Question

2.All societies face scarcity. Generally, resources are limited and human wants are infinite. How do economies attempt to overcome the problem of scarcity?

A.Through the division and specialization of labor

B.By producing all of the goods and services we consume

C.By importing more consumer goods

D.By exporting more capital goods

3.People have different skill sets and, therefore, are better at some jobs than others. If people _________ and produce what they do best, they will be more productive than if they produce a variety of things.

A.diversify B,categorize C.specialize D.integrate

4.The basic difference between macroeconomics and microeconomics is:

Multiple Choice

• A. microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade.

• B. microeconomics concentrates on the behavior of individual consumers while macroeconomics focuses on the behavior of firms.

• C. microeconomics concentrates on the behavior 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.

5. Which component part of economics covers the theory of consumer behavior?

Multiple Choice

• A. Microeconomics

• B.Macroeconomics

• C.Money and Banking

• D.Developmental Economics

6. The basic difference between macroeconomics and microeconomics is that:

Multiple Choice

• 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.

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

Multiple Choice

• 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

8.Macroeconomics primarily examines:

Multiple Choice

• A. the behavior 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.

9.Macroeconomic topics do not usually include:

Multiple Choice

• A. the profit maximizing decisions of an individual firm.

• B. the rate of inflation.

• C. the rate of unemployment.

• D. economic growth.

10. Economic models like the _____________________ are not physical models, but instead are diagrams or graphs or even mathematical equations that represent economic patterns or theories.

Multiple Choice

• A. financial capital market

• B. circular flow diagram

• C. financial investment market

• D. Specialization Model

Answer 1

2) A. We need to reduce the wastage of resources which is possible by using them in a manner that minimizes their use. Specialization involves the use of a resource in least costly manner

3) C. As mentioned, specialization can generate better results because it minimizes the cost of using a resource.

4) C. Microeconomics is the study of individual units while the study of the entire economy and its variable is called Macroeconomics

5) A

6) C

7) B

8) C

9) A

10) B