Deck 1: What Is Economics

Question 1

Which of the following is a positive statement in economics?

A) The income in the UK needs to be distributed more fairly.
B) The government needs to put more emphasis on improving UK export levels.
C) An increase in demand will increase the equilibrium price.
D) Faster economic growth is more important than a better quality of goods.

Answer 1

C

Question 2

Which of the following is a normative statement in economics?

A) A higher price reduces the quantity demanded.
B) A higher price reduces the quantity supplied.
C) The government should spend more on healthcare.
D) Increased spending by the government can increase the price level.

Answer 2

C

Question 3

Scarcity and choice occur because of:

A) Unlimited resources and limited human wants.
B) Limited resources and unlimited human wants.
C) Unlimited resources and unlimited human wants.
D) Limited resources and limited human wants.

Answer 3

B

Question 4

Resources in an economy do not include:

A) Demand
B) Capital
C) Labour
D) Land

Question 5

A mixed economy:

A) Has no supply.
B) Has no demand.
C) Is run by the government.
D) Has a private and a public sector.

Question 6

Which of the following is in the public sector in the UK?

A) Tesco plc.
B) A sole trader
C) The BBC
D) BP plc

Question 7

Organizations in the public sector:

A) Are owned by investors.
B) Are likely to be driven by the profit motive.
C) Are more likely to have social objectives.
D) Report to shareholders.

Question 8

Capital goods:

A) Are for immediate consumption.
B) Are usually bought by households.
C) Are bought by firms for production.
D) Help to raise the standard of living in the short run.

Question 9

Which of the following is an example of microeconomics?

A) The causes of UK unemployment.
B) The consequences of faster economic growth.
C) The causes of a UK trade deficit.
D) The price of houses in Oxford.

Question 10

"We need to redistribute income to make it "fairer" is an example of a:

A) Positive economic statement.
B) Normative economic statement.
C) Keynesian economic statement.
D) Mixed economic statement.

Question 11

Which of the following is not an opportunity cost of attending university?

A) The income foregone from full-time employment
B) The cost of meals
C) The tuition fee paid
D) The cost of textbooks and equipment for your course

Question 12

Three questions we need to ask are:

A) What is to be produced, who is going to produce, and when are we going to produce.
B) What is to be produced, how to produce, and for whom to produce.
C) How to produce, when to produce, and for whom to produce.
D) Who is going to produce, when to produce, and for whom to produce.

Question 13

An example of a planned economy would be:

A) United States
B) Japan
C) United Kingdom
D) Cuba

Question 14

In the free market, decisions are made by:

A) The government
B) Private firms only
C) Individuals and private firms
D) Individuals only

Question 15

Which of the following is not an advantage of the free market?

A) Greater efficiency
B) Increased profits
C) Greater consumer choice
D) More bureaucracy