ECON EXAM QUESTIONS & ANSWERS
which statement best explains why countries must make tradeoffs - Answers - National
production is limited by the availability of scarce natural resources
What is the primary incentive for business owners in a market economy - Answers -
Earning profits
Suppose a new federal budget raises health care spending by 15 million what is the
opportunity cost of that change - Answers - The alternative uses of the additional
money spent
Zoe is deciding which of two posters to buy one is regularly priced at $12 and the other
one is marked down from $20 to $12 which piece of advice should she consider most -
Answers - Ignore that one of the posters is marked down and consider them equally
One store in marias town sells her preferred guitar strings much cheaper than all the
other stores. Maria visisted the store but had a bad experience where would an
economist suggest she buy guitar strings next time - Answers - The same store
because fairness should not be a factor in her decision
Why is some government intervention most likely to be helpful in a market economy -
Answers - Incentives sometimes encourage producers to act in ways that are not
beneficial to consumers
How do budgets relate to opportunity costs - Answers - Opportunity costs are a result
of the decisions made using a budget
Achieving economic growth and in the process using up resources faster than they
become available puts the goal of economic growth in conflict with the goal of -
Answers - Sustainability
The McCormick family is trying to decide whether to plant corn or soybeans on their
farm. Which economic concept should they most consider in their decision - Answers -
Tradeoffs among goals
Which of the following is true of economic models - Answers - In order to be more
useful they may become less realistic
To calculate the net benefit of an action it would be correct to - Answers - Subtract cost
from benefit
Which of the following is an economic goal that command economies do well in
achieving - Answers - Economic security
, Economic studies that are based on facts and cause and effect relationships are -
Answers - Positive
Eugenia opened a bicycle store. Which of the following gives the best example of how
Eugenia uses the scarce resource "labor" - Answers - Eugenia hired an employee to
do bicycle repairs
A manufacturer who decides to use more labor and fewer machines to produce a given
level of output is dealing with the economic question of - Answers - How to produce
Which of the following would most contribute to economic security within a society -
Answers - Companies produce a great deal of well paying jobs
What is one likely effect of a lack of economic growth in a country with a growing
population - Answers - More people must divide the same number of goods and
services among themselves
A _____________ should not be a factor in decision making because it is paid no
matter what you decide - Answers - Sunk cost
Which of the following questions would be explored in the study of macroeconomics -
Answers - What causes inflation and makes prices rise
Which of the following transactions would take place in the product market - Answers -
Firms selling goods to households
Which of the following topics would a micro-economist study - Answers - How people
decide to buy or sell a home under different economic conditions
"My way of doing things has always worked in the past and I plan on continuing doing it
that way in the future" is irrational decision making caused by - Answers - Falling victim
to the status quo bias
Sometimes people let their emotions cloud their judgment about costs and benefits.
When this happens they make: - Answers - Irrational decisions
"My new Investment strategy cannot fail" is irrational decision making caused by -
Answers - Being overconfident
Which of the following correctly shows the relationship of scarcity, resources, and
wants? - Answers - Resource scarcity, Limited ability to produce goods and services,
limited ability to satisfy wants
Micah makes $50 per week at his part time job, and uses his earnings to buy movie
downloads for $2 each. Suppose that the price of movie downloads increases to $4
which statement best explains why countries must make tradeoffs - Answers - National
production is limited by the availability of scarce natural resources
What is the primary incentive for business owners in a market economy - Answers -
Earning profits
Suppose a new federal budget raises health care spending by 15 million what is the
opportunity cost of that change - Answers - The alternative uses of the additional
money spent
Zoe is deciding which of two posters to buy one is regularly priced at $12 and the other
one is marked down from $20 to $12 which piece of advice should she consider most -
Answers - Ignore that one of the posters is marked down and consider them equally
One store in marias town sells her preferred guitar strings much cheaper than all the
other stores. Maria visisted the store but had a bad experience where would an
economist suggest she buy guitar strings next time - Answers - The same store
because fairness should not be a factor in her decision
Why is some government intervention most likely to be helpful in a market economy -
Answers - Incentives sometimes encourage producers to act in ways that are not
beneficial to consumers
How do budgets relate to opportunity costs - Answers - Opportunity costs are a result
of the decisions made using a budget
Achieving economic growth and in the process using up resources faster than they
become available puts the goal of economic growth in conflict with the goal of -
Answers - Sustainability
The McCormick family is trying to decide whether to plant corn or soybeans on their
farm. Which economic concept should they most consider in their decision - Answers -
Tradeoffs among goals
Which of the following is true of economic models - Answers - In order to be more
useful they may become less realistic
To calculate the net benefit of an action it would be correct to - Answers - Subtract cost
from benefit
Which of the following is an economic goal that command economies do well in
achieving - Answers - Economic security
, Economic studies that are based on facts and cause and effect relationships are -
Answers - Positive
Eugenia opened a bicycle store. Which of the following gives the best example of how
Eugenia uses the scarce resource "labor" - Answers - Eugenia hired an employee to
do bicycle repairs
A manufacturer who decides to use more labor and fewer machines to produce a given
level of output is dealing with the economic question of - Answers - How to produce
Which of the following would most contribute to economic security within a society -
Answers - Companies produce a great deal of well paying jobs
What is one likely effect of a lack of economic growth in a country with a growing
population - Answers - More people must divide the same number of goods and
services among themselves
A _____________ should not be a factor in decision making because it is paid no
matter what you decide - Answers - Sunk cost
Which of the following questions would be explored in the study of macroeconomics -
Answers - What causes inflation and makes prices rise
Which of the following transactions would take place in the product market - Answers -
Firms selling goods to households
Which of the following topics would a micro-economist study - Answers - How people
decide to buy or sell a home under different economic conditions
"My way of doing things has always worked in the past and I plan on continuing doing it
that way in the future" is irrational decision making caused by - Answers - Falling victim
to the status quo bias
Sometimes people let their emotions cloud their judgment about costs and benefits.
When this happens they make: - Answers - Irrational decisions
"My new Investment strategy cannot fail" is irrational decision making caused by -
Answers - Being overconfident
Which of the following correctly shows the relationship of scarcity, resources, and
wants? - Answers - Resource scarcity, Limited ability to produce goods and services,
limited ability to satisfy wants
Micah makes $50 per week at his part time job, and uses his earnings to buy movie
downloads for $2 each. Suppose that the price of movie downloads increases to $4
