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Table of Contents

  1. Chapter One: Economic Issues and Concepts

Chapter One: Economic Issues and Concepts

1
Question 1

Which of the following is not one of the characteristics of a market economy that helps produce spontaneous self-organization?

a)
b)
c)
d)
e)
Correct.Incorrect. The answer is d) Firms are guided by the central government in deciding what to produce.Your answer has been saved.
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2
Question 2

Which one of the following is a correct definition of opportunity cost?

a)
b)
c)
d)
e)
Correct.Incorrect. The answer is c) A measure of the cost of something in terms of the alternatives that had to be given up but could have been chosen instead.Your answer has been saved.
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3
Question 3

A production possibility frontier shows:

a)
b)
c)
d)
e)
Correct.Incorrect. The answer is b) The maximum combinations of products that a nation can produce with its current resource endowment and current technology.Your answer has been saved.
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4
Question 4

The principle of comparative advantage implies that:

a)
b)
c)
d)
e)
Correct.Incorrect. The answer is a) By specializing in the production of things that individuals (or nations) are relatively good at and trading with others who specialize in what they are relatively good at, all can become better off.Your answer has been saved.
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5
Question 5

Which of the following is not one of the four main types of economic system?

a)
b)
c)
d)
e)
Correct.Incorrect. The answer is e) An agricultural economy.Your answer has been saved.
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6
Question 6

'Economics is all to do with money.' Comment on this statement.

Hint: Reading through Chapter One should reveal that the nature and scope of economics extends well beyond money, embracing a range of resource allocation problems that confront individuals, households, and governments.Hint

7
Question 7

What is the difference between 'macroeconomics' and 'microeconomics'?

Hint: read through the chapter contents for Parts One to Four and compare with the content of Parts Five and Six. Hint

8
Question 8

How does the economist's definition of 'land' differ from the definition we use in everyday language?

Hint: take a quick look at 'Kinds of Resources', Page 4.Hint

9
Question 9

What problems would you expect to encounter if you had to use barter in order to acquire your food, clothes, electricity, housing, travel and leisure for a whole month? How to what extent are the problems that you have identified addressed once you are able to use money again?

Hint: take a quick look at 'Markets and Money', Page 11.Hint

10
Question 10

In comparison with going to a high street shop, what are the advantages and disadvantages of buying goods and services on-line?

Hint: take a quick look at 'Markets and Money', Page 11.Hint

11
Question 11

If your country was run as a pure market economy, with a minimal role for government, outline the problems would you expect to emerge with respect to the provision of the following goods and services:

a) street lights;
b) museums;
c) roads;
d) medical services;
e) education.

Hint: take a quick look at 'Is there a practical alternative to the market economy?' Pages 12-14.Hint

12
Question 12

Since 1969, the Nobel Memorial Prize (known formally as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel), has been awarded to an economist who has made a lasting contribution to the development of the economics discipline. Identify the general area of contribution for which the following economists have received the Nobel Memorial Prize:

a) Simon Kuznets (1971);
b) Milton Friedman (1976);
c) George Stigler (1982);
d) Franco Modigliani (1985);
e) Ronald Coase (1991);
f) Gary Becker (1992);
g) Robert Fogel and Douglass North (1993, shared);
h) Amartya Sen (1998);
i) George Akerloff, Michael Spence and Joseph Stiglitz (2001, shared)
j) Edmund Phelps (2006)

Hint: this question provides readers with an opportunity to get familiarise themselves with the names of some of the major contributors to the economics discipline. These contributions can be linked back to topics raised in Chapter One and subsequent chapters of the book. Readers may wish to consult the following website: http://www.nobelprizes.com/nobel/economics/Hint