Trivia: Economics Quiz For Students!

Economics is the study of how individuals, households, and societies make choices in the face of limited resources. The problem of scarcity refers to the fact that resources are limited, while human wants and needs are unlimited. Therefore, people have to make choices about how to allocate these limited resources to satisfy their needs and wants. This is the central focus of economics, making the given answer the correct one.

Microeconomics focuses on the behavior and decision-making of individuals, households, and firms, as well as the interactions between buyers and sellers in specific markets. It analyzes how individuals allocate their resources, make choices, and respond to changes in prices. By studying the microeconomic level, economists can understand how individual actions and market interactions shape the overall economy. This approach allows for a detailed examination of specific markets and their impact on the larger economy, making it the correct answer.

Money is not considered a resource because it is not a factor of production. While money can be used to acquire resources, it is not a resource itself. Resources refer to the inputs used in the production of goods and services, such as land, labor, and capital. Money is a medium of exchange and a store of value, but it does not have inherent productive capabilities like the other options listed.

The phrase "ceteris paribus" means that other relevant factors like consumer incomes must be held constant. This means that in order to accurately test the theory that a rise in gasoline prices will cause gasoline purchases to fall, all other factors that could potentially influence gasoline purchases, such as consumer incomes, must be kept unchanged. By isolating the effect of gasoline prices on purchases and holding all other factors constant, the theory can be accurately tested.

Scarcity exists in all countries in the world because it is a fundamental economic concept that arises due to the limited availability of resources compared to the unlimited wants and needs of individuals and society as a whole. Regardless of the level of wealth or development of a nation, there will always be scarcity because resources are finite. This means that people will always have to make choices and trade-offs in order to satisfy their needs and wants, leading to the existence of scarcity in all countries.

This statement is an example of normative economics because it presents a value judgment about the minimum wage. It states that the minimum wage is good because it raises wages for the working poor, indicating a belief about what should be considered desirable or beneficial in the economy. Normative economics deals with subjective opinions and judgments about what ought to be, rather than objective analysis of what is.

The review of the performance of the U.S. economy during the 1990's is primarily the concern of macroeconomics because macroeconomics focuses on the overall behavior and performance of the entire economy. It examines factors such as GDP, inflation, unemployment, and government policies that impact the economy as a whole. In contrast, microeconomics focuses on individual economic agents, such as households and firms, and their behavior in specific markets. Since the question asks about the performance of the entire economy, macroeconomics is the appropriate field of study.

The statement "The income tax system collects a lower percentage of the incomes of the poor" is a statement of positive economics because it describes a factual observation about the current state of the income tax system. It does not express any value judgments or opinions about whether this is fair or should be changed. Positive economics focuses on objective analysis of economic phenomena, while normative economics deals with value judgments and opinions about what should be done.

None of the options mentioned in the question would eliminate scarcity as an economic problem. Scarcity is a fundamental concept in economics that refers to the limited availability of resources relative to unlimited human wants. While moderation of competitive instincts and the discovery of new energy reserves may alleviate certain aspects of scarcity, they cannot completely eliminate it. Similarly, although steady productivity growth can increase the availability of goods and services, it does not eliminate scarcity entirely. Therefore, none of the options provided would completely eliminate scarcity as an economic problem.

The economist has confused association with causation. This means that the economist is assuming that because sunspot activity is high just prior to recessions, sunspots must be the cause of recessions. However, this conclusion is based on a correlation between the two variables and does not necessarily imply a causal relationship. It is possible that there is another underlying factor that is causing both the increase in sunspot activity and the occurrence of recessions. Therefore, the economist's conclusion is not supported by evidence and is a result of misunderstanding the distinction between association and causation.

This answer suggests that if the minimum wage is raised rapidly, workers will gain their rightful share of total income. This is a normative statement because it expresses an opinion about what should happen or what is morally right. It implies that workers deserve a larger share of the total income and that raising the minimum wage would help achieve this goal.

The given statement, "If the overall unemployment rate is 7%, black unemployment rates will average 15%," is a statement of positive economics. It presents a factual relationship between the overall unemployment rate and black unemployment rates. It does not express any value judgments or opinions, but rather describes a cause-and-effect relationship based on data and evidence. Positive economics focuses on objective analysis and understanding of economic phenomena, without incorporating personal opinions or normative statements.