Tutorial 1

Instruction to students:
To begin, ask any questions regarding to the course materials to a tutor, and then attempt the
following:
10 Multiple Choice Questions
Spend 10-15 mins to complete in a class, and then discuss answers with a tutor

A.
B.
C.
D.

1. Society faces a trade-off between equity and efficiency because:

something that is equitable is also always efficient
people always think about the consequences of decisions before they act
government wage policies reduce incentives to work
often it is not possible to distribute resources fairly while also getting the most out
of them

A.
B.
C.
D.

2. The study of economics is concerned with:

keeping private businesses from losing money
demonstrating that capitalistic economies are superior to socialistic economies
how society manages its scarce resources
determining the most equitable distribution of society's output

A.
B.
C.
D.

3. When a society cannot produce all the resources that people wish to have, it is called:
a trade-off
a market
efficiency
scarcity

A.
B.
C.
D.

4. Economics is defined as the study of:

politics and business
central planning
government regulation
how society manages its scarce resources

A.
B.
C.
D.

A.
B.
C.
D.

5. The scarcity problem:

has been eliminated in the richest countries
persists only because countries have failed to eliminate unemployment
has been solved in all industrialised nations
persists because society cannot give every individual the highest standard of living
to which he or she might aspire
6. Which of the following does economics NOT attempt to do?
Study the past to learn lessons for the future
Devise theories, collect data, then analyse the data to test the theories
Use assumptions to make the world easier to understand
Conduct laboratory experiments that exactly replicate the real world

A.
B.
C.
D.

7. In constructing models, economists must:

employ simplifying assumptions
include as much detail as possible
use very complex mathematical equations
use very large datasets

A.
B.
C.
D.

8. Select the macroeconomic statement from the following:

fish prices have risen this year due to inflation
many households eat fish once a week
the price of fish at Victoria market is lower today than yesterday
the fish shop owner inflated the price of his fish

A.
B.
C.
D.

A.
B.
C.
D.

9. Which of the following is an example of a positive statement?

if welfare payments increase, the world will be a better place
prices rise when the government prints too much money
inflation is more harmful to the economy than unemployment
the benefits to the economy of improved equity are greater than the costs of
reduced efficiency

10. .
Which of the following is an example of a normative statement?
prices coordinate the actions of people buying and selling in a marketplace
trade makes countries better off
productivity is important in increasing wages
looking after the environment is more important than economic growth