Economic Analysis Quiz¹

Check the true or false box for each statement. Our scoring subtracts the number of wrong answers from the number of correct answers so guessing might reduce your score.

1: T F Automation reduces available jobs.
2: T F Raising the top income tax rates produces more revenue for the government.
3: T F Employment security taxes contributed by employers are
actually paid for by employees.
4: T F Private firms serve private interests while publicly owned
firms serve public interests.
5: T F American agriculture produces a surplus of wheat because
it is so productive.
6: T F The basic unit on which economic analysis focuses is the individual.
7: T F The higher the cost of any good to a person, the less of it he will demand.
8: T F Social conscience and civic sensitivity should
be the main guides to corporate behavior.
9: T F Tariffs protect domestic wage earners from foreign labor.
10: T F Unions protect workers from greedy employers.
11: T F Higher prices cause higher costs.
12: T F Unemployment occurs because not enough jobs are
available or because some people are too shiftless or lazy.
13: T F For each person, some goods are scarce.
14: T F Customers must take what producers offer them.
15: T F Inflation hurts the wage earner and benefits the employer.
16: T F Prices are determined by the quantity of labor required plus a profit margin.
17: T F Social-security payments contributed by employers
on behalf of their employees are paid for by the employers.
18: T F The more one has of any good, the lower his
personal value of it.
19: T F Markets reduce the cost of obtaining information
about exchange possibilities.
20: T F Choosing the best kind of competition is a function of economics.


[1] Most statements were extracted from Armen A. Alchian & William R. Allen’s University Economics, 2nd Edition (1967).