quiz questions

Question 1

The system of capitalism is said to have gone through 3 epoches (beginning with mercantile to classical and evolving into keynessian or state capitalism) began in some parts of Europe around ………

a) AD 1500
b) 15th century
c) 1985
d) BC 1500

Answer 1

a) AD 1500

Question 2

Socialism is an economic system in which a country’s trade and industry are controlled by private owners for profit.

a) true
b) false
c) none of the above

Answer 2

b) false

Question 3

After the emergence of capitalism, Industrial revolution took place as a result of increase
in ..

(a) Human capital
(b) Obsolete tools
(c) Agricultural productivity
(d) Amount of food

Answer 3

(c) Agricultural productivity

Question 4

Before the emergence of capitalism, new tools were used in the production process.
(a) True
(b) False
(c) Indifferent
(d) None of the above

Answer 4

(b) False

Question 5

Before the capitalist epoch, living conditions improved or deteriorated with changes in
the weather, epidemics and other natural phenomena, because …….

(a) Most people made their living by farming, herding, or hunting and gathering.
(b) Some ethnic were already enlightened
(c) Government intervention was weak
(d) Archaic technology of production came with some disadvantages

Answer 5

(a) Most people made their living by farming, herding, or hunting and gathering

Question 6

Capitalism brought about uneven growing equality because …….
(a) Rich became poorer and poor became richer
(b) The gap between the rich and poor became widen
(c) Most producers only sell goods to rich people and neglect the poor

Answer 6

(b) The gap between the rich and poor became widen

Question 7

Urbanization happens wherever ………….. takes place.
(a) Socialism
(b) Agriculture
(c) Industrialization
(d) Capitalism epoch

Answer 7

(c) Industrialization

Question 8

The development of capitalism meant that fossil fuels were put to work powering engines that ran industrial production, public transportation system and a growing number of vehicles causing …………
(a) Green House Gas
(b) Heat
(c) Flood

Answer 8

(a) Green House Gas

Question 9

One consequence of the spread of capitalism has been ……….
(a) Increasing family size
(b) Higher birth rates
(c) Higher birth rates
(d) Higher productivity

Answer 9

(d) Higher productivity

Question 10

The population of the world…………
(a) Has fallen since 1980
(b) Has been steady for the last century
(c) Has risen very quickly over the last century
(d) Has risen steadily since 10,000 BC

Answer 10

(c) Has risen very quickly over the last century

Question 11

The conception of human beings as acting primarily out of amoral self-interest is called

a) Homo economicus
b) Behavioral economics
c) Constrained behavior
d) None of the above

Answer 11

a) Homo economicus

Question 12

Economic institutions shape people’s preferences
a) Not at all
b) By changing human nature
c) Mostly by forcible behavior
d) By determining what kind of individuals will be successfu

Answer 12

d) By determining what kind of individuals will be successfu

Question 13

13. Human beings are a unique species because
    a) We compete so much
    b) We compete so little
    c) We cooperate so much
    d) We cooperate so little

Answer 13

c) We cooperate so much

Question 14

The results of the ultimatum game from various societies suggest that
a) People have self-regarding preferences
b) People have a preference for reciprocity
c) People are completely altruistic
d) People behave like Homo economicus

Answer 14

b) People have a preference for reciprocity

Question 15

15.The different results of games in small societies suggest that
a) Human nature does not exist
b) Human nature and cultural differences affect behavior
c) Cultural differences do not matter
d) None of the above

Answer 15

b) Human nature and cultural differences affect behavior

Question 16

16.A situation is said to be Pareto optimum when
a) It is not possible to make someone better off without making someone else worse off
b) Everyone is well off
c) It is possible to make everyone better off by making someone worse off
d) Everyone is equally well off

Answer 16

a) It is not possible to make someone better off without making someone else worse off

Question 17

17.The three dimensions referred to in the phrase “three-dimensional economics” are
a) Profits, commodities, and markets
b) Competition, command, and change
c) Household, firm, and government
d) Fairness, efficiency, and democracy

Answer 17

b) Competition, command, and change

Question 18

18.Economic systems are ways of organizing
a) Resources
b) Money
c) Labor
d) Markets

Answer 18

c) Labor

Question 19

19.Economic systems (including capitalism) are described in a political economy framework as
a) A set of social relationships
b) A system of markets
c) An association between bosses and workers
d) A system to expand money

Answer 19

a) A set of social relationships

Question 20

20.Democracy and command are not always inconsistent, but sometimes a command is undemocratic. One example of an undemocratic command is the following:
a) A court enforces an anti-pollution law
b) An elected manager of a workers’ cooperative tells a worker what to do
c) A factory owner decides to shut down the factory and relocate it
d) A police officer tells a motorist not to drive when drunk

Answer 20

c) A factory owner decides to shut down the factory and relocate it

Question 21

21. If in a year one family, using 20 bushels of seed grain, 4,000 hours of labour, and no tools
    but their own hands produces 100 bushels of grain, of which they customarily consume 50
    bushels, and there are 100 families producing grain, then the necessary product for all families
    combined is
    a) 2,000 bushels
    b) 5,000 bushels
    c) 7,000 bushels
    d) 10,000 bushels

Answer 21

c) 7,000 bushels

Question 22

22. Using the same amounts in the question above, the net product is

a) 3,000 bushels
b) 4,000 bushels
c) 5,000 bushels
d) 8,000 bushels

Answer 22

d) 8,000 bushels

Question 23

23.An item that is, strictly speaking, not one of the inputs into the production process is

a) Technical progress
b) Capital goods
c) Materials
d) Labor

Answer 23

a) Technical progress

Question 24

24. The difference between capital goods and materials used in production is that

a) Materials are used up; capital goods are durable
b) Capital goods are bought on credit; materials are paid for in cash
c) Capital goods are machinery; materials are everything else
d) Materials become physically part of the output produced; capital goods do not

Answer 24

a) Materials are used up; capital goods are durable

Question 25

25. If plows are imported as inputs into the production process and it takes two bushels of grain to get one plow, then the real price of the imported input is a) Half a plow b) One plow c) One bushel of grain d) Two bushels of grain

Answer 25

d) Two bushels of grain

Question 26

26.What distinguishes slavery from capitalism as an economic system is that a) Wage labor is paid in money, not goods b) Slavery is much more brutal c) Slavery is predominantly an agricultural system d) The capitalist does not own the worker outright

Answer 26

d) The capitalist does not own the worker outright

Question 27

27. Which of the following does not explain capitalism? a) Wage labor b) Privately owned capital goods c) Production of a large surplus d) Production of commodities

Answer 27

c) Production of a large surplus

Question 28

28. What determines whether an economic system is capitalist or not is .......... a) Whether ownership of land and wealth is sufficiently concentrated b) Whether advanced machinery is extensively used in production c) Whether private owners of capital goods hire wage labour to produce for profit d) Whether the bulk of production is industrial or agricultural

Answer 28

c) Whether private owners of capital goods hire wage labour to produce for profit

Question 29

29.The capitalist class usually does all of the following except a) Own capital goods used in production b) Receive income as profits c) Own products of the labor process d) Participate in the labor process

Answer 29

d) Participate in the labor process

Question 30

30. Capitalism can coexist with many different systems of government, such as democracy and fascism, because a) Capitalism is inherently democratic b) Capitalism is just one of many sets of rules that organize society c) The economic and political aspects of society are completely separate d) Capitalism is a class system

Answer 30

b) Capitalism is just one of many sets of rules that organize society

Question 31

31. Which of the following is not a common government economic activity? a) Rule enforcer b) Rule maker c) Economic actor d) Profit rate maximizer

Answer 31

d) Profit rate maximizer

Question 32

32. The ability of citizens to influence the government is sometimes called a) The power of capital b) Democracy c) Communism d) The power of the citizenry

Answer 32

d) The power of the citizenry

Question 33

33. All of the following are causes of the very substantial expansion in government activity over the twentieth century except a) Economic concentration b) International expansion c) Higher profit rates d) Economic instability

Answer 33

c) Higher profit rates

Question 34

34. Schools, the postal service, the police, and the military are all examples of the government’s role as a) Microeconomic regulator b) Macroeconomic regulator c) Producer

Answer 34

c) Producer

Question 35

35. When the government buys up certain agricultural products to keep their prices from falling, it is acting both as a) A producer and a distributor b) A producer and a macroeconomic regulator c) A distributor and a microeconomic regulator d) A microeconomic regulator and a macroeconomic regulator

Answer 35

c) A distributor and a microeconomic regulator

Question 36

36. People invest in homes/houses because of the following reasons except.... a) It is a form of holding wealth b) To have the freedom of not subjecting to landlords c) To boost their status in society d) To reduce income tax by deducting from their taxable income the interest paid on a mortgage

Answer 36

c) To boost their status in society

Question 37

37. Economic recession refers to a general decline in the overall economic conditions of a country such as falling GDP, rising unemployment rates, decrease in economic activity etc. TRUE OR FALSE

Answer 37

false

Question 38

38. All but one is not listed as a non-financial crisis a) High unemployment and rising wages b) Overinvestment c) Underconsumption d) Financial fragility

Answer 38

d) Financial fragility

Question 39

39. One of the consequences of the Great Recession is that it causes a vicious circle TRUE or FALSE

Answer 39

true

Question 40

40. In order to minimize or avoid crises, the government must ...... a) Impose laws on the financial sector to restrain excessive power of firms b) Recognize the minority who profit from crisis and the majority who suffer losses from the crisis c) Declare state of emergency prior to the crisis d) Ensure unequal distribution of income

Answer 40

b) Recognize the minority who profit from crisis and the majority who suffer losses from the crisis

Question 41

41. What is the best explanation for why capitalists must reinvest most of their surplus product? a) To expand the scale of their operations b) Capitalists cannot consume all of their profits c) Competition forces them to do so d) To prevent workers from getting a larger share

Answer 41

c) Competition forces them to do so

Question 42

42. Capitalism emerged in the United States from an economy consisting mainly of the economic system or systems of a) Slavery b) Independent commodity production c) Self-employed producers d) Slavery and independent commodity production

Answer 42

d) Slavery and independent commodity production

Question 43

43. Economic dualism refers to a) The two systems of communism and capitalism b) The industrial structure of the core and periphery c) The rich and the poor d) The working class and the capitalist class

Answer 43

b) The industrial structure of the core and periphery

Question 44

44. The most fundamental explanation for a firm’s drive to make profits in the capitalist economy is a) To reduce operating costs b) To grow as a firm c) To please their stockholders d) To survive as a firm

Answer 44

d) To survive as a firm

Question 45

45. The fundamental driving force at the center of capitalist accumulation is a) Profit-making and investment b) Meeting the material needs of society c) Improving the average standard of living d) Putting natural resources to the best possible use

Answer 45

a) Profit-making and investment

Question 46

46. Wealth is known to be a) The flow of income to a person b) The assets owned by a person, family, or household c) The income and assets of a person d) Assets – income

Answer 46

b) The assets owned by a person, family, or household

Question 47

47. All of the following may be reasons for the intergenerational transmission of income except: a) High-income parents teach their children personality traits that lead to success b) Children of high-income parents are healthier on average c) Government taxes the poor more than the rich d) It includes income received by the self-employed producer

Answer 47

c) Government taxes the poor more than the rich

Question 48

48. Which of the following may be evidence of racial discrimination in the labor market? a) An experiment suggests that people with “white-sounding” names receive more interview callbacks than people with “black-sounding” names b) Black people use more welfare c) Many employers are “equal opportunity” employers

Answer 48

a)

Question 49

50. All of the following are reasons to suggest that measuring living standards by the average level of income may not be completely appropriate except a) Income measures do not take leisure into account b) Income does not measure unequal access to goods and services c) Income is a good approximation of well-being d) Income may not measure nonmarket commodities

Answer 49

c) Income is a good approximation of well-being

Question 50

51. In order to solve the problems associated with negative externality, public policymakers employ 2 types of remedies namely; a) price policy and contractionary policy b) price policy and quantity regulation c) pollution reduction policy and firm reduction policy d) import duty policy and property right policy

Answer 50

b) price policy and quantity regulation

Question 51

52. Negative production externalities lead to overproduction. TRUE or FALSE

Answer 51

true

Question 52

53. The Coase theorem is a welfare theorem that talks about private-sector solutions to negative externalities but it is unlikely to solve many of the externalities caused by market failure. All but one is not a problem faced with the theorem a) Individual own river problem b) The assignment problem c) Transaction costs and negotiating problems d) The holdout problem

Answer 52

a) Individual own river problem

Question 53

54. Externality is created when ......... a) Government subsidizes education b) firms produce a product of low quality and consumers don’t like it c) people are affected (other than price) by a transaction which they were not part of d) firms have to pay for polluting the environment

Answer 53

c) people are affected (other than price) by a transaction which they were not part of

Question 54

55. The consumption of large cars such as SUVs produces all but one of the following types of negative externalities a) Safety externalities b) Wear and tear on roads c) Environmental externalities d) Hydro externalities

Answer 54

d) Hydro externalities