Checking to see if I got these right. The ones I selected are marked with an *
1. The price paid for the use of capital is called (Points : 1)
mortgage payment.
rent.
profit.
wages.
*interest.
2. Capital consists of (Points : 1)
stocks and bonds.
the assets of the government.
*aids to production created by humans.
the assets of a firm.
the assets of upper-income groups.
3. When the government redistributes income, it is answering a basic economic question. Which one? (Points : 1)
What?
*For whom?
How?
Why?
When?
4. The basic economic problem is (Points : 1)
predicting human behavior.
harnessing self-interest to serve the public interest.
building realistic models.
*balancing supply and demand.
scarce resources, unlimited wants.
5. The measure of the cost of a particular good in terms of what is given up to produce that good is called (Points : 1)
a necessary cost.
a dollar cost.
a fixed cost.
an explicit cost.
*an opportunity cost.
6. Demand relates the various amounts that consumers are willing to buy over a specified time period (Points : 1)
at various prices.
as their tastes change.
as their incomes change.
*when prices increase.
7. If beans are inferior goods, a decrease in income will (Points : 1)
increase the production of beans.
shift the demand curve for beans to the left.
shift the demand curve for beans to the right.
rotate the supply curve in a clockwise manner.
*cause beans to sell at a lower price.
8. If left alone, a market-directed economy will (Points : 1)
*avoid the production problems encountered in command economies.
provide the correct economic choice in many but not all cases.
invariably provide the correct economic choices.
protect consumers from monopoly.
disintegrate.
9. In a market system, property rights are enforced by (Points : 1)
central planners.
business and individuals, but not government.
*government.
business only.
individuals only.
10. A production possibilities curve shows (Points : 1)
*that in order to acquire more of one good, some of the alternative good must be given up.
that any amount of goods could be produced by society if people worked harder.
that in order to acquire more of one good, none of the alternative good must be given up.
various combinations of guns, bullets, bread, and butter that can be produced under conditions of 6 percent unemployment
1. To determine the correct answer, we need to understand what is being referred to as the "price paid for the use of capital." The options provided are mortgage payment, rent, profit, wages, and interest. Among these options, the most appropriate choice is "interest." Interest is the payment made to lenders or investors for the use of their capital.
2. To determine the correct answer, we need to understand the definition of capital. The options provided are stocks and bonds, the assets of the government, aids to production created by humans, the assets of a firm, and the assets of upper-income groups. Among these options, the most appropriate choice is "aids to production created by humans." Capital refers to the tools, machinery, equipment, and infrastructure used in the production process, which are created by humans.
3. To determine the correct answer, we need to understand the basic economic questions. The options provided are "What?", "For whom?", "How?", "Why?", and "When?" Among these options, the most appropriate choice is "For whom?." When the government redistributes income, it is addressing the question of how to distribute resources and income among different individuals or groups within society.
4. To determine the correct answer, we need to understand the concept of the basic economic problem. The options provided are predicting human behavior, harnessing self-interest to serve the public interest, building realistic models, balancing supply and demand, and scarce resources, unlimited wants. Among these options, the most appropriate choice is "scarce resources, unlimited wants." The basic economic problem refers to the scarcity of resources relative to unlimited human wants and needs.
5. To determine the correct answer, we need to understand the concept of opportunity cost. The options provided are a necessary cost, a dollar cost, a fixed cost, an explicit cost, and an opportunity cost. Among these options, the most appropriate choice is "an opportunity cost." Opportunity cost refers to the value of the next best alternative that is forgone when a choice is made. It represents the cost of choosing one option over another.
6. To determine the correct answer, we need to understand demand and its relationship with price. The options provided are at various prices, as their tastes change, as their incomes change, and when prices increase. Among these options, the most appropriate choice is "at various prices." Demand relates to the different quantities of a good or service that consumers are willing and able to buy at different price levels.
7. To determine the correct answer, we need to understand the concept of inferior goods and their relationship with income changes. The options provided are increase the production of beans, shift the demand curve for beans to the left, shift the demand curve for beans to the right, rotate the supply curve in a clockwise manner, and cause beans to sell at a lower price. Among these options, the most appropriate choice is "cause beans to sell at a lower price." Inferior goods are those for which demand decreases when income increases. Therefore, a decrease in income would lead to a decrease in demand for beans, resulting in a lower price for beans in the market.
8. To determine the correct answer, we need to understand the characteristics of a market-directed economy. The options provided are avoid the production problems encountered in command economies, provide the correct economic choice in many but not all cases, invariably provide the correct economic choices, protect consumers from monopoly, and disintegrate. Among these options, the most appropriate choice is "avoid the production problems encountered in command economies." A market-directed economy relies on the decentralized decisions of individuals and firms in the marketplace to allocate resources and make economic choices. It is generally considered to be more efficient and flexible compared to command economies.
9. To determine the correct answer, we need to understand who enforces property rights in a market system. The options provided are central planners, business and individuals but not government, government, business only, and individuals only. Among these options, the most appropriate choice is "government." In a market system, property rights, which include the right to own, use, and transfer property, are enforced and protected by the government through legal systems and institutions.
10. To determine the correct answer, we need to understand what a production possibilities curve represents. The options provided are that in order to acquire more of one good, some of the alternative good must be given up, that any amount of goods could be produced by society if people worked harder, that in order to acquire more of one good, none of the alternative good must be given up, and various combinations of guns, bullets, bread, and butter that can be produced under conditions of 6 percent unemployment. Among these options, the most appropriate choice is "that in order to acquire more of one good, some of the alternative good must be given up." A production possibilities curve illustrates the maximum potential combinations of two goods that can be produced with given resources and technology. It shows the trade-off involved in producing more of one good at the expense of producing less of the other good.