PRINCIPLES OF ECONOMICS EXAMINATION QUESTIONS
AND CORRECT ANSWER WITH EXPLANATION GRADED
A+ STUDY GUIDE SOUTHERN NEW HAMPSHIRE
UNIVERSITY
1. Economics is the study of:
A. Cooking methods
B. Allocation of scarce resources
C. HR recruitment
D. Marketing ads
Answer: B
Economics focuses on how scarce resources are allocated.
2. Scarcity means:
A. Abundance of goods
B. Limited resources
C. Unlimited supply
D. Free goods
Answer: B
Resources are limited relative to wants.
3. Opportunity cost is:
A. Money cost only
B. Value of next best alternative forgone
C. Cooking cost
D. HR cost
Answer: B
It represents what you sacrifice.
4. A market economy is driven by:
,A. Government only
B. Supply and demand
C. Cooking rules
D. HR rules
Answer: B
Prices are determined by market forces.
5. Demand refers to:
A. Desire only
B. Willingness and ability to buy
C. Free goods
D. Production
Answer: B
Demand requires ability to pay.
6. Law of demand states:
A. Price rises, demand rises
B. Price rises, demand falls
C. Demand is constant
D. Supply is constant
Answer: B
There is inverse relationship.
7. Supply refers to:
A. Desire to buy
B. Quantity producers are willing to sell
C. HR supply
D. Cooking supply
Answer: B
It relates to production.
8. Law of supply states:
, A. Price rises, supply falls
B. Price rises, supply rises
C. Supply is constant
D. Demand increases
Answer: B
Direct relationship exists.
9. Equilibrium price is:
A. Random price
B. Where demand equals supply
C. Highest price
D. Lowest price
Answer: B
Market clears at this point.
10. Inflation refers to:
A. Price decrease
B. General increase in prices
C. Stable prices
D. Free goods
Answer: B
It reduces purchasing power.
11. GDP stands for:
A. Gross Domestic Product
B. General Demand Price
C. Global Domestic Profit
D. Gross Development Plan
Answer: A
It measures economic output.
12. Microeconomics studies:
AND CORRECT ANSWER WITH EXPLANATION GRADED
A+ STUDY GUIDE SOUTHERN NEW HAMPSHIRE
UNIVERSITY
1. Economics is the study of:
A. Cooking methods
B. Allocation of scarce resources
C. HR recruitment
D. Marketing ads
Answer: B
Economics focuses on how scarce resources are allocated.
2. Scarcity means:
A. Abundance of goods
B. Limited resources
C. Unlimited supply
D. Free goods
Answer: B
Resources are limited relative to wants.
3. Opportunity cost is:
A. Money cost only
B. Value of next best alternative forgone
C. Cooking cost
D. HR cost
Answer: B
It represents what you sacrifice.
4. A market economy is driven by:
,A. Government only
B. Supply and demand
C. Cooking rules
D. HR rules
Answer: B
Prices are determined by market forces.
5. Demand refers to:
A. Desire only
B. Willingness and ability to buy
C. Free goods
D. Production
Answer: B
Demand requires ability to pay.
6. Law of demand states:
A. Price rises, demand rises
B. Price rises, demand falls
C. Demand is constant
D. Supply is constant
Answer: B
There is inverse relationship.
7. Supply refers to:
A. Desire to buy
B. Quantity producers are willing to sell
C. HR supply
D. Cooking supply
Answer: B
It relates to production.
8. Law of supply states:
, A. Price rises, supply falls
B. Price rises, supply rises
C. Supply is constant
D. Demand increases
Answer: B
Direct relationship exists.
9. Equilibrium price is:
A. Random price
B. Where demand equals supply
C. Highest price
D. Lowest price
Answer: B
Market clears at this point.
10. Inflation refers to:
A. Price decrease
B. General increase in prices
C. Stable prices
D. Free goods
Answer: B
It reduces purchasing power.
11. GDP stands for:
A. Gross Domestic Product
B. General Demand Price
C. Global Domestic Profit
D. Gross Development Plan
Answer: A
It measures economic output.
12. Microeconomics studies:
