Question

1	Which of the following best defines the subject of economics?				Your answer
A	the art of making money	B	the study of choices that businesses make to maximize profit		d
C	the science that studies unemployment, inflation, and economic stability	D	the study of choices made to cope with scarcity

2	" Over the long term inflation is less a problem than unemployment" is an example of :				answer
A	A positive statement	B	A statement that could never be true
C	A statement that suffers from a logical error	D	A normative statement

3	Which of the following statements relates to the concept of efficiency?				Your answer
A	Being able to produce more of one good only by producing less of something else.	B	Using resources as effectively as possible
C	The absence of waste	D	All of the above.

4	After Rayan received a raise in his income, he began buying more Ice Cream Cones and fewer Popsicles. For Rayan Popsicles is:				Your answer
A	A joint product	B	A normal good
C	An inferior good	D	A complementary good with Ice Cream

5	Which of the following will shift the supply curve for textbook to the left:				Your answer
A	A decrease in the demand of substitutes in production	B	A decrease in taxes on textbook suppliers
C	An increase in printing costs	D	Government subsidies textbook suppliers

7	When a textile firm decides to produce more cotton fabric and less synthetic fabric, it is most directly answering the ---------- question.				Your answer
A	How	B	Why
C	For whom	D	What

8	When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls and fewer Adidas soccer balls. Which of the following best explains Ronaldo's decision to buy more Nike soccer balls?				Your answer
A	The substitution effect	B	An increase in the demand for Nike soccer balls
C	The income effect	D	The price effect

9	The production possibilities curve is the boundary between				Your answer
A	Those combinations of goods and services that can be produced and those that cannot	B	Those resources that are limited and those that are unlimited
C	Those combinations of goods and services that can be produced and those that can be consumed.	D	Those wants that are limited and those that are unlimited

10	Using the production possibilities curve model, unemployment is described as producing at a point				Your answer
A	on the exact middle of the PPCcurve	B	inside the PPC curve
C	on either end of the PPCcurve	D	outside the PPC curve

Part II

Answer 1

1 - Option D

Study of choices made to cope with scarcity.

The economics is the study of ends and scarce and the alternative uses for them. The other options are not the correct definition of economics.

2 - Option A

Positive statement

This is because this statement is non suggestive in nature unlike normative statement. It is telling about a fact. Hence Option A will be correct

3 - Option D

All the above

Efficiency relates to any process that is performed effectively without causing loss to anyone. Opportunity cost os incurred in making every choice. Hence Option D will be correct

4 - Option C

Inferior good

This is because the demand for popsicles fell down due to rise in income. Normal good will be ice cream. Complementary good is not based upon income.