FSOT ECONOMICS REVIEW EXAM QUESTIONS AND
VERIFIED ANSWERS
Which of the following best defines laissez-faire capitalism?
a. Business activity and natural resource use and distribution are not regulated
by the government
b. Government-controlled distribution of natural resources with little
involvement in other sectors of the economy
c. Ownership of the means of production is split between public and private
entities
d. Existence of pervasive legislation regulating internal trade - ANSWER a.
Business activity and use and distribution of natural resources are not controlled
by the government
The following is an example of:
Exxon-Mobile reporting that their third quarter profits were down 15% from
last year.
a. Normative economics
b. Positive economics
c. Macroeconomics
d. Differentiated economics - ANSWER b. Positive economics
Which of the following defines the opportunity cost of production?
, a. A resource used for one purpose in production cannot be used for another
b. Sacrifice of possible profit in order to grab a big share of the market
c. Simplifying of cost of production for maximum profits
d. Increasing overheads to accommodate the expansion of production -
ANSWER a. If a resource is used in one activity of a firm's current production
then it cannot be used in another activity
Which of the following best describes the economy of the United Kingdom of
Great Britain?
a. Traditional economy
b. Command economy
c. Market economy
d. Mixed economy - ANSWER d. Mixed economy
Economist and philosopher Adam Smith's phrase, "the invisible hand" is a
theory or belief that:
a. the greed of capitalists seeking wealth actually serves the poor of society
b. the world economy is ruled by a set of natural laws
c. exogenous forces that are beyond the control of humanity shape economy
d. governments should not impose economic regulation - ANSWER a. the
greed of capitalists seeking wealth actually helps the poor in society
Which best describes the calculation of GNP or Gross National Product?
VERIFIED ANSWERS
Which of the following best defines laissez-faire capitalism?
a. Business activity and natural resource use and distribution are not regulated
by the government
b. Government-controlled distribution of natural resources with little
involvement in other sectors of the economy
c. Ownership of the means of production is split between public and private
entities
d. Existence of pervasive legislation regulating internal trade - ANSWER a.
Business activity and use and distribution of natural resources are not controlled
by the government
The following is an example of:
Exxon-Mobile reporting that their third quarter profits were down 15% from
last year.
a. Normative economics
b. Positive economics
c. Macroeconomics
d. Differentiated economics - ANSWER b. Positive economics
Which of the following defines the opportunity cost of production?
, a. A resource used for one purpose in production cannot be used for another
b. Sacrifice of possible profit in order to grab a big share of the market
c. Simplifying of cost of production for maximum profits
d. Increasing overheads to accommodate the expansion of production -
ANSWER a. If a resource is used in one activity of a firm's current production
then it cannot be used in another activity
Which of the following best describes the economy of the United Kingdom of
Great Britain?
a. Traditional economy
b. Command economy
c. Market economy
d. Mixed economy - ANSWER d. Mixed economy
Economist and philosopher Adam Smith's phrase, "the invisible hand" is a
theory or belief that:
a. the greed of capitalists seeking wealth actually serves the poor of society
b. the world economy is ruled by a set of natural laws
c. exogenous forces that are beyond the control of humanity shape economy
d. governments should not impose economic regulation - ANSWER a. the
greed of capitalists seeking wealth actually helps the poor in society
Which best describes the calculation of GNP or Gross National Product?
