Quiz 1

Which statement below does not describe 'markets'? They are a way for people to exchange things for their mutual benefit b. There is no competition c. They involve reciprocated transfers d. They involve voluntary participation

B

Which statement below does not describe 'firms'? a. Inputs and outputs are their private property b. They set prices that cover production costs c. They exist to help the less privileged in society d. They are organisations that use inputs to produces outputs

C

An individual's feasible set is Select one: a. All of the combinations of the things under consideration that a decision-maker could choose if they only faced economic constraints b. All of the combinations of the things under consideration that a decision-maker does choose given the economic, physical or other constraints that they face c. All of the combinations of the things under consideration that a decision-maker does not choose given the economic, physical or other constraints that they face d. All of the combinations of the things under consideration that a decision-maker could choose given the economic, physical or other constraints that they face

D

Which of the following is not an example of creative destruction? Select one: a. A new computer operating system that makes older systems obsolete b. The discovery of a new medical drug that eliminates the need for other, less effective drugs c. The invention of the printing press that eliminates the need for manual labour d. An improved training schedule that vastly improves a football team's record against their opponents

D

Which one of the following reasons has not been used to explain the industrial revolution Select one: a. Easy access to natural resources b. Europe's scientific revolution c. Dedication to hard work d. Relatively low cost of labour & high cost of local sources of energy

D

Capitalism only works when it is coupled with a democratic political system. True or False?

False

Isocost lines are combinations of outputs that give the same cost. True or False?

False

People who do not have any absolute advantage in producing any good/service cannot help the economy grow. True or False?

False

Rapid growth in GDP per capita occurred around the same time for different countries. True or False?

False

Is knowledge a private property?

It depends

What does GDP measure?

Measures the total value of final goods and services produced in an economy in a given time period, usually a year

'Capital goods' refer to:

Non-labour inputs used in production

Which institution is not used to define capitalism in our textbook? Select one: a. Private property b. Markets c. Specialisation d. Firms

Specialisation

An opportunity cost is:

The net benefit of the next best alternative

Diminishing returns is a situation in which

The use of an additional unit of an input results in a smaller increase in output than the previous increase

Economic cost is the out-of-pocket cost of an action, plus the opportunity cost. True or False?

True

Success of a capitalist economy depends on economic conditions, political conditions and the role of the government. True or False?

True

If Wendy can produce more of all goods than Tommy in an hour, then

Wendy has absolute advantage

Ceteris paribus means:

all other variables held constant

Scarcity means individuals must:

make choices