Trivia: Economics Quiz For Students!
An economic student has the power to help one utilize their resources in order to meet their unlimited wants. There are some different terms that an economics student can be expected to understand. This is an interactive quiz meant to build up your knowledge in Economics. If you are an economics student these are typical questions you will meet on your exams. Good luck!
- 1.
Scarcity exists
- A.
When people consume beyond their needs.
- B.
Only in rich nations.
- C.
In all countries in the world.
- D.
Only in poor nations.
Correct Answer
C. In all countries in the world.Explanation
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.Rate this question:
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- 2.
Which of the following would eliminate scarcity as an economic problem?
- A.
Moderation of people’s competitive instincts.
- B.
Discovery of large new energy reserves.
- C.
Resumption of steady productivity growth.
- D.
None of the above.
Correct Answer
D. None of the above.Explanation
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.Rate this question:
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- 3.
Which of the following is not a resource?
- A.
Land
- B.
Labor
- C.
Money
- D.
Capital
Correct Answer
C. MoneyExplanation
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.Rate this question:
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- 4.
Economics is the study of
- A.
How to make money
- B.
How to operate a business
- C.
People making choices because of the problem of scarcity
- D.
The government decision-making process.
Correct Answer
C. People making choices because of the problem of scarcityExplanation
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.Rate this question:
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- 5.
Microeconomics approaches the study of economics from the viewpoint of
- A.
Individuals or specific markets
- B.
The operation of the Federal Reserve
- C.
Economy wide effects
- D.
The national economy.
Correct Answer
A. Individuals or specific marketsExplanation
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.Rate this question:
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- 6.
A review of the performance of the U.S. economy during the 1990’s is primarily the concern of
- A.
Macroeconomics
- B.
Microeconomics
- C.
Both macroeconomics and microeconomics
- D.
Neither macroeconomics nor microeconomics.
Correct Answer
A. MacroeconomicsExplanation
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.Rate this question:
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- 7.
An economic theory claims that a rise in gasoline prices will cause gasoline purchases to fall, ceteris paribus. The phrase “ceteris paribus” means that
- A.
Other relevant factors like consumer incomes must be held constant
- B.
The gasoline prices must first be adjusted for inflation
- C.
The theory is widely accepted, but cannot be accurately tested
- D.
Consumers need for gasoline remains the same regardless of price.
Correct Answer
A. Other relevant factors like consumer incomes must be held constantExplanation
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.Rate this question:
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- 8.
An economist notices that sunspot activity is high just prior to recessions and concludes that sunspots cause recessions. The economist has
- A.
Confused association with and causation
- B.
Misunderstood the ceteris paribus assumption
- C.
Used normative economics to answer a positive question
- D.
Built an untestable model.
Correct Answer
A. Confused association with and causationExplanation
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.Rate this question:
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- 9.
Which of the following is a statement of positive economics?
- A.
The income tax system collects a lower percentage of the incomes of the poor
- B.
A reduction in the tax rates of the rich makes the tax system more fair
- C.
Tax rates ought to be raised to finance health care
- D.
All of the above are primarily statements of positive economics.
Correct Answer
A. The income tax system collects a lower percentage of the incomes of the poorExplanation
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.Rate this question:
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- 10.
Which of the following is a statement of positive economics?
- A.
An unemployment rate of greater than 8 percent is good because prices will fall
- B.
An unemployment rate of 7% is a serious problem
- C.
If the overall unemployment rate is 7%, black unemployment rates will average 15%
- D.
Unemployment is a more severe problem than inflation.
Correct Answer
C. If the overall unemployment rate is 7%, black unemployment rates will average 15%Explanation
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.Rate this question:
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- 11.
Which of the following is a statement of normative economics?
- A.
The minimum wage is good because it raises wages for the working poor
- B.
The minimum wage is supported by unions
- C.
The minimum wage reduces jobs for less skilled workers
- D.
The minimum wage encourages firms to substitute capital for labor
Correct Answer
A. The minimum wage is good because it raises wages for the working poorExplanation
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.Rate this question:
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- 12.
Select the normative statement that completes the following sentence: If the minimum wage is raised rapidly, then
- A.
Inflation will increase
- B.
Workers will gain their rightful share of total income
- C.
Profits will fall
- D.
Unemployment will rise.
Correct Answer
B. Workers will gain their rightful share of total incomeExplanation
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.Rate this question:
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Current Version
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Mar 14, 2023Quiz Edited by
ProProfs Editorial Team -
Mar 27, 2010Quiz Created by
Cha24ampong
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