Sample Econ Test Questions
Sample Multiple Choice Questions
Which of the following is a capital resource?
a) A pair of stockings
b) A dump truck
c) A savings account
d) A share of Apple stock
In a command economy, who decides what will be produced?
a) The people decide through their elected representatives
b) The managers of state enterprises and factories decide
c) The needs and wants of people ‘decide’ what will be produced
d) The central planners decided based on the priorities of the nation
Which statement below is the best definition of opportunity cost?
a) The resources that are used to produce a particular good to satisfy one want
instead of another
b) The cost of one good compared to that of another
c) The satisfaction we gain from choosing one good instead of another
d) The cost of the next best alternative that is lost from choosing one good or
course instead of another
The production possibilities curve illustrates the basic principle:
a) The production of more of any one item will in time require smaller and smaller
sacrifices of other items
b) An economy automatically seeks levels of output that employs all of its resources
c) If all resources of an economy are fully used, more of one item could be
produced only if less of another item is produced
d) Any production point below the curve reflects an opportunity cost
Use the following table to answer next 2 questions
Production Possibilities
(alternatives)
A
B
C
D
E
F
TV
5
4
3
2
1
Stereos
0
5
9
12
14 15
0
A total output of 3 TVs and 4 Stereos:
a) Would never be chosen because the economy is capable of producing a larger
total output
b) Represents the full employment of available resources
c) Involves the employment of an economy’s scarce resources at less than their
fully capacity
d) Is unobtainable in this economy
To produce a total output of 3 TVs and 13 stereos, this economy must:
a) Undergo an outward shift in its production possibilities curve
b) Ignore the notion of opportunity cost
c) Distribute its available resources more efficiently among alternative uses
d) Achieve the full employment of available resources
Sample Short Answer Questions
Explain the importance of central planning in a command economy. Why is this not
necessary in a market economy?
Why is political stability an important productive resource for an economy?