1. The word “economy” comes from the Greek word , which means oikonomos
a. “environment.”
b. “production.”
c. “one who manages a household.”
d. “one who makes decisions.”
2. Resources are
a. scarce for households but plentiful for economies.
b. plentiful for households but scarce for economies.
c. scarce for households and scarce for economies.
d. plentiful for households and plentiful for economies.
3. In considering how to allocate its scarce resources among its various members, a household considers
a. each member’s abilities.
b. each member’s efforts.
c. each member’s desires.
d. all of the above
4. Economics deals primarily with the concept of
a. scarcity.
b. money.
c. poverty.
d. banking.
5. Which of the following is correct?
a. The word economy comes from the Greek word for “rational thinker.”
b. Economists study the management of scarce resources.
c. Because economists believe that people pursue their best interests, they are not interested in how
people interact.
d. All of the above are correct.
6. The overriding reason as to why households and societies face many decisions is that
a. resources are scarce.
b. goods and services are not scarce.
c. incomes fluctuate with business cycles.
d. people, by nature, tend to disagree.
7. The phenomenon of stems from the fact that scarcity
a. most economies’ production methods are not very good.
b. in most economies, wealthy people consume disproportionate quantities of goods and services.
c. governments restrict production of too many goods and services.
d. resources are limited.
8. Approximately what percentage of the world's economies experience scarcity?
a. 25%
b. 50%
c. 75%
d. 100%
9. When a society cannot produce all the goods and services people wish to have, it is said that the economy is
experiencing
a. scarcity.
b. surpluses.
c. inefficiencies.
d. inequalities.
10. The two words most often used by economists are
a. prices and quantities.
b. resources and allocation.
c. supply and demand.
d. efficiency and equity.
11. The forces that make market economies work are
a. work and leisure.
b. politics and religion.
c. supply and demand.
d. taxes and government spending.
12. In a market economy, supply and demand determine
a. both the quantity of each good produced and the price at which it is sold.
b. the quantity of each good produced, but not the price at which it is sold.
c. the price at which each good is sold, but not the quantity of each good produced.
d. neither the quantity of each good produced nor the price at which it is sold.
13. In a market economy, supply and demand are important because they
a. play a critical role in the allocation of the economy’s scarce resources.
b. determine how much of each good gets produced.
c. can be used to predict the impact on the economy of various events and policies.
d. All of the above are correct.
14. In a market economy,
a. supply determines demand and demand, in turn, determines prices.
b. demand determines supply and supply, in turn, determines prices.
c. the allocation of scarce resources determines prices and prices, in turn, determine supply and
demand.
d. supply and demand determine prices and prices, in turn, allocate the economy’s scarce resources.
15. A group of buyers and sellers of a particular good or service is called a(n)
a. coalition.
b. economy.
c. market.
d. competition.
16. Which of the following statements is correct?
a. Buyers determine supply and sellers determine demand.
b. Buyers determine demand and sellers determine supply.
c. Buyers determine both demand and supply.
d. Sellers determine both demand and supply.
17. The demand for a good or service is determined by
a. those who buy the good or service.
b. the government.
c. those who sell the good or service.
d. both those who buy and those who sell the good or service.
18. The supply of a good or service is determined by
a. those who buy the good or service.
b. the government.
c. those who sell the good or service.
d. both those who buy and those who sell the good or service.
19. For a market for a good or service to exist,
a. there must be a group of buyers and sellers.
b. there must be a specific time and place at which the good or service is traded.
c. there must be a high degree of organization present.
d. All of the above are correct.
20. Which of the following is an example of a market?
a. a gas station
b. a garage sale
c. a barber shop
d. All of the above are examples of markets.
21. The market for ice cream is
a. a monopolistic market.
b. a highly competitive market.
c. a highly organized market.
d. both (b) and (c) are correct.
22. Most markets in the economy are
a. markets in which sellers, rather than buyers, control the price of the product.
b. markets in which buyers, rather than sellers, control the price of the product.
c. perfectly competitive.
d. highly competitive.
23. In a competitive market, the price of a product
a. is determined by buyers and the quantity of the product produced is determined by sellers.
b. is determined by sellers and the quantity of the product produced is determined by buyers.
c. and the quantity of the product produced are both determined by sellers.
d. None of the above is correct.
24. In a competitive market, the quantity of a product produced and the price of the product are determined by
a. buyers.
b. sellers.
c. both buyers and sellers.
d. None of the above is correct.

Preview text:

1.
The word “economy” comes from the Greek word oikonomos, which means a. “environment.” b. “production.” c.
“one who manages a household.” d. “one who makes decisions.” 2. Resources are a.
scarce for households but plentiful for economies. b.
plentiful for households but scarce for economies. c.
scarce for households and scarce for economies. d.
plentiful for households and plentiful for economies. 3.
In considering how to allocate its scarce resources among its various members, a household considers a. each member’s abilities. b. each member’s efforts. c. each member’s desires. d. all of the above 4.
Economics deals primarily with the concept of a. scarcity. b. money. c. poverty. d. banking. 5.
Which of the following is correct? a.
The word economy comes from the Greek word for “rational thinker.” b.
Economists study the management of scarce resources. c.
Because economists believe that people pursue their best interests, they are not interested in how people interact. d. All of the above are correct. 6.
The overriding reason as to why households and societies face many decisions is that a. resources are scarce. b.
goods and services are not scarce. c.
incomes fluctuate with business cycles. d.
people, by nature, tend to disagree. 7.
The phenomenon of scarcity stems from the fact that a.
most economies’ production methods are not very good. b.
in most economies, wealthy people consume disproportionate quantities of goods and services. c.
governments restrict production of too many goods and services. d. resources are limited. 8.
Approximately what percentage of the world's economies experience scarcity? a. 25% b. 50% c. 75% d. 100% 9.
When a society cannot produce all the goods and services people wish to have, it is said that the economy is experiencing a. scarcity. b. surpluses. c. inefficiencies. d. inequalities. 10.
The two words most often used by economists are a. prices and quantities. b. resources and allocation. c. supply and demand. d. efficiency and equity. 11.
The forces that make market economies work are a. work and leisure. b. politics and religion. c. supply and demand. d. taxes and government spending. 12.
In a market economy, supply and demand determine a.
both the quantity of each good produced and the price at which it is sold. b.
the quantity of each good produced, but not the price at which it is sold. c.
the price at which each good is sold, but not the quantity of each good produced. d.
neither the quantity of each good produced nor the price at which it is sold. 13.
In a market economy, supply and demand are important because they a.
play a critical role in the allocation of the economy’s scarce resources. b.
determine how much of each good gets produced. c.
can be used to predict the impact on the economy of various events and policies. d. All of the above are correct. 14. In a market economy, a.
supply determines demand and demand, in turn, determines prices. b.
demand determines supply and supply, in turn, determines prices. c.
the allocation of scarce resources determines prices and prices, in turn, determine supply and demand. d.
supply and demand determine prices and prices, in turn, allocate the economy’s scarce resources. 15.
A group of buyers and sellers of a particular good or service is called a(n) a. coalition. b. economy. c. market. d. competition. 16.
Which of the following statements is correct? a.
Buyers determine supply and sellers determine demand. b.
Buyers determine demand and sellers determine supply. c.
Buyers determine both demand and supply. d.
Sellers determine both demand and supply. 17.
The demand for a good or service is determined by a.
those who buy the good or service. b. the government. c.
those who sell the good or service. d.
both those who buy and those who sell the good or service. 18.
The supply of a good or service is determined by a.
those who buy the good or service. b. the government. c.
those who sell the good or service. d.
both those who buy and those who sell the good or service. 19.
For a market for a good or service to exist, a.
there must be a group of buyers and sellers. b.
there must be a specific time and place at which the good or service is traded. c.
there must be a high degree of organization present. d. All of the above are correct. 20.
Which of the following is an example of a market? a. a gas station b. a garage sale c. a barber shop d.
All of the above are examples of markets. 21. The market for ice cream is a. a monopolistic market. b. a highly competitive market. c. a highly organized market. d. both (b) and (c) are correct. 22.
Most markets in the economy are a.
markets in which sellers, rather than buyers, control the price of the product. b.
markets in which buyers, rather than sellers, control the price of the product. c. perfectly competitive. d. highly competitive. 23.
In a competitive market, the price of a product a.
is determined by buyers and the quantity of the product produced is determined by sellers. b.
is determined by sellers and the quantity of the product produced is determined by buyers. c.
and the quantity of the product produced are both determined by sellers. d. None of the above is correct. 24.
In a competitive market, the quantity of a product produced and the price of the product are determined by a. buyers. b. sellers. c. both buyers and sellers. d. None of the above is correct.