Can You Pass This Basic Economics Test? Quiz
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Some people want to seek a career in economics but do know much, especially when it comes to the basics of this study. This is an online interactive quiz in Economics meant to test your knowledge in Economics as well as give you extra knowledge in the subject. Take it up and see if you can pass it with ease or might need some more practice before the exam comes.
- 1.
1. Which of the following decisions must be made by all economies?
- A.
A. How much to produce? When to produce? How much does it cost?
- B.
B. What is the price? Who will produce it? Who will consume it?
- C.
C. What to produce? How to produce? For whom to produce?
- D.
D. none of the above.
Correct Answer
C. C. What to produce? How to produce? For whom to produce?Explanation
C. Regardless of the size of wealth of a nation, it must choose a system to answer these three basic questionsRate this question:
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- 2.
2. The student who has one evening in which to prepare for two exams on the following day has the following two alternatives: Possibility Score in Economics Score in Accounting A 95 80 B 80 90 A 95 80 B 80 90 The opportunity cost of receiving 90, rather than 80, on the accounting exam is represented by how many points on the economic exam?
- A.
15 points.
- B.
80 points.
- C.
90 points.
- D.
10 points.
Correct Answer
A. 15 points.Explanation
A. By spending more time studying for accounting and therefore spending less time studying for the economics exam, 15 points on the economics exam are given up.Rate this question:
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- 3.
3. Opportunity cost is the
- A.
Purchase price of a good or service.
- B.
Value of leisure time plus out-of-pocket costs.
- C.
Best option given up as a result of choosing an alternative.
- D.
Undesirable sacrifice required to purchase a good.
Correct Answer
C. Best option given up as a result of choosing an alternative.Explanation
C. Opportunity cost is that which is given up in the best alternative, not that which is paid in money for the good bought.Rate this question:
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- 4.
4. On a production possibilities curve, the opportunity cost of more units of good A in terms of units of good B is represented by
- A.
The distance to the curve from the vertical axis.
- B.
The distance to the curve from the horizontal axis.
- C.
The movement along the horizontal axis.
- D.
All of the above.
Correct Answer
C. The movement along the horizontal axis.Explanation
C. While operating within the boundaries of the production possibilities curve, more of both goods can be attained if efficiency is improved. However, points beyond the curve are not possible without an increase in resources or technological advance.Rate this question:
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- 5.
8. Using a production possibilities curve, unemployment is represented by a point located
- A.
Near the middle of the curve.
- B.
At the top corner of the curve.
- C.
At the bottom corner of the curve.
- D.
Outside the curve.
- E.
Inside the curve.
Correct Answer
E. Inside the curve.Explanation
E. Any point underneath the production possibilities curve indicates that the economy’s resources are not being used efficiently, including labor.Rate this question:
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- 6.
9. Along a production possibilities curve, an increase in the production of one good can be accomplished only by
- A.
Decreasing the production of another good.
- B.
Increasing the production of another good.
- C.
Holding constant the production of another good.
- D.
Producing at a point on the corner of the curve.
Correct Answer
A. Decreasing the production of another good.Explanation
A. Along the production possibilities curve, there are no unemployed resources. Therefore, in order to produce more of one product, units of the other product must be given up.Rate this question:
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- 7.
10. Education and training that improve the skill of the labor force are represented on the production possibilities curve by a (an)
- A.
Movement along the curve.
- B.
Inward shift of the curve.
- C.
Outward shift of the curve.
- D.
Movement toward the curve from an exterior point.
Correct Answer
C. Outward shift of the curve.Explanation
C. Investment in human capital enhances people’s ability being able to more effectively use the economy’s capital and push the production possibilities curve outward where more units of both products can be attained.Rate this question:
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- 8.
A nation can accelerate its economic growth by
- A.
Reducing the number of immigrants allowed into the country.
- B.
Adding to its capital stock.
- C.
Printing more money.
- D.
Imposing tariffs and quotas on imported goods.
Correct Answer
B. Adding to its capital stock.Explanation
B. By increasing its stock of capital a nation can increase its productivity.Rate this question:
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- 9.
5. If a farmer adds 1 pound of fertilizer per acre, the value of the resulting crops rises from $80 to $100 per acre. According to marginal analysis, the farmer should add fertilizer if it costs less than
- A.
$12.50 per pound.
- B.
$20 per pound.
- C.
$80 per pound.
- D.
$100 per pound.
Correct Answer
B. $20 per pound.Explanation
B. As long as the fertilizer costs less than $20 per pound, the farmer will gain more by fertilizing then he or she will lose by the expense of the fertilizer.Rate this question:
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- 10.
7. Any point inside the production possibilities curve is a (an)
- A.
Efficient point.
- B.
Unfeasible point.
- C.
Inefficient point.
- D.
Maximum output combination.
Correct Answer
C. Inefficient point.Explanation
C. While operating within the boundaries of the production possibilities curve, more of both goods can be attained if efficiency is improved. However, points beyond the curve are not possible without an increase in resources or technological advance.Rate this question:
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- 11.
10. Education and training that improve the skill of the labor force are represented on the production possibilities curve by a (an)
- A.
Movement along the curve.
- B.
Inward shift of the curve.
- C.
Outward shift of the curve.
- D.
Movement toward the curve from an exterior point.
Correct Answer
C. Outward shift of the curve.Explanation
C. Investment in human capital enhances people’s ability being able to more effectively use the economy’s capital and push the production possibilities curve outward where more units of both products can be attained.Rate this question:
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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
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Current Version
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Mar 20, 2023Quiz Edited by
ProProfs Editorial Team -
Apr 12, 2010Quiz Created by
Cha24ampong
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