Unit 3 Econ: The Price is Right

Which of the following best explains why unions give workers more power in contract negotiations?

B. Employers can't fire an entire union because of the difficulty of replacing every worker.

What is the most direct result of free trade supplying productive resources to areas where they're most needed?

B. Enhanced efficiency

Which of the following best describes the effect of a tariff on the import of cars from a foreign country?

B. Foreign cars become more expensive.

Which of the following best explains why buying a single-family home in a city is a good investment?

B. Housing prices in cities generally increase more quickly than anywhere else.

Which of the following results of globalization has led to wage cuts for workers in the United States?

B. Outsourcing

Which of the following accurately describes a situation in which consumers have elastic demand?

B. People give up eating pasta and bread because they want to lose weight

Which of the following is the most direct cause of cost-push inflation?

B. Rising production costs.

Which of the following is located at the point where the supply and demand curves intersect?

B. The equilibrium price.

Which of the following best explains what happens when unemployment increases during a recession?

C. The recession worsens into a depression.

When someone buys a fourth television for his or her house, what is the result?

C. There's a decrease in the marginal utility of the television.

Which of the following best explains one of the restrictions on producers that keeps the labor market from being a completely free market?

C. Workers don't always have the education required to perform certain jobs.

If the price of building materials suddenly increased by a large amount, there would most likely be which of the following?

A. Shift to a seller's market.

A calculation of the amount that the average person can afford to buy is a way of measuring which of the following?

A. Standard of living

Which of the following can employers use to prevent an industrial action by a union from affecting production?

A. Strikebreakers

Which of the following is an example of the use of fiscal policy by the U.S. government?

A. The Department of Transportation increases spending on highway repairs

Which of the following areas provides residents with close access to high- paying jobs and cultural attractions?

A. The city

Which of the following best explains how unions help workers get better wages?

A. The collective bargaining power of unions puts workers on a more equal level with employers.

Which of the following results from a large company's ability to take advantage of economies of scale?

A. The company can offer goods more cheaply than smaller retailers.

Which of the following limits the freedom of workers in the labor market?

A. The inflexibility of the work force.

Which of the following is a problem for the production of public goods?

A. The possibility of free riders.

When either prices go down or income goes up, there is an increase in which of the following?

A. The standard of living

Which of the following best states the purpose of a government subsidy?

A. To protect domestic producers against international competition.

Which of the following best states the purpose of an import quota?

A. To reduce competition from foreign producers.

Which of the following actions can a union take to get an employer to submit to collective bargaining?

B. Call a strike.

Which of the following is the cause of demand-pull inflation?

B. Consumers want more and more goods and services.

Which of the following best explains why large companies have an advantage over smaller companies?

D. Economies of scale make it possible to offer lower prices.

Which of the following is most likely to create new markets?

D. Free trade

The selling price of houses would be most likely to increase if there were a decrease in which of the following?

D. Mortgage interest rates.

Which of the following leads to an increase in bargaining power for workers?

D. The existence of unions.

All of the following factors affect the level of wages except which of the following?

D. The production possibilities frontier.

What happens when someone orders a second dessert when he or she is already full from the first dessert?

D. The second dessert has less utility than the first dessert.

Which of the following areas gives people access to both high-paying jobs and more living space?

D. The suburbs

Which of the following is most necessary for specialization among producers to take place?

A. Free trade

Which of the following has led to greater competition among workers looking for jobs?

A. Globalization

Which of the following commodities has the most inelastic supply?

A. Housing

Which of the following is most likely to lead to a general decrease in wages?

A. Immigration

Immigration can result in a general decrease in wages because immigration does which of the following?

A. Increases the supply of labor.

Which of the following best explains why wholesalers can offer lower prices to larger customers?

A. Large companies can buy all or most of a wholesaler's stock, reducing the wholesaler's administrative costs.

Which of the following results from outsourcing jobs from the United States to other countries?

A. Lower wages for U.S. workers.

Which of the following is a trait of public goods?

A. Non-excludability

Which of the following accurately describes one way that individual goods differ from public goods?

A. People can be excluded from using individual goods if they don't pay.

Which of the following is an example of a fiscal policy?

A. Raising taxes in order to cover a budget deficit.

Which of the following would lead to an increase in the inflation rate?

A. Rapidly rising production costs.

The selling price of houses would be most likely to decrease if there were first a decrease in which of the following?

A. Construction workers' wages

Which of the following accurately describes a surplus?

A. Consumer demand for a certain car is below the number of cars that are produced.

Which of the following occurs when someone buys a third winter coat?

A. Decreasing marginal utility

Match each type of policy with the example that best fits its definition. A. Protectionist policy B. Fiscal policy C. Monetary policy

A. A high tax on cars imported from other countries. B. Reduced taxes on corporate profits. C. Increased interest rates on loans.

Which of the following leads to the end of a boom period in the business cycle?

A. A reduction in consumer demand resulting from inflation.

Which of the following accurately describes a situation in which substitution occurs?

A. A restaurant starts using margarine instead of butter because butter becomes more expensive.

Which of the following are needed to determine the equilibrium price of a good or service?

A. A supply curve and a demand curve.

In which of the following situations would the price of a good be most likely to increase?

A. An increase in production costs results from a rise in wages.

Which of the following housing decisions gives a person the best chance to make a profit on his or her investment?

A. Buying a single-family home in a city.

A factory laying off a lot of workers in a town is most likely to lead to which of the following?

B. A buyer's market.

In which of the following situations would the price of a good be most likely to increase?

B. A rise in demand happens too quickly for producers to increase production to keep up.

Match each type of policy with the example that best fits its definition. A. Protectionist policy B. Fiscal policy C. Monetary policy

B. The government goes into debt to buy a large number of vehicles for the military. A. The government limits the number of foreign cars that can be sold in the United States. C. The government decreases the interest rates on loans charged to car companies.

Which of the following results from the fact that housing is expensive and time-consuming to build?

B. The supply of housing is inelastic.

Which of the following accurately describes the effect of a situation of scarcity?

B. There's a shortage of oil, pushing car companies into researching alternative fuels.

A rapid increase in the population of a city or town is most likely to lead to which of the following?

C. A seller's market

Which of the following is intended to demonstrate to an employer the importance of cooperating with workers?

C. A work slowdown.

Which of the following best explains how a recovery period leads to a boom?

C. An increase in consumer demand resulting from a reduction in prices.

Which of the following best explains why the supply of housing often cannot keep up with increases in demand?

C. Housing is expensive and time-consuming to build

An increase in the standard of living results from an increase in which of the following?

C. Income

Which of the following is an example of a fiscal policy?

C. Increasing taxes to pay for greater military spending.

Consumers are most likely to be priced out of the option to buy a home when there's an increase in which of the following?

C. Mortgage interest rates.

Which of the following accurately describes a situation in which consumers have inelastic demand?

C. People cannot quit drinking coffee even though they want to cut down on caffeine intake.

Which of the following has the lowest housing prices and the smallest population density?

C. Rural areas

In which of the following situations would the price of a good be most likely to decrease?

C. The development of a new energy source reduces production costs for a company.

Which of the following is shown by the intersection of the supply curve and the demand curve?

C. The equilibrium price of a good or service.

Which of the following limits the freedom of both employers and workers in the labor market?

C. The existence of a minimum wage.

Match each type of policy with the example that best fits its definition. A. Protectionist policy B. Fiscal policy C. Monetary policy

C. The government restricts the amount of money that can be loaned to farmers. B. The government purchases a large amount of domestically grown grain. A. The government limits the amount of European grain that can be sold in the United States.

All of the following factors affect the level of wagesexcept which of the following?

C. The gross domestic product

Which of the following is one of the major factors determining the level of wages?

C. The law of supply and demand.

Because immigration can result in an increase in the supply of labor, immigration can result in which of the following?

D. A general decrease in wages.

Which of the following housing decisions provides a person with both housing and an investment?

D. Buying a single-family home.

Which of the following accurately describes a shortage?

D. Consumer demand for a certain car is greater than the number of cars that can be produced.