ECN 211 ASU EXAM 1: COMPLETE
PRACTICE GUIDE WITH 300 ACTUAL-
CORRECT QUESTIONS - COVERING TEN
PRINCIPLES, CIRCULAR FLOW, GDP,
UNEMPLOYMENT, CPI, AD/AS, FISCAL &
MONETARY POLICY, AND MORE! | WITH
VERIFIED QUESTIONS AND ANSWERS
100% CORRECT | GRADED A+!!
Section 1: Ten Principles of Economics & Basic Concepts
Q1: What is the definition of scarcity?
• A. The study of how society manages its resources
• B. The limited nature of society's resources
• C. The ability to produce goods and services
• D. The exchange of goods and services in markets
Answer: B. The limited nature of society's resources
Q2: What is the definition of economics?
• A. The study of how society manages its scarce resources
• B. The study of how households make decisions
• C. The study of financial markets
• D. The study of government policy
Answer: A. The study of how society manages its scarce resources
Q3: The first four principles of economics deal with what?
, • A. How the economy as a whole works
• B. How people make decisions
• C. How markets function
• D. How governments intervene
Answer: B. How people make decisions
Q4: What do the last four principles of economics primarily relate to?
• A. How people interact
• B. How the economy as a whole works
• C. Productivity as the ultimate source of living standards
• D. Government regulation
Answer: C. Productivity are the ultimate source of living
Q5: The economist plays two roles. What are they?
• A. Producer and Consumer
• B. Scientist and Policy Adviser
• C. Buyer and Seller
• D. Analyst and Consultant
Answer: B. Scientist: Trying to explain the world; Policy Adviser: Trying to
improve the world
Q6: What is the opportunity cost of an item?
• A. The monetary price paid for the item
• B. What you give up to get that item
• C. The total cost of production
• D. The market value of the item
Answer: B. What you give up to get that item
,Q7: What is Ceteris Paribus?
• A. The study of economic systems
• B. With other conditions remaining the same
• C. The relationship between supply and demand
• D. The study of inflation
Answer: B. With other conditions remaining the same
Q8: What is Utility?
• A. The cost of producing a good
• B. The usefulness a customer obtains from a good
• C. The market price of a good
• D. The supply of a good
Answer: B. Usefulness a customer obtains from a good
Q9: What is microeconomics?
• A. The study of economy-wide phenomena
• B. The study of how households and firms make decisions and how they
interact in markets
• C. The study of government policy
• D. The study of international trade
Answer: B. The study of how households and firms make decisions and how
they interact in markets
Q10: What is macroeconomics?
• A. The study of individual household decisions
• B. The study of economy-wide phenomena, including inflation,
unemployment, and economic growth
• C. The study of firm production
• D. The study of market competition
, Answer: B. The study of economy-wide phenomena, including inflation,
unemployment, and economic growth
Section 2: Circular Flow Diagram & Factors of Production
Q11: What does the circular-flow diagram show?
• A. Government spending patterns
• B. A visual model of the economy showing how dollars, goods, and services
flow through markets among households and firms
• C. The stock market
• D. International trade flows
Answer: B. A visual model of the economy showing how dollars, goods, and
services flow through markets among households and firms
Q12: What are the factors of production?
• A. The goods and services produced in an economy
• B. The resources the economy uses to produce goods and services
• C. The money used in transactions
• D. The government regulations on production
Answer: B. The resources the economy uses to produce goods and services
Q13: What are the three main factors of production?
• A. Money, goods, and services
• B. Labor, land, and capital (buildings and machines used in production)
• C. Stocks, bonds, and investments
• D. Supply, demand, and equilibrium
Answer: B. Labor, land, and capital (buildings and machines used in
production)
PRACTICE GUIDE WITH 300 ACTUAL-
CORRECT QUESTIONS - COVERING TEN
PRINCIPLES, CIRCULAR FLOW, GDP,
UNEMPLOYMENT, CPI, AD/AS, FISCAL &
MONETARY POLICY, AND MORE! | WITH
VERIFIED QUESTIONS AND ANSWERS
100% CORRECT | GRADED A+!!
Section 1: Ten Principles of Economics & Basic Concepts
Q1: What is the definition of scarcity?
• A. The study of how society manages its resources
• B. The limited nature of society's resources
• C. The ability to produce goods and services
• D. The exchange of goods and services in markets
Answer: B. The limited nature of society's resources
Q2: What is the definition of economics?
• A. The study of how society manages its scarce resources
• B. The study of how households make decisions
• C. The study of financial markets
• D. The study of government policy
Answer: A. The study of how society manages its scarce resources
Q3: The first four principles of economics deal with what?
, • A. How the economy as a whole works
• B. How people make decisions
• C. How markets function
• D. How governments intervene
Answer: B. How people make decisions
Q4: What do the last four principles of economics primarily relate to?
• A. How people interact
• B. How the economy as a whole works
• C. Productivity as the ultimate source of living standards
• D. Government regulation
Answer: C. Productivity are the ultimate source of living
Q5: The economist plays two roles. What are they?
• A. Producer and Consumer
• B. Scientist and Policy Adviser
• C. Buyer and Seller
• D. Analyst and Consultant
Answer: B. Scientist: Trying to explain the world; Policy Adviser: Trying to
improve the world
Q6: What is the opportunity cost of an item?
• A. The monetary price paid for the item
• B. What you give up to get that item
• C. The total cost of production
• D. The market value of the item
Answer: B. What you give up to get that item
,Q7: What is Ceteris Paribus?
• A. The study of economic systems
• B. With other conditions remaining the same
• C. The relationship between supply and demand
• D. The study of inflation
Answer: B. With other conditions remaining the same
Q8: What is Utility?
• A. The cost of producing a good
• B. The usefulness a customer obtains from a good
• C. The market price of a good
• D. The supply of a good
Answer: B. Usefulness a customer obtains from a good
Q9: What is microeconomics?
• A. The study of economy-wide phenomena
• B. The study of how households and firms make decisions and how they
interact in markets
• C. The study of government policy
• D. The study of international trade
Answer: B. The study of how households and firms make decisions and how
they interact in markets
Q10: What is macroeconomics?
• A. The study of individual household decisions
• B. The study of economy-wide phenomena, including inflation,
unemployment, and economic growth
• C. The study of firm production
• D. The study of market competition
, Answer: B. The study of economy-wide phenomena, including inflation,
unemployment, and economic growth
Section 2: Circular Flow Diagram & Factors of Production
Q11: What does the circular-flow diagram show?
• A. Government spending patterns
• B. A visual model of the economy showing how dollars, goods, and services
flow through markets among households and firms
• C. The stock market
• D. International trade flows
Answer: B. A visual model of the economy showing how dollars, goods, and
services flow through markets among households and firms
Q12: What are the factors of production?
• A. The goods and services produced in an economy
• B. The resources the economy uses to produce goods and services
• C. The money used in transactions
• D. The government regulations on production
Answer: B. The resources the economy uses to produce goods and services
Q13: What are the three main factors of production?
• A. Money, goods, and services
• B. Labor, land, and capital (buildings and machines used in production)
• C. Stocks, bonds, and investments
• D. Supply, demand, and equilibrium
Answer: B. Labor, land, and capital (buildings and machines used in
production)
