Chapter 1-4

In competitive markets, excess production or excess demand will A. Cause changes in the quantities demanded and supplied that tend to eliminate the excess production or excess funds B. Cause changes in the quantities demanded and supply at that time to intensify the excessive production or excess demand C. Never exist because the markets are always at equilibrium D. Because shifts in the demand and supply curves that tend to eliminate the excess production or excess demand

A

Specialization allows a society to produce _______ goods A. More B. Inefficient C. Fewer D. Efficient

A

The problems of aggregate inflation and unemployment are A. Major topics of macro economics B. Major topics of micro economics C. Only relevant to European economies D. Not relevant to the US economy

A

There is excess production of tomatoes in the market this implies that A. Is the current price is above the equilibrium level B. The supply of tomatoes is more than the demand C. Quantity demand it is more than quantity supplied D. The price will be rising, as a result

A

When economists say that the supply for a product has decreased, they mean that the A. Supply curve has shifted to the left B. Supply curve has gifted to the right C. Products has become more expensive and thus customers are buying less of it D. Product has become particularly abundant for some reason

A

When the price of a product falls, the purchasing power of our money income rises and the permits consumers to purchase more of the product this statement describes A. The income effect B. Inferior good C. The substitution effect D. The rationing function of prices

A

Which would cause an increase in the supply curve of cell phone services? A. A decrease in the wages of phone company workers B. A decrease in a subsidy given to cell phone service providers C. An increase in the price of cell phone services D. And increase in the taxes paid by cell phone service providers

A

A market for product reaches equilibrium when A. The price rises further after there is a surplus B. Buyers intend to buy a quantity equal to the quantity that sellers intend to sell C. Price falls further after there is a shortage D. The actual quantity bought by buyers equals actual quantity sold by sellers

B

Farmers withholding some of their current corn harvest from the market because they anticipate a higher price of corn in the near future would cause a A. Movement up along the surrender supply curve of corn B. Leftward shift C. Rightward shift D. Movement down

B

One major part of the opportunity costs of one's decisions to go to college after high school graduation is the A. Education that one gets while in college B. Full-time job that one could have gotten instead of going to college C. Hi school diploma needed in order to apply for college D. Additional income that one could get if one had a college degree

B

The horizontal axis of a graph that shows a market demand curve indicates the A. Various quantities of output at which the market will be cleared B. Quantities that consumers will be willing and able to buy at various prices C. The number of consumers who are in the market for this product D. Different prices at which various levels of output can be sold

B

The law of demand states that, other things equal, A. Consumers will buy more of a product at higher prices than at low prices B. Price and quantity demanded are inversely related C. Price and quantity demanded are directly related D. The larger number of buyers in a market, the lower the product price will be

B

The simple circular flow model shows that workers and Capital owners offer their services to the firms through the A. Government agencies B. Resource markets C. Product markets D. Employment agencies

B

The terms of trade are acceptable if the price is ______ the sellers opportunity cost and ______ the buyers opportunity cost A. Below , below B. Above below C. Above above D. Below above

B

Which situation is consistent with the law of diminishing marginal benefit? A. Joseph marginal benefit from eating pizza becomes positive after eating three slices B. The more pizza Joseph eats, the less he enjoys an additional slice C. The more pizza Joe sieve eat, the more he enjoys an additional slice D. Joseph's marginal benefit from eating pizza reaches a maximum win total benefit is zero

B

Which statement best illustrates the concept of diminishing marginal utility? a. A decrease in the price of hamburgers will cause consumers to buy more hamburgers because they can afford more B. Atypical consumer will receive less satisfaction from consuming the fourth hamburger in a week then from the third hamburger C. As one consumes more hamburgers per week, one would be willing to pay a higher price for additional hamburgers D. Consumers will receive less satisfaction from consuming hamburgers and from consuming fried chicken

B

Which would be a likely cause of an increase in the demand for pizza? A. An increase in the price of pizza B. A health report showing eating pizza reduces stress C. A reduced desire for takeout and a fast food dining D. A decrease in the price of pizza

B

A tax on suppliers will cause the equilibrium price paid by the consumer to ______ and the equilibrium quantity to ______. A. Decrease, decrease B. Decrease, increase C. Increase , increase D. Increase, decrease

D

Economists use the term "demand" to refer to A. A particular price quantity combination on a stable demand curve B. And upsloping line on a graph that relates consumer purchases and a product price C. The total amount spent on a particular commodity over a fixed time period D. A schedule of various combinations of market prices and amounts/quantities demanded

D

From an economic perspective, when a consumer it decides to buy more life insurance, a consumer has most likely concluded that the marginal A. Cost of more insurance coverage is negative B. Benefit of more insurance coverage is greater than zero C. Cost of the more insurance coverage is equal to the payment for the extra coverage D. Benefit of more insurance coverage is greater than the marginal cost

D

Grains from specialization and mutually beneficial trade ____ wealth or well-being. A. Moderates B. Dilutes C. Decreases D. Increases

D

One of the basic difference between land and capital resources is that land is A. Manufactured while capital is man-made B. Limited while capital is unlimited C. Unlimited while capital is limited D. Natural while capital is man-made

D

Price is the statement of the Law of Supply refers to the A. Total revenues that selllers receive for selling a given quantity of the product B. Amount that buyers are willing and able to pay for each unit of product C. Total amount that buyers pay in order to acquire a given quantity of the product D. Marginal cost of producing the last unit of the product

D

Suppose that corn prices rise significantly. If farmers expect the price of corn to continue rising relative to other crops, then we would expect: A. consumer demand for corn to fall in the future B. the supply of ethanol, a corn-based product, to increase. C. the future supply to fall as farmers plant more of other crops D. the future supply to increase as farmers plan more corn

D

Which is most likely to be observed in a community where legal ceilings are imposed on residential rents? A. Those whose needs for housing are most urgent will be able to obtain the space they want B. Poor people will be able to find adequate housing C. Homeowners will reduce their own use of housing space, making more available to others D. People moving into the community will have difficulty locating residential space to rent

D

Which of the following is not a main function of the entrepreneur A. To innovate B. To make strategic business decisions C. To assume risk of economic losses D. To make routine pricing decisions

D

Which one of the following would not affect the position of the supply curve for cranberries? A. Cost of fertilizers for cranberries production B. Devolpment of a new pest control for cran C. The number of sellers in the market D. Popularity of cran drinks

D

An "increase is quantity supplied" suggets A. Movement down along the supply curve B. Rightward shift of the supply curve C. Movement up aling the supply curve D. Leftward shit amoing the supply curve

C

If a price ceiling is set below the equilibrium price in a market A. The quantity supplied will exceed the quantity demanded B. Surpluses of the commodity will develop C. The quantity demand it will exceed the quantity supplied D. Rationing will be unnecessary

C

If a price floor is set above the equilibrium price in a market A. The quantity demanded will exceed the quantity supplied B. Rationing will be unnecessary C. The quantity supplied will exceed the quantity demanded D. Shortages will develop

C

If the price of a product decreases, we would expect A. Quantity supplied to increase B. Supply to decrease C. Quantity supplied to decrease D. Demand to increase

C

In a competitive markets, a surplus or shortage will a. Cause changes in the quantities demanded and supplied that tend to intensify the surplus or shortage B. Cause shift in the demand and supply curves that tend to eliminate the surplus or shortage C. Cause changes in the quantities demanded and supplied that tend to eliminate the surplus or shortage D. Never exist because the markets are always at equilibrium

C

In the circular flow model of the market system, households A. Sell products and buy resources B. Sell products and resources C. By products and sell resources D. By products and resources

C

In understanding and analyzing "market supply" we focus on how much all A. Firms have sold in the recent past B. Firms will sell in the future C. Firms can and will sell at a given price D. Firms want to sell

C

Sophie is willing to sell her used economics textbook for $30. Ruby is willing to pay $60 for the used economics textbook. Sophie and Ruby agree on a price of $45. The gains from trade for sophie equals ____ and the gains from trade for Ruby Equals____. A. 15 15 B. 30 60 C. 0, 30 D. 30 0

C

There is an excess supply in a market for a product when A. Supply is less then demand B. Quantity demanded is greater then quantity supplied C. Quantity demanded is less then quantity supplied D. The current price is lower than the equilibrium price

C

There is excess demand in a market for a product when A. Quantity demanded is less than quantity supplied B. The current price is higher than equilibrium price C. Quantity demanded is greater than quantity supplied D. Supply is less then demand

C

When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls and fewer Adidas soccer balls. Which of the following best explains Ronaldo's decision to buy more Nike soccer balls? A. The price affect B. An increase in the demand for Nike soccer balls C. The substitution effect D. The income effect

C

When the price of a product of rises, consumers with a given that money income shift their purchases to other products whose prices are now relatively lower. This statement describes A. The income affect B. And inferior good C. The substitution effect D. The rationing function of prices

C

Which statement is true about supply? A. As prose decreases, producers are willing to put more of the good on the market for sale B. There is and inverse relationship between price and quantity supplied C. To entice producers to offer more of a good on the market for sale, prices must rise D. Supply refers to the amount of inventory that sellers have in their warehouses

C