
C) How do unemployment rates differ among nations?
D) What are the long-term effects of unemployment?

Question 62

There would be no economic problems in a world where all resources are:

A) unlimited.
B) privately owned.
C) owned by the government.
D) scarce.

Question 63

Opportunity costs:

A) are generally the same from individual to individual.
B) involve monetary rather than nonmonetary costs.
C) decrease as individuals become wealthier.
D) influence all economic decisions.

Question 64

The opportunity costs of attending college do NOT include:

A) the expenditures for food.
B) the costs of textbooks or eBooks.
C) the forgone wages that could have been earned working.
D) required student activity fees.

Question 65

When government policies are being designed:

A) there is usually a tradeoff between equity and efficiency.
B) equity and efficiency goals are usually independent of each other.
C) equity can usually be achieved without an efficiency loss.
D) increasing efficiency usually results in more equity.

Question 66

The opportunity cost of buying a ticket to a major league baseball game and then going to the game is:

A) the price of the ticket.
B) the next best alternative activity that could have been undertaken.
C) the time spent at the game.
D) all other alternative activities that could have been undertaken.

Question 67

When the individuals who get a good or service are the ones who desire that product the most,the economy is experiencing:

A) allocative efficiency.
B) production efficiency.
C) equity.
D) deflation.

Question 68

A common definition of economics is that it is the study of:

A) the allocation of scarce resources to competing wants.
B) maximizing net personal disposable income.
C) the factors underlying financial markets.
D) maximizing personal financial wealth.

Question 69

When economists say that all societies face scarcity,they are describing:

A) free lunches.
B) unlimited resources.
C) unlimited wants.
D) tradeoffs societies must make.

Question 70

The idea that wants are virtually unlimited but the resources to meet those wants are limited is called:

A) the want-resource paradox.
B) the economic gap.
C) the dismal conclusion.
D) scarcity.

Question 71

The problem of the medically uninsured involves:

A) opportunity cost.
B) equity.
C) production efficiency.
D) allocative efficiency.

Question 72

The concept of scarcity:

A) exists in all societies.
B) affects only greedy people.
C) is the cause of poverty.
D) used to be a problem,but is not an issue for modern industrial nations.

Question 73

Resources are:

A) unlimited but wants are limited.
B) limited but efficiency is unlimited.
C) limited but wants are unlimited.
D) unlimited but efficiency is limited.

Question 74

When goods are produced at the lowest possible cost,the economy is experiencing:

A) allocative efficiency.
B) production efficiency.
C) equity.
D) deflation.

Question 75

Scarcity:

A) is synonymous with poverty.
B) is eliminated with greater technology.
C) is faced by all individuals and societies.
D) can be eliminated with adequate resources.

Question 76

_________ people are forced to make tradeoffs.

A) Only wealthy
B) Only middle-class
C) Only poor
D) All

Question 77

The core problem in economics is:

A) unemployment.
B) economic growth.
C) inflation.
D) scarcity.

Question 78

Efficiency within economics focuses on:

A) how well resources are used and allocated.
B) the fairness of various policies.
C) how quickly a task can be completed.
D) calculations of opportunity cost.

Question 79

What would be a possible opportunity cost of you going to a doctor for a check-up?

A) the cost of getting nontraditional care
B) the opportunity to make an acquaintance in the waiting room
C) lost income due to not being at work for those hours
D) the cost of the insurance reimbursing the doctor

Question 80

An airline finds that its 6 P.M.flights are half-empty but its mid-afternoon flights are full.Which would be the MOST plausible thing for an economist to say?

A) Cut the price of the early morning flight and raise the price of the afternoon flight.
B) Nothing can be done to rectify the situation because of consumer sovereignty.
C) Fewer flights should be scheduled in the afternoon to force travelers to take the morning flight.
D) Nothing can be done because travelers are inflexible with their schedules.