ECON 2105: Exam 1 Chapters 1-3(practice quizzes)

Suppose that computers are a normal good. If consumers' income increases, what happens? a. there is an increase in the quantity demanded of computers b. there is an increase in the demand for computers c. there is decrease in the quantity demanded of computers d. there is a decrease in demand computers e. both the quantity demanded and the demand for computers increases

b. there is an increase in the demand for computers

At full employment, a society produces a. somewhere within its production possibilities frontier (PPF) b. somewhere outside its PPF c. at the origin on its PPF d. on its PPF e. only one good or service

d. on its PPF

If a nation is currently experiencing a high level of unemployment, it will be producing a. somewhere within its production possibilities frontier (PPF) b. somewhere outside its PPF c. at the origin on its PPF d. on its PPF e. only one good or service

a. somewhere within its PPF

An example of a direct negative incentive is... a. providing commission for sales b. awarding a promotion for hard work c. threatening to fire those who do not perform well d. providing orientation for new employees e. providing generous pay and benefits for employees

c. threatening to fire those who do not perform well

Which of the following is a normative statement? a. One should wear a helmet when cycling b. The sky is blue c. A bicycle has two wheels d. A unicycle has one wheel e. Electricity flows the path of the least resistance

a. One should wear a helmet when cycling

Economic growth is, by definition, an increase in the... a. ability to produce goods b. number of participants in the workforce c. demand for goods d. average citizen's standard of living e. average workers' salary

a. ability to produce goods

Suppose that a nation's PPF is concave. What causes this shape? a. increasing opportunity cost b. decreasing opportunity cost c. constant opportunity cost d. economic growth e. a high level of unemployment

a. increasing opportunity cost

A parent that pays a child an allowance for doing chores is providing a(n)_______ incentive. a. positive b. negative c. neutral d. complementary e. unintended

a. positive

When the price of product decreases, what happens? a. there is an increase in the quantity demanded b. there is an increase in demand c. there is a decrease in the quantity demanded d. there is a decrease in demand e. there's is no change in quantity demanded or demand

a. there is an increase in the quantity demanded

Which of the following is a positive statement? a. Nelly's dog should lose some weight b. Legally requiring dogs to have rabies shots will reduce the number of rabid dogs c. Nelly should take her dog to the veterinarian once a year for a checkup d. Chihuahuas are cuter than bulldogs e. All dogs should be required to wear leashes at all times

b. Legally requiring dogs to have rabies shots will reduce the number of rabid dogs

Which scenario represents economic contraction? a. an outward shift of the ppf b. an inward shift of the ppf c. upward movement along the ppf d. downward movement along the ppf e. straightening of the curve of the ppf

b. an inward shift of the PPF

According to economic thinking, the presence of scarcity requires a. incentives b. choices c. intelligence d. a dismal outlooks e. unintended consequences

b. choices

If there is an increase in the demand for a product while the supply is held constant a. the market equilibrium price and quantity will both decrease b. the market equilibrium price and quantity will both increase c. the market equilibrium price will increase and the market equilibrium price will decrease d. the market equilibrium price will decrease and the market equilibrium price will increase. e. the market equilibrium price will stay the same, while the quantity will increase

b. the market equilibrium price and quantity will both increase

When sellers expect the price of computers to fall in the future, what happens? a. there is an increase in the quantity supplied of computers b. there is an increase in the supply of computers c. there is a decrease in the quantity supplied of computers d. there is a decrease in the supply of computers e. both the quantity supplied and the supply of the computers increases

b. there is an increase in the supply of computers

Which of the following is a microeconomic question? a. What is the current level of GDP in the United States? b. What is the current unemployment rate in the United States? c. How much should McDonalds charge for a Big Mac? d. What government policies are most likely to promote economic growth? e. What government policies are most likely to reduce the unemployment rate among Hispanic males?

c. How much should McDonalds charge for a Big Mac?

What is the opportunity cost of taking an exam? a. all of the things that someone could have done by not studying b. each of the questions that someone misses on the exam c. the highest valued alternative that someone gave up to prepare for and attend the exam d. the money someone spent purchasing the textbook and the other materials with which he or she studies e. the money someone spent on tuition

c. the highest valued alternative that someone gave up to prepare for and take the exam

Which of the following will cause the demand for burgers to shift to the right? a. the price of burgers increases b. the price of burgers decreases c. the price of hot dogs, a substitute for burgers, increases d. the price of hot dogs, a substitute for burgers, decreases e. the price of beer, a complement with burgers, increases

c. the price of hot dogs, a substitute for burgers, decreases

When the price of a product decreases, what happens? a. there is an increase in the quantity supplied b. there is an increase in supply c. there is a decrease in the quantity supplied d. there is a decrease in supply e. there is no change in quantity supplied or supply

c. there is a decrease in the quantity supplied

Which of the following is a macroeconomic question? a. How many textbooks should be published by a publisher b. how much should a college pay an economics professor? c. How much should McDonald's charge for a Big Mac? d. What is the current unemployment rate for the United States? e. How many workers should the local Walmart employ?

d. What is the current unemployment rate for the United States?

Decision makers engage in marginal thinking by... a. comparing the average cost and benefit of all units produced b. comparing the sum of costs and benefits of all units produced c. ignoring benefits, which are a subjective determination d. comparing the benefit of one additional unit with its cost to produce e. focusing on mass production, which often keeps cost down

d. comparing the benefit of one additional unit with its cost to produce

Shoes are considered a normal good. What would happen to the equilibrium price and equilibrium quantity of shoes if income increases and the cost of labor to produce shoes increases? a. The equilibrium price and equilibrium quantity will both increase. b. The equilibrium price will be indeterminate and the equilibrium quantity will increase. c. The equilibrium price will decrease and the equilibrium quantity will be indeterminate. d. The equilibrium price will go up and the equilibrium quantity will be indeterminate. e. The equilibrium price will be indeterminate and the equilibrium quantity will decrease.

d. the equilibrium price will go up and the equilibrium quantity will be indeterminate

If there is an increase in the supply of a product while the demand is held constant... a. the market equilibrium price and quantity will both decrease. b. the market equilibrium price and quantity will both increase. c. the market equilibrium price will increase and the market equilibrium quantity will decrease. d. the market equilibrium price will decrease and the market equilibrium quantity will increase. e. the market equilibrium price will stay the same, while the quantity will increase

d. the market equilibrium price will decrease and the market equilibrium quantity will increase

When the government places a tax on the seller of a good or service a. the demand for the good or service shifts to the right b. the demand for the good or service shifts to the left c. the supply of the good or service shifts to the right d. the supply of the good or service shifts to the left e. both the supply and demand for the good or service shifts to the right

d. the supply of the good or service shifts to the left

When the workers that produce a good or service negotiate a wage increase... a. the demand for the good or service shifts to the right b. the demand for the good or service shifts to the left c. the supply of the good or service shifts to the right d. the supply of the good or service shifts to the left e. both the supply and demand for the good or service shift to the right

d. the supply of the good or service shifts to the left

When consumers expect the price of computers to fall in the future, what happens? a. there is an increase in the quantity demanded of computers b. there is an increase in demand for computers c. there is a decrease in the quantity demanded of computers d. there is a decrease in demand computers e. both the quantity demanded and demand for computers increases

d. there is a decrease in demand computers

Economists believe that optimal decisions are made up to the point where... a. marginal benefit is zero b. marginal cost is zero c. marginal benefits are greater than the marginal costs d. marginal costs are greater then the marginal benefits e. marginal benefits are equal to marginal costs

e. marginal benefits are equal to marginal costs

If there is an increase in the supply of a product at the same time that there is a decrease in demand, a. the market equilibrium price and quantity will both decrease. b. the market equilibrium price and quantity will both increase. c. the market equilibrium price will increase and the market equilibrium price will decrease. d. the market equilibrium price could increase, decrease, or stay the same and the market equilibrium quantity will increase. e. the market equilibrium price will decrease, while the quantity could increase, decrease, or stay the same.

e. the market equilibrium price will decrease, while the quantity could increase, decrease, or stay the same