← Economics 1-4 Test
5 Written Questions
5 Matching Questions
- Secondary effects
- "Ceteris paribus"
- Fallacy of composition
- a The indirect impact of an event or policy that may not be easily and immediately observable. In the area of policy, these effects are often both unintended and overlooked.
- b A person who buys and sells goods or services or arranges trades. A middleman reduces transaction costs.
- c Human-made resources (such as tools, equipment and structures) used to produce goods and services. They enhance our ability to produce in the future.
- d erroneous view that what is true for the individual will always be true for the group.
- e "other things constant" is used when the effect of one change is being described, recognizing that if other things changed, they also could affect the result. Economists often describe the effects of one change, knowing that in the real world, other things might change and also exert an effect.
5 Multiple Choice Questions
- An input used to produce economic goods. Land, labor, skills, natural resources, and capital are examples. Throughout history, people have struggled to transform available, but limited, resources into things they would like to have-economic goods.
- The act of selecting among alternatives.
- Allocating a limited supply of a good or resource among people who would like to have more of it. When price performs the rationing function, the good or resource is allocated to those willing to give up the most "other things" in order to get it.
- Fundamental concept of economics that indicates that there is less of a good freely available from nature than people would like.
- a fact based on observable phenomena that is not influenced by differences in personal opinion.
5 True/False Questions
Transaction costs → The time, effort, and other resources needed to search out, negotiate and complete an exchange.
Utility → The subjective benefit or satisfaction a person expects from a choice or course of action.
Normative economics → Judgements about what ought to be in economic matters. They are views that cannot be proven false because they are based on value judgments.
Scientific thinking → Allocating a limited supply of a good or resource among people who would like to have more of it. When price performs the rationing function, the good or resource is allocated to those willing to give up the most "other things" in order to get it.
Private-property rights → The rights to use, control, and obtain the benefits from a good or service.