Question 1 of 50 1 0 1 0 Points An answer to the question For whom determines A tastes and preferences B how resources are combined in production C the kinds and quantities of goods produced D who gets the goods and services produced Answer Key D Question 2 of 50 1 0 1 0 Points Macroeconomics is most likely to be concerned with the A price determination in the car industry B relative prices C the efficient allocation of resources D unemployment and inflation Answer Key D Question 3 of 50 1 0 1 0 Points Whenever a choice is made A the value of all the other choices that could have been made is called opportunity cost B normative economics is encountered C the problem of all other things unchanged results D the opportunity cost of that choice is the highest valued other choice that could have been made Answer Key D Question 4 of 50 1 0 1 0 Points Unemployment and inflation are A not relevant in the U S economy today B major topics in macroeconomics C unique only to capitalistic economies D very important in the study of microeconomics Answer Key B Question 5 of 50 1 0 1 0 Points Statements that make value judgments are A pecuniary B positive C nominal D normative Answer Key D Question 6 of 50 1 0 1 0 Points What is a business cycle A It is a firm s pattern of sales during a given year B It is the economy s pattern of fluctuations in economic activity expansion followed by contraction and then by an expansion C It is the pattern of fluctuations in consumer spending increased spending during the summer months and holiday seasons and decreases at other times of the year D It is the pattern of growth in gross domestic product over the long run Answer Key B Question 7 of 50 1 0 1 0 Points The peak of the business cycle A usually occurs when the actual rate of unemployment equals the natural rate B is a temporary minimum level of real GDP C is a temporary maximum level of real GDP D usually occurs immediately after the recession phase Answer Key C Question 8 of 50 1 0 1 0 Points The three fundamental economic questions of what how and for whom A exist because of scarcity B are much more serious in a socialist system C are not serious in a capitalistic system D are not relevant in the industrialized world of today Answer Key A Question 9 of 50 1 0 1 0 Points An example of a positive statement is A slow growth in real GDP will raise unemployment B A high rate of economic growth is good for the country C Everyone in the country needs to be covered by national health insurance D Baseball players should not be paid higher salaries than the president of the United States Answer Key A Question 10 of 50 1 0 1 0 Points Economists are A concerned with developing theories and interested in solving problems B interested in solving problems but not concerned with developing theories C reluctant to predict changes in variables such as prices employment and spending D always in agreement on the best way to implement policy decisions Answer Key A Question 11 of 50 1 0 1 0 Points In a market capitalist economy A factors of production are owned privately and decisions about their use are basically made by individuals B factors of production are owned by the government but decisions about their use are made privately C private ownership exists but decisions about resource allocation are usually made centrally by the government D there is no role for the government Answer Key A Question 12 of 50 1 0 1 0 Points What is a sub prime mortgage A It is a mortgage loan which carries an interest rate below the prime lending rate B It is a loan made to a homeowner by an insolvent lender C It is a mortgage loan made to a buyer whose credit or income would not ordinarily qualify for a mortgage loan D It is a mortgage loan made to a buyer whose outstanding credit score earns the buyer a preferential interest rate Answer Key C Question 13 of 50 1 0 1 0 Points A person who seeks to earn profits by finding ways to organize factors of production is called a n A foreman B finance capitalist C entrepreneur D manager Answer Key C Question 14 of 50 1 0 1 0 Points Scarcity in economics means A not having sufficient resources to produce all the goods and services we want B the wants of people are limited C there must be poor people in rich countries D economists are clearly not doing their jobs Answer Key A Question 15 of 50 1 0 1 0 Points Economic data that are adjusted for price level changes are said to be expressed in terms of A historical dollars B variable dollars C nominal dollars D real dollars Answer Key D Question 16 of 50 1 0 1 0 Points A simplified representation of a particular problem is a A model B constant C hypothesis D law Answer Key A Question 17 of 50 1 0 1 0 Points A model or theory in economics is A based mostly on value judgments B built using relevant observations assumptions and abstractions C only useful if it correctly portrays the real world and its complexities D useful only if it is based on normative economic statements Answer Key B Question 18 of 50 1 0 1 0 Points Water is considered a scarce good rather than a free good because A it has alternative uses B it does not have alternative uses C scarce goods are less expensive than free goods D free goods are more expensive than scarce goods Answer Key A Question 19 of 50 1 0 1 0 Points The fundamental economic questions that every economic system must answer are A what how and for whom B what why and for whom C when why and for whom D how when and how much Answer Key A Question 20 of 50 1 0 1 0 Points A hypothesis is an assertion that can be A proven to be false B proven to be true C proven to be true or false D tested only in the normative sense Answer Key A Question 21 of 50 1 0 1 0 Points Factors of production are Answer Key A Question 22 of 50 1 0 1 0 Points Ceteris paribus means A allowing all other things to change B making value judgments C all other things unchanged A the resources the economy has available to produce goods and services B generally unlimited in modern economies C always employed in modern economies D the knowledge that can be applied to the production of goods and services D differentiating between macroeconomics and microeconomics Answer Key C Question 23 of 50 1 0 1 0 Points Microeconomics is most likely to be concerned with the A how …