Question 1

The formal study of economics began when Adam Smith 1723-1790) published his famous book The Wealth of Nations in 1776. In the first chapter of The Wealth of Nations, Smith introduces the idea of the division of labor. Define "division of labor" and illustrate with an example.

Accepted Answer

Division	of	labor	means	the	way	in	which...

Question 2

When nations desire a healthy macroeconomy, they typically focus on several goals:. Three are:

Accepted Answer

Growth	in	the	standard	of	livi...

Question 3

When nations desire a healthy macroeconomy, they typically focus on three goals, one of these being:

Accepted Answer

A)   balanced budget
B)   prudent monetary policy
C)   low inflation
D)   assuring competition between firms

Question 4

Which of the following lies primarily within the realm of macroeconomics?

Accepted Answer

A)   a study of the demand for gasoline
B)   a study of how tax cuts stimulate aggregate production
C)   an analysis of supply and demand conditions in the electricity market
D)   a study of the impact of "mad cow" disease on the price of beef worldwide

Question 5

Which of the following statements most likely lies within the realm of macroeconomics?

Accepted Answer

A)   An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded.
B)   Due to process innovations in computer chip manufacturing, the market supply of computers increased.
C)   Due to an economic recession, manufacturing firms began implementing layoffs of their workforces.
D)   Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook.

Question 6

In the ______________, households receive goods and services and pay firms for them.

Accepted Answer

A)   labor market
B)   financial capital market
C)   goods and services market
D)   savings market

Question 7

Macroeconomics:

Accepted Answer

A)   is concerned with the expansion of a small business into a large corporation.
B)   is narrower in scope than microeconomics.
C)   analyzes mergers and acquisitions between firms.
D)   is concerned with the expansion and contraction of the overall economy.

Question 8

Macroeconomics primarily examines:

Accepted Answer

A)   the behaviour of individual households and firms.
B)   how prices are determined within individual markets.
C)   broad issues such as national output, employment and inflation.
D)   the output levels that maximize the profits of business firms

Question 9

In which of the following countries will the national government have the greatest influence with respect to the nation's economy?

Accepted Answer

A)   China
B)   Cuba
C)   Canada
D)   Chile

Question 10

Specialization:

Accepted Answer

A)   leads to greater self-sufficiency.
B)   can lead to an increase in overall production.
C)   allows workers to develop skills by working on a large number of tasks
D)   is always the result of an inefficient use of resources

Question 11

In countries like _____________ the command economy predominates.

Accepted Answer

A)   China and Vietnam
B)   Cuba and North Korea
C)   South Africa and Kenya
D)   Germany and France

Question 12

In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made.

Accepted Answer

A)   government
B)   market
C)   firm
D)   business sector

Question 13

In the ____________, households work and receive payment from firms.

Accepted Answer

A)   financial investment market
B)   financial capital market
C)   labor market
D)   savings market

Question 14

The basic difference between macroeconomics and microeconomics is that:

Accepted Answer

A)   microeconomics looks at the forest aggregate markets)  while macroeconomics looks at the trees individual markets) .
B)   macroeconomics is concerned with groups of individuals while microeconomics is concerned with single countries.
C)   microeconomics is concerned with the trees individual markets)  while macroeconomics is concerned with the forest aggregate markets) .
D)   macroeconomics is concerned with generalization while microeconomics is concerned with specialization.

Question 15

The two main tools of macroeconomic policy include monetary policy, and fiscal policy, which involves __________ spending.

Accepted Answer

A)   business
B)   government
C)   household
D)   capital market

Question 16

Which of the following best characterizes the circular flow of income?

Accepted Answer

A)   Businesses buy resources from the government, and households buy goods and services from businesses.
B)   Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.
C)   The government purchases resources from businesses and households and then sells goods and services to businesses and households.
D)   Households buy factors of production from businesses, and businesses buy goods and services from households.

Question 17

If macroeconomics looks at the economy as a whole, it focuses on which of the following?

Accepted Answer

A)   households
B)   business firms
C)   unemployed people
D)   the division of labor

Question 18

The basic difference between macroeconomics and microeconomics is:

Accepted Answer

A)   microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade.
B)   microeconomics concentrates on the behaviour of individual consumers while macroeconomics focuses on the behaviour of firms.
C)   microeconomics concentrates on the behaviour of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.
D)   microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment.

Question 19

_____________ - a term referring to the fact that for many goods, as the level of production increases, the average cost of producing each individual unit declines.

Accepted Answer

A)   Skill
B)   Specialization
C)   Economies of scale
D)   Division of labor

Question 20

Which of the following is most likely a topic of discussion in macroeconomics?

Accepted Answer

A)   an increase in the price of a hamburger
B)   a decrease in the production of DVD players by a consumer electronics company
C)   an increase in the wage rate paid to automobile workers
D)   a decrease in the unemployment rate

Exam 1: Welcome to Economics

Macroeconomics primarily examines:

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Macroeconomics:

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In the ______________, households receive goods and services and pay firms for them.

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The basic difference between macroeconomics and microeconomics is that:

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In the ____________, households work and receive payment from firms.

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The formal study of economics began when Adam Smith 1723-1790) published his famous book The Wealth of Nations in 1776. In the first chapter of The Wealth of Nations, Smith introduces the idea of the division of labor. Define "division of labor" and illustrate with an example.

Correct AnswerverifiedDivision of labor means the way in which...View AnswerShow Answer

The two main tools of macroeconomic policy include monetary policy, and fiscal policy, which involves __________ spending.

Correct AnswerverifiedShow Answer

When nations desire a healthy macroeconomy, they typically focus on three goals, one of these being:

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Which of the following best characterizes the circular flow of income?

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In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made.

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In countries like _____________ the command economy predominates.

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Which of the following statements most likely lies within the realm of macroeconomics?

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If macroeconomics looks at the economy as a whole, it focuses on which of the following?

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When nations desire a healthy macroeconomy, they typically focus on several goals:. Three are:

Correct AnswerverifiedGrowth in the standard of livi...View AnswerShow Answer

The basic difference between macroeconomics and microeconomics is:

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In which of the following countries will the national government have the greatest influence with respect to the nation's economy?

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Which of the following lies primarily within the realm of macroeconomics?

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_____________ - a term referring to the fact that for many goods, as the level of production increases, the average cost of producing each individual unit declines.

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Specialization:

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Which of the following is most likely a topic of discussion in macroeconomics?

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Division of labor means the way in which...
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Growth in the standard of livi...
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