EC101 Quiz 1,2,3 Answers

Which of the following is not part of an economy's financial markets?

Political action committees

After Hurricane Katrina, the supply curve for gasoline

shifted to the left.

In a movement along the demand curve, the demand schedule

stays the same, but the price changes.

The graph pictured above is most likely a

supply curve, because it is upward-sloping.

In a centrally planned economy, decisions are made by

top-level government officials.

Supply curves are generally

upward-sloping.

Closed economies generally do __________ open economies, in the __________ run.

worse than; long

Price per YardQuantity Supplied$15?$25 20 Refer to the table, which shows part of the weekly supply schedule for fall leaf-raking in a certain neighborhood. According to the laws of economics, which of the following could be the missing number?

10

What phrase do economists use to describe the assumption that everything else about a situation stays the same, allowing only one variable, such as price, to change?

Ceteris paribus

Which of the following goods is not an example of a good that carries an advance purchase discount?

Refrigerated milk

The market price can sometimes be difficult to identify due to which of the following?

Sale prices and negotiated prices

Which of the following is not an example of a good or service provided by a market?

The air we breathe

Which of the following is not a monetary measure of economic prosperity?

Life expectancy

With inferior goods, demand will increase with an increase in income.

false

Natural resources, such as crude oil and fish, are often sold in ________ markets.

global

The demand curve is the graphical counterpart to the

demand schedule.

Global markets consist of buyers and sellers

anywhere in the world.

In 2018, the gross domestic product of the United States was

$20.5 trillion.

In what way does the government impact the U.S. housing market?

By setting zoning rules and construction codes

In recent years, the demand curve for IT workers has moved to the right. What does this mean?

At any price, the quantity demanded is now higher.

Why do individuals and businesses have to make decisions?

Because resources are scarce

Who competes with whom in a market?

Buyers compete with other buyers and sellers compete with other sellers.

What will happen as a result of a decrease in demand?

Equilibrium price and quantity both fall.

By total economic output (gross domestic product), the United States ranks as the __________ largest economy in the world.

First

Economic competition sometimes has which of the following negative effects on a domestic economy?

It drives down wages and profits.

Financial markets do not include which of the following?

Nonprofit organizations

What might happen if the market price for haircuts increased?

Some hair salons might hire more stylists.

Which is not an example of government intervention in the economy?

The Great Recession

The textbook says that which of the following is among the key forces shaping today's economy?

The evolution of financial markets

Based on the law of demand, what would you expect to happen if the price of gasoline were to rise to $8.00 per gallon?

The quantity demanded would decrease.

Which of the following is not a good indicator of prosperity?

The size of the safety net

What caused the decline in demand for red delicious apples?

The taste of the apples

Hurricane Katrina caused refineries and oil rigs in New Orleans and in the Gulf of Mexico to close down. In the market for gasoline, Hurricane Katrina caused

a decrease in supply

Stricter loan standards in the mortgage lending sector could cause

a demand shift to the left in the housing market.

Ceteris paribus, when used by economists, means

all other things equal.

PriceQuantity DemandedQuantity Supplied$02000$115040$210080$350120$40160 Refer to the table. If the current price in this market is $3, then there is

excess supply and pressure on the price to fall.

In a market, buyers and sellers

exchange goods and services for money.

If the supply of a good increases, the equilibrium price of that good

falls while quantity demanded rises.

If the interest rates on new car loans increase, the quantity of new cars supplied will

decrease.

When a demand curve shifts to the right

demand has increased, so equilibrium price increases, and equilibrium quantity increases.

Suppose the government decides to eliminate some, but not all, of the rules that govern how investment banks conduct their business. This would be an example of

deregulation.

The law of demand suggests that most demand curves will be

downward-sloping.

On the basic supply-demand graph, the point at which the demand curve and the supply curve intersect is located at

equilibrium price and equilibrium quantity.

The price at which the quantity supplied equals quantity demanded is the

equilibrium price.

The law of supply says that higher prices tend to ________ the quantity of a good or service ________, assuming no other changes.

increase; supplied

PriceQuantity DemandedQuantity Supplied$02000$115040$210080$350120$40160 Refer to the table. In this market, the equilibrium price

is between $2 and $3.

Inferior goods are characterized by ________ demand as a result of increased income.

lower

Gross domestic product is

one of many indicators of prosperity, some of which are monetary and some of which are not.

Market equilibrium is the point where quantity supplied and ________ are equal.

quantity demanded

The average sale price of single-family homes in the United States increased from $264,700 to $306,100 from April 2015 to April 2019. All else equal, we would expect that during the same time

quantity supplied also increased

The supply schedule is a description of the

relationship between quantity supplied and market price.

If a new major oil field is discovered in Africa, the world ________ curve for oil would shift to the ________.

supply; right

Sale prices mean that a good's price is

temporarily reduced.

Most markets, if left alone, will tend toward

the equilibrium price.

Demand is inelastic if

the quantity demanded does not change very much even if the price changes dramatically.

The market price is

the typical price at which a good or service sells.

The market price is the typical price at which a good or service sells.

true

The gross domestic product is calculated by adding up the

value of all goods and services produced within the nation.

A laissez-faire economy has

very little government regulation of the economy.