ECONOMICS TEST QUESTIONS & ANSWERS
ECONOMICS TEST QUESTIONS & ANSWERS
Chapter 1 Introduction
Multiple-Choice Questions
1) Which of the following is an example of how the question
of "what goods and services to produce?" is answered by the
command process?
A) government subsidies for affordable housing
B) laws regarding equal opportunity in employment
C) government allowance for the deduction of
interest payments on private mortgages
D) government regulations concerning the dumping
of industrial waste
Answer: A
2) Opportunity cost is best defined as
A) the amount given up when choosing one activity over
all other alternatives.
B) the amount given up when choosing one activity over
the next best alternative.
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,ECONOMICS TEST QUESTIONS & ANSWERS
C) the opportunity to earn a profit that is greater than the
one currently being made.
D) the amount that is given up when choosing an activity
that is not as good as the next best alternative.
Answer: B
3) In a market economy, which of the following is the
most important factor affecting scarcity?
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,ECONOMICS TEST QUESTIONS & ANSWERS
A) the needs and wants of consumers
B) the price of the product
C) the degree to which the government is involved in
the allocation of resources.
D) All of the above are equally important.
Answer: A
4) Which of the following is not considered by economists to be
a basic resource or factor of production?
A) money B) machinery and equipment
C) technology D) unskilled labor
Answer: A
5) Select the group that best represents the basic factors
of production.
A) land, labor, capital, entrepreneurship B) land, labor,
money, management skills
C) land, natural resources, labor, capital D) land, labor,
capital, technology
Answer: A
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, ECONOMICS TEST QUESTIONS & ANSWERS
6) Which of the statements below best illustrates the use of the
market process in determining the allocation of scarce
resources?
A) "Let's make this product because this is what we know
how to do best."
B) "Although we're currently making a profit on the products
we make, we should consider shifting to products where
we can earn even more money."
C) "Everyone is opening video stores, why don't we?"
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ECONOMICS TEST QUESTIONS & ANSWERS
Chapter 1 Introduction
Multiple-Choice Questions
1) Which of the following is an example of how the question
of "what goods and services to produce?" is answered by the
command process?
A) government subsidies for affordable housing
B) laws regarding equal opportunity in employment
C) government allowance for the deduction of
interest payments on private mortgages
D) government regulations concerning the dumping
of industrial waste
Answer: A
2) Opportunity cost is best defined as
A) the amount given up when choosing one activity over
all other alternatives.
B) the amount given up when choosing one activity over
the next best alternative.
Page 1 of 378
,ECONOMICS TEST QUESTIONS & ANSWERS
C) the opportunity to earn a profit that is greater than the
one currently being made.
D) the amount that is given up when choosing an activity
that is not as good as the next best alternative.
Answer: B
3) In a market economy, which of the following is the
most important factor affecting scarcity?
Page 2 of 378
,ECONOMICS TEST QUESTIONS & ANSWERS
A) the needs and wants of consumers
B) the price of the product
C) the degree to which the government is involved in
the allocation of resources.
D) All of the above are equally important.
Answer: A
4) Which of the following is not considered by economists to be
a basic resource or factor of production?
A) money B) machinery and equipment
C) technology D) unskilled labor
Answer: A
5) Select the group that best represents the basic factors
of production.
A) land, labor, capital, entrepreneurship B) land, labor,
money, management skills
C) land, natural resources, labor, capital D) land, labor,
capital, technology
Answer: A
Page 3 of 378
, ECONOMICS TEST QUESTIONS & ANSWERS
6) Which of the statements below best illustrates the use of the
market process in determining the allocation of scarce
resources?
A) "Let's make this product because this is what we know
how to do best."
B) "Although we're currently making a profit on the products
we make, we should consider shifting to products where
we can earn even more money."
C) "Everyone is opening video stores, why don't we?"
Page 4 of 378
