Which of the following is a basic assumption of an economic analysis?
a. Private property rights exist and are secure.
b. A controlled market structure is the key to economic growth.
c. In a free market, resources are owned by the government.
d. There are no private property rights under a free market economy.
e. Social well-being is the prime objective of an entrepreneur.
QUESTION 2Marginal utility:
a. generally increases as more of a good is acquired.
b. generally remains constant as more of a good is acquired.
c. generally decreases as more of a good is acquired.
d. begins to fall when total utility reaches its highest point.
QUESTION 3For the world as a whole, economic freedom increased since 1994 as the countries opened up in the world market and the governments slashed tax rates.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4The government sector sells resource services to households and buys goods and services from firms.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5The law of diminishing marginal utility states that:
a. total utility decreases as consumption of a good increases.
b. total utility increases as consumption of a good increases.
c. the increase in total utility from consuming an additional unit decreases as consumption increases.
d. the increase in total utility from consuming an additional unit increases as consumption increases.
QUESTION 6A country is likely to have investment freedom if the government allows free flow of foreign capital into the domestic economy.
a. True
b. False
Indicate whether the statement is true or false
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