William Rainey Harper College
ECO 211
Microeconomics: An Introduction to Economic Efficiency

5Es Practice Quiz

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ANSWERS:

1. The price of plywood rising after a hurricane hits Florida is an example of which of the 5 Es?

  1. Economic Growth
  2. Allocative Efficiency - CORRECT
  3. Productive efficiency
  4. Equity
  5. Full Employment

2. The "E" that supports the concept of free trade is:

  1. Economic Growth
  2. Allocative Efficiency
  3. Productive efficiency - CORRECT
  4. Equity
  5. Full Employment

3. Economic growth helps reduce scarcity by:

  1. using our resources to produce more of what people want
  2. using our resources to produce at a lower cost
  3. achieving a more equal distribution of income
  4. using new resources and better technology to produce more - CORRECT
  5. using all of our resources to produce as much as possible

4. The economic principle that is used to explain how equity helps society achieve the maximum satisfaction possible from its limited resources is:

  1. the principle of comparative advantage
  2. the law of increasing costs
  3. economies of scale
  4. supply and demand
  5. the law of diminishing marginal utility - CORRECT

5. Which of the following is NOT one of the three choices available to a society to deal with scarcity?

  1. Economic Growth
  2. Limited resources - CORRECT
  3. Use existing resources wisely
  4. Reducing wants

6. When the Coca-Cola company lays-off 6,000 employees, assuming that the quantity of soft drinks they produce does not decrease, may be considered GOOD for society because:

  1. Coca-Cola was not using resources where they were best suited
  2. Coca-Cola was using more resources then necessary - CORRECT
  3. Coca-Cola was not using the appropriate technology
  4. Coca-Cola is trying to achieve economic growth
  5. There is no way that this could be GOOD for society

7. What is the "Economic Problem" (sometimes called the "Economizing Problem")?

  1. The desire to achieve full employment.
  2. Getting a bigger boat for Mark.
  3. High inflation rates
  4. Because of scarcity we must make choices. - CORRECT
  5. The unequal distribution of income.

8. The richest quintile (20%) of the US population receives about what percent of income?

  1. 10%
  2. 20%
  3. 30%
  4. 40%
  5. 50% - CORRECT

9. Secretaries should be typing letters and truck drivers should be driving trucks is an example of:

  1. Economic Growth
  2. Allocative Efficiency
  3. Productive efficiency - CORRECT
  4. Equity
  5. Full Employment

10. Using our resources to produce more sport utility vehicles and fewer small cars is an example of:

  1. Economic Growth
  2. Allocative Efficiency - CORRECT
  3. Productive efficiency
  4. Equity
  5. Full Employment
INSTRUCTOR: Mark L. Healy