Question 1

What are the two basic types of economies?

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Question 2

Economists use the term ______ to refer to the ability of a single person (or a small group) to have a substantial influence on market prices.

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Question 3

Economists use the term ______ to refer to a situation in which the market on its own fails to produce an efficient allocation of resources.

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Question 4

Economists use the term ______ to refer to an increase in the overall level of prices in the economy.

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Question 5

Consider two countries, Muria and Zenya. In Muria total annual output is worth $800 million and people work 40 million hours. In Zenya total annual output is worth $900 million and people work 50 million hours. In which country is productivity higher?

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Question 6

Explain the concept of market failure.

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Question 7

What does the "invisible hand" refers to?

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Question 8

Explain how trade with other countries is beneficial.

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Question 9

Economists use the term ______ to refer to fluctuations in economic activity, such as employment and production.

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Question 10

What is the main difference between a centrally planned economy and a market economy?

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Question 11

Explain the concept of externality and give an example.

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Question 12

Give an example of government intervention that is intended to reduce an externality.

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Question 13

In the short run, an increase in the money supply is likely to lead to ______ inflation and ______ unemployment.

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Question 14

What are the two possible causes of market failure?

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Question 15

What do prices reflect in a market economy?

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Question 16

Invisible hand is a term used by the economist ______ in his 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

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Question 17

Invisible hand is a term used by the economist ______ to describe how the decisions of households and firms lead to desirable market outcomes.

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Question 18

Suppose that in Germany total annual output is worth $600 million and people work 40 million hours. In France total annual output is worth $700 million and people work 50 million hours. In which country do people enjoy a higher standard of living?

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Question 19

What are the two reasons for the government to intervene in a market?

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Question 20

Give an example of government intervention that is intended to improve equality.

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Quiz 1: Ten Principles of Economics

What are the two basic types of economies?

Economists use the term ______ to refer to the ability of a single person (or a small group) to have a substantial influence on market prices.

Economists use the term ______ to refer to a situation in which the market on its own fails to produce an efficient allocation of resources.

Economists use the term ______ to refer to an increase in the overall level of prices in the economy.

Consider two countries, Muria and Zenya. In Muria total annual output is worth $800 million and people work 40 million hours. In Zenya total annual output is worth $900 million and people work 50 million hours. In which country is productivity higher?

Explain the concept of market failure.

What does the "invisible hand" refers to?

Explain how trade with other countries is beneficial.

Economists use the term ______ to refer to fluctuations in economic activity, such as employment and production.

What is the main difference between a centrally planned economy and a market economy?

Explain the concept of externality and give an example.

Give an example of government intervention that is intended to reduce an externality.

In the short run, an increase in the money supply is likely to lead to inflation and unemployment.

What are the two possible causes of market failure?

What do prices reflect in a market economy?

Invisible hand is a term used by the economist ______ in his 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

Invisible hand is a term used by the economist ______ to describe how the decisions of households and firms lead to desirable market outcomes.

Suppose that in Germany total annual output is worth $600 million and people work 40 million hours. In France total annual output is worth $700 million and people work 50 million hours. In which country do people enjoy a higher standard of living?

What are the two reasons for the government to intervene in a market?

Give an example of government intervention that is intended to improve equality.