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Topic Quiz 1: Scarcity, Choice & Economic Thinking 10 questions · explanations appear as you answer
1. An economist wants to isolate the effect of a higher minimum wage on teen employment. Which approach reflects the ceteris paribus assumption? A Comparing teen employment before and after the wage hike, while assuming other factors like the overall economy stayed the same B Comparing teen employment in two different countries with different economies C Studying total employment across all age groups over a decade D Ignoring the minimum wage entirely and studying inflation instead
2. "The government should raise taxes on the wealthy to reduce inequality" is an example of a: A Positive statement B Normative statement C Marginal statement D Macroeconomic law
3. A study on how a citywide rent increase affects a single family's grocery budget is an example of: A Macroeconomics B Microeconomics C Positive economics only D Normative economics only
4. The "economizing problem" refers to the fact that: A Governments always spend more than they collect in taxes B Human wants are virtually unlimited while the resources available to satisfy them are limited C Businesses must choose between hiring and firing employees D Prices always rise over time due to inflation
5. A vineyard's soil quality and the sunlight it receives are examples of which factor of production? A Land B Labor C Capital D Entrepreneurial ability
6. Which of the following is NOT considered a resource (factor of production) in economics? A A factory building B A delivery truck C Money in a checking account D A construction worker's skills
7. A person who takes on the financial risk of starting a new bakery, hires staff, and decides what products to sell is providing which factor of production? A Labor B Capital C Entrepreneurial ability D Land
8. In economic terms, when a bakery purchases three new commercial ovens, this is best described as: A Consumption B Investment C A normative decision D A change in demand
9. Maria spends her Saturday afternoon studying for an economics exam instead of working a shift at her part-time job for $60. The opportunity cost of studying is: A The economics exam grade she receives B The $60 she could have earned working C The time she spent studying D Zero, since studying doesn't cost money
10. Which of these is a positive statement? A Interest rates are currently 5%. B Interest rates are too high for young homebuyers. C The Federal Reserve should lower interest rates. D High interest rates are unfair to low-income families.