Introduction to Economics

Copyright Disclaimer Under Section 107 of the Copyright Act 1976, allowance is made for “fair use” for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favour of fair use. All rights and credit go directly to its rightful owner(s). No copyright infringement intended.

With this note I clarify that none of these questions and answers were made by me nor do I have a financial benefit from posting them. The following is a practice quiz (like many others; they are usually made per thematic unit), already posted on the internet on various websites and sources, which have the sole purpose of making it easy for the student to evaluate himself / herself and his / her understanding, before being examined in the official examination of the University where he / she attends. For the same reason I post the present sheet with no personal benefit, disclaiming any copyrights as well as responsibility for their correctness. I am also not aware of the creator of these questions and answers thus I am not able to mention the name of the creator.

You can use Ctrl + F and jump straight to the question you’re looking for. You will find the correct answer underlined. If no answer is underlined, it means that the question has not yet been answered, but it might help you have time to work on the answer yourself, before encountering the question on a test. Lastly the wrong answers that have already been tested as such, are marked as (wrong), so pick any of the remaining options.

I will update this every time I find more questions and answers.

Enjoy!

Any given demand or supply curve is based on the ceteris paribus assumption that ___________________.

Select one:

a. everything is variable.

b. all else is held equal

c. no one knows which variables will change and which will remain constant.

d. what is true for the individual is not necessarily true for the whole.

Improvements in the productivity of labor will tend to:

Select one:

a. decrease wages.

b. decrease the supply of labor.

c. increase wages.

d. increase the supply of labor.

If the state of Washington’s government collects $75 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be a:

Select one:

a. budget deficit. (wrong)

b. budget surplus.

c. decrease in payroll tax.

d. decrease in proportional taxes.

During the last two centuries, the average rate of growth of GDP per capita in the leading industrialized countries has averaged about _________ per year.

Select one:

a. 2%

b. 12%

c. 22%

d. 32%

_____________________ is a term which refers to the widespread use of power-driven machinery and the economic and social changes that resulted in the first half of the 1800s.

Select one:

a. GDP per capita

b. The Industrial Revolution

c. The living standard

d. Investment and inventions

The slope of the production possibility frontier is determined by the ________________ of expanding production of one good, measured by how much of the other good would be lost.

Select one:

a. absolute advantage

b. opportunity cost

c. relative advantage

d. specialization

Consumption in the United States is about ____________ of GDP, and it moves relatively little over time.

Select one:

a. 10%

b. 33%

c. 68%

d. 90%

Reginald looked for work for six months but could not find a job to his liking. He now spends his time at the beach. For purposes of employment he is considered:

Select one:

a. out of the labor force.

b. unemployeD)

c. employed in the underground economy.

d. underemployeD)

Deregulation occurs when a government eliminates or scales back rules relating to all but one of the following. Which one is it?

Select one:

a. prices that can be charged

b. natural monopoly

c. conditions of entry in a certain industry

d. quantities that can be produced

The nature of demand indicates that as the price of a good increases:

Select one:

a. suppliers wish to sell less of it.

b. more of it is produceD)

c. more of it is desireD)

d. buyers desire to purchase less of it.

The high-income economies of the world contain approximately __________ of the world’s population and produce and consume ___________ of the World’s GDP.

Select one:

a. 14%; over 50%

b. 12%; over 60%

c. 14%; over 70%

d. 12%; over 80%

The term “basic research” applies specifically to research pertaining to fundamental scientific breakthroughs that may offer commercial applications in the ______________.

Select one:

a. distant future

b. near future

c. immediate future

d. short run

The neoclassical perspective on macroeconomics emphasizes that in the long run, the economy seems to rebound back to its _____________ and its ____________________.

Select one:

a. long term growth; cyclical unemployment

b. potential GDP; natural rate of unemployment

c. natural level of output; cyclical unemployment rate

d. real GDP; natural rate of unemployment

As depicted in _________________________________, it is necessary to give up some of one good to gain more of the other gooD)

Select one:

a. the production possibilities frontier

b. allocative efficiency

c. scarcity

d. utility

A new American import quota on imported steel would be likely to:

Select one:

a. increase the production of steel-using American firms.

b. increase American production of steel.

c. generate tax revenue to the government.

d. reduce the cost of production to steel-using American firms. (wrong)

A firm’s ___________ consist of expenditures that must be made before production starts that typically, over the short run, _______________ regardless of the level of production.

Select one:

a. fixed costs; do not change,

b. variable costs; are constantly changing,

c. fixed costs; are consistently changing,

d. variable costs; do not change,

A tariff differs from a quota in that a tariff is:

Select one:

a. levied on imports, whereas a quota is imposed on exports.

b. levied on exports, whereas a quota is imposed on imports.

c. a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exporteD)

d. a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be importeD)

The term “applied research” refers to research that is focused on a particular product that promises

Select one:

a. to offer commercial applications in the short-term.

b. to offer commercial applications in the long-term.

c. an economic payoff in the short or medium-term.

d. an economic payoff in the medium or long-term.

Negotiations between unions and a firm or firms is called __________________ .

Select one:

a. collective bargaining

b. cooperative bargaining

c. united bargaining

d. organized bargaining

As the __________ substitute for low-skill labor becomes available, the demand curve for low-skill labor will shift to the left.

Select one:

a. high-skill labor

b. lower wage

c. technology

d. market

When one nation can produce a product at lower cost relative to another nation, it is said to have a(n) __________________ in producing that product.

Select one:

a. relative advantage

b. absolute advantage

c. economy of scale

d. production efficiency

The term _________________ refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product.

Select one:

a. price setter

b. business entity

c. price taker

d. trend setter

The term ___________________ is used to describe the common pattern whereby each marginal unit of a consumed good provides less of an addition to utility than the previous unit.

Select one:

a. diminishing marginal utility

b. marginal utility pattern

c. marginal income utility

d. decreasing marginal utility

In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made.

Select one:

a. government

b. market

c. firm

d. business sector

________________ economists place an emphasis on __________ run economic performance.

Select one:

a. Phillips; short

b. Keynesian; long

c. Neoclassical; long

d. Says; short

If South Dakota’s governor reports a budget surplus in 2011, that state government likely:

Select one:

a. received more in taxes than it spent in that year.

b. increased the proportional tax level.

c. equalized spending and taxes in that year.

d. increased the corporate income tax rate.

Treasury bonds are issued by the federal government through the _____________________ .

Select one:

a. Federal Reserve

b. Central Bank

c. U.S. Department of the Treasury

d. U.S. Office of the Comptroller of Currency

_________ arises when firms act together to reduce output and keep prices high.

Select one:

a. Collusion (wrong)

b. A cartel

c. A monopoly

d. An oligopoly

The unemployment rate measures:

Select one:

a. the number of people unemployed divided by the number of people employeD)

b. unemployed workers as a percentage of the labor force.

c. unemployed workers as a percentage of the population age over-sixteen.

d. unemployed workers as a percentage of the population.

A ______________ is a promise to fix or replace the good, at least for a certain period of time.

Select one:

a. service contract

b. insurance policy

c. money-back guarantee

d. warranty

If Bill performs plumbing upgrades for Alice in exchange for her incorporating his business, then their _________________________ will be satisfieD)

Select one:

a. balance of trade

b. double coincidence of wants

c. convenience of exchange

d. division of labor

______________________ refers to the additional revenue gained from selling one more unit.

Select one:

a. Marginal revenue

b. Total revenue

c. Economic profit

d. Accounting profit

In economics, a firm that faces no competitors is referred to as _________________.

Select one:

a. an oligopoly

b. a monopoly

c. a perfect competitor

d. an oligopolizor

An import quota does which of the following?

Select one:

a. decreases the price of the imported goods to consumers

b. increases the price of the domestic goods to consumers

c. redistributes income away from domestic producers of those products toward domestic producers of exports

d. both a) and c)

In countries like _____________ the command economy predominates.

Select one:

a. China and Vietnam

b. Cuba and North Korea

c. South Africa and Kenya

d. Germany and France

The term _________________ refers to the additional utility provided by one additional unit of consumption.

Select one:

a. utility

b. marginal utility

c. added utility

d. Giffen utility

Which of the following is the best example of a quota?

Select one:

a. a tax placed on all small cars sold in the domestic market

b. a limit imposed on the number of men’s suits that can be imported from a foreign country

c. a subsidy from the American government to domestic manufacturers of men’s suits so they can compete more effectively with foreign producers of men’s suits

d. a $100-per-car fee imposed on all small cars imported

____________ means selling goods below their cost of production.

Select one:

a. Protectionism

b. Dumping

c. Import quotas

d. Non-tariff barriers

The infant industry argument for protectionism suggests that an industry must be protected in the early stages of its development so that:

Select one:

a. firms will be protected from subsidized foreign competition.

b. domestic producers can attain the economies of scale to allow them to compete in world markets.

c. there will be adequate supplies of crucial resources in case they are needed for national defence.

d. it will not be subjected to a takeover from a foreign competitor.

During the recent U.S. recession, some large automakers required bailouts from the federal government to avoid being forced into bankruptcy by their _________________ .

Select one:

a. shareholders

b. bondholders

c. Chief Executive Officer

d. Board of Directors

During the Great Depression of the 1930s, the unemployment rate reached more than _________ of the labor force.

Select one:

a. 25%

b. 45%

c. 65%

d. 85%

If markets throughout the global economy all have flexible and continually adjusting prices, then:

Select one:

a. all market-oriented economies will implement coordinated wage reductions.

b. each economy will always head for its natural rate of unemployment.

c. each economy must shift in aggregate demand and create additional employment.

d. all changes in prices and wages will create additional employment. (wrong)

The term _____________ describes circumstances where a country’s exports exceed its imports.

Select one:

a. trade deficit

b. trade imbalance

c. trade surplus

d. trade balance

The term ____________ refers to a market exchange that affects a third party who is outside or external to the exchange.

Select one:

a. social costs

b. spillover

c. market failure

d. private costs

If a country’s economic data shows private savings of $300 million, government spending of $350 million, tax revenue of $400 million, and a trade surplus of $75 million, then what does investment equal?

Select one:

a. $775 million

b. $475 million

c. $275 million

d. $700 million

The ___________________ is the institution designed to control the quantity of money in the economy and also to oversee the:

Select one:

a. FOMC; passing of tax and spending bills.

b. Central Bank; safety and stability of the banking system.

c. FFIEC; day-to-day democratic control of policy.

d. FDIC; responsibility for deposit insurance.

Which of the following institutions oversees the safety and stability of the U.S. banking system?

Select one:

a. Office of the Comptroller of the Currency

b. Federal Financial Institutions Examination Council

c. Federal Open Market Committee

d. The Federal Reserve

Attending college is a case where the ________________ exceeds the monetary cost.

Select one:

a. budget constraint

b. marginal analysis

c. opportunity cost

d. marginal utility

If the government for the state of Washington collects $65.8 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be:

Select one:

a. an increase in payroll tax.

b. an increase in excise tax.

c. a budget surplus.

d. a budget deficit.

________________ occurs when a group of legislators all agree to vote for a package of otherwise unrelated laws that they individually favor.

Select one:

a. Pork-barrel spending

b. Logrolling

c. Competitive spending

d. Politically conservative spending

Good luck!

education quiz

The cost of capital as an opportunity cost

The Capital Asset Pricing Model (CAPM)

Total revenue, total cost, and total profit

Analyzing a company’s profit and loss through diagrams

The concepts of marginal and average tax rates

Personalized learning

Gamification

Free Calisthenics Certification Program

Principles of Marketing

Managerial Accounting

The cost of capital as an opportunity cost

The Capital Asset Pricing Model (CAPM)

Total revenue, total cost, and total profit

Analyzing a company’s profit and loss through diagrams

The concepts of marginal and average tax rates

Personalized learning

Gamification

Free Calisthenics Certification Program

Principles of Marketing

Managerial Accounting

Introduction to Economics

Introduction to Economics

Σεισμός – ο Αρχέγονος Φόβος

Entering Vietnam after the 15th of March 2022

Related Posts

Leave a Comment Cancel Reply