Economics Practice Quiz 125

Q1.What is the term used for the cost of having a little more of one good in terms of the amount of the other good that has to be forgone?

A. Opportunity cost B. Production cost C. Marginal cost D. Economic cost

Q2.What is another name for opportunity cost?

A. Economic cost B. Production cost C. Explicit cost D. Sunk cost

Q3.In a centrally planned economy, who makes all important decisions regarding production, exchange and consumption?

A. The government or central authority B. Free interaction of individuals C. Market forces D. Private firms

Q4.What does the production possibility frontier show?

A. Combinations of two goods that can be produced with full utilization of resources B. Combinations of goods that are always produced C. The maximum profit possible D. The demand for goods

Q5.If the economy wants to produce more corn, what happens to the production of cotton?

A. Less cotton can be produced B. More cotton can be produced C. Cotton production remains unchanged D. Cotton production increases proportionally

Q6.Which of the following is a central problem of the economy mentioned in the text?

A. Choosing from one of the many production possibilities B. Maximizing profit C. Minimizing cost D. Achieving full employment

Q7.How can basic economic problems be solved?

A. By free interaction of individuals in the market or by central planning B. Only through government intervention C. Only through market forces D. By international trade

Q8.What is the primary role of the central authority in a centrally planned economy when some people get too little share of goods and services?

A. To induce individuals to produce more goods B. To intervene and achieve an equitable distribution C. To organize free market interactions D. To set prices based on demand

Q9.In a market economy, how are economic activities organized?

A. Through central planning by the government B. Through the market C. Through government directives D. Through barter exchanges

Q10.What is a market in economics?

A. A physical marketplace where buyers and sellers meet B. An institution that organizes free interaction of individuals pursuing economic activities C. A government-regulated trading zone D. A system of price controls

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Economics Practice Quiz 125