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Economics Test 1
Economics Test 1
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Flashcards
30 cards
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Questions
30
Answers
1
Which of the following statements is an example of positive economics
unemployment is worse than inflation
the unemployment rate is 6%
we need to pray to God for lower unemployment
the major economic goal should be lower unemployment
2
The local grocery store announces an upcoming sale on beef, what will be the immediate result?
a decrease in demand
a change in quantity demanded
an increase in demand
a switch to a substitute good
3
Which of the following will most likely persuade a dairy farmer to purchase more cows?
current investment rates
the current real estate market
the price of milk
the price of grain
4
What biblical concept refers to a person's responsibility to make proper choices with resources
public good
utility
stewardship
contentment
5
Which approach to economic study focuses on value judgments?
macroeconomics
normative economics
positive economics
microeconomics
6
The family car is finally beyond repair and must be taken to the junkyard, the car is
an economic good
a scarce good
a nuisance good
a free good
7
Which of the following is a transfer payment?
income tax witholdings
Department of Defense purchases
the wages of postal workers
governmental unemployment checks
8
Which of the following would an economist not consider an example of land?
machinery
wheat
petroleum
sheep
9
What is the most significant reason for the drop in cell phone prices?
improvements in technology
increase in demand
a change in tastes and preferences
increase in the price of substitute goods
10
Which of the following is not one of the functions of price?
increasing utility
transmitting information
redistributing income
providing incentives
11
What term describes the amount of a product a company is willing to provide at various prices?
equilibrium price
product ceiling
supply
demand
12
Which is the most important factor of production?
labor
capital
land
entrepreneurship
13
On a PPC graph, any point on the graphed line represents
minimum costs
wasted resources
production efficiency
production variables
14
what term do economist use to describe the act of buying?
util
supply
demand
price
15
a drop in income would have the least effect on the demand for
bread
candy bars
automobiles
steaks
16
The economic cost of a good or service is
the value people place on it
the regret a consumer feels after choosing it
the price charged for it
the cumulative cost of making and marketing it
17
What is the chief advantage of the line graph over the schedule?
it is more scientific
it better illustrates results
it is less complicated
it contains more data
18
Which of the following examples falls into the sphere of economics?
all of the above
a college class on business management
the rise and fall of the stock market
a mother's trip to the grocery store
19
Conservation of natural resources primarily shows a grasp of which economic concept?
public good
microeconomics
utility
scarcity
20
According to Carl Menger, what determines the value of an object?
the public good accomplished
the labor of the producer
the utility for the user
the quality of raw materials
21
Which of the following is not an example of capital?
a hammer
a tractor
a business loan
a house
22
What is the demand solution to a shortage?
discouraging demand
raising prices
setting a price ceiling
increasing production
23
Which of the following is not a demand solution to a surplus?
lowering the price of the product
advertising to increase preferences for the product
persuading the government to buy the surplus
driving competitors out of business
24
From the standpoint of the supplier, what is the best solution to a surplus?
increasing demand
cutting production
cutting prices
increasing the price floor
25
Which two basic economic principles create the need for choices?
scarcity and contentment
insatiability and scarcity
utility and opportunity
subjective value and utility
26
If the government forces milk to be sold above the market equilibrium price, what results?
a shortage
an increase in demand
a surplus
a price ceiling
27
When a mother grabs the photo album on the way out of a burning house she is illustrating
intrinsic value
insatiability
subjective value
utility
28
Which economist developed the principle of diminishing marginal utility?
Fredrich von Hayek
Adam Smith
Carl Menger
William Jevons
29
If the government forces homes to be rented below the market equilibrium price, what results?
a surplus
a shortage
a decrease in demand
price floors
30
What is an example of dissavings?
making a payment on a loan
opening a checking account
taking out a mortgage
making a deposit in a savings account
