Pierce College » Economics » Economics 002 - Principles of Economics II » Fall 2020

Economics 002 - Principles of Economics II » Fall 2020 » Week 1 Quiz

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Question #1

_____________ - a term referring to the fact that for many goods, as the level of production increases, the average cost of producing each individual unit declines.

A. Specialization

B. Economies of scale

C. Skill

D. Division of labor

Question #2

If macroeconomics looks at the economy as a whole, it focuses on which of the following?

A. households

B. the division of labor

C. business firms

D. unemployed people

Question #3

Which of the following best characterizes the circular flow of income?

A. The government purchases resources from businesses and households and then sells goods and services to businesses and households.

B. Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.

C. Households buy factors of production from businesses, and businesses buy goods and services from households.

D. Businesses buy resources from the government, and households buy goods and services from businesses.

Question #4

Regardless of whether you are looking through the microeconomics microscope or the macroeconomics telescope, the fundamental subject material of the interconnected __________ doesn’t change.

A. market

B. production

C. economy

D. firm

Question #5

Which of the following lies primarily within the realm of macroeconomics?

A. a study of the demand for gasoline

B. a study of the impact of "mad cow" disease on the price of beef worldwide

C. an analysis of supply and demand conditions in the electricity market

D. a study of how tax cuts stimulate aggregate production

Question #6

Which of the following statements most likely lies within the realm of microeconomics?

A. A rapid acceleration of the supply of money may create inflation.

B. Unemployment rises during a recession and falls during an expansion.

C. An increase in labor costs will increase the additional cost of producing another bus.

D. An increase in government spending will increase the aggregate demand for goods and services in the economy.

Question #7

When nations desire a healthy macroeconomy, they typically focus on three goals, one of these being:

A. low inflation

B. prudent monetary policy

C. balanced budget

D. assuring competition between firms

Question #8

In which of the following countries will the national government have the greatest influence with respect to the nation's economy?

A. Canada

B. Cuba

C. Chile

D. China

Question #9

The slope of the _________________ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good.

A. opportunity set

B. personal preference

C. budget constraint

D. utility level

Question #10

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

A. utility

B. scarcity

C. allocative efficiency

D. the production possibilities frontier

Question #11

The opportunity cost of attending university is likely to include all except which of the following?

A. tuition fees

B. the cost of haircuts received during the school term

C. the cost of required textbooks

D. the income you forgo in order to attend classes

Question #12

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is:

A. nothing, because he enjoys playing basketball more than studying.

B. the increase in skill he obtains from playing basketball for that hour.

C. the benefit to his grades from studying for an hour

D. nothing, because he had a free pass into the sports complex to play basketball.

Question #13

Scarcity exists because of:

A. the market mechanism.

B. the allocation of goods by prices

C. specialization and division of labor.

D. unlimited wants and limited resources.

Question #14

The choice on a production possibilities set that is socially preferred, or the choice on an individual’s budget constraint that is personally preferred, will display _____________________.

A. allocative efficiency

B. scarcity

C. the production possibilities frontier

D. trade-offs

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