Question 1

Which of the following best describes the concept of opportunity cost?

Accepted Answer

The value of the next best alternative forgone when a choice is made.

Question 2

Which of the following is an example of a positive economic statement?

Accepted Answer

Raising taxes will reduce consumer spending.

Question 3

A society faces the economic problem because:

Accepted Answer

Resources are scarce and wants are unlimited.

Question 4

Which of the following is NOT one of the five fundamental economic questions?

Accepted Answer

Why to produce?

Question 5

If a country decides to produce more cars and fewer computers, the opportunity cost of this decision is:

Accepted Answer

The number of computers not produced.

Question 6

Which of the following best illustrates the concept of consumer sovereignty?

Accepted Answer

Consumers determine what goods are produced through their purchasing choices.

Question 7

Suppose the price of apples increases. According to the demand model $$ D_v = (P_p, P_s, Y, O) $$, what is the likely effect on the demand for oranges if apples are a substitute?

Accepted Answer

Demand for oranges will increase.

Question 8

Which of the following statements is normative?

Accepted Answer

The government ought to reduce unemployment.

Question 9

In microeconomics, a choice is considered a trade-off because:

Accepted Answer

Choosing one option means giving up another due to limited resources.

Question 10

Which of the following best describes equilibrium in a market?

Accepted Answer

Quantity demanded equals quantity supplied.

Question 11

If a market is in disequilibrium with excess supply, what is likely to happen to the price?

Accepted Answer

Price will fall.

Question 12

Which of the following is a key difference between microeconomics and macroeconomics?

Accepted Answer

Microeconomics studies individual markets, while macroeconomics studies the economy as a whole.

Question 13

Which of the following is an example of using a model in economics?

Accepted Answer

Describing the relationship between price and quantity demanded using $$ Q_d = a - bP .$$

Question 14

A production possibilities curve (PPC) illustrates:

Accepted Answer

The maximum combinations of two goods that can be produced with available resources.

Question 15

Which of the following is a real-world example of the impact of supply on market price?

Accepted Answer

A good harvest leads to lower prices for agricultural products.

Question 16

Which economic institution operates at the global level?

Accepted Answer

IMF (International Monetary Fund)

Question 17

If the market price of a good is above equilibrium, what will happen according to economic theory?

Accepted Answer

Supply will exceed demand and price will fall.

Question 18

Which of the following best describes the economic way of thinking?

Accepted Answer

Analyzing choices by considering trade-offs and opportunity costs.

Question 19

Which of the following is a step in constructing economic theory?

Accepted Answer

Hypothesis testing using empirical data.

Question 20

Suppose a government introduces a tax cut that increases consumer spending ($$C) in $$the short run but increases saving ($$S) $$and investment ($$I) in $$the long run. This scenario illustrates:

Accepted Answer

The difference between short-term and long-term economic consequences.

The Nature and Scope of Economics: Microeconomics Foundations

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