1 | Page
MACROECONOMICS EC112 QUESTIONS
AND ANSWERS 2025
Technological progress has m ade it possible for firms such as
Apple and Alivecor to develop small electronic devices,
including smartwatches, smartphones, and products that can
be attached to the smartwatches and smartphones, to serve
consumers who have become more health conscious and wish
to monitor various health conditions. These firms are reacting to
which of the three key economic ideas?
A) firms attempt to maximize revenues
B) optimal decisions are made at the margin
C) people are rational
D) people respond to economic incentives -correct answer- d
The term "market" in economics refers to ______________
A) a place where money changes hands.
B) a legal institution where exchange can take place.
C) a group of buyers and sellers of a product and the
arrangement by which they come together to trade.
D) an organization which sells goods and services. -correct
answer- c
Which of the following best describes an assumption
economists make about human behavior?
,2 | Page
A) They assume that individuals act rationally all the time in all
circumstances.
B) They assume that rational behavior is useful in explaining
choices people make even though people may not behave
rationally all the time.
C) They assume that people take into account the question of
fairness in all decisions they make.
D) They assume that individuals act randomly. -correct answer-
b
1. In the first six months of 2003, branches of Commerce Bank
in New York City were robbed 14 times. The New York City
Police recommended steps the bank could take to deter
robberies, including the installation of plastic barriers called
"bandit barriers." The police were surprised the bank did not
take their advice. According to a deputy commissioner of police,
"Commerce does very little of what we recommend. They've
told our detectives they have no interest in ever putting in the
barriers."
It would seem that Commerce Bank would have a strong
incentive to install "bandit barriers" to deter robberies. Why
wouldn't they do it?
A) The banks would rather delay installation of any theft
deterring equipment in anticipation of new, lower-cost
innovations in the security devices market.
,3 | Page
B) The banks must have weighed the cost of installing bandit
barriers against the benefits and decided that they have "no
interest in -correct answer- b
Economics promotes which of the following as the way to make
the best decision?
A) Continue an enjoyable activity as long as you do not have to
pay for it.
B) Continue an enjoyable activity until it is no longer enjoyable.
C) Continue an enjoyable activity until you cannot afford to
pursue it.
D) Continue an enjoyable activity up to the point where its
marginal benefit equals its marginal cost. -correct answer- d
Which of the following is an example of a "how much" decision?
A) Octavia is debating whether to buy a pair of Jimmy Choo
shoes or Steve Madden boots.
B) Humberto has taken a second job to earn money to buy a
Harley-Davidson SuperLow Sportster.
C) You plan on going to Las Vegas for your birthday and are
deciding if you should fly or drive.
D) Diana is trying to decide if she should open her pet shop on
Sundays. -correct answer- d
Every society faces economic trade-offs. This means ______
, 4 | Page
A) me people live better than others do.
B) not everyone can have enough goods to survive.
C) producing more of one good means less of another good
can be produced.
D) society's output cannot be made available to all. -correct
answer- c
Which of the following statements is false?
A) Anytime you have to decide which action to take you are
facing an economic trade-off.
B) Trade-offs do not apply when the consumers purchase a
product for which there is excess supply, such as a stock
clearance sale.
C) Every individual, no matter how rich or poor, is faced with
making trade-offs.
D) Economics is a social science that studies the trade-offs we
are forced to make because of scarcity. -correct answer- b
Who, in a modern mixed economy, decides what goods and
services will be produced with the scarce resources available in
that economy?
A) the government
B) producers
C) consumers
D) consumers and producers
MACROECONOMICS EC112 QUESTIONS
AND ANSWERS 2025
Technological progress has m ade it possible for firms such as
Apple and Alivecor to develop small electronic devices,
including smartwatches, smartphones, and products that can
be attached to the smartwatches and smartphones, to serve
consumers who have become more health conscious and wish
to monitor various health conditions. These firms are reacting to
which of the three key economic ideas?
A) firms attempt to maximize revenues
B) optimal decisions are made at the margin
C) people are rational
D) people respond to economic incentives -correct answer- d
The term "market" in economics refers to ______________
A) a place where money changes hands.
B) a legal institution where exchange can take place.
C) a group of buyers and sellers of a product and the
arrangement by which they come together to trade.
D) an organization which sells goods and services. -correct
answer- c
Which of the following best describes an assumption
economists make about human behavior?
,2 | Page
A) They assume that individuals act rationally all the time in all
circumstances.
B) They assume that rational behavior is useful in explaining
choices people make even though people may not behave
rationally all the time.
C) They assume that people take into account the question of
fairness in all decisions they make.
D) They assume that individuals act randomly. -correct answer-
b
1. In the first six months of 2003, branches of Commerce Bank
in New York City were robbed 14 times. The New York City
Police recommended steps the bank could take to deter
robberies, including the installation of plastic barriers called
"bandit barriers." The police were surprised the bank did not
take their advice. According to a deputy commissioner of police,
"Commerce does very little of what we recommend. They've
told our detectives they have no interest in ever putting in the
barriers."
It would seem that Commerce Bank would have a strong
incentive to install "bandit barriers" to deter robberies. Why
wouldn't they do it?
A) The banks would rather delay installation of any theft
deterring equipment in anticipation of new, lower-cost
innovations in the security devices market.
,3 | Page
B) The banks must have weighed the cost of installing bandit
barriers against the benefits and decided that they have "no
interest in -correct answer- b
Economics promotes which of the following as the way to make
the best decision?
A) Continue an enjoyable activity as long as you do not have to
pay for it.
B) Continue an enjoyable activity until it is no longer enjoyable.
C) Continue an enjoyable activity until you cannot afford to
pursue it.
D) Continue an enjoyable activity up to the point where its
marginal benefit equals its marginal cost. -correct answer- d
Which of the following is an example of a "how much" decision?
A) Octavia is debating whether to buy a pair of Jimmy Choo
shoes or Steve Madden boots.
B) Humberto has taken a second job to earn money to buy a
Harley-Davidson SuperLow Sportster.
C) You plan on going to Las Vegas for your birthday and are
deciding if you should fly or drive.
D) Diana is trying to decide if she should open her pet shop on
Sundays. -correct answer- d
Every society faces economic trade-offs. This means ______
, 4 | Page
A) me people live better than others do.
B) not everyone can have enough goods to survive.
C) producing more of one good means less of another good
can be produced.
D) society's output cannot be made available to all. -correct
answer- c
Which of the following statements is false?
A) Anytime you have to decide which action to take you are
facing an economic trade-off.
B) Trade-offs do not apply when the consumers purchase a
product for which there is excess supply, such as a stock
clearance sale.
C) Every individual, no matter how rich or poor, is faced with
making trade-offs.
D) Economics is a social science that studies the trade-offs we
are forced to make because of scarcity. -correct answer- b
Who, in a modern mixed economy, decides what goods and
services will be produced with the scarce resources available in
that economy?
A) the government
B) producers
C) consumers
D) consumers and producers
