Principles of Economics All chapters' Practice Assessment Review

Principles of Economics All chapters' Practice Assessment Review Inflation and unemployment: are the focus of macroeconomics are the focus of positive economics are the focus of microeconomics are the focus of economic history A study of how the changes in minimum wage rates in Australia will affect the rate of unemployment rate among unskilled workers is a _____issue. macroeconomics descriptive economics normative economics microeconomics An economic model is: an overly simplified depiction of the real world, used only in introductory economics a complex mathematical analysis of the real world used only by experienced economists a simplified representation of the real world used to understand relationships between economic variables a complex diagrammatic depiction of the real world used to confuse economic students The idea of choice would not be needed if: no one was poor we were just looking at one person's lifestyle capital were eliminated scarcity did not exist Which of the following is a reason to study economics? to understand society to understand global affairs to be an informed consumer all of the above Which of the following is the best definition of economics? the study of how firms decide what inputs to hire and what outputs to produce the study of how governments allocate tax revenue the study of how consumers spend their income the study of how individuals and societies choose to use their scarce resources During times of war, many of a country's resources are often destroyed. This would be shown on a production possibility curve (PPC) by: a shift of the PPC back and to the left a movement down along the PPC a movement up along the PPC a movement of prediction levels from a point on the PPC to some point inside the PPC The 'for whom' question is concerned with: the combination of goods and services used in production who produces what goods and services who demands what goods and services the distribution of income The branch of economics that examines the economic behaviour of aggregates such as income and employment is: macroeconomics normative economics positive economics microeconomics Aggregate supply is the total amount of: goods and services produced by the government labour supplied by all households goods and services produced in an economy goods and services produced by a particular industry Opportunity cost is defined as: the wages paid by a firm to its workforce the lowest price at which a good can be purchased the value of the next best alternative that is not chosen none of the above The process by which resources are transformed into useful items is: allocation capitalisation production consumption Which of the following would NOT be called a resource by economists? money labour buildings land A change in the tax system designed to encourage single-parents to work is a/an: supply-side policy incomes policy demand-side policy anti-inflation policy The economic problem of scarcity exists because: technological advances have increased the rate at which natural resources are being depleted the world's resources are insufficient to sustain the global population global warming is increasing the rate at which the natural resources are being depleted human wants are assumed to be virtually unlimited meaning resources will always be scarce relative to wants The study of why a person may decide to go to university instead of accepting a $40 000 a year job would be considered a/an ______ issue. microeconomics macroeconomics industrial relations public sector economics Studying how the management of Telstra decides what price to charge customers for its G3 mobile network is a _______ issue. positive economics microeconomics normative economics macroeconomics The opportunity cost of being a full-time student is: the loss of earnings had you chosen to work instead plus student fees the cost of accommodation and food during your time studying the loss of earnings had you chosen to work instead having to miss out on lots of parties while you are busy studying all the time Microeconomics is the branch of economics that examines: outcomes of economic behaviour, evaluates them as good or bad, and prescribes preferred courses of action ways to understand behaviour and the operation of systems without making judgements the functioning of individual industries and the behaviour of individual decision-making units, that is, business firms and households the economic behaviour of income, employment, and output on a national scale The problem of scarcity occurs: only in recent times as the rate of resource use has increased in all countries only in wealthy countries due to high levels of consumer demand only in poor countries The factors of production include: labour, land and raw materials and capital land, labour, raw materials and money land, raw materials and capital labour, land and raw materials The reason that opportunity costs arise is that: there are no alternative decisions that could be made an economy relies on money to facilitate exchange of goods and services resources are scarce people have unlimited wants Economists define inflation as: a decrease in the overall price level a decrease in the overall level of economic activity an increase in the overall level of economic activity an increase in the overall price level The opportunity cost of going on a holiday to an unemployed person is: zero, as the person does not have a next best alternative zero, as the person is not foregoing any wages to take the holiday equal to the cost of the holiday plus the alternative use of the person's time equal to the cost of the holiday only Economists say that there is unemployment when: at the going wage rate there are people who want to work but cannot find work there are less unfilled vacancies than there are people seeking work there are people who are not willing to work at the going wage rate there is excess demand in the labour market A retired individual decides to spend the day golfing. The opportunity cost of this decision: is zero, since the individual is retired and is not forgoing any income to spend his time golfing equals the cost of the golf outing plus the value of the individual's alternative use of time is best measured by using the wage rate this individual earned prior to retirement is equal to the cost of the golf outing Opportunity cost is best defined as the: next best alternative that is not chosen price paid for a good or service leisure time that is lost due to increased hours at work cost to producers resulting from a failed investment opportunity ...