ECO 2013: Test 1 (Carrie Lee) UPDATED ACTUAL QUESTIONS AND CORRECT
ANSWERS
Economists assume that people are rational in the sense c
that they do the best they can based on their values and the information they have
a
always make decisions based on complete and accurate
information
b
make decisions that will not be regretted later
c
do the best they can based on their values and the
information they have
d
commit no errors in judgement
What is scarcity? a
a When unlimited wants exceed the limited resources available
When unlimited wants exceed the limited resources
available
b
When wants cannot be fulfilled and thus all goods must
be rationed
c
When prices of goods are very high
d
When markets cannot properly allocate resources
,Scarcity is central to the study of economics because it C.
implies that every choice involves an opportunity cost.
A.
economic agents are rational.
B.
wants are unlimited.
C.
every choice involves an opportunity cost.
D.
society must make decisions at the margin.
Economists use the word marginal to mean an extra or A.
additional benefit or cost of a decision. An optimal marginal benefit equals marginal cost.
decision occurs when
A.
marginal benefit equals marginal cost.
B.
marginal benefit is greater than marginal cost.
C.
marginal benefit is maximized.
D.
marginal cost is zero.
The three economic questions that every society must D.
answer are What goods will be produced, how will they be produced, and who will receive
A. the goods?
What economic system will be used, how will it be
implemented, and who will make market decisions?
B.
What kind of government will the society have, how will it
be run, and who will run it?
C.
What are the prices of goods, how are they determined,
and who will pay for them?
D.
What goods will be produced, how will they be
produced, and who will receive the goods?
Centrally planned economies allocate resources based government; households and firms
on decisions by _____ , while market economies answer
these questions through decisions made by _____ _.
Opportunity cost is defined as d
a the highest valued alternative that must be given up to engage in an activity
the total value of all alternatives that must be given up to
engage in an activity
b
the benefit of an activity
c
the monetary expense associated with an activity
d
the highest valued alternative that must be given up to
engage in an activity
, In a market system, how does society decide what goods B.
and services will be produced? Consumers, firms, and the government determine what goods and services will
A. be produced by the choices they make.
What goods and services will be produced is determined
by a vote of consumers.
B.
Consumers, firms, and the government determine what
goods and services will be produced by the choices they
make.
C.
Firms alone determine what goods and services will be
produced.
D.
The government decides what goods and services will be
produced.
Which of the following is a correct statement about a C.
mixed economy? In a mixed economy, most economic decisions are made in markets but the
A. government plays a significant role in the allocation of resources.
In a mixed economy, most economic decisions are made
by the government but markets plays a significant role in
the allocation of resources.
B.
In a mixed economy, all economic decisions are made in
markets.
C.
In a mixed economy, most economic decisions are made
in markets but the government plays a significant role in
the allocation of resources.
D.
In a mixed economy, the government makes all economic
decisions.
A 50-cent-per-pack tax on cigarettes will reduce smoking a
by teenagers by 12 percent. This represents __________. positive analysis
a
positive analysis
b
normative analysis
The federal government should spend more on AIDS b
research. This represents ___________. normative analysis
a
positive analysis
b
normative analysis
Rising paper prices will increase textbook prices. This a
represents __________. positive analysis
a
positive analysis
b
normative analysis
ANSWERS
Economists assume that people are rational in the sense c
that they do the best they can based on their values and the information they have
a
always make decisions based on complete and accurate
information
b
make decisions that will not be regretted later
c
do the best they can based on their values and the
information they have
d
commit no errors in judgement
What is scarcity? a
a When unlimited wants exceed the limited resources available
When unlimited wants exceed the limited resources
available
b
When wants cannot be fulfilled and thus all goods must
be rationed
c
When prices of goods are very high
d
When markets cannot properly allocate resources
,Scarcity is central to the study of economics because it C.
implies that every choice involves an opportunity cost.
A.
economic agents are rational.
B.
wants are unlimited.
C.
every choice involves an opportunity cost.
D.
society must make decisions at the margin.
Economists use the word marginal to mean an extra or A.
additional benefit or cost of a decision. An optimal marginal benefit equals marginal cost.
decision occurs when
A.
marginal benefit equals marginal cost.
B.
marginal benefit is greater than marginal cost.
C.
marginal benefit is maximized.
D.
marginal cost is zero.
The three economic questions that every society must D.
answer are What goods will be produced, how will they be produced, and who will receive
A. the goods?
What economic system will be used, how will it be
implemented, and who will make market decisions?
B.
What kind of government will the society have, how will it
be run, and who will run it?
C.
What are the prices of goods, how are they determined,
and who will pay for them?
D.
What goods will be produced, how will they be
produced, and who will receive the goods?
Centrally planned economies allocate resources based government; households and firms
on decisions by _____ , while market economies answer
these questions through decisions made by _____ _.
Opportunity cost is defined as d
a the highest valued alternative that must be given up to engage in an activity
the total value of all alternatives that must be given up to
engage in an activity
b
the benefit of an activity
c
the monetary expense associated with an activity
d
the highest valued alternative that must be given up to
engage in an activity
, In a market system, how does society decide what goods B.
and services will be produced? Consumers, firms, and the government determine what goods and services will
A. be produced by the choices they make.
What goods and services will be produced is determined
by a vote of consumers.
B.
Consumers, firms, and the government determine what
goods and services will be produced by the choices they
make.
C.
Firms alone determine what goods and services will be
produced.
D.
The government decides what goods and services will be
produced.
Which of the following is a correct statement about a C.
mixed economy? In a mixed economy, most economic decisions are made in markets but the
A. government plays a significant role in the allocation of resources.
In a mixed economy, most economic decisions are made
by the government but markets plays a significant role in
the allocation of resources.
B.
In a mixed economy, all economic decisions are made in
markets.
C.
In a mixed economy, most economic decisions are made
in markets but the government plays a significant role in
the allocation of resources.
D.
In a mixed economy, the government makes all economic
decisions.
A 50-cent-per-pack tax on cigarettes will reduce smoking a
by teenagers by 12 percent. This represents __________. positive analysis
a
positive analysis
b
normative analysis
The federal government should spend more on AIDS b
research. This represents ___________. normative analysis
a
positive analysis
b
normative analysis
Rising paper prices will increase textbook prices. This a
represents __________. positive analysis
a
positive analysis
b
normative analysis
