Practice Quiz Answers- Economics Unit PDF

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Summary

These are answers to an economics quiz for business orientation class. It is filled with multiple choice answers. It will help students with this class....

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Module 1: What is Economics?



Question 1 4 out of 4 points

The beginning point of a graph (the 0,0 point) is known as Selected Answer:

e.

the origin.

Correct Answer:



e.

the origin.

Question 2 4 out of 4 points

As a student, one of the costs of sleeping in rather than going to class is likely to be a lower grade in the class.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 3 4 out of 4 points

One problem with the European Union's choice regarding equality versus efficiency is that it may inadvertently shrink the size of its "economic pie".



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 4 4 out of 4 points

The tangent at point A on a curve has a positive slope. Therefore, the curve has a Selected Answer: Correct Answer:



c.

positive slope at point A. c.

positive slope at point A.

Question 5 4 out of 4 points

Opportunity cost can best be defined as the Selected Answer: Correct Answer:



c.

value of what must be given up in order to acquire an item. c.

value of what must be given up in order to acquire an item.

Question 6 4 out of 4 points

The marginal cost of an airline ticket is the total cost of flying the plane divided by the number of passengers. Selected

Fals

Answer: Correct Answer:



e Fals e

Question 7 4 out of 4 points

The process of focusing on only the most important factors to explain a phenomenon is called



Selected Answer:

abstraction.

Correct Answer:

abstraction.

a.

a.

Question 8 4 out of 4 points

A large factory pours its toxic wastewater into a nearby river, and as a result, the residents of a downstream community experience high rates of illness and birth defects. The economic problem illustrated by this example is



Selected Answer:

externalities.

Correct Answer:

externalities.

a.

a.

Question 9 4 out of 4 points

A horizontal line has a slope of 0.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 10 4 out of 4 points

Economics is a social science rather than a "hard" science like physics because Selected Answer:

Correct Answer:



b.

economists study human behavior, which is affected by an unpredictable and vast range of influences. b.

economists study human behavior, which is affected by an unpredictable and vast range of influences.

Question 11 4 out of 4 points

There are frequently market solutions that the government can use to deal with externalities.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 12 4 out of 4 points

The opportunity cost of any good or service is the



Selected Answer:

value of the next best alternative.

Correct Answer:

value of the next best alternative.

b.

b.

Question 13 4 out of 4 points

Economic efficiency and income equality are often conflicting goals in an economy.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 14 4 out of 4 points

What is the "right" degree of abstraction necessary to analyze an economic problem? Selected Answer:

c.

There is no "right" degree of abstraction to analyze an economic problem.

Correct Answer:



c.

There is no "right" degree of abstraction to analyze an economic problem.

Question 15 4 out of 4 points

Two variables that systematically change together are correlated.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 16 4 out of 4 points

Abstraction is used in economics to omit unnecessary details and focus on the essence of the problem being studied.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 17 4 out of 4 points

Abstract economic theory can be used by academicians, but not by politicians or business people.



Selected Answer:

e

Correct Answer:

e

Fals Fals

Question 18 4 out of 4 points

Rent control is usually justified on the grounds that it protects moderate- to low-income families from

the burden of rapidly rising rents and from eviction if they are unable to pay. It also prevents landlords from reaping windfalls as property values rise. Opponents note that rent controls usually lead to a reduced supply of rental housing and shortages. The proponents of rent controls support them primarily on the grounds of Selected Answer:

d.

equality.

Correct Answer:



d.

equality.

Question 19 4 out of 4 points

Productivity growth is the main cause of rising living standards.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 20 4 out of 4 points

In her calculation of the cost of going to college, an economist would include the amount of forgone earnings over the years spent at college.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 21 4 out of 4 points

An article in a recent economics periodical asks the question: "Is low inflation worth it?" By "it," the article probably means Selected Answer:

c.

unemployment.

Correct Answer:



c.

unemployment.

Question 22 0 out of 4 points

Economic models are often expressed in



Selected Answer:

equations.

Correct Answer:

graphs.

b.

a.

Question 23 4 out of 4 points

The lower left-hand corner of a graph where the two axes meet is called the graph's origin. Selected Answer:

Tru e

Correct Answer:



Tru e

Question 24 4 out of 4 points

In contrast to the United States, the European Union has chosen Selected Answer:

a.

less wage inequality for higher unemployment.

Correct Answer:



a.

less wage inequality for higher unemployment.

Question 25 4 out of 4 points

The government uses fiscal and monetary policy to mitigate the effects of economic fluctuations. Selected Answer:

e

Correct Answer:

e

Tru Tru

Economics Unit Test Answers:



Question 1 2.5 out of 2.5 points

Scarcity is the fundamental problem of the economy.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 2 2.5 out of 2.5 points

High opportunity costs go hand in hand with high money costs in a properly functioning economy.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 3 2.5 out of 2.5 points

A market society will always protect the natural environment.



Selected Answer:

e

Correct Answer:

e

Fals Fals

Question 4 2.5 out of 2.5 points

Scarcity is a concept that applies to all of the following except



Selected Answer:

human wants.

Correct Answer:

human wants.

b.

b.

Question 5 2.5 out of 2.5 points

In a market economy, government decides the answers to the three economic decisions.



Selected Answer:

e

Correct Answer:

e

Fals Fals

Question 6 2.5 out of 2.5 points

The market system provides a way Selected Answer:

e.

All of the above are correct.

Correct Answer:



e.

All of the above are correct.

Question 7 2.5 out of 2.5 points

Economics studies the logic of choices made from among available possibilities.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 8 2.5 out of 2.5 points

If production involves constant opportunity cost, the production possibilities curve



Selected Answer:

is a straight line.

Correct Answer:

is a straight line.

c.

c.

Question 9 2.5 out of 2.5 points

Rational production decisions require an understanding of



Selected Answer:

All of the above are correct.

Correct Answer:

All of the above are correct.

d.

d.

Question 10 2.5 out of 2.5 points

All of the points inside a production possibilities frontier are ____; all of the points outside the

production possibilities frontier are ____.



Selected Answer:

attainable, unattainable

Correct Answer:

attainable, unattainable

a.

a.

Question 11 2.5 out of 2.5 points

Over the last several years and until recently, the United States has had lower unemployment rates than most European countries.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 12 2.5 out of 2.5 points

The federal government employs more civilians than state and local governments.



Selected Answer:

e

Correct Answer:

e

Fals Fals

Question 13 2.5 out of 2.5 points

The average hourly wage (excluding benefits) in the United States is currently Selected Answer:

c.

$20.00

Correct Answer:



c.

$20.00

Question 14 0 out of 2.5 points

Nonconsumption spending accounts for roughly what percent of total output of goods and services? Selected Answer:

b.

30%

Correct Answer:



a.

40%

Question 15 2.5 out of 2.5 points

A recession is a period of time in which real GDP falls.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 16 2.5 out of 2.5 points

Consumer spending accounts for about 70 percent of GDP.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 17 2.5 out of 2.5 points

The largest single portion of the federal budget is devoted to



Selected Answer:

Social Security and unemployment compensation.

Correct Answer:

Social Security and unemployment compensation.

b.

b.

Question 18 2.5 out of 2.5 points

Antitrust laws are designed to Selected Answer:

a.

preserve competition.

Correct Answer:



a.

preserve competition.

Question 19 2.5 out of 2.5 points

The United States is one of the least marketized economies in the world.



Selected Answer:

e

Correct Answer:

e

Fals Fals

Question 20 2.5 out of 2.5 points

The U.S. economy is relatively open in terms of economic activity related to international trade.



Selected Answer:

e

Correct Answer:

e

Fals Fals

Question 21 2.5 out of 2.5 points

Two variables that systematically change together are correlated.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 22 2.5 out of 2.5 points

A graph with a positive slope indicates that the variables depicted on the axes move in the same directions.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 23 2.5 out of 2.5 points

Both parties gain in a voluntary exchange.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 24 2.5 out of 2.5 points

One problem with the European Union's choice regarding equality versus efficiency is that it may inadvertently shrink the size of its "economic pie".



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 25 2.5 out of 2.5 points

The relatively low rate of inflation coupled with a low unemployment rate that occurred in the 1990s represented a "normal" economic situation.



Selected Answer:

e

Correct Answer:

e

Fals Fals

Question 26 2.5 out of 2.5 points

Models are used to describe cause-and-effect relationships.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 27 2.5 out of 2.5 points

Opportunity cost is the value of the next best alternative to a given choice.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 28 2.5 out of 2.5 points

Abstraction is used in economics to omit unnecessary details and focus on the essence of the problem being studied. Selected

Tru

Answer: Correct Answer:



e Tru e

Question 29 2.5 out of 2.5 points

Which of the following mathematical expressions represents the equation of a straight line with a slope of zero at all points on a graph with Y on the vertical axis and X on the horizontal axis? Selected Answer:

d.

Y=a

Correct Answer:



d.

Y=a

Question 30 2.5 out of 2.5 points

In economics, abstraction from reality is necessary because of the complexity of the real world.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 31 2.5 out of 2.5 points

The government of Economica announces that it will purchase its farmers' surplus of milk. From this announcement, you can infer that Economica has a Selected Answer:

c.

price floor above the equilibrium price for milk.

Correct Answer:



c.

price floor above the equilibrium price for milk.

Question 32 2.5 out of 2.5 points

Lines, ration coupons, and black markets are symptoms of a



Selected Answer:

price ceiling.

Correct Answer:

price ceiling.

d.

d.

Question 33 2.5 out of 2.5 points

A shortage occurs when price is higher than the market equilibrium.



Selected Answer:

e

Correct Answer:

e

Fals Fals

Question 34 2.5 out of 2.5 points

Exhibit 4-1 The following are the equations for the supply and demand curves in the market for weezils: Qd = 20 −2P Qs = 5 + 3P

Demand: Supply:

where Qd is the quantity demanded, Qs is the quantity supplied, and P is the price per weezil in dollars. Refer to Exhibit 4-1. According to the data given, the equilibrium price of a weezil is



Selected Answer:

$3.

Correct Answer:

$3.

b.

b.

Question 35 2.5 out of 2.5 points

How much the quantity of a good traded changes after a shift of the supply curve depends on



Selected Answer:

All of the above are correct.

Correct Answer:

All of the above are correct.

d.

d.

Question 36 2.5 out of 2.5 points

Consumer income changes can shift market demand.



Selected Answer:

e

Correct Answer:

e

Tru Tru

Question 37 2.5 out of 2.5 points

In January, 2,500 quarts of ice cream are sold in Boston at $2 a quart. In February, 3,000 quarts are sold at $2.50 a quart. This change in quantity sold and price may have been caused by Selected Answer:

Correct Answer:



c.

the release of a medical study showing that ice cream consumption improves mental health. c.

the release of a medical study showing that ice cream consumption improves mental health.

Question 38 2.5 out of 2.5 points

Why does quantity demanded decrease when price increases? Selected Answer:

d.

All of the above are correct.

Correct Answer:



d.

All of the above are correct.

Question 39 2.5 out of 2.5 points

Advertising has no effect on the demand schedule for a good.



Selected Answer:

e

Correct Answer:

e

Fals Fals

Question 40 2.5 out of 2.5 points

At equilibrium, the market will clear, with no surpluses or shortages occurring. Selected Answer:

e

Correct Answer:

e

Tru Tru...