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