Econ 102 Exam 1

Copper falls into which factor of production category? A) land B) capital C) labor D) entrepreneurship

A

In a market, at the equilibrium price A) neither buyers nor sellers can do business at a better price. B) buyers are paying the minimum price they are willing to pay for any amount of output and sellers are charging the maximum price they are willing to charge for any amount of production. C) buyers are willing to pay a higher price, but sellers do not ask for a higher price. D) None of the above is true.

A

In order to determine a household's budget line, you must know the A) prices of the goods bought and the household's income. B) prices of the goods bought, but not the household's income. C) household's income, but not the prices of goods bought. D) household's income, prices of the goods bought, and the household's preferences.

A

When there is a surplus in the market, the quantity sold is A) equal to the quantity demanded. B) equal to the quantity supplied. C) greater than the quantity bought. D) less than the quantity demanded.

A

Which of the following is NOT a factor of production? A) Wages Paid to workers B) the management skill of a small business owner. C) the water used to cool a nuclear power plant. D) the effort of farmers raising cattle.

A

A marginal benefit curve shows A) there are increasing opportunity costs. B) the quantity of one good that people are willing to forgo to get another unit of another good. C) the quantity of one good that must be forgone to get more of another good. D) the efficient use of resources.

B

In economics, the term "land" means A) only land that is used in agricultural production. B) land, mineral resources, and nature's other bounties. C) land used for agricultural and urban purposes. D) land that is devoted to economic pursuits.

B

The word "final" in the definition of GDP refers to A) the time period when production took place. B) not counting intermediate goods or services. C) counting the intermediate goods and services used to produce GDP. D) valuing production at market prices.

B

Which of the following best defines capital as a factor of production? A) the knowledge and skills that people obtain from education and use in production of goods and services B) financial assets used by businesses C) instruments, machines, and buildings used in production D) the gifts of nature that businesses use to produce goods and services

C

Any production point outside the production possibilities frontier is A) attainable only if prices rise. B) associated with unused resources. C) unattainable. D) attainable only if prices fall

C

The circular flow of income shows that A) households transact only in the goods market. B) firms generally are the demanders in the goods markets and suppliers in the factor markets. C) governments purchase goods and services. D) None of the above answers is correct.

C

When moving along the production possibilities frontier, opportunity cost is measured as the A) quantity produced of one good multiplied by the quantity produced of another good. B) quantity produced of one good divided by the quantity produced of another good. C) decrease in the quantity produced of one good divided by the increase in the quantity produced of another good. D) increase in the quantity produced of one good divided by the decrease in the quantity produced of another good.

C

17) A nation can produce at a point outside its PPF A) when its PPF is bowed out. B) when it produces inefficiently. C) when it trades with other nations. D) never.

D

If the price of lumber rises, then, in the market for sawdust A) the supply curve of sawdust shifts leftward. B) there is a movement upward along the supply curve for sawdust. C) there is a movement downward along the supply curve for sawdust. D) the supply curve of sawdust shifts rightward.

D

The supply curve slopes upward when graphed against ________, because of ________. A) the price of the good; decreasing marginal cost B) income; decreasing marginal cost C) income; increasing marginal cost D) the price of the good; increasing marginal cost

D

We measure the marginal ________ of a good by what a ________ for another unit of the good. A) cost; person is willing to pay B) cost; person's preferences are C) benefit; person must pay D) benefit; person is willing to pay

D

When graphing a demand curve for corn, we are showing the relationship between the quantity demanded of corn and the A) money price of corn. B) income effect. C) substitution effect. D) relative price of corn

D