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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. What describes the extent to which time or effort is well used for the intended task or purpose?
(a) Proximity.
(b) Reliability.
(c) Intention.
(d) Efficiency.

2. What is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities?
(a) Mutual fund.
(b) Index fund.
(c) Asset allocation.
(d) Foreign Exchange Market.

3. According to the author, the Hope Scholarships were a plan wherein students could borrow money for college and pay back their loans after they graduated using what?
(a) Regular debit payments.
(b) Government bonds.
(c) A percentage of their annual income.
(d) Interest free payments.

4. What does OPEC stand for?
(a) Oil and Petroleum Exclusion Clause.
(b) Original Plan Excluding Copyright.
(c) Organization of Petroleum Exporting Countries.
(d) Oval Palace Executive Class.

5. What is a financial term denoting a collection of investments held by an investment company, hedge fund, financial institution or individual?
(a) Collateral.
(b) Legislation.
(c) Security.
(d) Portfolio.

Short Answer Questions

1. According to the author, there are two lessons to be learned from a monopoly situation. What is the first?

2. According to the principles of a market economy, if it's raining, it's time to sell what?

3. Ross Perot ran for President of the United States in what year?

4. When did the Korean War begin?

5. What rhetorical question do economists ask, according to the author in Chapter 1?

Short Essay Questions

1. Who wrote the book's Foreword? What does this individual say regarding the perception of economics and economists?

2. What is the difficulty of studying economics, according to the author of the Foreword? What is the role of economics in everyday activities?

3. What do economists assume about human nature and motivation, according to the author in Chapter 1?

4. How does the author of the Foreword describe Charles Wheelan's approach to explaining economics in "Naked Economics: Undressing the Dismal Science"?

5. How does human capital relate to productivity? How does this in turn reflect the economic well-being of a nation, according to the author in Chapter 6?

6. How do the resources of a country reflect its economic well-being, according to the author in Chapter 6?

7. How is the black rhinoceros described in Chapter 2? What are the horns of the animal worth in Yemen, and why?

8. How does the author describe the concept of "trade-offs" in Chapter 1? How do trade-offs apply to individuals and to the economy?

9. How does the author of the Foreword describe the focus the book of "Naked Economics: Undressing the Dismal Science"? Does he find it balanced? Why?

10. How is adverse selection described in the example of Hope Scholarships in Chapter 4?

(see the answer keys)

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