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Economics - Exam
Contributed by: Baker
  • 1. Economics is a social science that studies how individuals, governments, firms, and societies allocate resources to satisfy their wants and needs. It explores concepts of scarcity, opportunity cost, supply and demand, production and consumption, and the distribution of wealth. Economists analyze economic data and trends to understand and predict how economic systems work and how policy decisions can impact outcomes such as inflation, unemployment, and economic growth. The field of economics encompasses various subfields such as macroeconomics, microeconomics, international economics, and development economics, offering insights into the complex dynamics of markets, trade, finance, and social welfare.

    What is economics primarily concerned with?
A) Weather patterns
B) Allocation of resources
C) Sports statistics
D) Historical events
  • 2. Which economic system is characterized by private ownership of resources and a market economy?
A) Capitalism
B) Socialism
C) Feudalism
D) Communism
  • 3. What is the term used for the total value of all goods and services produced in a country in a given period?
A) Trade Deficit
B) Consumer Price Index (CPI)
C) Gross Domestic Product (GDP)
D) Inflation Rate
  • 4. What does the term 'opportunity cost' refer to in economics?
A) The next best alternative given up when a decision is made
B) The total value of all goods produced
C) Income earned from a job
D) The price of goods and services
  • 5. What is the study of how individuals, businesses, and governments make choices to allocate limited resources?
A) Political Science
B) Microeconomics
C) Macroeconomics
D) Sociology
  • 6. Which economic concept refers to the total satisfaction received from consuming a good or service?
A) Scarcity
B) Equilibrium
C) Subsidy
D) Utility
  • 7. What is the term used for a situation where there are not enough resources to produce everything that people need and want?
A) Scarcity
B) Trade-off
C) Surplus
D) Monopoly
  • 8. What is an economic good that is used to produce other goods or services called?
A) Capital
B) Consumer good
C) Inferior good
D) Normal good
  • 9. Which type of market structure is characterized by a single seller of a product with no close substitutes?
A) Monopolistic competition
B) Monopoly
C) Oligopoly
D) Perfect competition
  • 10. What does the term 'economics' originally derive from?
A) Ancient Greek οἰκονομία (oikonomia), meaning 'the way to run a household'
B) French for 'study of wealth'
C) German for 'science of markets'
D) Latin for 'management of resources'
  • 11. Who defined political economy as an inquiry into the nature and causes of the wealth of nations?
A) John Stuart Mill
B) Thomas Carlyle
C) Adam Smith
D) Jean-Baptiste Say
  • 12. Which economist coined the term 'the dismal science' for classical economics?
A) Adam Smith
B) Alfred Marshall
C) Jean-Baptiste Say
D) Thomas Carlyle
  • 13. What does macroeconomics focus on?
A) Individual agents such as households and firms
B) Behavior of economic agents in isolation
C) Market interactions at the micro level
D) Production, distribution, consumption, savings, and investment expenditure as systems
  • 14. Which economist provided a widely cited definition of economics extending analysis beyond wealth?
A) Jean-Baptiste Say
B) Adam Smith
C) Lionel Robbins
D) Alfred Marshall
  • 15. Who criticized the Robbins definition for being overly broad?
A) Some subsequent commentators
B) Adam Smith
C) Jean-Baptiste Say
D) Alfred Marshall
  • 16. Which economists prefer definitions of economics in terms of its subject matter rather than methodology?
A) Thomas Carlyle and Adam Smith
B) Lionel Robbins and Alfred Marshall
C) James M. Buchanan and Ronald Coase
D) Gary Becker and Jean-Baptiste Say
  • 17. What distinguishes normative economics from positive economics?
A) Normative economics advocates what ought to be
B) Normative economics analyzes rational behavior
C) Normative economics focuses on theoretical models
D) Normative economics describes what is
  • 18. What does economic analysis apply to beyond traditional business and finance?
A) Subjects like crime, education, health care, and the environment
B) Exclusively government policies
C) Only market transactions and financial systems
D) Purely theoretical models without practical application
  • 19. Who is often described as the 'first economist'?
A) Xenophon
B) The Boeotian poet Hesiod
C) Adam Smith
D) Aristotle
  • 20. Which author is credited by modern scholarship as writing on economics proper?
A) Hesiod
B) Joseph Schumpeter
C) Xenophon
D) Aristotle, particularly in the Nicomachean Ethics
  • 21. What did physiocrats advocate in place of administratively costly tax collection?
A) Accumulation of gold and silver
B) Importing inexpensive raw materials
C) A single tax on landowners' income
D) Protective tariffs on foreign goods
  • 22. What policy did physiocrats advocate in reaction to mercantilist trade regulations?
A) Accumulating gold and silver through trade
B) Laissez-faire, or minimal government intervention
C) Promoting manufacturing over agriculture
D) Protective tariffs on foreign manufactured goods
  • 23. What concept did Thomas Robert Malthus use to explain low living standards?
A) Market saturation
B) Technological stagnation
C) Diminishing returns
D) Inflationary pressures
  • 24. In which year was the first volume of Marx's major work, Das Kapital, published?
A) 1887
B) 1897
C) 1876
D) 1867
  • 25. Who further developed Marxian economics after Karl Marx?
A) Karl Kautsky, Rudolf Hilferding, Vladimir Lenin, Rosa Luxemburg
B) Adam Smith and David Ricardo
C) Alfred Marshall and Paul Samuelson
D) John Maynard Keynes and Milton Friedman
  • 26. What is studied by economic science when a decision is made to attain the best possible outcome?
A) Total utility measurement
B) The economic problem
C) Market equilibrium
D) Labor theory of value
  • 27. Who initially defined economics as the study of production, distribution, and consumption of wealth?
A) Mary Paley Marshall
B) Alfred Marshall
C) Lionel Robbins
D) Jean-Baptiste Say
  • 28. What is the main objective of central banks in developed countries?
A) Controlling government spending.
B) Upholding a fixed exchange rate system.
C) Maximizing employment levels.
D) Inflation targeting.
  • 29. What is considered key to economic efficiency according to theoretical and empirical considerations?
A) Diversification
B) Protectionism
C) Isolationism
D) Specialisation
  • 30. What type of models emerged from the new neoclassical synthesis?
A) Dynamic stochastic general equilibrium (DSGE) models
B) Classical general equilibrium models
C) Keynesian cross models
D) Monetarist policy models
  • 31. What economic concept did Keynes argue might not self-correct due to low 'effective demand'?
A) Fiscal policy
B) Inflation
C) Monetary policy
D) High labour-market unemployment
  • 32. Who won the Nobel Prize in Economics in 2002 for empirical discoveries related to cognitive biases?
A) Daniel Kahneman
B) Richard Thaler
C) Robert Shiller
D) Amos Tversky
  • 33. What was the percentage of women authors in the RePEc database in 2018?
A) 19%
B) 75%
C) 50%
D) 5%
  • 34. In what century did neoclassical theorists shift from measuring total utility to ordinal utility?
A) 19th century
B) 20th century
C) 21st century
D) 18th century
  • 35. What occurs at market equilibrium?
A) Quantity supplied equals quantity demanded, stabilizing the price.
B) Prices continuously fluctuate without stabilization.
C) Demand consistently exceeds supply.
D) There is always a surplus of goods.
  • 36. Which economist coauthored 'A Monetary History of the United States, 1867–1960' with Milton Friedman?
A) Elinor Ostrom
B) Esther Duflo
C) Anna Schwartz
D) Mary Paley Marshall
  • 37. Which coefficient is widely used to measure income differences among individuals?
A) Gini coefficient.
B) Human Development Index.
C) Lorenz curve.
D) Coefficient of variation.
  • 38. What is a widely accepted standard for economic efficiency?
A) Technical efficiency
B) Pareto efficiency
C) Dynamic efficiency
D) Allocative efficiency
  • 39. What tool do expositions of economic reasoning often use to illustrate theoretical relationships?
A) Three-dimensional models.
B) Statistical software simulations.
C) Two-dimensional graphs.
D) Narrative descriptions.
  • 40. Which economist built the first large-scale macroeconometric model applying Keynesian thinking to the US economy?
A) John Hicks
B) Alvin Hansen
C) Franco Modigliani
D) Lawrence Klein
  • 41. Which school of economics emphasizes human action, property rights, and minimal state intervention?
A) Austrian School
B) Keynesian Economics
C) Ecological Economics
D) Chicago School
  • 42. What is the primary function of money as a medium of exchange?
A) Promoting barter systems.
B) Increasing the complexity of transactions.
C) Eliminating the need for credit creation.
D) Facilitating trade by reducing transaction costs.
  • 43. Which concept involves high social costs or benefits not reflected in market prices?
A) Public goods
B) Externalities
C) Information asymmetries
D) Natural monopoly
  • 44. Who was the intellectual leader of Monetarism?
A) Robert Lucas
B) Alvin Hansen
C) Milton Friedman
D) John Maynard Keynes
  • 45. What is an example of specialization between developed and developing countries?
A) Developing countries specializing in high-tech knowledge products.
B) Developed countries producing high-tech products while trading with developing nations for labor-intensive goods.
C) Both types of countries produce only low-tech products.
D) No trade occurring between developed and developing countries.
  • 46. In which market structure are participants considered 'price takers'?
A) Monopolistic competition
B) Duopoly
C) Perfectly competitive markets
D) Oligopoly
  • 47. Which school of economics is associated with Milton Friedman?
A) Chicago School
B) Keynesian Economics
C) Post-Keynesian Economics
D) Austrian School
  • 48. Which concept refers to riskier behavior resulting from insurance?
A) Adverse selection.
B) Market for lemons.
C) Information asymmetry.
D) Moral hazard.
  • 49. What type of market structure is characterized by many sellers producing highly differentiated goods?
A) Monopolistic competition
B) Monopoly
C) Perfect competition
D) Oligopoly
  • 50. What did monetarists argue was more important than fiscal policy for economic stabilization?
A) Labor market policies
B) Supply-side economics
C) Trade policies
D) Monetary policy
  • 51. What problem arises when those at most risk are most likely to insure?
A) Moral hazard.
B) Information asymmetry.
C) Adverse selection.
D) Risk aversion.
  • 52. What is the term for a market with only one buyer of a good?
A) Duopoly
B) Monopolistic competition
C) Oligopoly
D) Monopsony
  • 53. What does acceptance of an economic hypothesis depend on?
A) The falsifiable hypothesis surviving tests
B) Publication in a prestigious journal
C) Support from policymakers
D) General consensus among economists
  • 54. Who is considered the founder of Keynesian economics?
A) Milton Friedman
B) John Maynard Keynes
C) Robert Lucas
D) Thomas Sargent
  • 55. What key principle did New Keynesian economists adopt from monetarist or new classical ideas?
A) Keynesian multiplier effect
B) Laissez-faire capitalism
C) Rational expectations
D) Supply-side economics
  • 56. Which economist received both the Nobel Prize and the John Bates Clark Medal?
A) Susan Athey
B) Elinor Ostrom
C) Esther Duflo
D) Claudia Goldin
  • 57. What critique is associated with the introduction of rational expectations?
A) The Hicks-Hansen critique
B) The Friedman critique
C) The Keynesian critique
D) The Lucas critique
  • 58. Which market failure category includes information asymmetries and incomplete markets?
A) Natural monopoly
B) Information asymmetries
C) Public goods
D) Externalities
  • 59. What role does fiscal policy play according to the new neoclassical synthesis?
A) It solely controls inflation
B) It only affects long-term growth
C) It can influence aggregate demand
D) It is irrelevant for economic stability
  • 60. Which theory models public-sector behavior similarly to microeconomics?
A) Classical economics.
B) Monetarism.
C) Keynesian economics.
D) Public choice theory.
  • 61. What is a common statistical method used by practitioners in empirical economic research?
A) Descriptive statistics
B) Cluster analysis
C) Factor analysis
D) Regression analysis
  • 62. Which policy option involves changing incentives through emission fees?
A) Market solutions
B) Subsidizing public goods
C) Regulations reflecting cost-benefit analysis
D) Encouraging monopolies
  • 63. What is an example of a negative externality?
A) Public parks
B) Air pollution
C) Education
D) Technical monopoly
  • 64. What is the outcome when the market price is above equilibrium?
A) Demand exceeds supply, increasing prices.
B) There is no change in market dynamics.
C) The quantity demanded equals the quantity supplied.
D) A surplus occurs, pushing prices down.
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