1.
Economic theories:
A.
are useless because they are not based upon laboratory experimentation.
B.
which are true for individual economic units are never true for the economy as a whole.
C.
are generalizations based upon a careful observation of facts.
D.
are abstractions and therefore of no application to real situations.
2.
The term "ceteris paribus" means:
A.
that if event A precedes event B, A has caused B.
B.
that economics deals with facts, not values.
C.
other things equal.
D.
prosperity inevitably follows recession.
3.
The economizing problem is essentially one of deciding how to make the best use of:
A.
virtually unlimited resources to satisfy virtually unlimited wants.
B.
limited resources to satisfy virtually unlimited wants.
C.
unlimited resources to satisfy limited wants.
D.
limited resources to satisfy limited wants.
4.
The fundamental problem of economics is:
A.
to establish a democratic political framework for the provision of social goods and services.
B.
the establishment of prices which accurately reflect the relative scarcities of products and resources.
C.
the scarcity of productive resources relative to material wants.
D.
to achieve a more equitable distribution of money income in order to mitigate poverty.
5.
"Productive efficiency" refers to:
A.
the use of the least-cost method of production.
B.
the production of the product-mix most wanted by society.
C.
the full employment of all available resources.
D.
production at some point inside of the production possibilities curve.
6.
The idea of allocative efficiency is concerned with:
A.
producing the combination of goods most desired by society.
B.
achieving the full employment of all available resources.
C.
producing every good with the least-cost combination of inputs.
D.
reducing the concavity of the production possibilities curve.
7.
The term "mixed economy" refers to an economy:
A.
comprised of both product and resource markets.
B.
which engages in both domestic and international trade.
C.
comprised of both extensive private markets and government involvement in the economy.
D.
which functions primarily on the basis of custom and tradition.
8.
Growth is advantageous to a nation because it:
A.
promotes faster population growth.
B.
lessens the burden of scarcity.
C.
eliminates the economizing problem.
D.
slows the growth of wants.
9.
According to official Census Bureau statistics, since 1969 the distribution of income has:
A.
remained virtually constant from year to year.
B.
become more equal.
C.
varied considerably from year to year but in general has been stable.
D.
become less equal.
10.
The Russian transition from a planned to a market economy has resulted in:
A.
the privatization of public property.
B.
business competition.
C.
the removal of price controls.
D.
all of the above.
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