1. The term capitol, as used by economists, refers to____

(A) Money

(B) The physical space in which production occurs

(C) The time allocated to producing goods and services

(D) Financial securities such as stocks and bonds

(E) Something that is long-lasting and used to produce goods and services.

2. Microeconomics topics include the overall unemployment rate in the United States and the rate of inflation. (TRUE/FALSE)

3. Which of the following is a positive statement?

(A) Driving speeds should be lowered so that fewer accidents will occur.

(B) When per capita income falls, fewer meals are consumed at restaurants

(C) The minimum wage is too low; college students deserve a raise

(D) Cigarette sales should be made illegal in order to reduce the incidence of cancer

(E) Social Security is a good program for U.S. workers.

4. Which of the following are the best examples of substitute goods?

(A) Personal computers and computer software programs

(B) Milk and cookies

(C) Packard Bell and IBM personal computers

(D) Hotdogs and Mustard

(E) Contact lenses and Lens cleaning solutions