Microeconomics

1. Macroeconomics deals with: (Points: 3)

       bits and pieces of the economy.

       the question of how a business unit should operate profitably.

       the working of the entire economy or large sectors of it.

       how individuals make decisions.

2. The basic concern of economics is: (Points: 3)

       to keep business firms from losing money.

       to prove that capitalism is better than socialism.

       to study the choices people make.

       to use unlimited resources to produce goods and services to satisfy limited wants.

3. If the state government allocates additional spending on education, the opportunity cost is: (Points: 3)

       zero.

       the dollar amount of the additional spending.

       only considered if additional taxes need to be raised to fund the spending.

       measured in terms of the alternative uses for that money.

4. Which of the following principles underlie the economics of individual choices? (Points: 3)

       There are gains from trade.

       Markets move toward equilibrium.

       People usually exploit opportunities to make themselves better off.

       Resources should be used as efficiently as possible to achieve society's goals.

5. Specialization and trade usually lead to: (Points: 3)

       lower economic growth.

       the exchange of goods and services in markets.

       lower living standards.

       higher prices.

6. Increases in total output realized when individuals specialize in particular tasks and trade are known as: (Points: 3)

       the gains from trade.

       the profits obtained from sales of a good or service.

       marginal analysis.

       a tradeoff.

7. Economists believe that resources should be used as efficiently as possible to: (Points: 3)

       achieve society's goals.

       eliminate scarcity.

       reduce inequity.

       do all of the above.

8. When markets fail: (Points: 3)

       government intervention...