Module 2 Quiz: Economics
Why does the demand or supply curve shift the way it does and what element of demand caused the shift? How does that affect the equilibrium price and quantity?
A pay cut decreases production costs for the firm. A decrease in production cost generally increases supply. Therefore supply curve shifts to the right to show a decrease in the equilibrium price and an increase in the equilibrium quantity. A decrease in tax rates effectively increases your income. An increase in income generally increases demand. Therefore demand curve shifts to the right to show an increase in the equilibrium price and quantity.
Which of the following is an example of frictional unemployment as defined in the text?
An auto worker has received a job offer two states away, and must take off one month in between
Which one of the following countries exhibits characteristics of a command economy?
China
Suppose Congress cuts personal income tax rates. Which graph most accurately shows how this would affect the market for air conditioners? Note that the new curve is shown in grey.
Demand curve shifts right:
Which of these is the most effective way to learn a new topic?
Doing practice questions about the topic
The economic term "scarcity" describes which of the following conditions?
Global oil reserves are limited.
Which of the following statements describe(s) a free market?
Government does not intervene in any way.
A business cycle reflects changes in economic activity, as measured by:
Gross Domestic Product (GDP).
Each year it is good to measure the market value of all goods and services produced by an economy, known as:
Gross Domestic Product (GDP).
The market value of all goods and services produced by the economy in a given year is known as:
Gross Domestic Product (GDP).
The main economic indicators include
Gross Domestic Product, Inflation, Unemployment
If a decrease in the price of MP3 players decreases the demand for CD players, this means that:
NOT MP3 players and CD players are rivalrous goods.
When economists talk about supply, they are referring to a relationship between the price in a market and the:
NOT amount that buyers wish to purchase.
Each of us face decisions in our lives that require us to make choices, knowing that:
NOT the opportunity cost of one's decision is always maximized.
If an increase in the price of Nike shoes increases the demand for Adidas shoes, this means that:
Nike shoes and Adidas shoes are substitutes.
Which of the following describes a business cycle?
Periods of increasing and decreasing real Gross Domestic Product (GDP).
What would cause the demand curve to shift?
Population grows in a particular market area.
Marquise is studying for his Biology test. He only has an hour because he has lots of other homework to get through as well. What's the best use of Marquise's time?
Practicing by answering questions (in his homework or from the textbook)
Which country has characteristics of a command economy?
Russia
Which of these does research show is the best study technique?
Spacing out your practice over time
Suppose that air conditioner workers accept a pay cut of 2 dollars per hour. Which graph most accurately shows how this would affect the market for air conditioners? Note that the new curve is shown in grey.
Supply curve shifts right:
Identify the macroeconomic issue among the following statements.
The average cost of producing electricity nationally is rising.
A free market is described by which of the following statements?
The government does not intervene in any way.
What is one of the benefits of specialization in labor?
Workers who specialize in certain tasks often learn to produce more quickly and with higher quality.
A decrease in the quantity supplied can be the result from:
a decrease in price.
When the price in some market is above its equilibrium price:
a surplus exists.
Excess supply occurs when the actual price in some market is ________ the equilibrium price.
above
Which of the following items is not scarce?
air
According to the law of supply, assuming other factors are held constant:
as the price of milk decreases, the quantity of milk supplied will decrease.
The law of demand states that as the price of a good increases:
buyers desire to purchase less of it.
The law of demand states that as the price of a good decreases:
buyers desire to purchase more of it.
Because of our limited money, time, and effort, we are best off when we allocate those things:
by constantly assessing the opportunity costs of our choices.
The point of a business cycle fluctuation during which growth slows, unemployment increases, and pricing pressures subside is called a(n):
contraction.
When ________, a typical firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.
costs of production fall
When ________, business firms will collectively supply a higher quantity of output at any given price, and the supply curve will shift to the right.
costs of production fall
When ________, business firms will collectively supply a lower quantity of output at any given price, and the supply curve will shift to the left.
costs of production increase
Complete the following sentence: If people think that the price of televisions will decrease in the near future, that belief may cause a(n):
decrease in the demand for televisions today.
An extended period of decline with no improving indicators typically signals a ________ in the economy.
depression
What is the term for an extended period of economic decline with no improving indicators?
depression
________ is the way a service or good is produced and divided into a variety of tasks performed by different workers, instead of the same person performing all the tasks.
division of labor
Market economies are based on private enterprise, which means
economic decision-making happens through markets.
The Coalatree company makes travel clothes, gear, hammocks, and blankets. The company used Kickstarter to fund increased production of its new "Trailhead Pants" line. Increase production has resulted in a decrease in the average per pant production cost. This increase in production efficiency is an example of:
economies of scale.
The ________ is where quantity demanded and quantity supplied are equal at a certain price.
equilibrium
The one unique point in which quantity demanded equals quantity supplied is called:
equilibrium.
When the actual price in some market is above the equilibrium price, the resulting market condition is known as:
excess supply
In a market with an upward sloping supply curve and a downward sloping demand curve, when the actual price must be higher than the equilibrium price, there will be:
excess supply.
Businesses are most likely to hire new employees during which stage of the economic cycle?
expansion
Rising economic indicators typically signal ________ in the economy.
expansion
In a planned economy, government determines the prices for goods and services, and:
government also determines what goods will be produced.
Complete the following sentence: If people think that the price of electronics will increase in the near future, that belief may cause a(n):
increase in the demand for electronics today.
Economists refer to the relationship that a higher price leads to a lower quantity demanded as the:
law of demand.
Economists refer to the relationship that a higher price leads to a higher quantity supplied as the:
law of supply
The field of economics that looks at the economy as a whole and focuses on broad issues such as growth, unemployment, inflation, and trade balance is:
macroeconomics
In a world of scarcity, we will never:
meet all of society's wants
What will we never do in a world of scarcity?
meet all of society's wants
The field of economics that focuses on the actions of individual agents within the economy, like households, workers, and businesses is:
microeconomics.
If a community college decided to build an academic building, then the money and resources would not be available for a parking garage. This is an example of:
opportunity cost.
If a county government decided to build parks, then the money and resources would not be available for additional fire fighters. This is an example of:
opportunity cost.
During an economic ________, business is booming, prices are high, and it is difficult to hire new workers because virtually everyone who wants to work is already employed.
peak
The downward slope of a demand curve illustrates the pattern that as ________ decreases, ________ increases.
price : quantity demanded
A demand curve shows the graphical relationship between quantity demanded and:
price.
A demand curve shows the graphical relationship between price and:
quantity demanded.
A supply curve is a graphical illustration of the relationship between price and:
quantity supplied.
The unemployment rate generally ________ during contractions and ________ during expansions.
rises: falls
A change in technology that reduces the costs of production will:
shift the supply curve to the right.
The relationship between the price in a market and the amount that producers collectively make available for sale, is referred to as:
supply.
In a market with an upward sloping supply curve and a downward sloping demand curve, when there is an excess supply:
the actual price must be higher than the equilibrium price.
The equilibrium price for Gizmos Puzzle Toys is $12, but Gizmos are currently priced at $10 throughout the market. In the typical store that sells Gizmos, we might expect:
the box of available Gizmos is often empty.
The equilibrium price for Gizmos Puzzle Toys is $10, but Gizmos are currently priced at $12 throughout the market. In the typical store that sells Gizmos, we might expect:
the box of available Gizmos is often full or overflowing.
Periods of increasing and decreasing real Gross Domestic Product (GDP) describes:
the business cycle.
In life, we all come to a fork in the path when we need to make a choice, knowing that:
the correct choice depends upon how much we need to give up.
When a market is experiencing a shortage, or "excess demand":
the equilibrium price is higher than the current market price.
When higher prices result in a lower quantity demanded, economists call this relationship:
the law of demand
A microeconomic example may include(s):
the price that a local automobile repair shop will charge for its services.
A severe drought has damaged the Washington state apple crop. As a result apple producers will pay more for apples and ultimately consumers will have to pay more for apple juice at the grocery store. The impact on the market for apple juice will cause which of the following to shift to the left?
the supply curve
An unexpected freeze has damaged the Florida orange crop. As a result orange juice producers will pay more for oranges and ultimately consumers will have to pay more for orange juice at the grocery store. The impact on the market for orange juice will cause which of the following to shift to the left?
the supply curve
Suppose Congress passes legislation that offers subsidies to orange farmers. The impact on the market for orange juice will be a rightward shift of:
the supply curve
When quantity demanded decreases in response to a change in price:
there is a movement from one point to another along the demand curve.
When quantity demanded increases in response to a change in price:
there is a movement from one point to another along the demand curve.
The point of a business cycle fluctuation during which growth ceases and the economy has hit a bottom is called a(n):
trough.
Nearly all supply curves share a basic similarity. The slope is:
up from left to right.
