Economics is the study of
A. production methods.
B. how society manages its scarce resources.
C. how households decide who performs which tasks.
D. the interaction of business and government.
Point Value: 1
2
When computing the opportunity cost of attending a concert you should include
A. the price you pay for the ticket and the value of your time.
B. the price you pay for the ticket, but not the value of your time.
C. the value of your time, but not the price you pay for the ticket.
D. neither the price of the ticket nor the value of your time.
Point Value: 1
You are considering staying in college another semester so that you can complete a major in economics.? In deciding whether or not to stay you should
A. compare the total cost of your education to the total benefits of your education.
B. compare the total cost of your education to the benefits of staying one more semester.
C. compare the cost of staying one more semester to the benefits of staying one more semester.
D. compare the total benefits of your education to the cost of staying one more semester.
Point Value: 1
Trade between countries tends to
A. reduce both competition and specialization.
B. reduce competition and increase specialization.
C. increase competition and reduce specialization.
D. increase both competition and specialization.
Point Value: 1
5- The "invisible hand" directs economic activity through
A. advertising.
B. prices.
C. central planning.
D. government regulations.
Point Value: 1
6- One reason we need government, even in a market economy, is that
A. there is insufficient market power in the absence of government.
B. property rights are too strong in the absence of government.
C. the invisible hand is not perfect.
D. Both a and b are correct.
Point Value: 1
7.This question has not been answered completely
The government enforces property rights by
A. requiring property owners to pay property taxes.
B. providing police and courts.
C. forcing people to own property.
D. providing public parks and recreation facilities.
Point Value: 1
8.This question has not been answered completely
Causes of market failure include
A. externalities and market power.
B. market power and incorrect forecasts of consumer demand.
C. externalities and foreign competition.
D. incorrect forecasts of consumer demand and foreign competition.
Point Value: 1
9.This question has not been answered completely
Market power refers to the
A. power of a single person or small group to influence market prices.
B. ability of a person or small group to successfully market new products.
C. power of the government to regulate a market.
D. importance of a certain market in relation to the overall economy.
Point Value: 1
10.This question has not been answered completely
Large or persistent inflation is almost always caused by
A. excessive government spending.
B. excessive growth in the quantity of money.
C. foreign competition.
D. higher-than-normal levels of productivity.
