Econ quiz
56. Refer to Figure 6-12. Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?
a. Buyers of gasoline paid a price of P1 before 1973; they paid a price of P2 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price.
23. Refer to Figure 2-14. If this economy uses all its resources in the dishwasher industry, it produces 35 dishwashers and no doghouses
a. True
28. Refer to Table 3-35. Which good(s) does Finland have an absolute advantage producing?
a. both eggs and ham.
71. Trade raises the economic well-being of a nation in the sense that
a. the gains of the winners exceed the losses of the losers.
73. If the world price of a good is greater than the domestic price in a country that can engage in international trade, then that country becomes an importer of that good.
b. False
51. Policymakers use taxes
b. both to raise revenue for public purposes and to influence market outcomes.
44. Another term for equilibrium price is
b. market-clearing price.
47. Refer to Table 4-12. If only members are allowed to purchase tickets to this year's celebrity golf tournament, then what will be the equilibrium price?
c. $20
45. Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market demand schedule is:
c. $6.00 and 600 cases
36. In a competitive market, the quantity of a product produced and the price of the product are determined by
c. both buyers and sellers
40. Good X and good Y are substitutes. If the price of good Y increases, then the
c. demand for good X will increase.
16. Economists, like mathematicians, physicists, and biologists,
d. All of the above are correct.
74. Which of the following headlines is more closely related to what microeconomists study than to what macroeconomists study?
d. The price of gasoline rises due to rising oil prices.
4. Which of the following is not subject to scarcity?
d. none of the above
25. Assume for Brazil that the opportunity cost of each cashew is 100 peanuts. Which of these pairs of points could be on Brazil's production possibilities frontier?
a. (200 cashews, 30,000 peanuts) and (150 cashews, 35,000 peanuts)
11. The term "invisible hand" was coined by
a. Adam Smith.
61. Which of the following statements is correct?
a. Buyers always want to pay less and sellers always want to be paid more.
72. Refer to Figure 9-1. Relative to the no-trade situation, trade with the rest of the world results in
a. Guatemalan consumers paying a higher price for coffee.
22. The scientific method can be applied to the study of economics.
a. True
31. Opportunity cost measures the trade-off between two goods that each producer faces.
a. True
32. Timmy can edit 2 pages in one minute and he can type 80 words in one minute. Olivia can edit 1 page in one minute and she can type 100 words in one minute. Timmy has an absolute advantage and a comparative advantage in editing, while Olivia has an absolute advantage and a comparative advantage in typing.
a. True
58. If the government removes a tax on a good, then the quantity of the good sold will
a. increase.
63. Willingness to pay
a. measures the value that a buyer places on a good
68. Efficiency is attained when
a. total surplus is maximized.
59. A $2.00 tax levied on the sellers of birdhouses will shift the supply curve
a. upward by exactly $2.00.
64. Refer to Table 7-1. If the price of the product is $122, then the total consumer surplus is
b. $41.
8. Consider Mandy's decision to go to college. If she goes to college, she will spend $20,000 on tuition, $10,000 on room and board, and $2,000 on books. If she does not go to college, she will earn $18,000 working in a store and spend $8,000on room and board. Mandy's cost of going to college is
b. $42,000.
65. Refer to Table 7-10. If the market price is $1,200, the producer surplus in the market is
b. $800.
54. A nonbinding price ceiling
b. (iii) only
19. Refer to Figure 2-1. Which arrow represents the flow of goods and services?
b. B
69. With which of the Ten Principles of Economics is the study of international trade most closely connected?
b. Trade can make everyone better off.
29. Refer to Table 3-38. Iowa and Nebraska can both produce corn and soybeans, and can switch between the production of corn and soybeans at a constant rate. The table illustrates the amount of corn or soybeans each state can produce in one growing season. From this table, we know that Nebraska has an absolute advantage in the production of
b. both goods and a comparative advantage in the production of soybeans.
24. People who provide you with goods and services
b. do so because they get something in return.
21. President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would
b. have 100 questions and 3,000 answers.
43. If suppliers expect the price of their product to fall in the future, then they will
b. increase supply now.
66. Suppose consumer income increases. If grass seed is a normal good, the equilibrium price of grass seed will
b. increase, and producer surplus in the industry will increase.
14. In a particular country in 2008, the average worker had to work 40 hours to produce 100 units of output. In that same country in 2018, the average worker needed to work 35 hours to produce 94.5 units of output. In that country, the productivity of the average worker
b. increased by 8 percent between 2008 and 2018.
75. GDP
b. is used to monitor the performance of the overall economy and is the single best measure of a society's economic well-being.
17. Economists make assumptions to
b. make a complex world easier to understand
55. Refer to Figure 6-2. The price ceiling
b. makes it necessary for sellers to ration the good.
26. Comparative advantage is related most closely to which of the following?
b. opportunity cost
41. Holding the nonprice determinants of supply constant, a change in price would
b. result in a movement along a stationary supply curve.
33. The two words economists use most often are
b. supply and demand.
18. In the circular-flow diagram
b. the factors of production are labor, land, and capital.
46. The law of supply and demand asserts that
b. the price of a good will eventually rise in response to an excess demand for that good
15. The language of economics is
b. valuable because it provides a new and useful way of learning about the world
37. The quantity demanded of a good is the amount that buyers are
b. willing and able to purchase.
1. The word "economy" comes from the Greek word oikonomos, which means
c. "one who manages a household."
39. Refer to Table 4-2. Suppose Abby, Brandi, Carrie, and DeeDee are the only four buyers in the market. If the price is $8, then the market quantity demanded is
c. 24 units.
49. During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains the decrease in production?
c. Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the equilibrium price of beef, making it less attractive to produce.
62. Welfare economics explains which of the following in the market for televisions?
c. The market equilibrium price for televisions maximizes the total welfare of television buyers and sellers.
57. Economists generally believe that rent control is
c. a highly inefficient way to help the poor raise their standard of living
50. Minimum-wage laws dictate
c. a minimum wage that firms may pay workers.
60. Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?
c. between $5 and $7
34. In a market economy, supply and demand are important because they
c. can be used to predict the impact on the economy of various events and policies
20. The production possibilities frontier is a graph that shows the various combinations of output that an economy
c. can produce.
35. A group of buyers and sellers of a particular good or service is called a(n)
c. market.
52. In a competitive market free of government regulation,
c. price adjusts until quantity demanded equals quantity supplied.
12. The term "productivity"
c. refers to the quantity of goods and services produced from each unit of labor input
48. Refer to Figure 4-18. At a price of $35, there would be a
c. surplus of 400 units.
67. Total surplus in a market is equal to
c. value to buyers - costs of sellers.
7. Suppose that you have received $300 as a birthday gift. You can spend it today or you can put the money in a bank account for a year and earn 5 percent interest. The opportunity cost of spending the money today, in terms of what you could have after one year, is
d. $315.
6. Government policies designed to equalize the distribution of economic well-being include
d. (i), (ii), and (iii)
10. The principle that "trade can make everyone better off" applies to interactions and trade between
d. All of the above are correct
13. US citizens have better nutrition, better healthcare, and a longer life expectancy than citizens of Ghana. Which of the following conclusions can be drawn from this statement?
d. All of the above are correct.
2. In considering how to allocate its scarce resources among its various members, a household considers
d. All of the above are correct.
5. The principle that "people face tradeoffs" applies to
d. All of the above are correct.
9. Government policies can change the costs and benefits that people face. Those policies have the potential to
d. All of the above are correct.
30. Which of the following is not an example of the principle that trade can make everyone better off?
d. All of the above are examples of the principle that trade can make everyone better off.
70. The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if
d. Canada forbids international trade in soybeans.
42. Refer to Table 4-6. Which supply schedules obey the law of supply?
d. Firm B's and Firm D's only
53. A legal maximum on the price at which a good can be sold is called a price
d. ceiling.
38. Refer to Figure 4-1. The movement from point A to point B on the graph shows a(n)
d. increase in quantity demanded.
27. Refer to Table 3-20. Brad has an absolute advantage in the production of
d. neither good and Theresa has an absolute advantage in the production of both goods.
3. In most societies, resources are allocated by
d. the combined actions of millions of households and firms.