Question 1

Which of the following statements is most closely associated with general equilibrium analysis?
A)everything depends on everything else
B)the equilibrium price of a factor depends on the balancing of the forces of demand and supply for that factor
C)the equilibrium price of a good or service depends on the balancing of the forces of demand and supply for that good or service
D)none of these

Accepted Answer

General equilibrium analysis is a broad economic concept that posits that all parts of the economy are interconnected, and changes in one area can affect all others. This approach contrasts with partial equilibrium analysis, which focuses on equilibrium in a single market or sector in isolation. The statement "everything depends on everything else" captures the essence of general equilibrium analysis by emphasizing the interconnectedness and interdependence of various markets and sectors within the economy.

Question 2

The meaning of the word 'economic' is most closely associated with the word:
A)free
B)scarce
C)unlimited
D)unrestricted

Accepted Answer

The word 'economic' is most closely associated with the concept of scarcity. Economics as a field studies how individuals, businesses, governments, and societies make choices on allocating resources which are typically scarce, to satisfy their unlimited wants and needs.

Question 3

Microeconomics studies the decision making behavior of:
A)society as a whole
B)an individual or household
C)a group of individuals
D)economy as a whole

Accepted Answer

Microeconomics focuses on the decision-making processes of individuals, households, and firms, rather than the economy or society as a whole.

Question 4

The word micro was first used in Economics by:
A)Keynes
B)Ragnar Frisch
C)J. R. Hicks
D)Marshall

Accepted Answer

Ragnar Frisch, a Norwegian economist, was the first to use the term "micro" in economics, distinguishing between microeconomics, which focuses on the behavior of individual economic agents and markets, and macroeconomics, which deals with the economy as a whole.

Quiz 1: Economics: Definitions, Methods, and Concepts

Which of the following statements is most closely associated with general equilibrium analysis?

The meaning of the word 'economic' is most closely associated with the word:

Microeconomics studies the decision making behavior of:

The word micro was first used in Economics by: