1) The best definition of economics is

A) how choices are made under conditions of scarcity.

B) how money is used.
C) how goods and services are produced.
D) how businesses maximize profits.

2 The fundamental economic problem faced by all societies

is:
a. unemployment
b. inequality
c. poverty
d. scarcity
3

"Capitalism" refers to:

a. the use of markets
b. government ownership of capital goods
c. private ownership of capital goods
d. private ownership of homes & cars

4
7. The three groups of decision makers in the economy are ( b )
a. households, business firms, and banks
b. households, business firms, and governments
c. business firms, governments, and banks

d. business firms, banks, and foreign traders e. households,

governments, and banks

5. Whose opinions have revolutionised the scope of macro

economics ?
(A) Adam Smith
(B) J.B. Say
(C) J.M. Keynes
(D) All of the above

6 In the mixed economy

This is the correct answer.

A)

economic problems are solved by the government

and market

B)

economic decisions are made by the private sector and

free market

C)

economic allocation is achieved by the invisible hand

D)

economic questions are solved by government

departments

3. There are three fundamental questions every society

must answer. Which of the following is/are one of these
questions?
a. What goods and services are to be produced?
b. How are the goods and services to be produced?
c. Who will get the goods and services that are produced?
d. All of the above