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Question(s) / Instruction(s):

Principles of Microeconomics Quiz One

 

 

            1.   Which of the following is true?

a.

Efficiency and equity can both be achieved if the economic pie is cut into equal pieces.

b.

Efficiency refers to the size of the economic pie; equity refers to how the pie is divided.

c.

As long as the economic pie continually gets larger, no one will have to go hungry.

d.

Government policies usually improve upon both equity and efficiency.

 

 

            2.   Economic models

a.

must incorporate all aspects of the economy if those models are to be useful.

b.

can be useful, even if they are not particularly realistic.

c.

were once thought to be useful, but that is no longer true.

d.

cannot be useful if they are based on false assumptions.

 

 

            3.   The field of economics is traditionally divided into two broad subfields,

a.

consumer economics and producer economics.

b.

national economics and international economics.

c.

private sector economics and public sector economics.

d.

microeconomics and macroeconomics.

 

 

            4.   The principle that people face tradeoffs applies to

a.

societies.

b.

families.

c.

individuals.

d.

All of the above are correct.

 

 

            5.   The adage, There is no such thing as a free lunch, is used to illustrate the principle that

a.

income must be earned.

b.

households face many decisions.

c.

people face tradeoffs.

d.

goods are scarce.

 

 

            6.   For a college student who wishes to calculate the true costs of going to college, the costs of room and board

a.

should be counted in full, regardless of the costs of eating and sleeping elsewhere.

b.

plus the cost of tuition, equals the opportunity cost of going to college.

c.

should be counted only to the extent that they are more expensive at college than elsewhere.

d.

usually exceed the opportunity cost of going to college.

 

 

            7.   The opportunity cost of an item is

a.

the dollar value of the item.

b.

what you give up to get that item.

c.

usually less than the dollar value of the item.

d.

the number of hours needed to earn money to buy the item.

 

 

            8.   In economics, the cost of something is

a.

always measured in units of time given up to get it.

b.

the dollar amount of obtaining it.

c.

often impossible to quantify, even in principle.

d.

what you give up to get it.

 

 

            9.   Another name for goods and services produced by firms is

a.

factors of production.

b.

output.

c.

resources.

d.

inputs.

 

 

          10.   Microeconomics is the study of

a.

how individual households and firms make decisions.

b.

how government affects the economy.

c.

how the economy as a whole works.

d.

the behavior of consumers.

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