Econ 100 UNR Final Exam Questions With
Correct Answers
What is economics?
A study of how businesses and individuals make the most money.
A study of how people make choices to achieve goals with resource constraints.
A study of the institutional mechanisms of commerce, like trade and the stock
market.
A study of comprehensive, international economic development. - ANSWER A
study of how people make choices to achieve goals with resource constraints.
What is meant by "the invisible hand?"
The "invisible hand" of government is essential for economic planning.
The "invisible hand" is the force of corruption which limits economic
development.
The "invisible hand" means that the division of labor and exchange are directed
by an unseen authority which keeps everything well organized.
The "invisible hand" means that the division of labor and exchange occur
naturally among people without being directed by anyone. - ANSWER The
"invisible hand" means that the division of labor and exchange occur naturally
among people without being directed by anyone.
What is the root of exchange behavior?
Human natural tendency toward self-sufficiency.
Human natural tendency toward equivalent talents and skills.
Human natural tendency toward division of labor to gain efficiency.
Human natural tendency toward desiring international experiences. - ANSWER
Human natural tendency toward division of labor to gain efficiency.
,Division of labor and exchange are human tendencies to enhance one's self-
interest. Can contributing to charities to assure everyone in one's community
has access to food, housing and health care be consistent with the principles of
self-interest?
Yes.
No. - ANSWER Yes.
What is scientific about Social Science?
Human beings are animals, so the science of human decisions is part of biology.
Social scientists have professional journals.
Adam Smith was a physicist.
Social scientists use the scientific method to test hypotheses about human
behavior. - ANSWER Social scientists use the scientific method to test
hypotheses about human behavior.
What is the contribution of The Wealth of Nations published by Adam Smith in
1776?
Adam Smith described how people made production and consumption decisions
in the 18th Century.
Adam Smith created capitalism.
Adam Smith was an English warrior who led the English people to freedom from
a king.
Adam Smith was a landowner and trade protectionist who drafted the "corn
laws." - ANSWER Adam Smith described how people made production and
consumption decisions in the 18th Century.
What is a market as discussed in an economics class?
A grocery store.
The stock market.
The coming together of suppliers and demanders of goods and services.
A place where exchange occurs. - ANSWER The coming together of suppliers
and demanders of goods and services.
,What do consumers want to achieve?
Maximize personal satisfaction.
Take care of their children and families.
Assure that poor people are fed, housed, and clothed.
Any and all of the above. - ANSWER Any and all of the above.
As the price of gasoline continues to rise,
The quantity consumed will not change because everyone must travel.
The quantity consumed will decline as consumers respond to higher prices.
The quantity consumed will rise because consumers will need more gasoline for
their bigger cars.
The quantity consumed will rise because producers will produce more gasoline.
- ANSWER The quantity consumed will decline as consumers respond to higher
prices.
Why would producers offer more of a product as price rises?
Because some inefficient, high-cost producers can enter the market at high
prices.
Because producers can justify using more expensive inputs when product
prices are high.
Because producers are willing to work overtime when prices are good.
Any and all of the above. - ANSWER Any and all of the above.
What is the principal communication device between producers and consumers
in a free market?
The telephone.
Price.
Brokers.
Politics. - ANSWER Price.
, From an economic perspective, a choice is:
A decision that can be made because we have resources.
A decision no one wants to make because they do not have enough resources.
A decision that must be made because resources are scarce.
A decision which most people can avoid making. - ANSWER A decision that must
be made because resources are scarce.
You know you have incurred a cost when:
You use money in a transaction.
You must give up something you wanted when making a choice.
You receive something you wanted.
You sell something someone else wanted. - ANSWER You must give up
something you wanted when making a choice.
Why do we tend to see specialization and trade develop at the same time?
Trade increases productivity, so specialization must increase for trade to occur.
Specialization increases productivity, so trade must decrease to use all that is
produced to avoid surplus.
Specialization increases productivity, so trade must increase because no one
remains self-sufficient.
Trade broadens markets to absorb the surplus. - ANSWER Specialization
increases productivity, so trade must increase because no one remains self-
sufficient.
In a free market, competition involves:
Buyer competing against seller.
Seller competing against buyer.
Buyer competing against buyer, and seller competing against seller.
Correct Answers
What is economics?
A study of how businesses and individuals make the most money.
A study of how people make choices to achieve goals with resource constraints.
A study of the institutional mechanisms of commerce, like trade and the stock
market.
A study of comprehensive, international economic development. - ANSWER A
study of how people make choices to achieve goals with resource constraints.
What is meant by "the invisible hand?"
The "invisible hand" of government is essential for economic planning.
The "invisible hand" is the force of corruption which limits economic
development.
The "invisible hand" means that the division of labor and exchange are directed
by an unseen authority which keeps everything well organized.
The "invisible hand" means that the division of labor and exchange occur
naturally among people without being directed by anyone. - ANSWER The
"invisible hand" means that the division of labor and exchange occur naturally
among people without being directed by anyone.
What is the root of exchange behavior?
Human natural tendency toward self-sufficiency.
Human natural tendency toward equivalent talents and skills.
Human natural tendency toward division of labor to gain efficiency.
Human natural tendency toward desiring international experiences. - ANSWER
Human natural tendency toward division of labor to gain efficiency.
,Division of labor and exchange are human tendencies to enhance one's self-
interest. Can contributing to charities to assure everyone in one's community
has access to food, housing and health care be consistent with the principles of
self-interest?
Yes.
No. - ANSWER Yes.
What is scientific about Social Science?
Human beings are animals, so the science of human decisions is part of biology.
Social scientists have professional journals.
Adam Smith was a physicist.
Social scientists use the scientific method to test hypotheses about human
behavior. - ANSWER Social scientists use the scientific method to test
hypotheses about human behavior.
What is the contribution of The Wealth of Nations published by Adam Smith in
1776?
Adam Smith described how people made production and consumption decisions
in the 18th Century.
Adam Smith created capitalism.
Adam Smith was an English warrior who led the English people to freedom from
a king.
Adam Smith was a landowner and trade protectionist who drafted the "corn
laws." - ANSWER Adam Smith described how people made production and
consumption decisions in the 18th Century.
What is a market as discussed in an economics class?
A grocery store.
The stock market.
The coming together of suppliers and demanders of goods and services.
A place where exchange occurs. - ANSWER The coming together of suppliers
and demanders of goods and services.
,What do consumers want to achieve?
Maximize personal satisfaction.
Take care of their children and families.
Assure that poor people are fed, housed, and clothed.
Any and all of the above. - ANSWER Any and all of the above.
As the price of gasoline continues to rise,
The quantity consumed will not change because everyone must travel.
The quantity consumed will decline as consumers respond to higher prices.
The quantity consumed will rise because consumers will need more gasoline for
their bigger cars.
The quantity consumed will rise because producers will produce more gasoline.
- ANSWER The quantity consumed will decline as consumers respond to higher
prices.
Why would producers offer more of a product as price rises?
Because some inefficient, high-cost producers can enter the market at high
prices.
Because producers can justify using more expensive inputs when product
prices are high.
Because producers are willing to work overtime when prices are good.
Any and all of the above. - ANSWER Any and all of the above.
What is the principal communication device between producers and consumers
in a free market?
The telephone.
Price.
Brokers.
Politics. - ANSWER Price.
, From an economic perspective, a choice is:
A decision that can be made because we have resources.
A decision no one wants to make because they do not have enough resources.
A decision that must be made because resources are scarce.
A decision which most people can avoid making. - ANSWER A decision that must
be made because resources are scarce.
You know you have incurred a cost when:
You use money in a transaction.
You must give up something you wanted when making a choice.
You receive something you wanted.
You sell something someone else wanted. - ANSWER You must give up
something you wanted when making a choice.
Why do we tend to see specialization and trade develop at the same time?
Trade increases productivity, so specialization must increase for trade to occur.
Specialization increases productivity, so trade must decrease to use all that is
produced to avoid surplus.
Specialization increases productivity, so trade must increase because no one
remains self-sufficient.
Trade broadens markets to absorb the surplus. - ANSWER Specialization
increases productivity, so trade must increase because no one remains self-
sufficient.
In a free market, competition involves:
Buyer competing against seller.
Seller competing against buyer.
Buyer competing against buyer, and seller competing against seller.
