ECONOMICS TODAY THE MICRO VIEW
COMPREHENSIVE EXAMINATION TEST
COMPLETE QUESTIONS AND CORRECT
ANSWERS
●● What does microeconomics focus on?
Answer: The actions of individual agents within the economy, such as
households, workers, and businesses.
●● What is the main focus of macroeconomics?
Answer: Broad issues such as growth of production, unemployment,
inflation, government deficits, and levels of exports and imports.
●● Define 'market' in economic terms.
Answer: A space (physical or not) where potential buyers and sellers
interact.
●● What is opportunity cost?
Answer: What one must give up to obtain what he/she desires.
●● What are the three general types of economic systems?
Answer: Traditional economy, command economy, and market economy.
, ●● Describe a traditional economy.
Answer: An economy where customs and traditions dictate economic
activity; it is the oldest economic system.
●● What characterizes a command economy?
Answer: Economic decisions are made by the government, which
decides what is produced, the methods of production, prices, and
allocation of goods/services.
●● What is a market economy?
Answer: An economy where economic decisions are made by
individuals and businesses based on supply and demand.
●● What is an economic model?
Answer: A simplified representation of how two or more economic
variables interact with each other.
●● What does the Circular Flow Diagram illustrate?
Answer: The flow of resources in the economy through the relationship
between economic agents.
●● What does the Production Possibilities Frontier (PPF) show?
COMPREHENSIVE EXAMINATION TEST
COMPLETE QUESTIONS AND CORRECT
ANSWERS
●● What does microeconomics focus on?
Answer: The actions of individual agents within the economy, such as
households, workers, and businesses.
●● What is the main focus of macroeconomics?
Answer: Broad issues such as growth of production, unemployment,
inflation, government deficits, and levels of exports and imports.
●● Define 'market' in economic terms.
Answer: A space (physical or not) where potential buyers and sellers
interact.
●● What is opportunity cost?
Answer: What one must give up to obtain what he/she desires.
●● What are the three general types of economic systems?
Answer: Traditional economy, command economy, and market economy.
, ●● Describe a traditional economy.
Answer: An economy where customs and traditions dictate economic
activity; it is the oldest economic system.
●● What characterizes a command economy?
Answer: Economic decisions are made by the government, which
decides what is produced, the methods of production, prices, and
allocation of goods/services.
●● What is a market economy?
Answer: An economy where economic decisions are made by
individuals and businesses based on supply and demand.
●● What is an economic model?
Answer: A simplified representation of how two or more economic
variables interact with each other.
●● What does the Circular Flow Diagram illustrate?
Answer: The flow of resources in the economy through the relationship
between economic agents.
●● What does the Production Possibilities Frontier (PPF) show?
