Activities designed to convert resources into goods and services is known as
A) supply.
B) consumption.
C) production.
D) scarcity.
Ques. 2Ceteris paribus, as the price of a good or service increases
A) people will buy more of it.
B) people will buy less of it.
C) people will want less of it.
D) people will want more of it.
Ques. 3Economic bads are items
A) for which the produced quantity is less than the amount desired at a positive price.
B) for which the desired quantity is less than what nature provides at a zero price.
C) that individuals desire but which receive social disapproval.
D) that receive social approval but which governments dislike.
Ques. 4Consumers are sovereign when
A) prices are decided by sellers.
B) a few consumers exercise coercion on sellers and other consumers.
C) they can prevent market failure.
D) they have the freedom to decide what they wish to purchase.
Ques. 5Is inflation a macroeconomic or a microeconomic question? Why?
What will be an ideal response?
Ques. 6The fact that when the price of a good goes up, people buy less of it is known as the
A) law of supply.
B) law of demand.
C) concept of market equilibrium.
D) need for inferior goods.
Ques. 7The government budget constraint implies that
A) government borrowings = government spending+ transfers - taxes and user charges.
B) government borrowings = taxes and user charges + government spending - transfers
C) government spending = transfers - taxes and user charges - government borrowing.
D) government spending = government borrowing - transfers - taxes and user charges
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