Mods 1 and 2 practice
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____
1. If resources are “scarce” it means that:
A. they cannot provide enough goods or services to satisfy all human material wants and
needs at zero cost.
B. they have no opportunity cost.
C. they are probably not valued by consumers.
D. they have an unlimited supply.
E. it is impossible to create a supply of, or demand for, these resources.
____
2. A key theme fundamental to all of economics is:
A. there are limited wants.
B. we are a rich country but are simply not aware of it.
C. people have unlimited wants and face limited means to satisfy them.
D. there are unlimited resources.
E. income is evenly distributed to all persons in the economy.
____
3. A resource is anything that:
A. can be used in production.
B. you pay for.
C. is in scarce supply.
D. can be consumed.
E. requires technology to harvest.
____
4. You can either spend $100 on a new economics textbook or a new CD player. If you choose to buy the new
economics textbook, the opportunity cost is:
A. $100.
B. the new economics textbook.
C. both the $100 and the new CD player.
D. impossible to determine.
E. the new CD player.
____
5. Khalil is offered a free ticket to the opera. His opportunity cost of going to the opera is:
A. zero—the tickets were free.
B. the price listed on the ticket.
C. whatever Khalil would have done had he not gone to the opera.
D. the price listed on the ticket plus whatever Khalil would have done had he not gone to the
opera.
E. the price listed on the ticket minus whatever Khalil could have received by selling it to
another person in the parking lot.
____
6. Which of the following is an example of normative economics?
A. The minimum wage has not kept pace with inflation.
B. The minimum wage is an important tool in fighting poverty and should be increased.
C. The minimum wage creates higher unemployment for teens and unskilled workers.
D. A higher minimum wage is expected to increase the price of a fast-food cheeseburger.
E. The purchasing power of the minimum wage has declined over time.
____
7. Which of the following would be a normative economic statement?
A.
B.
C.
D.
E.
Government has grown too large and should be reduced.
There has been an increase in the rate of inflation.
Government is subject to the same rules as all other institutions.
All of these are normative economic statements.
None of these are normative statements.
____
8. Of the following statements, which reflect(s) a normative view?
I. The U.S. needs to increase the minimum wage to $10 per hour.
II. An effective minimum wage results in unemployment.
III. An effective minimum wage is a form of a price floor.
A. I only
B. I and II only
C. II only
D. II and III only
E. I and III only
____
9. Which of the following is a topic typically studied in macroeconomics:
A. inflation.
B. monopolies.
C. spillovers like pollution.
D. corporate mergers.
E. child labor laws.
____ 10. Efficiency in the use of available productive resources is the focus of __________.
A. macroeconomics
B. fiscal policy
C. monetary policy
D. microeconomics
E. natural resource conservation
____ 11. “Sometimes the government spends more or less, depending on the needs of the country.” This statement best
represents the economic concept of:
A. resources should be used as efficiently as possible to achieve society's goals.
B. when markets don't achieve efficiency, government intervention can improve society's
welfare.
C. overall spending sometimes gets out of line with the economy's productive capacity.
D. people usually exploit opportunities to make themselves better off.
E. government policies can change spending.
____ 12. The short-run alternation between economic downturns, recessions, and economic upturns and expansions is
known as the:
A. business cycle.
B. contractionary cycle.
C. expansionary cycle.
D. disequilibrium cycle.
E. productivity cycle.
____ 13. In a typical business cycle, the business cycle trough is immediately followed by the:
A. business cycle peak.
B. recession.
C. depression.
D. expansion.
E. downturn.
____ 14. The annual percentage change in the aggregate price level is negative when there is:
A. wage inflation.
B. disinflation.
C. inflation.
D. spiraling inflation.
E. deflation.
____ 15. In macroeconomics:
A. aggregate data such as real gross domestic product, the price level and unemployment are
analyzed.
B. individual and firm decisions regarding utility and profit maximization are studied.
C. long term economic growth in not considered to be important.
D. government regulation of specific firms and industries is studied.
E. the growth and decline of specific occupations and industries are analyzed.
Mods 1 and 2 practice
Answer Section
MULTIPLE CHOICE
1. ANS:
SKL:
2. ANS:
SKL:
3. ANS:
SKL:
4. ANS:
SKL:
5. ANS:
SKL:
6. ANS:
SKL:
7. ANS:
SKL:
8. ANS:
SKL:
9. ANS:
SKL:
10. ANS:
SKL:
11. ANS:
SKL:
12. ANS:
SKL:
13. ANS:
SKL:
14. ANS:
SKL:
15. ANS:
SKL:
A
PTS:
Definitional
C
PTS:
Concept-Based
A
PTS:
Definitional
E
PTS:
Critical Thinking
C
PTS:
Critical Thinking
B
PTS:
Definitional
A
PTS:
Critical Thinking
A
PTS:
Critical Thinking
A
PTS:
Fact-Based
D
PTS:
Fact-Based
E
PTS:
Critical Thinking
A
PTS:
Definitional
D
PTS:
Fact-Based
E
PTS:
Concept-Based
A
PTS:
Concept-Based
1
DIF: E
REF: Module 1
1
DIF: E
REF: Module 1
1
DIF: E
REF: Module 1
1
DIF: M
REF: Module 1
1
DIF: M
REF: Module 1
1
DIF: E
REF: Module 1
1
DIF: E
REF: Module 1
1
DIF: M
REF: Module 1
1
DIF: M
REF: Module 1
1
DIF: E
REF: Module 1
1
DIF: E
REF: Module 2
1
DIF: E
REF: Module 2
1
DIF: E
REF: Module 2
1
DIF: E
REF: Module 2
1
DIF: E
REF: Module 2