jump to content of this page Bized logo linked to homepage
You are here: Home > Learning Materials > Economics > Question Bank > Introduction to Microeconomics

Learning Materials
Bookmark and Share

Advanced

Resources

Use the drop down boxes below to find resources related to this page.

Definitions:


Question Bank - Economics

Introduction to Microeconomics

Q1. Which of the following statements is true about a market economy?

(Select one answer)

(a) *With a large enough computer, central planners could guide production more efficiently than markets
(b) *Market participants act as if guided by an invisible hand to produce outcomes that maximize social welfare
(c) *The strength of a market system is that it tends to distribute resources evenly across consumers
(d) *Taxes help prices communicate costs and benefits to producers and consumers

Source: Mankiw logo

Q2. In a free-market economy the allocation of resources is determined by:

(Select one answer)

(a) * votes taken by consumers
(b) * a central planning authority
(c) * By consumer preferences
(d) * the level of profits of firms

Source: Bized

Q3. Fill in the gaps in the paragraph below, to give a good description of how a market economy allocates resources. (There is a bonus mark if you get all words right!)


(Type your answer)

Source: Bized

Q4. Fill in the gaps in the paragraph below to give a good description of merit and de-merit goods. (There is a bonus mark if you get them all right!)


(Type your answer)

Source: Bized

Q5. Which of the following is not a factor of production?

(Select one answer)

(a) *Labour
(b) *Land
(c) *Money
(d) *Capital
(e) *All of these answers are factors of production

Source: Mankiw logo

Q6. Economic models are:

(Select one answer)

(a) *Usually made of wood and plastic.
(b) *Built with assumptions.
(c) *Useless if they are simple.
(d) *Created to duplicate reality.

Source: Mankiw logo

Q7. Which of the following would be considered a disadvantage of allocating resources using a market system?

(Select one or more answers)

(a) * Income will tend to be unevenly distributed
(b) * Significant unemployment may occur
(c) * It cannot prevent the wastage of scarce economic resources
(d) * A misallocation of resources may occur where there is a discrepancy between private and social costs



Source: Bized

Q8. Which of the following statements would you consider to be a normative one?

(Select one answer)

(a) * Faster economic growth should result if an economy has a higher level of investment
(b) * Changing the level of interest rates is a better way of managing the economy than using taxation and government expenditure
(c) * Higher levels of unemployment will lead to higher levels of inflation
(d) * The average level of growth in the economy was faster in the 1990s than the 1980s

Source: Bized

Q9. Trade-offs are required because wants are unlimited and resources are:

(Select one answer)

(a) *Economical
(b) *Unlimited
(c) *Efficient
(d) *Marginal
(e) *Scarce

Source: Mankiw logo

Q10. Which of the following bundles of goods could not be produced with the resources the economy currently has available? (Move the mouse around over the diagram to find the clickable points. Click on the one you think it is not possible to produce.)

(Click on the image to select your answer)



*
(a) (b) (c) (d)



Source: Bized

Q11. Raising taxes and increasing welfare payments:

(Select one answer)

(a) *reduces market power.
(b) *proves that there is such a thing as a free lunch
(c) *improves efficiency at the expense of equity
(d) *improves equity at the expense of efficiency

Source: Mankiw logo

Q12. A rational person does not act unless

(Select one answer)

(a) *the action is ethical
(b) *the action produces marginal costs that exceed marginal benefits
(c) *the action produces marginal benefits that exceed marginal costs
(d) *the action makes money for the person
(e) *none of these answers

Source: Mankiw logo

Q13. Which of the following goods or services would not be provided by a pure free-market economy?

(Select one answer)

(a) * Public transport system
(b) * Pensions
(c) * National Defence
(d) * Education

Source: Bized

Q14. Which of the following are considered to be essential characteristics of a public good?

(Select one or more answers)

(a) * It must be provided by the government
(b) * Consumption by one person does not diminish the quantity available for others
(c) * Once the good is provided, it is not possible to exclude people from consuming it
(d) * It must benefit the whole economy



Source: Bized

Q15. Which of the following might be considered to be a characteristic of a planned economy?

(Select one answer)

(a) * All income is completely evenly distributed
(b) * Price is relatively unimportant as a means of allocating resources
(c) * Goods and services produced reflect consumer sovereignty
(d) * There is no incentive for people to work hard

Source: Bized

Q16. What is meant by allocative efficiency?

(Select one answer)

(a) * Getting the right goods to the right people at the right price
(b) * Producing using the optimum factor combination
(c) * Ensuring that sufficient is spent on research and development to ensure the development of new goods and services
(d) * Giving appropriate incentives for firms and consumers

Source: Bized

Q17. Economic growth is depicted by

(Select one answer)

(a) * a shift in the production possibilities frontier outward
(b) * a movement from inside the curve toward the curve
(c) * a shift in the production possibilities frontier inward
(d) * a movement along a production possibilities frontier toward capital goods

Source: Mankiw logo

Q18. Which of the following will not shift a country's production possibilities frontier outward?

(Select one answer)

(a) * an advance in technology
(b) * an increase in the labour force
(c) * an increase in the capital stock
(d) * a reduction in unemployment

Source: Mankiw logo

Q19. Which of the following is part of the opportunity cost of going on holiday?

(Select one answer)

(a) * the money you spent on a theatre show
(b) * the money you could have made if you had stayed at home and worked
(c) * the money you spent on airline tickets
(d) * the money you spent on food

Source: Mankiw logo

Q20. Positive statements are

(Select one answer)

(a) * macroeconomics
(b) * microeconomic
(c) * statements of description that can be tested
(d) * statements of prescription that involve value judgments

Source: Mankiw logo

Q21. Which of the following statements about microeconomics and macroeconomics is not true?

(Select one answer)

(a) * The study of very large industries is a topic within macroeconomics
(b) * Macroeconomics is concerned with economy-wide phenomena
(c) * Microeconomics is a building block for macroeconomics
(d) * Microeconomics and macroeconomics cannot be entirely separated

Source: Mankiw logo

Click to view your total score for all the above questions that you have attempted.

Contents | Previous | Next