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ECO 213 - Test 1 Questions And 100% Correct Answers
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ECO 213 - Test 1 Questions And 100% Correct Answers1) Economics is the study of
A) supply and demand.
B ) how to make money in a market economy.
C) the choices everybody makes to attain their goals, given their scarce resources.
D) how to make money in the stock market. - Answer C) the choices everybody makes to
attain their goals, given their scarce resources.
2) What assumptions about humans do economists make?
A) People are greedy and selfish.
B ) None, because economics takes humans as given.
C) Humans prefer to live in a society that values fairness above all else.
D) People are rational and respond to incentives - Answer D) People are rational and
respond to incentives
3) Scarcity
A) is found only in developing nations.
B ) occurs because there are too many people.
C) is due to unlimited wants, as well as limited resources available to satisfy those
wants.
D) is not a problem for the wealthy. -Answer C) is due to unlimited wants, as well as
limited resources available to satisfy those wants.
4) Which of the following best describes the assumption that economics makes about
human behavior?
A) People weigh religious, envy, compassion, anger aspects in all decisions they make.
B) Assuming rational behavior is useful in explaining choices people make even though
,they may not behave rationally all of the time.
C) Economics assumes people act rationally at all times under all circumstances.
D) None of the above describes what economics assumes about human behavior.
Answer B) Assuming rational behavior is useful in explaining choices people make even
though they may
not behave rationally all of the time.
5) What does the adjective marginal mean in economics?
A) Something done at the edge of a market, like buying a table at a garage sale.
B ) Buying something that is illegal to buy.
C) Incremental, additional, or extra of some action.
D) None of these illustrate how the word marginal is used in economics. Answer C)
Incremental, additional, or extra of some action
6) Where do buyers and sellers meet?
A) Only in cities, towns and villages.
B ) A market, which is a place or an electronic link.
C) A market, which is necessarily a physical location.
D) Only in shopping malls. - Answer B) A market, which is a place or an electronic link.
7) What does marginal analysis include?
A) total costs compared to total benefits.
B ) total costs subtracted from total benefits.
C) average costs compared to average benefits.
D) marginal costs compared to marginal benefits.- Answer D) marginal costs compared
to marginal benefits.
8) What forces humans to make tradeoffs?
A) productive inefficiency
, B ) confusion
C) scarcity
D) more than one political party- Answer C) scarcity
9) In a market economy, how is it decided what goods and services will be produced?
A) What is produced depends upon what society needs the most.
B ) The producing firms decide to make only what the boss says must be made.
C) Government lawmakers vote on what is to be produced.
D) By consumers, firms, and government choosing which goods and services to buy. -
Answer D) By consumers, firms, and government choosing which goods and services to
buy.
10) Every society faces economic tradeoffs, which means
A) if one political party controls the government, the other party can't.
B ) some people live better than others do.
C) one good can be produced in greater quantity by producing less of another.
D) none of the above. -Answer C) one good can be produced in greater quantity by
producing less of another.
11) Which of the following is true?
A) Economics is a decision science that studies the tradeoffs we are forced to make
because of
scarcity.
B ) Each and every individual has to face a tradeoff irrespective of his level of income or
wealth.
C) An economic tradeoff is faced whenever a choice of action is to be made
D) All of the above - Answer D) All of the above.
12) Who decides what goods and services will be produced in a market economy?
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