Question

1. Economics is a social science concerned with:

1. The best use of scarce resources to achieve the maximum satisfaction of economic wants.
2. Increasing the level of productive resources so there is a minimum level of income.
3. Increasing the level of productive resources so there is maximum output in society.
4. The best use of scarce resources paid for at the minimum level of cost to consumers and businesses.

            Answer:

2. A person should consume more of something when its marginal:

1. benefit exceeds its marginal cost.
2. cost exceeds its marginal benefit.
3. cost equals its marginal benefit.
4. benefit is still positive.

            Answer:

3. The process of developing hypotheses, testing them against facts, and using the results to construct theories is called:

1. Opportunity cost calculation
2. Microeconomics
3. Marginal analysis
4. The scientific method

            Answer:

4. Which is an illustration of a microeconomic question?

1. What is the current national rate of unemployment?
2. Is the economy experiencing a decline in the rate of inflation?
3. Will a new type of television set increase the number of buyers?
4. Is the production of goods and services in the economy greater this year than last year?

            Answer:

5. A schedule or curve that shows the various combinations of two products a consumer can purchase with a specific amount of money income is:

1. A tradeoff
2. A budget line
3. A tangent point
4. An optimal output

            Answer:

6. Which of the following is real capital?

1. a pair of stockings
2. a construction crane
3. a savings account
4. a share of IBM stock

            Answer:

7.         Which statement best describes a command economy?

A.         The production of goods and services is determined primarily by markets, but the allocation of goods and services is determined primarily by government

B.         The production of goods and services is determined primarily by government, but the allocation of goods and services is determined primarily by markets

C.         The production and allocation of goods and services is determined primarily through markets

D.         The production and allocation of goods and services is determined primarily through government

Answer:

8.         Which statement is correct?

A.         Freedom of choice and enterprise are essential elements of the market system

B.         Producers are "kings" in a market economy because they determine what is produced

C.         The market system is efficient at allocation of resources, but not consumer goods to their most valued uses

D.         The operation of a market system eventually results in an equal distribution of income

Answer:

9.         In a competitive economy, prices:

A.         influence consumers in their purchases of goods and services.

B.         influence businesses in their purchases of economic resources.

C.         influence workers in making occupational choices.

D.         do all of these.

Answer:

10.         The competitive market system:

A.         encourages innovation because government provides tax breaks and subsidies to those who develop new products or new productive techniques.

B.         discourages innovation because it is difficult to acquire additional capital in the form of new machinery and equipment.

C.         discourages innovation because firms want to get all the profits possible from existing machinery and equipment.

D.         encourages innovation because successful innovators are rewarded with economic profits.

Answer:

11.         Which is not one of the Five Fundamental Questions?

A.         How will the goods and services be produced?

B.         How should the system accommodate change?

C.         Who is to receive the output of the system?

D.         What goods and services should be produced by government?

Answer:

12.         The idea that firms and resource suppliers in seeking to further their own self-interests in a competitive market economy also simultaneously promotes the public or social interest is a description of:

A.         The guiding function of prices

B.         Capital accumulation

C.         The "invisible hand"

D.         "Dollar votes"

Answer:

Answer 1

Answer 1. The best use of scarce resources to achieve the maximum satisfaction of economic wants.

REASON- Economics deals with use allocation of scarce resources to achieve maximum satisfaction.

Answer 2. benefit exceeds its marginal cost.

Reason- Marginal analysis states that a person will keep on increasing the consumption till marginal benefit exceeds marginal cost.

Answer 3. The scientific method

Reason- The scientific method frames hypothesis, collects data, analyse data and draws conclusion.

Answer 4. Will a new type of television set increase the number of buyers?

Reason- Microeconomics deals with issues related to micro /small level instead of issues of national concern.

Note-According to Chegg's Answering policy first four parts are answered