Economics test 1

Refer to the above data. Equilibrium price will be

$2.

The average tax rate is:

the ratio of total taxes paid to total taxable income.

Which of the following is a positive statement?

the temperature is 92 degrees today

At the equilibrium price:

there are no pressures on price to either rise or fall

In determining one's personal income tax, taxable income is:

total income less deductions and exemptions.

The "fallacy of composition" states that:

what is true for the individual must be true for the group.

Normative statements are concerned with:

what ought to be.

The division of labor means that:

workers specialize in various production tasks.

Answer the question on the basis of the following data: Picture Refer to the above data. If your taxable income is $4000, your average tax rate will be: 20 percent.

15 percent.

At the state and local levels of the U.S. government, a majority of government employees work in which of the following areas?

Education

If two goods are complements:

a decrease in the price of one will increase the demand for the other.

Microeconomics is concerned with:

a detailed examination of specific economic units that make up the economic system.

The marginal tax rate is:

change in taxes/change in taxable income.

The slope of a straight line can be determined by:

comparing the absolute vertical change to the absolute horizontal change between two points on the line.

Refer to the above diagram. Flow (4) represents:

consumer expenditures.

The competitive market system:

encourages innovation because successful innovators are rewarded with economic profits.

Barter:

entails the exchange of goods for goods

Which of the following is correct?

he Federal tax system is progressive, while the state and local tax system is regressive.

The economizing problem is:

he need to make choices because economic wants exceed economic means.

In the resource market:

households sell resources to businesses.

Consumer sovereignty refers to the:

idea that the decisions of producers and resource suppliers with respect to the kinds and amounts of goods produced must be appropriate to consumer demands.

The production possibilities curve illustrates the basic principle that:

if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced.

Refer to the above diagram. Which one of the following would shift the production possibilities curve away from the origin?

immigration of skilled workers into the economy

The two general types of economic systems that exist today are

market systems and command systems.

The largest source of tax revenue for the U.S. Federal government is:

personal income taxes.

The three most important sources of Federal tax revenue in order of descending importance are:

personal income, payroll, and corporate income taxes.

For economists, the word "utility" means:

pleasure and satisfaction.

The tax represented above is:

progressive

Which of the following is not an important source of revenue for the Federal government?

property taxes

Specialization in production is important primarily because it:

results in greater total output.

if government set a minimum price of $50 in the above market, a:

surplus of 21 units would occur.

Other things equal, which of the following might shift the demand curve for gasoline to the left?

the development of a low-cost electric automobile

Refer to the above diagram. If this is a competitive market, price and quantity will move toward:

$40 and 150 respectively

Refer to the above diagram. The highest price that buyers will be willing and able to pay for 100 units of this product is:

$60

Total governmental purchases—Federal, state, and local combined—account for about what percentage of domestic output?

20 percent

Examples of command economies are:

Cuba and North Korea.

Which of the following is a microeconomic statement?

The price of personal computers declined last year.

Which of the following is one of the Five Fundamental Questions?

What goods and services will be produced?

Which of the following is a labor resource?

a computer programmer

Which of the following would not shift the demand curve for beef?

a reduction in the price of cattle feed

Refer to the above diagram. A price of $20 in this market will result in

a shortage of 100 units

Refer to the above diagram. A price of $60 in this market will result in

a surplus of 100 units

As a proportion of domestic output, taxes in the United States:

are lower than in most other industrially advanced countries.

A person should consume more of something when its marginal:

benefit exceeds its marginal cost.

The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.

direct, inverse

Refer to the diagram. The variables P and Q are:

directly related.

College students living off-campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. When they finish school and start their careers, their consumption of these goods frequently declines. This suggests that ramen noodles and boxed macaroni and cheese are:

inferior goods.

According to economists, economic self-interest:

is a reality that underlies economic behavior.

A market:

is an institution that brings together buyers and sellers.

Refer to the above diagram. Flow (2) represents:

land, labor, capital, and entrepreneurial ability.

Assume an economy is operating at some point on its production possibilities curve, which shows civilian and military goods. If the output of military goods is increased, the output of civilian goods:

must be decreased

The demand for most products varies directly with changes in consumer incomes. Such products are known as:

normal goods.

The term "ceteris paribus" means:

other things equal.

The largest category of Federal spending is for:

pensions and income security.

The sales tax is a regressive tax because the:

percentage of income paid as taxes falls as income rises.

The law of demand states that

price and quantity demanded are inversely related.

The supply curve shows the relationship between:

price and quantity supplied.

In the above market, economists would call a government-set minimum price of $50 a:

price floor

In deciding whether to study for this economics exam or go to a movie, you were confronted with the notion(s) of:

scarcity and opportunity costs.

A decrease in the price of cameras will:

shift the demand curve for film to the right.

An improvement in production technology will:

shift the supply curve to the right.

A progressive tax is such that:

tax rates are higher the greater one's income.

Opportunity cost is best defined as:

the amount of one product that must be given up to produce one more unit of another product.

Because of unseasonably cold weather, the supply of oranges has substantially decreased. This statement indicates that:

the amount of oranges that will be available at various prices has declined

Macroeconomics approaches the study of economics from the viewpoint of:

the entire economy.