Macro test 1 questions
Assume the demand schedule for smart phones is downward sloping. If the price of smart phones increases from $200 to $600: a. a decrease in quantity demanded of smart phones will occur. b. the demand for smart phones will decrease. c. an increase in quantity demanded of smart phones will occur. d. the demand for smart phones will increase.
a. a decrease in quantity demanded of smart phones will occur.
The _____ the opportunity cost of an activity, the _____ a person will do that activity. a. higher; less b. It doesn't matter c. higher; more d. lower; less
a. higher; less
When the government chooses to use resources to build tourist centers, the selected resources are no longer available to build highways. This BEST illustrates the concept of? a. opportunity cost b. efficiency c. macroeconomics d. scarcity
a. opportunity cost
The conversion of resources to satisfy wants is described as? a. production. b. distribution. c. consumption. d. conservation.
a. production.
Points inside (below and to the left of) the production possibility frontier are? a. unattainable and efficient. b. attainable and inefficient. c. attainable and efficient. d. unattainable and inefficient.
b. attainable and inefficient.
*For any given product, _____ is determined by what the market will bear? a. quality b. price c. quantity d. none of these answers are correct
b. price
Which is NOT a source of economic growth? a. educing barriers to financial aid for higher education b. reducing the level of international trade c. increasing research and development d. increasing business investment
b. reducing the level of international trade
*Ceteris paribus, an improvement in production technology? a. shifts the supply curve to the left, increasing the equilibrium price and reducing equilibrium output. b. shifts the supply curve to the right, reducing the equilibrium price and increasing equilibrium output. c. shifts the demand curve to the right, increasing both equilibrium price and output. d. shifts the demand curve to the left, reducing both equilibrium price and output.
b. shifts the supply curve to the right, reducing the equilibrium price and increasing equilibrium output.
If you were not studying economics, you could be doing one of the following: sleeping in (which you value at $5), playing cards with your friends (which you value at $10), or working (you would have earned an extra $8). The opportunity cost of studying economics is therefore: a. $23 b. $8 c. $10 d. $5
c. $10
When the mix of goods and services produced is just what society desires, then __________ exists. a. communism. b. production efficiency. c. allocative efficiency. d. socialism.
c. allocative efficiency.
The purpose of an economic model is to? a. be a complex, exact replica of reality. b. manage the economy like an automatic pilot. c. explain the behavior of the issue being examined. d. demonstrate which values and beliefs are best for the economy.
c. explain the behavior of the issue being examined.
Suppose Mike has three hours of time to spend so he ranks the following activities in order of priority: (1) see a movie, (2) attend a ball game, (3) study economics. Assume that each activity takes three hours. What is Mike's opportunity cost of seeing the movie? a. attending a ball game and studying economics b. studying economics c. either attending a ball game or studying economics d. attending a ball game
d. attending a ball game
*If supply increases and at the same time demand decreases, equilibrium price? a. increases and equilibrium quantity decreases. b. decreases and equilibrium quantity is indeterminate. c. is indeterminate and equilibrium quantity increases. d. is indeterminate and equilibrium quantity decreases.
d. is indeterminate and equilibrium quantity decreases
The _____ shows the combination of two goods that are possible for a society to produce at full employment? a. full employment line b. maximal productivity curve c. goods and services frontier d. production possibilities frontier
d. production possibilities frontier