Question 1

Which of the following best describes the concept of scarcity in economics?

Accepted Answer

Scarcity means that people must make choices because resources are limited and wants are unlimited.

Question 2

Which of the following is an example of a microeconomic question?

Accepted Answer

How does a tax on online shopping affect Amazon's sales?

Question 3

Which of the following is NOT a factor of production?

Accepted Answer

Money

Question 4

In the context of economics, what does the term 'opportunity cost' refer to?

Accepted Answer

The highest-valued alternative that must be given up to get something else.

Question 5

Which of the following statements is a positive statement?

Accepted Answer

Raising taxes will reduce consumer spending.

Question 6

Suppose you spend $$50 and 3 hours to attend a concert. If your next best alternative was working for 15 $$per hour, what is your total opportunity cost?

Accepted Answer

$95

Question 7

Which of the following best illustrates a marginal decision?

Accepted Answer

Choosing to study for one more hour instead of watching TV.

Question 8

Resource use is considered efficient if:

Accepted Answer

It is not possible to make someone better off without making someone else worse off.

Question 9

Which of the following is an example of a normative statement?

Accepted Answer

The government should provide free college education.

Question 10

If the marginal benefit of an activity exceeds its marginal cost, what should a rational person do?

Accepted Answer

Increase the activity.

Question 11

Which of the following best describes the role of incentives in economics?

Accepted Answer

Incentives are rewards or penalties that influence choices.

Question 12

Which of the following is NOT a job typically available to someone with an economics degree?

Accepted Answer

Medical doctor

Question 13

Which of the following equations correctly represents the slope of a straight line in economics?

Accepted Answer

$$ \Delta y / \Delta x $$

Question 14

A scatter diagram is used in economics to:

Accepted Answer

Show the relationship between two variables using points plotted for different values.

Question 15

Which of the following best describes a positive relationship between two variables?

Accepted Answer

As one variable increases, the other also increases.

Question 16

If a line on a graph is downward sloping, what type of relationship does it represent?

Accepted Answer

A negative (inverse) relationship

Question 17

Which of the following is an example of a real-world tradeoff?

Accepted Answer

Choosing between spending money on a vacation or saving for retirement.

Question 18

When economists use the term 'ceteris paribus,' what do they mean?

Accepted Answer

If all other relevant things remain the same.

Question 19

Which of the following best describes the difference between microeconomics and macroeconomics?

Accepted Answer

Microeconomics focuses on individual and business choices, while macroeconomics focuses on the performance of the national and global economies.

Question 20

Which of the following is a key skill employers look for in economics graduates?

Accepted Answer

Critical-thinking skills

Chapter 1: What is Economics? (Microeconomics Study Guide)

Study Guide - Practice Questions

Study Guide - Flashcards