Module 1: Economics Test

Question 1

What is the philosophy that the government should not interfere in the marketplace?

Accepted Answer

Lassiez faire

Question 2

Which of the following would NOT be associated with the study of global economics?

Accepted Answer

Individual consumer practices

Question 3

Your friend obtains another degree. After he graduates, he is only able to find part-time work. While working he is ____

Accepted Answer

Frictionally unemployed

Question 4

What is inflation?

Accepted Answer

The rate at which the price level of goods and services rises.

Question 5

A country grows grapes to produce wine/wheat to produce bread, the costs of which of the following are counted in GDP?

Accepted Answer

Bread and wine

Question 6

In economics, why must consumers, businesses, and governments make choices?

Accepted Answer

There is resource scarcity.

Question 7

Which of the following would NOT lead to economic growth?

Accepted Answer

Tighter government regulation

Question 8

Which of the following is an example of a public good?

Accepted Answer

Fireworks display

Question 9

What are things required for survival?

Accepted Answer

Needs

Question 10

Why does the market system fail to produce public goods?

Accepted Answer

Private firms cannot restrict the benefits of such goods to consumers

Question 11

You fish and hunt animals. The food caught is divided among the village. This represents which type of economy?

Accepted Answer

Traditional economy

Question 12

What is the amount of a good or service that businesses have available to sell?

Accepted Answer

Supply

Question 13

You work and get paid. Then you go to the store to buy a new video game. What type of economy are you participating in?

Accepted Answer

Market economy

Question 14

Which of the following will probably cause prices to decrease?

Accepted Answer

Many companies start making a product that is high in demand

Question 15

Which of the following are included in the business cycle?

Accepted Answer

Gross Domestic Product (GDP), unemployment rate, inflation

Question 16

In economics, what is equilibrium?

Accepted Answer

Demand is the same as supply

Question 17

Which of the following statements best summarizes the reason for economics?

Accepted Answer

While wants are unlimited, resources are scarce.

Question 18

Which of the following does NOT describe an economic system?

Accepted Answer

Socialism

Question 19

In a command economy, who owns the factors of production?

Accepted Answer

Government

Question 20

The government runs activities such as healthcare, libraries, but citizens and businesses control all other activities

Accepted Answer

Mixed economy

Question 21

A store sells their game for $299, but across the street it is sold for $250. They reduce their price to $249.

Accepted Answer

Invisible hand

Question 22

More companies make information on job listings easily available on the Internet and minimum wage is decreased.

Accepted Answer

Unemployment rate is decreased

Question 23

When demand for a product increases, the price of that product will tend to ____.

Accepted Answer

Increase

Question 24

Which BEST describes the calculation of GDP?

Accepted Answer

Total value of goods and services produced domestically, plus income earned

Question 25

Which defines a market economy?

Accepted Answer

Business activity and resources are not regulated by the government.

Question 26

Toyota is a Japanese car manufacturer in the US. If they sell a car to a visitor from Italy, who records the GDP?

Accepted Answer

Economic activity is included in the GDP for the US.

Question 27

A mixed economy combines which economic systems?

Accepted Answer

Market and command

Module 1: Economics Test

Questions 27

Module 1: Economics Test

Questions 27