1. (TCO 1) Economics is the study of (Points : 1)
increasing the level of productive resources so there is maximum output in society.
increasing the level of productive resources so there is a minimum level of income.
how people, institutions, and society make choices under conditions of scarcity.
the efficient use of scarce resources paid for at the minimum level of cost to consumers
and businesses.
0
1106788776
MultipleChoice
1
Question 2. 2. (TCO 1) The key economic concept that serves as the basis for the study of
economics is (Points : 1)
inflation.
unemployment.
money.
scarcity.
0
1106788777
MultipleChoice
6
Question 3. 3. (TCO 1) James wants to buy a book. The economic perspective suggests that
James will buy the book if (Points : 1)
the book will give him utility.
his income is high.
the marginal cost of the book is greater than its marginal benefit.
the marginal benefit of the book is greater than its marginal cost.
0
1106788778
MultipleChoice
9
Question 4. 4. (TCO 1) Which is not considered to be an economic resource? (Points : 1)
Land (or natural resources)
Money
Labor
Tools and machinery
0
1106788779
MultipleChoice
11
Question 5. 5. (TCO 1) A movement along the production possibilities curve would imply that
(Points : 1)
the labor force has grown.
productivity has increased.
productivity has declined.
society has chosen a different set of outputs.
0
1106788780
MultipleChoice
13
Question 6. 6. (TCO 1) Which would not be characteristic of a capitalist economy? (Points : 1)
Government ownership of the factors of production
Competition and unrestricted markets
Reliance on the market system
Free enterprise and choice
0
1106788781
MultipleChoice
18
Question 7. 7. (TCO 1) The development of CDs and DVDs that significantly reduced the
market for cassette tapes would be an example of (Points : 1)
specialization.
derived demand.
roundabout production.
creative destruction.
0
1106788782
MultipleChoice
21
Question 8. 8. (TCO 1) In the circular flow model, households (Points : 1)
buy products and resources.
sell products and resources.
buy products and sell resources.
sell products and buy resources.
0
1106788783
MultipleChoice
23
Question 9. 9. (TCO 1) Which is a major feature of the market system? (Points : 1)
Government set prices in all markets
Reallocation of all resources from private to public uses
The right to own private property and control resource use
Central planning by government to provide goods and services
0
1106788784
MultipleChoice
25
Question 10. 10. (TCO 1) Which is necessary to make a trade in a barter economy? (Points : 1)
Money
Unlimited wants
A medium of exchange
A coincidence of wants
0
1106788785
MultipleChoice
28
Question 11. 11. (TCO 1) Tammie makes $150 a day as a bank clerk. She takes off two days
of work without pay to fly to another city to attend the concert of her favorite music group.
The cost of transportation for the trip is $250. The cost of the concert ticket is $50. What is
the opportunity cost of Tammie’s trip to the concert? Show your calculations (Points : 5)
The opportunity cost of Tammie's trip to the concert is:
We start by adding up all the losses incurred.
$300 = what Tammie will lose without pay
$250 = transportation for the trip
$50 = concert ticket price
Adding up=$150 + $150 + $250 + $50 = $600
Hence the opportunity cost of Tammie's trip to the concert is 600 dollars.
0
1106788786
Short
1
Question 12. 12. (TCO 1) Identify some intrinsic qualities of capitalist and command economic
systems. Identify two countries that practice each. (Points : 5)
Capitalism is natural resources and finished product are privately owned with a market value of
the product dictated by
a) the demand of the product by the consumer;
b) the cost of the manufacture of the product; and
c) the profit to the seller. In a truly capitalist society, government does not concern itself in
financial affairs of private transactions beyond taxation .examples are US, Germany and United
Kingdom
command economic system
System where the government determines the type of goods, and how much is produced, the
price for sale as opposed to free market. Examples are North Korea, Cuba, and China