Question 1

The primary focus of microeconomics is
A) to examine the operation of the entire (aggregate) economy.
B) the levels of employment and inflation.
C) to examine the behaviour and operation of the individual units or sectors that make up the economy.
D) to study how we managed to eliminate scarcity.
E) our government's monetary policy.

Accepted Answer

Microeconomics focuses on individual units or sectors in the economy, such as households, firms, and markets. It analyzes how these units make decisions regarding the allocation of scarce resources and how their behaviors impact prices, production, and consumption. The other choices (A, B, D, and E) deal with macroeconomics, which looks at the economy as a whole, including topics such as overall production, employment, inflation, and government policies.

Question 2

When Tesla decides to increase production of electric cars, it directly answers the ________ question.
A) why
B) how
C) what
D) for whom
E) where

Accepted Answer

Increasing production of electric cars directly answers the "what" question in economics, which pertains to what goods and services are to be produced.

Question 3

Scarcity exists because:
A) human wants exceed the resources available to satisfy them.
B) some people make bad economic decisions.
C) people take too much leisure time.
D) some individuals have low incomes.
E) the costs of production are high.

Accepted Answer

Scarcity exists because human wants and needs are unlimited, but the resources available to fulfill these wants and needs are limited. This necessitates the need for individuals, businesses, and governments to make choices and allocate resources efficiently.

Question 4

Which of the following BEST describes macroeconomics?
A) It is not a social science because its predictions cannot be tested.
B) It examines how the choices that individuals make affect governments.
C) It analyses the aggregate effects on the national economy of the choices made by individuals, firms and governments.
D) Proving causation is never a problem for macroeconomics.
E) It studies the choices that individuals and businesses make when coping with scarcity

Accepted Answer

Macroeconomics is the branch of economics that analyzes the overall performance of the economy, focusing on topics such as inflation, economic growth, and unemployment. It looks at the aggregate effects on the national economy of the choices made by individuals, firms and governments.

Question 5

When an electricity distribution company decides to use manpower to bury its lines, it directly answers the ________ question.
A) for whom
B) how
C) what
D) why
E) when

Accepted Answer

The decision to use manpower to bury lines answers the "how" question, as it is specifying the method or approach that will be used to carry out the task.

Question 6

Which of the following is a microeconomic issue?
A) The unemployment rate soars in Spain.
B) The Brazilian economy experiences rapid economic growth.
C) Inflation skyrockets in Russia.
D) The price of petrol increases in the United States this year.
E) The Australian government cuts taxes to combat a recession.

Accepted Answer

The price of petrol increasing in the United States is a microeconomic issue because it deals with the specific market for petrol in the US and how consumers and producers in that market will be affected by the price change. The other options are macroeconomic issues as they deal with broader economic trends in entire countries or regions.

Question 7

The question of 'What goods and services get produced?' most closely relates to which of the following issues?
A) The distribution of goods and services in the economy.
B) Building a missile defence system, or putting a computer in every primary school classroom.
C) Producing goods and services in the least costly manner.
D) Obtaining specialised training to increase one's income.
E) Taxing high-income workers to give payments to poor households

Accepted Answer

The question of "What goods and services get produced?" is related to the issue of allocating resources in the economy, specifically deciding what to produce with the limited resources available. Building a missile defence system or putting a computer in every primary school classroom are examples of specific goods/services that could be produced with the available resources.

Question 8

Which of the following statements best describes the study of economics?
A) Economics studies how firms make profits.
B) Economics studies how to organise production so that scarcity does not occur.
C) Economics studies how businesses reach decisions.
D) Economics studies how we make choices in the face of scarcity.
E) Economics studies how to create incentives so that scarcity does not exist.

Accepted Answer

Economics is the study of how individuals, businesses, and society make choices when faced with scarcity, which means there are limited resources but unlimited wants and needs. Economics looks at how individuals and businesses allocate their resources to achieve their objectives, and also analyzes the effects of the actions of governments and other institutions on markets and the economy as a whole.

Question 9

Scarcity forces people to:
A) cheat and steal.
B) choose among the available alternatives.
C) be unwilling to help others.
D) live at a low standard of living.
E) consume as much as they can as quickly as they can.

Accepted Answer

Scarcity means limited resources, which requires individuals to make choices among available alternatives. It does not necessarily lead to cheating or stealing, being unwilling to help others, or consuming as much as possible. While scarcity can result in a lower standard of living, it does not force people to live at a low standard of living.

Question 10

Economics is best defined as the social science that studies
A) how choices made in the social interest must conflict with choices made in the self-interest.
B) how a person can get everything he or she wants.
C) the choices that societies, and the people and institutions that make up societies, make in dealing with the issue of scarcity.
D) the reason money exists.
E) the way to eliminate choices in our decisions.

Accepted Answer

Economics is primarily concerned with the study of how societies, as well as individuals and institutions within those societies, make choices in the face of scarcity. It is concerned with the allocation and distribution of resources and goods, and aims to understand how different economic systems operate and how they can be improved. While there may be conflicts between choices made in the social interest and the self-interest of individuals or groups, this is not the defining feature of economics. Similarly, while money is an important concept in economics, it is not the reason that the field exists. Finally, economics is not concerned with eliminating choices, but rather with understanding how choices are made and how they can be improved.

Question 11

Which of the following is a macroeconomic topic? i. China increases interest rates to slow its economic growth.
Ii) Parliament lowers tax rates to try to lower the unemployment rate.
Iii) Nissan decides to produce more electric Leaf models and fewer Altima sedans.
A) ii and iii
B) i and iii
C) iii only
D) i and ii
E) i only

Accepted Answer

Macroeconomics deals with the economy as a whole or its basic subdivisions or aggregates, such as the government, household, and business sectors. Choices i and ii involve government policies affecting the entire economy, such as interest rates and tax rates, which are macroeconomic topics. Choice iii is a microeconomic topic, focusing on individual firms' production decisions.

Question 12

Which of the following is the best example of a 'what?' question?
A) Should higher-income or lower-income people buy SUVs?
B) Should cars be produced using workers or robots?
C) Should we make faster microprocessors or pest-resistant corn?
D) Should migrant workers or domestic workers be used to pick grapes?
E) What should doctors be paid?

Accepted Answer

The answer of Which of the following is the best...

Question 13

Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of
A) social interest versus self-interest.
B) macroeconomics.
C) microeconomics.
D) scarcity.
E) why to produce.

Accepted Answer

The problem described in the question is that human wants are insatiable and unlimited, while resources are limited. This is the problem of scarcity, which is the central concept in economics.

Question 14

When a home builder decides to computerise all of his production schedule, it directly answers the ________ question.
A) what
B) where
C) why
D) for whom
E) how

Accepted Answer

Computerising the production schedule is a decision related to the process or methodology of how to produce the homes, hence it directly answers the "how" question.

Question 15

Which economic question depends on the incomes that people earn and the prices they pay for goods and services?
A) For whom?
B) What?
C) Where?
D) How?
E) Why?

Accepted Answer

The economic question "For whom?" is focused on how goods and services are distributed among different members of society, which is directly influenced by the incomes people earn and the prices they pay for those goods and services.

Question 16

Which of the following is a microeconomic topic? i. K-Mart's decision to close stores that are not making a profit.
Ii) Bunning's choice to hire more full-time employees because its sales increased.
Iii) Virgin Airlines changes its fares.
A) i only
B) i and iii
C) ii and iii
D) i, ii, and iii
E) i and ii only

Accepted Answer

Microeconomics focuses on the actions of individuals and industries, like the behavior of businesses and consumers. All three options (i, ii, iii) involve decisions made by individual companies, which are microeconomic topics.

Question 17

Scarcity requires that we
A) have unlimited resources.
B) make choices about what goods and services to produce.
C) learn to limit our wants.
D) have the most rapid economic growth possible.
E) produce efficiently.

Accepted Answer

Scarcity means that we have limited resources but unlimited wants. Therefore, we must make choices about what goods and services to produce. This is the fundamental economic problem that every society must face.

Question 18

Which of the following is a microeconomic issue?
A) The Australian government cuts taxes to combat a recession.
B) The inflation rate fell this year.
C) The quantity of wheat grown in South Australia increases this year.
D) Growth in the Australian economy slowed.
E) Increased federal government expenditures have lowered the unemployment rate.

Accepted Answer

The quantity of wheat grown in South Australia increasing is a microeconomic issue because it focuses on the production and decision-making of individual farmers or firms within a specific market. The other answer choices are macroeconomic issues, as they deal with the overall performance of the entire economy.

Question 19

Which of the following is a topic studied in macroeconomics?
A) How the wheat industry determines how much wheat to grow.
B) The effect on economic growth if the government raises taxes.
C) The impact of higher prices for petrol on the number of SUVs people buy.
D) The pricing decisions in the computer hardware industry.
E) The impact of labour unions on wages.

Accepted Answer

Macroeconomics deals with the overall functioning and performance of the economy, including GDP, inflation, employment, and government policies such as taxes. The effect of government raising taxes on economic growth is a topic studied in macroeconomics. The other options relate to microeconomics, which focuses on specific markets and industries.

Question 20

When an AFL player earns more than a police officer, society answers the ________ question.
A) for whom
B) why
C) what
D) social interest versus self-interest
E) how

Accepted Answer

The question being asked is "for whom" is society answering, as it pertains to the distribution of salaries between an AFL player and a police officer. The other answer choices are not directly related to this specific question.

Quiz 1: Getting Started

The primary focus of microeconomics is

When Tesla decides to increase production of electric cars, it directly answers the ________ question.

Scarcity exists because:

Which of the following BEST describes macroeconomics?

When an electricity distribution company decides to use manpower to bury its lines, it directly answers the ________ question.

Which of the following is a microeconomic issue?

The question of 'What goods and services get produced?' most closely relates to which of the following issues?

Which of the following statements best describes the study of economics?

Scarcity forces people to:

Economics is best defined as the social science that studies

Which of the following is a macroeconomic topic? i. China increases interest rates to slow its economic growth. Ii) Parliament lowers tax rates to try to lower the unemployment rate. Iii) Nissan decides to produce more electric Leaf models and fewer Altima sedans.

Which of the following is the best example of a 'what?' question?

Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of

When a home builder decides to computerise all of his production schedule, it directly answers the ________ question.

Which economic question depends on the incomes that people earn and the prices they pay for goods and services?

Which of the following is a microeconomic topic? i. K-Mart's decision to close stores that are not making a profit. Ii) Bunning's choice to hire more full-time employees because its sales increased. Iii) Virgin Airlines changes its fares.

Scarcity requires that we

Which of the following is a microeconomic issue?

Which of the following is a topic studied in macroeconomics?

When an AFL player earns more than a police officer, society answers the ________ question.