Principles of Microeconomics
Exam Questions and Answers
100% PASS
CH 1: Because of their relatively small national economies, which of the following
is most likely considered to be the most important factor for Belgium, Korea, and
Canada to take full advantage of specialization?
A: Division of labour
B: International trade
C: Economies of scale
D: Command Economy - CORRECT ANSWER-B: International Trade
CH 1: The basic difference between macroeconomics and microeconomics is that:
A: microeconomics looks at the forest (aggregate markets) while macroeconomics
looks at the trees (individual markets).
,B: macroeconomics is concerned with groups of individuals while microeconomics
is concerned with single countries.
C: microeconomics is concerned with the trees (individual markets) while
macroeconomics is concerned with the forest (aggregate markets).
D: macroeconomics is concerned with generalization while microeconomics is
concerned with specialization. - CORRECT ANSWER-C: microeconomics is
concerned with the trees (individual markets) while macroeconomics is concerned
with the forest (aggregate markets).
CH 1: Macroeconomics:
A: is concerned with the expansion of a small business into a large corporation.
B: is narrower in scope than microeconomics.
C: analyzes mergers and acquisitions between firms
D: is concerned with the expansion and contraction of the overall economy. -
CORRECT ANSWER-D: is concerned with the expansion and contraction of the
overall economy.
CH 1: When nations desire a healthy macroeconomy, they typically focus on three
goals, one of these being:
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,A: balanced budget
B: prudent monetary policy
C: low inflation
D: assuring competition between firms - CORRECT ANSWER-C: low inflation
CH 1: In a discussion of economics, which of the following would exert the most
influence on an individual firm's decision to hire workers?
A: wage levels
B: the macroeconomy
C: the firm's income
D: household income - CORRECT ANSWER-B: the macroeconomy
CH 1: Which of the following best characterizes the circular flow of income?
A: Businesses buy resources from the government, and households buy goods and
services from businesses.
B: Businesses buy resources from households, and households use their income
from the sale of resources to buy goods and services from businesses.
C: The government purchases resources from businesses and households and then
sells goods and services to businesses and households.
, D: Households buy factors of production from businesses, and businesses buy
goods and services from households. - CORRECT ANSWER-B: Businesses buy
resources from households, and households use their income from the sale of
resources to buy goods and services from businesses.
CH 1: In the first chapter of The Wealth of Nations, Smith introduces the idea of
the __________, which means the way in which the work required to produce a
good or service is divided into a number of tasks that are performed by different
workers.
A: division of labor
B: interconnected economy
C: task economy
D: modern economy - CORRECT ANSWER-A: Division of labor
CH 1: In which of the following countries will the national government have the
greatest influence with respect to the nation's economy?
A: China
B: Cuba
C: Canada
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law
Exam Questions and Answers
100% PASS
CH 1: Because of their relatively small national economies, which of the following
is most likely considered to be the most important factor for Belgium, Korea, and
Canada to take full advantage of specialization?
A: Division of labour
B: International trade
C: Economies of scale
D: Command Economy - CORRECT ANSWER-B: International Trade
CH 1: The basic difference between macroeconomics and microeconomics is that:
A: microeconomics looks at the forest (aggregate markets) while macroeconomics
looks at the trees (individual markets).
,B: macroeconomics is concerned with groups of individuals while microeconomics
is concerned with single countries.
C: microeconomics is concerned with the trees (individual markets) while
macroeconomics is concerned with the forest (aggregate markets).
D: macroeconomics is concerned with generalization while microeconomics is
concerned with specialization. - CORRECT ANSWER-C: microeconomics is
concerned with the trees (individual markets) while macroeconomics is concerned
with the forest (aggregate markets).
CH 1: Macroeconomics:
A: is concerned with the expansion of a small business into a large corporation.
B: is narrower in scope than microeconomics.
C: analyzes mergers and acquisitions between firms
D: is concerned with the expansion and contraction of the overall economy. -
CORRECT ANSWER-D: is concerned with the expansion and contraction of the
overall economy.
CH 1: When nations desire a healthy macroeconomy, they typically focus on three
goals, one of these being:
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law
,A: balanced budget
B: prudent monetary policy
C: low inflation
D: assuring competition between firms - CORRECT ANSWER-C: low inflation
CH 1: In a discussion of economics, which of the following would exert the most
influence on an individual firm's decision to hire workers?
A: wage levels
B: the macroeconomy
C: the firm's income
D: household income - CORRECT ANSWER-B: the macroeconomy
CH 1: Which of the following best characterizes the circular flow of income?
A: Businesses buy resources from the government, and households buy goods and
services from businesses.
B: Businesses buy resources from households, and households use their income
from the sale of resources to buy goods and services from businesses.
C: The government purchases resources from businesses and households and then
sells goods and services to businesses and households.
, D: Households buy factors of production from businesses, and businesses buy
goods and services from households. - CORRECT ANSWER-B: Businesses buy
resources from households, and households use their income from the sale of
resources to buy goods and services from businesses.
CH 1: In the first chapter of The Wealth of Nations, Smith introduces the idea of
the __________, which means the way in which the work required to produce a
good or service is divided into a number of tasks that are performed by different
workers.
A: division of labor
B: interconnected economy
C: task economy
D: modern economy - CORRECT ANSWER-A: Division of labor
CH 1: In which of the following countries will the national government have the
greatest influence with respect to the nation's economy?
A: China
B: Cuba
C: Canada
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law
