Multiple choice questions

Question 1: Economics may best be defined as:

A: the interaction between macro and micro considerations.
B: the study of the behaviour of people and institutions in the production,
distribution, and consumption of scarce goods.
C: the empirical testing of value judgements through the use of induction
and deduction.
D: the use of policy to refute facts and hypotheses.
Question 2: The study of economics is primarily concerned with:
A: keeping private businesses from losing money.
B: demonstrating that capitalistic economies are superior to socialistic
economies.
C: choices that are made in seeking to use scarce resources efficiently.
D: determining the most equitable distribution of society's output.

Question 3: The term ‘ceteris paribus’ means:

A: if event A precedes event B, A has caused B.
B: economics deals with facts, not values.
C: other things being equal.
D: prosperity inevitably follows recession.
Question 4: The concept of economic efficiency is primarily concerned
with:
A: the limited wants and unlimited resources dilemma.
B: considerations of equity in the distribution of wealth.
C: obtaining the maximum output from available resources.
D: the conservation of irreplaceable natural resources.
Question 5: The fundamental problem of economics is:
A: to establish an equitable system of personal and business taxation.
B: to establish a democratic political framework for the provision of social
goods and services.
C: the establishment of prices that accurately reflect the relative scarcities of
products and resources.
D: the scarcity of productive resources relative to material wants.
Question 6: The scarcity problem:
A: persists only because countries have failed to achieve continuous full
employment.
B: persists because material wants exceed available productive resources.
C: has been solved in all industrialised nations.
D: has been eliminated in affluent societies such as Australia.

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Question 7: The idea of ‘allocative efficiency’ refers to:
A: the use of the least-cost method of production.
B: the production of the product-mix most wanted by society.
C: the full employment of all available resources.
D: production, at some point, inside of the production possibilities curve.

Question 8: ‘Productive efficiency’ refers to:

A: the use of the least-cost method of production.
B: the production of the product-mix most wanted by society.
C: the full employment of all available resources.
D: production, at some point, inside of the production possibilities curve.

Question 9: Which of the following is not one of the three basic

economics issues?
A: Which products should be in short supply and which in excess supply?
B: For whom should the total output be produced?
C: How should production be organised?
D: What goods and services should be produced?