ECON EXAM QUESTIONS AND ANSWERS
Economists define this as limited quantities to meet unlimited wants - Answers -
Scarcity
Individuals who decided how to combine factors of production to create new goods and
services - Answers - Entrepreneurs
Which of the following is NOT a factor of production? - Answers - Goods
An alternative that we sacrifice when we make a decision - Answers - Trade-off
A graph that can show alternative ways to use as economy's resources - Answers -
Production possibilities graph
What can you tell about the relationship between the length of the loan and the monthly
payment? - Answers - A longer the term of the loan, the lower the payment
Using the table above, what is the opportunity cost of choosing to produce the
combination of goods shown at point c instead of that shown at point d? - Answers -
The opportunity cost is the production of 4 million tons of strawberries
Any point falling inside the line on the table indicates the following... - Answers -
Underutilization
Which of the following is not one of the three key economic questions? - Answers -
What is the cost of these goods and services?
The income people receive for supplying factors of production, such as land, labor, or
capital. - Answers - Factor payments
Why do governments provide safety nets for their citizens? - Answers - to protect
people from unfavorable economic conditions and create security and predictability
An economic system in which decisions on production and consumption of goods and
services are based on voluntary exchange in markets. - Answers - Market economy
Which of the following is a benefit of economic growth? - Answers - the standard of
living improves
the concentration of the productive efforts of individuals and firms on a limited number
of activities - Answers - Specialization
Which of the following is an accurate definition of competition? - Answers - the struggle
among producers for the dollars of consumers
, Scottish social philosopher credited with the creation of the term "the invisible hand" -
Answers - Adam Smith
Which of the following is NOT an advantage of a free market? - Answers - economic
security
The power of consumers to decide what gets produced. - Answers - consumer
sovereignty
Which of the following is NOT a characteristic of an authoritarian government? -
Answers - require all citizens to engage in military service
Which of the following economic goals are difficult to achieve in a centrally planned
economy? (circle all that apply) - Answers - economic efficiency and economic growth
and innovation
The doctrine that government generally should not intervene in the marketplace. -
Answers - Laissez faire
What is the foundation of the United States economy? - Answers - free market
What is the purpose of the free enterprise system? - Answers - to give consumers
freedom to make economic choices
The laws and standards on topics of public interest - Answers - public policy
Which of the following programs was created in 1935 to provide aid for the elderly? -
Answers - Social Security
Why is it economically important to provide educational program opportunities? -
Answers - educational programs add to the nation's human capital and labor
productivity
Goods or services provided for free or at greatly reduced prices - Answers - in-kind
benefits
A situation in which the market does not distribute resources efficiently - Answers -
market failure
Which of the following is an example of a positive externality? - Answers - the local
high school requires all students to pass a first-aid course
Free riders are an example of - Answers - market failure
The study of the behavior and decision making of entire economies - Answers -
Macroeconomics
Economists define this as limited quantities to meet unlimited wants - Answers -
Scarcity
Individuals who decided how to combine factors of production to create new goods and
services - Answers - Entrepreneurs
Which of the following is NOT a factor of production? - Answers - Goods
An alternative that we sacrifice when we make a decision - Answers - Trade-off
A graph that can show alternative ways to use as economy's resources - Answers -
Production possibilities graph
What can you tell about the relationship between the length of the loan and the monthly
payment? - Answers - A longer the term of the loan, the lower the payment
Using the table above, what is the opportunity cost of choosing to produce the
combination of goods shown at point c instead of that shown at point d? - Answers -
The opportunity cost is the production of 4 million tons of strawberries
Any point falling inside the line on the table indicates the following... - Answers -
Underutilization
Which of the following is not one of the three key economic questions? - Answers -
What is the cost of these goods and services?
The income people receive for supplying factors of production, such as land, labor, or
capital. - Answers - Factor payments
Why do governments provide safety nets for their citizens? - Answers - to protect
people from unfavorable economic conditions and create security and predictability
An economic system in which decisions on production and consumption of goods and
services are based on voluntary exchange in markets. - Answers - Market economy
Which of the following is a benefit of economic growth? - Answers - the standard of
living improves
the concentration of the productive efforts of individuals and firms on a limited number
of activities - Answers - Specialization
Which of the following is an accurate definition of competition? - Answers - the struggle
among producers for the dollars of consumers
, Scottish social philosopher credited with the creation of the term "the invisible hand" -
Answers - Adam Smith
Which of the following is NOT an advantage of a free market? - Answers - economic
security
The power of consumers to decide what gets produced. - Answers - consumer
sovereignty
Which of the following is NOT a characteristic of an authoritarian government? -
Answers - require all citizens to engage in military service
Which of the following economic goals are difficult to achieve in a centrally planned
economy? (circle all that apply) - Answers - economic efficiency and economic growth
and innovation
The doctrine that government generally should not intervene in the marketplace. -
Answers - Laissez faire
What is the foundation of the United States economy? - Answers - free market
What is the purpose of the free enterprise system? - Answers - to give consumers
freedom to make economic choices
The laws and standards on topics of public interest - Answers - public policy
Which of the following programs was created in 1935 to provide aid for the elderly? -
Answers - Social Security
Why is it economically important to provide educational program opportunities? -
Answers - educational programs add to the nation's human capital and labor
productivity
Goods or services provided for free or at greatly reduced prices - Answers - in-kind
benefits
A situation in which the market does not distribute resources efficiently - Answers -
market failure
Which of the following is an example of a positive externality? - Answers - the local
high school requires all students to pass a first-aid course
Free riders are an example of - Answers - market failure
The study of the behavior and decision making of entire economies - Answers -
Macroeconomics
