ECON 304 WITH 370+ EXAM QUESTIONS & CORRECT ANSWERS

ECON 304 WITH 370+ EXAM QUESTIONS & CORRECT
ANSWERS

Adam Smith's The Wealth of Nations was the first real publication of a
comprehensive view on the subject of economics. - ANSWER-True


Microeconomics and macroeconomics are not separate subjects, but rather
complementary perspectives on the overall subject of the economy. Which one
focuses more on economic principles that impact individuals, industries, and local
economies. - ANSWER-Microeconomics


Economic scarcity arises from: - ANSWER-the human want for goods exceeds
what is available


The study of the decisions of individual units in the economy is known as: -
ANSWER-microeconomics


The process that allows people to focus on parts of a job where they have an
advantage is called: - ANSWER-specialization


How do people (households) in a market economy obtain income that is used to
buy goods and services? - ANSWER-Supplying labor and other resources to firms.


Adam Smith's idea that competition and a person's self-interest would regulate the
economy without the need for government intervention. - ANSWER-Free Market.


In his book, Wealth of Nations, he argued that a free market system reduces waste
and regulates the economy in the most efficient manner. He explained his ideas
using the "invisible hand" theory. - ANSWER-Adam Smith

,The invisible hand is associated helps explain what type of economic system? -
ANSWER-Free markets


Which of the following is a problem for a free market economy? - ANSWER-Big
gap between the poor and the wealthy


The Untied States is an example of a mixed market economy. - ANSWER-True


Which of the following is NOT one of the three economic questions every society
has to answer? - ANSWER-Price


Refers to the idea that the government should be in control and totally make the
economic decisions, what is the name for this type of system? - ANSWER-
Command and control


The concept of the Invisible Hand exists in a mixed market economies. -
ANSWER-True


A command economy decides resource allocation by individuals and markets. -
ANSWER-False


Typically our own individual choices do not impact the economy. - ANSWER-
False


If you have already made a decision the cost of that decision in economics is called
___________. - ANSWER-sunk cost

,Economics is really all about money and finance. - ANSWER-False


Most issues with war and other world problems are not associated with economics.
- ANSWER-False


A country has an __________________ over another country in producing a good
if it uses fewer resources to produce that good. - ANSWER-absolute advantage


A country has a _______________ when it can produce a good at a lower cost in
terms of other goods. - ANSWER-comparative advantage


Saudi Arabia can produce 100 barrels of oil using 100 worker hours or 25 bushels
of corn using 100 worker hours.
United States can produce 50 barrels of oil using 100 worker hours or 100 bushels
of corn using 100 worker hours.
The United States has a comparative advantage in the production of oil. -
ANSWER-False


Saudi Arabia can produce 100 barrels of oil using 100 worker hours or 25 bushels
of corn using 100 worker hours.
United States can produce 50 barrels of oil using 100 worker hours or 100 bushels
of corn using 100 worker hours.
The United States has a comparative advantage in the production of corn. -
ANSWER-True


Saudi Arabia can produce 100 barrels of oil using 100 worker hours or 25 bushels
of corn using 100 worker hours.
United States can produce 50 barrels of oil using 100 worker hours or 100 bushels
of corn using 100 worker hours.

, Which country has the absolute advantage in oil? - ANSWER-Saudi Arabia


Saudi Arabia can produce 100 barrels of oil using 100 worker hours or 25 bushels
of corn using 100 worker hours.
United States can produce 50 barrels of oil using 100 worker hours or 100 bushels
of corn using 100 worker hours.
Which country has the absolute advantage in corn? - ANSWER-United States


What is the best definition of globalization? - ANSWER-globalization is the
process of interaction and integration among the people, companies, and
governments of different nations, driven by international trade, investment, and
technology.


International trade should be based on: - ANSWER-comparative advantage


One perceived drawback of globalization is: - ANSWER-outsourcing


Based on the article on Fair Trade, Fair Trade Certification would help promote
fairer trade between producers in poor countries and consumers in richer countries.
- ANSWER-True


A country has an absolute advantage in producing a product when it has the lowest
opportunity cost for producing the product. - ANSWER-False


If a domestic suppliers can supply the product for less than the world price the
product should not be produced domestically and the product should be imported. -
ANSWER-False


A tariff is a tax on imported goods. - ANSWER-True