Question

1. Economists regard decision making as

important because:

(a) The resources required to satisfy our

unlimited wants and needs are finiteor

scarce.

(b) It is crucial to understand how we can

best allocate our scarce resources to

satisfy society’s unlimited wants and

needs.

(c) Resources have alternative uses.

(d) All the above.

2. Business Economics is

(a) Abstract and applies the tools of

Microeconomics.

(b) Involves practical application of

economic theory in business decision

making.

(c) Incorporates tools from multiple

disciplines.

(d) ((b) and ((c) above.

3. In Economics, we use the term scarcity to

mean;

(a) Absolute scarcity and lack of resources in

less developed countries.

(b) Relative scarcity i.e. scarcity in relation

to the wants of the society.

(c) Scarcity during times of business failure

and natural calamities.

(d) Scarcity caused on account of excessive

consumption by the rich.

4. What implication(s) does resource scarcity

have for the satisfaction of wants?

(a) Not all wants can be satisfied.

(b) We will never be faced with the need to

make choices.

(c) We must develop ways to decrease our

individual wants.

(d) The discovery of new natural resources

is necessary to increase our ability to

satisfy wants.

5. Which of the following is a normative

statement?

(a) Planned economies allocate resources

via government departments.

(b) Most transitional economies have

experienced problems of falling output

and rising prices over the past decade.

(c) There is a greater degree of consumer

sovereignty in market economies than

planned economies.

(d) Reducing inequality should be a major

priority for mixed economies.

6. In every economic system, scarcity imposes

limitations on

(a) households, business firms,

governments, and the nation as a whole.

(b) households and business firms, but not

the governments.

(c) local and state governments, but not the

federal government.

(d) households and governments, but not

business firms.

e) business firms, governments, and the

nation as a whole.

7. Macroeconomics is also called———

economics.

(a) applied

(b) aggregate

(c) experimental

(d) none of the above

8. An example of ‘positive’ economic analysis

would be:

(a) an analysis of the relationship between

the price of food and the quantity

purchased.

(b) determining how much income each

person should be guaranteed.

(c) determining the ‘fair’ price for food.

(d) deciding how to distribute the output of

the economy.

9. A study of how increases in the corporate

income tax rate will affect the national

unemployment rate is an example of

(a) Macro-Economics.

(b) Descriptive Economics.

(c) Micro-economics.

(d) Normative economics.​

Answer 1

Answer:

1.(c) resources have alternative users

Answer 2

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