1. Microeconomics deals with:
A) the working of the entire economy or large sectors of it.
B) economic growth.
C) individual decision makers in the economy.
D) gross domestic product.
2. The study of a single firm and how it determines prices falls under the study of:
A) macroeconomics.
B) microeconomics.
C) economic growth.
D) fiscal policy.
3. Macroeconomics deals with:
A) bits and pieces of the economy.
B) how a business unit should operate profitably.
C) the working of the entire economy or large sectors of it.
D) how individuals make decisions.
4. The primary emphasis in macroeconomics is on:
A) how firms set prices.
B) the national economy.
C) marginal analysis.
D) bits and pieces of the economy.
5. Which of the following is studied in macroeconomics?
A) the change in automobile sales due to a change in the price of automobiles
B) the effect of a tax reduction on the profits of an individual business
C) recessions
D) the unemployment of workers displaced by technological change in the typesetting
industry
6. The basic concern of microeconomics is:
A) to keep business firms from losing money.
B) to prove that capitalism is better than socialism.
C) to study the choices people make.
D) to use unlimited resources to produce goods and services to satisfy limited wants.
Page 1
, 7. How people choose among the alternatives available to them is:
A) not part of the study of economics.
B) impossible to describe.
C) the study of microeconomics.
D) not important in the study of microeconomics.
8. Scarcity in economics means that:
A) we do not have sufficient resources to produce all of the goods and services we
want.
B) the wants of people are limited.
C) there must be poor people in rich countries.
D) shortages exist in nearly all markets.
9. If resources are scarce, it means that they:
A) are insufficient to provide enough goods and services to satisfy all human material
wants and needs.
B) have no opportunity cost.
C) are probably not valued by consumers.
D) have an unlimited supply.
10. A key theme fundamental to all of economics is that:
A) wants are limited.
B) the United States is a rich country, but we are simply not aware of it.
C) people have unlimited wants but limited means to satisfy them.
D) resources are unlimited.
11. The problem of scarcity is confronted by:
A) industrialized societies only.
B) preindustrial societies only.
C) societies governed by communist philosophies only.
D) all societies.
12. When we are forced to make choices, we are facing the concept of:
A) human capital.
B) inflation.
C) scarcity.
D) market failure.
Page 2
,13. We are forced to make choices because of:
A) exploitation.
B) efficiency.
C) scarcity.
D) the margin.
14. Scarcity exists when:
A) making choices among two or more alternatives is not necessary.
B) individuals can have more of any good without giving up anything.
C) individuals can have more of one good but only by giving up something else.
D) resources are unlimited.
15. Scarcity in economics means that:
A) we do not have sufficient resources to produce all of the goods and services we
want.
B) the wants of people are limited.
C) there must be poor people in rich countries.
D) economists are clearly not doing their job.
16. Although freshwater is very abundant in most places, it is scarce because:
A) it has no alternative uses.
B) there is not enough of it to meet all needs.
C) it is a free good.
D) scarce goods in general are not all that costly.
17. Freshwater is considered a scarce good because:
A) not enough of it is available for all needs.
B) it does not have any uses.
C) scarce goods are not expensive.
D) not enough of it is available for all needs and because it is not expensive.
18. The problem of determining what goods and services society should produce:
A) exists because we can produce more than we need or want.
B) exists because there are not enough resources to provide all of the goods and
services that people want.
C) would not exist if all goods and services were scarce.
D) would not exist if government owned all of the resources.
Page 3
, 19. Which of the following is NOT a resource in the production of rice?
A) fertile land
B) labor
C) capital equipment
D) money
20. A resource is anything that:
A) can be used in production.
B) you pay for.
C) is in scarce supply.
D) can be consumed.
21. We have to make choices because:
A) we have unlimited income.
B) resources are scarce.
C) resources are infinite.
D) with good planning, trade-offs can be avoided.
22. When a chef prepares a dinner for a customer, which of the following is physical
capital?
A) the chef
B) the oven
C) the food ingredients
D) the chef's training and experience
23. Manny is attending college and majoring in economics. By doing so, Manny is
improving his:
A) land.
B) labor.
C) capital.
D) human capital.
24. Which is NOT an example of a resource?
A) land
B) labor
C) capital
D) production
Page 4
A) the working of the entire economy or large sectors of it.
B) economic growth.
C) individual decision makers in the economy.
D) gross domestic product.
2. The study of a single firm and how it determines prices falls under the study of:
A) macroeconomics.
B) microeconomics.
C) economic growth.
D) fiscal policy.
3. Macroeconomics deals with:
A) bits and pieces of the economy.
B) how a business unit should operate profitably.
C) the working of the entire economy or large sectors of it.
D) how individuals make decisions.
4. The primary emphasis in macroeconomics is on:
A) how firms set prices.
B) the national economy.
C) marginal analysis.
D) bits and pieces of the economy.
5. Which of the following is studied in macroeconomics?
A) the change in automobile sales due to a change in the price of automobiles
B) the effect of a tax reduction on the profits of an individual business
C) recessions
D) the unemployment of workers displaced by technological change in the typesetting
industry
6. The basic concern of microeconomics is:
A) to keep business firms from losing money.
B) to prove that capitalism is better than socialism.
C) to study the choices people make.
D) to use unlimited resources to produce goods and services to satisfy limited wants.
Page 1
, 7. How people choose among the alternatives available to them is:
A) not part of the study of economics.
B) impossible to describe.
C) the study of microeconomics.
D) not important in the study of microeconomics.
8. Scarcity in economics means that:
A) we do not have sufficient resources to produce all of the goods and services we
want.
B) the wants of people are limited.
C) there must be poor people in rich countries.
D) shortages exist in nearly all markets.
9. If resources are scarce, it means that they:
A) are insufficient to provide enough goods and services to satisfy all human material
wants and needs.
B) have no opportunity cost.
C) are probably not valued by consumers.
D) have an unlimited supply.
10. A key theme fundamental to all of economics is that:
A) wants are limited.
B) the United States is a rich country, but we are simply not aware of it.
C) people have unlimited wants but limited means to satisfy them.
D) resources are unlimited.
11. The problem of scarcity is confronted by:
A) industrialized societies only.
B) preindustrial societies only.
C) societies governed by communist philosophies only.
D) all societies.
12. When we are forced to make choices, we are facing the concept of:
A) human capital.
B) inflation.
C) scarcity.
D) market failure.
Page 2
,13. We are forced to make choices because of:
A) exploitation.
B) efficiency.
C) scarcity.
D) the margin.
14. Scarcity exists when:
A) making choices among two or more alternatives is not necessary.
B) individuals can have more of any good without giving up anything.
C) individuals can have more of one good but only by giving up something else.
D) resources are unlimited.
15. Scarcity in economics means that:
A) we do not have sufficient resources to produce all of the goods and services we
want.
B) the wants of people are limited.
C) there must be poor people in rich countries.
D) economists are clearly not doing their job.
16. Although freshwater is very abundant in most places, it is scarce because:
A) it has no alternative uses.
B) there is not enough of it to meet all needs.
C) it is a free good.
D) scarce goods in general are not all that costly.
17. Freshwater is considered a scarce good because:
A) not enough of it is available for all needs.
B) it does not have any uses.
C) scarce goods are not expensive.
D) not enough of it is available for all needs and because it is not expensive.
18. The problem of determining what goods and services society should produce:
A) exists because we can produce more than we need or want.
B) exists because there are not enough resources to provide all of the goods and
services that people want.
C) would not exist if all goods and services were scarce.
D) would not exist if government owned all of the resources.
Page 3
, 19. Which of the following is NOT a resource in the production of rice?
A) fertile land
B) labor
C) capital equipment
D) money
20. A resource is anything that:
A) can be used in production.
B) you pay for.
C) is in scarce supply.
D) can be consumed.
21. We have to make choices because:
A) we have unlimited income.
B) resources are scarce.
C) resources are infinite.
D) with good planning, trade-offs can be avoided.
22. When a chef prepares a dinner for a customer, which of the following is physical
capital?
A) the chef
B) the oven
C) the food ingredients
D) the chef's training and experience
23. Manny is attending college and majoring in economics. By doing so, Manny is
improving his:
A) land.
B) labor.
C) capital.
D) human capital.
24. Which is NOT an example of a resource?
A) land
B) labor
C) capital
D) production
Page 4
