ECO203 Assignments Week 1 – Quiz

Question 1

The self-interest assumption is made by economists because

  it allows economist security of revenue.

Correct!

  economists believe that human behavior is influenced by costs and benefits, and the assumption allows economists to predict the average behavior of a group.

  economists believe that human motives don’t matter in economic decision making.

  it allows economists to predict the average of a group.

  economists believe that human behavior is influenced by costs and benefits.

  there are no other human motives in economics.

Question 2

Which of the following is a macroeconomic issue?

  the price of cell phone service.

  unemployment in the steel industry.

Correct!

  the growth rate of total output.

  the number of new cars produced.

  the price of butter.

Question 3

When price changes, there is an opposite change in the

  level of technology and income.

Correct Answer

  quantity demanded.

  supply.

  demand.

  quantity supplied.

Question 4

Demand relates the various amounts that consumers are willing to buy over a specified time period

  when prices increase.

  as their tastes change.

  as their incomes change.

Correct!

  at various prices.

Question 5

A production possibilities curve shows

  that in order to acquire more of one good, none of the alternative good must be given up.

Correct!

  that in order to acquire more of one good, some of the alternative good must be given up.

  that any amount of goods could be produced by society if people worked harder.

  various combinations of guns, bullets, bread, and butter that can be produced under conditions of 6  percent unemployment.

Question 6

In a market economic system, the productive resources are owned by

  anyone; it does not matter who owns the resources in a market system.

  individuals, except for capital, which is owned by the government.

  business firms only.

Correct!

  individuals.

  the government.

Question 7

In economics, scarcity means that

Correct!

  there are not sufficient resources to produce everything that people want.

  poverty will always exist.

  a country can never feed all of its citizens.

  the price of a good may increase more rapidly than the general price level.

  there is not enough of a particular good for people to buy all they want at the prevailing price.

Question 8

If caviar is a normal good, a decrease in income will

  increase the production of caviar.

  shift the demand curve for caviar to the right.

Correct!

  shift the demand curve for caviar to the left.

  cause the price of caviar to increase.

Question 9

The basis for a market solution to the basic economic questions is

  a division of governmental functions into federal and state levels.

  a government that never participates in economic activities.

Correct!

  a well-established system of property rights.

  a framework for the implementation of comparative advantages.

  a central market organization.

Question 10

Capital consists of

  stocks and bonds.

Correct!

  aids to production created by humans.

  the assets of upper-income groups.

  the assets of the government.

  the assets of a firm.