Econ 102 - Principles of Macroeconomics » Fall 2022 » Circular Flow and PPF Quiz

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Question #1
In a market economy, the decision regarding allocation of resources is made by
A.   Automatic forces of supply and demand
B.   Committees from a variety of economic interest groups
C.   Central planners
D.   Authorities in Washington, D.C.
Question #2
Economists define efficiency as
A.   The absence of waste
B.   Output maximization
C.   The presence of surplus
D.   Input minimization
Question #3
The problem of scarcity
A.   Has been "cooked up" by disenchanted anti-capitalists
B.   Exists because resources are limited relative to wants
C.   Is caused by artificially high prices
D.   Is solved by promoting economic growth
Question #4
An economy that wants to experience growth should
A.   Increase current consumption and reduce producing capital goods
B.   Increase production of capital goods and increase consumption
C.   Increase production of capital goods and reduce consumption
D.   Decrease current consumption and reduce production of capital goods
Question #5
The concept of the "invisible hand" led Adam Smith to believe that
A.   Pursuit of self-interest promotes economic well-being for society as a whole
B.   Governmental rule actually results in greater good than is apparent at the time
C.   Traditional religion is an appropriate guide for human behavior
D.   If each person looks out for himself or herself, then chaos will inevitably ensue
Question #6
The central question in economics is how to
A.   Induce people to want less
B.   Use government agencies
C.   Make the best use of scarce resources
D.   Increase human knowledge
Question #7
Because of scarcity, every economic decision involves
A.   A tradeoff or choice
B.   A free good
C.   An increasing cost
D.   A money payment
Question #8
Because resources tend to be specialized, increased production of military goods tends to
A.   Change the slope of the production possibilities frontier (PPF)
B.   Increase the opportunity cost of more non-military goods.
C.   Decrease the opportunity cost of more military goods.
D.   Increase the opportunity cost of more military goods.
Question #9
Specialization in the labor market or Division of Labor, usually refers to splitting
A.   The three coordination decisions among different sets of planners
B.   The parts of a complex task among different workers
C.   Political leaders into radical and conservative camps each year.
D.   The production of consumption goods and capital goods among different workers

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