Survey of Economics Test Questions with Correct Answers Fully Solved Latest Version 2025
Which of the following statements is true about scarcity? - Answers Scarcity refers to the situation in
which unlimited wants exceed limited resources.
By definition, economics is the study of - Answers the choices people make to attain their goals, given
their scarce resources.
An economic ________ is a simplified version of some aspect of economic life used to analyze an
economic issue. - Answers model
The term ________ in economics refers to a group of buyers and sellers of a product and the
arrangement by which they come together to trade. - Answers market
Economists assume that individuals - Answers are rational and respond to incentives.
The three fundamental questions that any economy must address are: - Answers What goods and
services to produce; how will these goods and services be produced; and who receives them?
The idea that because of scarcity, producing more of one good or service means producing less of
another good or service refers to the economic concept of - Answers trade-off.
Which of the following statements is true? - Answers Every individual, no matter how rich or poor, is
faced with making trade-offs.
The highest valued alternative that must be given up to engage in an activity is the definition of -
Answers opportunity cost.
Economic models do all of the following except - Answers portray reality in all its minute details.
Which of the following statements about positive economic analysis is false? - Answers There is much
more disagreement among economists over positive economic analysis than over normative economic
analysis.
Which of the following is a positive economic statement? - Answers If the price of iPhones falls, a larger
quantity of iPhones will be purchased.
Microeconomics is the study of - Answers how households and firms make choices.
Macroeconomics is the study of - Answers the economy as a whole.
Which of the following is a microeconomics question? - Answers Will the merger of American Airlines
and US Airways increase or decrease airfares?
Which of the following is a macroeconomics question? - Answers What determines the growth rate of
gross domestic product?/What determines the unemployment rate?
, The principle of opportunity cost is that - Answers the economic cost of using a factor of production is
the alternative use of that factor that is given up.
The production possibilities frontier model shows that - Answers if all resources are fully and efficiently
utilized, more of one good can be produced only by producing less of another good.
The attainable production points on a production possibility curve are - Answers the points along and
inside the production possibility frontier.
The points outside the production possibilities frontier are - Answers unattainable.
In a production possibilities frontier model, a point ________ the frontier is productively inefficient. -
Answers inside
You have an absolute advantage whenever you - Answers can produce more of something than others
with the same resources.
Which of the following is a factor of production? - Answers an oven in a bakery
An example of a factor of production is - Answers a worker hired by Dell.
The natural resources used in production are made available in the - Answers factor market.
Households - Answers sell resources in the factor market.
Households ________ final goods and services in the ________ market. - Answers purchase; product
If the Apple iPhone and the Samsung Galaxy are considered substitutes, then, other things equal, an
increase in the price of the iPhone will - Answers increase the demand for the Galaxy.
What is the difference between an "increase in demand" and an "increase in quantity demanded"? -
Answers An "increase in demand" is represented by a rightward shift of the demand curve while an
"increase in quantity demanded" is represented by a movement along a given demand curve.
The demand by all the consumers of a given good or service is the ________ for the good or service. -
Answers market demand
The law of demand implies, holding everything else constant, that - Answers as the price of bagels
increases, the quantity of bagels demanded will decrease.
If a demand curve shifts to the right, then - Answers demand has increased
What is the difference between an "increase in supply" and an "increase in quantity supplied"? -
Answers An "increase in supply" means the supply curve has shifted to the right while an "increase in
quantity supplied" refers to a movement along a given supply curve in response to an increase in price.
If in the market for peaches, the supply curve has shifted to the left, - Answers the supply of peaches has
decreased.
Which of the following statements is true about scarcity? - Answers Scarcity refers to the situation in
which unlimited wants exceed limited resources.
By definition, economics is the study of - Answers the choices people make to attain their goals, given
their scarce resources.
An economic ________ is a simplified version of some aspect of economic life used to analyze an
economic issue. - Answers model
The term ________ in economics refers to a group of buyers and sellers of a product and the
arrangement by which they come together to trade. - Answers market
Economists assume that individuals - Answers are rational and respond to incentives.
The three fundamental questions that any economy must address are: - Answers What goods and
services to produce; how will these goods and services be produced; and who receives them?
The idea that because of scarcity, producing more of one good or service means producing less of
another good or service refers to the economic concept of - Answers trade-off.
Which of the following statements is true? - Answers Every individual, no matter how rich or poor, is
faced with making trade-offs.
The highest valued alternative that must be given up to engage in an activity is the definition of -
Answers opportunity cost.
Economic models do all of the following except - Answers portray reality in all its minute details.
Which of the following statements about positive economic analysis is false? - Answers There is much
more disagreement among economists over positive economic analysis than over normative economic
analysis.
Which of the following is a positive economic statement? - Answers If the price of iPhones falls, a larger
quantity of iPhones will be purchased.
Microeconomics is the study of - Answers how households and firms make choices.
Macroeconomics is the study of - Answers the economy as a whole.
Which of the following is a microeconomics question? - Answers Will the merger of American Airlines
and US Airways increase or decrease airfares?
Which of the following is a macroeconomics question? - Answers What determines the growth rate of
gross domestic product?/What determines the unemployment rate?
, The principle of opportunity cost is that - Answers the economic cost of using a factor of production is
the alternative use of that factor that is given up.
The production possibilities frontier model shows that - Answers if all resources are fully and efficiently
utilized, more of one good can be produced only by producing less of another good.
The attainable production points on a production possibility curve are - Answers the points along and
inside the production possibility frontier.
The points outside the production possibilities frontier are - Answers unattainable.
In a production possibilities frontier model, a point ________ the frontier is productively inefficient. -
Answers inside
You have an absolute advantage whenever you - Answers can produce more of something than others
with the same resources.
Which of the following is a factor of production? - Answers an oven in a bakery
An example of a factor of production is - Answers a worker hired by Dell.
The natural resources used in production are made available in the - Answers factor market.
Households - Answers sell resources in the factor market.
Households ________ final goods and services in the ________ market. - Answers purchase; product
If the Apple iPhone and the Samsung Galaxy are considered substitutes, then, other things equal, an
increase in the price of the iPhone will - Answers increase the demand for the Galaxy.
What is the difference between an "increase in demand" and an "increase in quantity demanded"? -
Answers An "increase in demand" is represented by a rightward shift of the demand curve while an
"increase in quantity demanded" is represented by a movement along a given demand curve.
The demand by all the consumers of a given good or service is the ________ for the good or service. -
Answers market demand
The law of demand implies, holding everything else constant, that - Answers as the price of bagels
increases, the quantity of bagels demanded will decrease.
If a demand curve shifts to the right, then - Answers demand has increased
What is the difference between an "increase in supply" and an "increase in quantity supplied"? -
Answers An "increase in supply" means the supply curve has shifted to the right while an "increase in
quantity supplied" refers to a movement along a given supply curve in response to an increase in price.
If in the market for peaches, the supply curve has shifted to the left, - Answers the supply of peaches has
decreased.
