ECO111 FE
D
QN=72 (17177) Factors of production are a. the mathematical calculations firms make in determining their optimal production levels. b. social and political conditions that affect production. c. the physical relationships between economic inputs and outputs. d. inputs into the production process.
C
QN=43 (17175) Refer to Figure 2-8, Panel (a). In order to gain 2 donuts by moving from point L to point M, society must sacrifice a. (i) efficiency. b. (ii) employment. c. (iii) 4 cups of coffee. d. More than one of (i), (ii), and (iii) is correct.
B
QN=44 (17149) Economists sometimes give conflicting advice because a. graduate students in economics are encouraged to argue with each other. b. economists have different values and scientific judgment. c. economists acting as scientists do not like to agree with economists acting as policy advisers. d. economics is more of a belief system than a science.
C
QN=45 (17153) The scientific method is a. the use of modern technology to understand the way the world works. b. the use of controlled laboratory experiments to understand the way the world works. c. the dispassionate development and testing of theories about how the world works. d. the search for evidence to support preconceived theories about how the world works.
B
QN=47 (17165) When economists make normative statements, they are a. speaking as scientists. b. speaking as policy advisers. c. making claims about how the world is. d. revealing that they are very liberal in their views of how the world works.
A
QN=48 (17158) When economists attempt to simplify the real world and make it easier to understand they make a. assumptions. b. mistakes in judgment. c. predictions. d. evaluations.
B
QN=73 (17182) Which of the following is not an example of a positive, as opposed to normative, statement? a. Higher gasoline prices will reduce gasoline consumption. b. Equality is more important than efficiency. c. Trade restrictions lower our standard of living. d. If a nation wants to avoid inflation, it will restrict the growth rate of the quantity of money.
B
QN=74 (17204) Two goods are substitutes if a decrease in the price of one good a. increases the demand for the other good. b. reduces the demand for the other good. c. reduces the quantity demanded of the other good. d. increases the quantity demanded of the other good.
D
QN=75 (17209) Who gets scarce resources in a market economy? a. the government b. whoever the government decides gets them c. whoever wants them d. whoever is willing and able to pay the price
C
QN=76 (17220) Refer to Table 4-2. Whose demand does not obey the law of demand? a. Audrey's b. Bob's c. Chuck's d. Dottie's
D
QN=77 (17205) In a market economy, supply and demand are important because they a. (i) play a critical role in the allocation of the economy's scarce resources. b. (ii) determine how much of each good gets produced. c. (iii) can be used to predict the impact on the economy of various events and policies. d. All of (i), (ii), and (iii) are correct.
B
QN=78 (17197) Which of the following statements is correct? a. Buyers determine supply and sellers determine demand. b. Buyers determine demand and sellers determine supply. c. Buyers determine both demand and supply. d. Sellers determine both demand and supply.
D
QN=79 (17224) What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold? a. Price will rise. b. Price will fall. c. Price will stay exactly the same. d. The price change will be ambiguous.
B
QN=80 (17206) Suppose that Carolyn receives a pay increase. We would expect a. to observe Carolyn moving down and to the right along her given demand curve. b. Carolyn's demand for inferior goods to decrease. c. Carolyn will go shopping at a clothing store worse than before. d. Carolyn's demand for normal goods to decrease.
B
QN=81 (17217) If the price of a good is low, a. firms would increase profit by increasing output. b. the quantity supplied of the good could be zero. c. the supply curve for the good will shift to the left. d. firms can and should raise the price of the product.
B
QN=82 (17216) Today's demand curve for gasoline could shift in response to a. (i) a change in today's price of gasoline. b. (ii) a change in the expected future price of gasoline. c. (iii) a change in the number of sellers of gasoline. d. All of (i), (ii), and (iii) are correct.
C
QN=83 (17213) Which of the following events would cause the price of oranges to fall? a. (i) There is a shortage of oranges. b. (ii) An article is published in which it is claimed that tangerines cause a serious disease, and oranges and tangerines are substitutes. c. (iii) The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges. d. All of (i), (ii), and (iii) are correct.
B
QN=84 (17199) The law of demand states that, other things equal, a. an increase in price causes quantity demanded to increase. b. an increase in price causes quantity demanded to decrease. c. an increase in quantity demanded causes price to increase. d. an increase in quantity demanded causes price to decrease.
B
QN=49 (17148) Which of the following is not correct? a. Economists use some familiar words in specialized ways. b. Economics has its own language and its own way of thinking, but few other fields of study do. c. Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language. d. The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live.
B
QN=50 (17166) The slope of a line is equal to a. the change in the value of x divided by the change in the value of y. b. the change in the value of y divided by the change in the value of x. c. the horizontal distance divided by the vertical distance. d. the value of y divided by the value of x.
A
QN=20 (17127) Prices direct economic activity in a market economy by a. influencing the actions of buyers and sellers. b. reducing scarcity of the goods and services produced. c. eliminating the need for government intervention. d. allocating goods and services produced in the most equitable way.
D
QN=21 (17121) In considering how to allocate its scarce resources among its various members, a household considers a. (i) each member's abilities. b. (ii) each member's efforts. c. (iii) each member's desires. d. all of (i), (ii), and (iii).
A
QN=42 (17170) The slope of a fairly flat upward-sloping line will be a a. small positive number. b. large positive number. c. small negative number. d. large negative number.
B
QN=15 (17134) The term used to describe a situation in which markets do not allocate resources efficiently is a. economic meltdown. b. market failure. c. equilibrium. d. the effect of the invisible hand.
D
QN=16 (17114) Communist countries worked on the premise that economic well-being could be best attained by a. a market economy. b. a strong reliance on prices and individuals' self-interests. c. a system of large privately-owned firms. d. the actions of government central planners.
A
QN=17 (17120) Productivity is defined as the a. amount of goods and services produced from each unit of labor input. b. number of workers required to produce a given amount of goods and services. c. amount of labor that can be saved by replacing workers with machines. d. actual amount of effort workers put into an hour of working time.
A
QN=18 (17116) To promote good economic outcomes, policymakers should strive to enact policies that a. (i) enhance productivity. b. (ii) enhance individuals' market power. c. (iii) result in a rapidly-growing quantity of money. d. All of (i), (ii), and (iii) are correct.
B
QN=19 (17139) Which of the following principles is not one of the four principles of individual decision making? a. People face tradeoffs. b. Trade can make everyone better off. c. People respond to incentives. d. Rational people think at the margin.
A
QN1 - The marginal benefit John gets from eating a fourth cheeseburger at a picnic is A. the total benefit John gets from eating four cheeseburgers minus the total benefit John gets from eating three cheeseburgers. B. the same as the total benefit of eating four cheeseburgers. C. less than the marginal cost of eating the fourth cheeseburger since he chose to eat the fourth cheeseburger. D. the total benefit John gets from eating five cheeseburgers minus the total benefit John gets from eating four cheeseburgers.
B
QN2 - Mitch has $100 to spend and wants to buy either a new amplifier for his guitar or a new mp3 player to listen to music while working out. Both the amplifier and the mp3 player cost $100, so he can only buy one. This illustrates the basic concept that A. trade can make everyone better off. B. people face trade-offs C. rational people think at the margin. D. people respond to incentives.
B
QN3 - Senator Smart, who understands economic principles, is trying to convince workers in her district that trade with other countries is beneficial. Senator Smart should argue that trade can be beneficial A. only if it allows us to obtain things that we couldn't make for ourselves. B. because it allows specialization, which increases total output. C. to us if we can gain and the others involved in the trade lose. D. in only a limited number of circumstances because others are typically self-interested.
A
QN4 - Economics deals primarily with the concept of A. scarcity B. money C. poverty D. banking
D
QN5 - Households and economies have each of the following in common EXCEPT both A. must allocate scarce resources. B. face many decisions. C. face many decisions. D. must have a central decision maker.
B
QN6 - An increase in the overall level of prices in an economy is referred to as 22 A. economic growth. B. inflation. C. monetary policy. D. supply shocks.
A
QN7 - In an economy in which decisions are guided by prices and individual self-interest, there is 2222 A. the potential to achieve efficiency in production. B. a strong need for government intervention in the market. C. less efficiency than would be observed in a centrally-planned economy. D. more need for a strong legal system to control individual greed than would be needed in a centrally-planned economy.
B
QN8 - The invisible hand refers to A. how central planners made economic decisions. B. how the decisions of households and firms lead to desirable market outcomes. C. the control that large firms have over the economy. D. government regulations without which the economy would be less efficient.
D
QN=10 (17138) Which of the following statements best represents the principle represented by the adage, "There is no such thing as a free lunch"? a. Melissa can attend the concert only if she takes her sister with her. b. Greg is hungry and homeless. c. Brian must repair the tire on his bike before he can ride it to class. d. Kendra must decide between going to Colorado or Cancun for spring break.
B
QN=100 (17202) Generally, the market for ice cream would be considered a. a monopolistic market. b. a competitive market. c. more organized than an auction. d. a market where individual sellers have significant pricing power.
B
QN=11 (17145) Suppose a typical worker in France can produce 32 units of product in an eight-hour day, while a typical worker in Germany can produce 30 units of product in a 10-hour day. We can conclude that a. worker productivity in Germany is higher than in France. b. the standard of living will likely be higher in France than in Germany. c. productivity is 4 units per hour for the German worker and 3 units per hour for the French worker. d. there will be no difference between the standard of living in France and Germany.
C
QN=12 (17146) Russell spends an hour studying instead of playing tennis. The opportunity cost to him of studying is a. the improvement in his grades from studying for the hour. b. the improvement in his grades from studying minus the enjoyment of playing tennis. c. the enjoyment and exercise he would have received had he played tennis. d. zero. Since Russell chose to study rather than to play tennis, the value of studying must have been greater than the value of playing tennis.
A
QN=13 (17142) The term market failure refers to a. a situation in which the market on its own fails to allocate resources efficiently. b. an unsuccessful advertising campaign which reduces demand for a product. c. a situation in which competition among firms becomes ruthless. d. a firm which is forced out of business because of losses.
D
QN=14 (17117) In considering how to allocate its scarce resources among its various members, a household considers a. (i) each member's abilities. b. (ii) each member's efforts. c. (iii) each member's desires. d. all of (i), (ii), and (iii).
C
QN=22 (17129) A tradeoff exists between a clean environment and a higher level of income in that a. studies show that individuals with higher levels of income actually pollute less than low-income individuals. b. to pay for pollution clean-up, the government must increase taxes which lowers income. c. laws that reduce pollution raise costs of production and reduce incomes. d. by employing individuals to clean up pollution, employment and income both rise.
C
QN=23 (17113) As a result of a successful attempt by government to cut the economic pie into more equal slices, a. it is easier to cut the pie, and therefore the economy can produce a larger pie. b. those who earn more income pay less in taxes. c. the pie gets smaller, and there will be less pie overall. d. government will spend too much time cutting and it causes the economy to lose the ability to produce enough pie for everyone.
C
QN=24 (17115) In a market economy, who makes the decisions that guide most economic activities? a. firms only b. households only c. firms and households d. government
A
QN=25 (17128) When a society cannot produce all the goods and services people wish to have it is said that the economy is experiencing a. scarcity. b. communism. c. externalities. d. market failure.
D
QN=26 (17137) The tradeoff between inflation and unemployment a. (i) implies that policies designed to reduce unemployment also reduce inflation. b. (ii) was eliminated by improved economic policies in the 1900s. c. (iii) is a long-run tradeoff, persisting for decades, according to most economists. d. None of (i), (ii), and (iii) are correct.
D
QN=27 (17124) Most economists believe that an increase in the quantity of money results in a. (i) an increase in the demand for goods and services. b. (ii) lower unemployment in the short run. c. (iii) higher inflation in the long run. d. All of (i), (ii), and (iii) are correct.
A
QN=28 (17125) The terms equality and efficiency are similar in that they both refer to benefits to society. However they are different in that a. equality refers to uniform distribution of those benefits and efficiency refers to maximizing benefits from scarce resources. b. equality refers to maximizing benefits from scarce resources and efficiency refers to uniform distribution of those benefits. c. equality refers to everyone facing identical tradeoffs and efficiency refers to the opportunity cost of the benefits. d. equality refers to the opportunity cost of the benefits and efficiency refers to everyone facing identical tradeoffs.
D
QN=29 (17133) If Japan chooses to engage in trade, it a. will only benefit if it trades with countries that produce goods Japan cannot produce. b. cannot benefit if it trades with less developed countries. c. should first attempt to produce the good itself. d. can benefit by trading with any other country.
A
QN=30 (17118) When society requires that firms reduce pollution, there is a. a tradeoff because of reduced incomes to the firms' owners and workers. b. a tradeoff only if some firms are forced to close. c. no tradeoff, since the cost of reducing pollution falls only on the firms affected by the requirements. d. no tradeoff, since everyone benefits from reduced pollution.
D
QN=31 (17135) The business cycle is measured by the a. (i) production of goods and services. b. (ii) number of people employed. c. (iii) the interest rate. d. both (i) and (ii).
D
QN=32 (17140) The phenomenon of scarcity stems from the fact that a. most economies' production methods are not very good. b. in most economies, wealthy people consume disproportionate quantities of goods and services. c. governments restrict production of too many goods and services. d. resources are limited.
D
QN=33 (17119) Trade between countries tends to a. reduce both competition and specialization. b. reduce competition and increase specialization. c. increase competition and reduce specialization. d. increase both competition and specialization.
C
QN=34 (17141) Hue decides to spend three hours working overtime rather than watching a video with her friends. She earns $8 an hour. Her opportunity cost of working is a. the $24 she earns working. b. the $24 minus the enjoyment she would have received from watching the video. c. the enjoyment she would have received had she watched the video. d. nothing, since she would have received less than $24 of enjoyment from the video.
C
QN=35 (17132) You are considering staying in college another semester so that you can complete a major in economics. In deciding whether or not to stay you should a. compare the total cost of your education to the total benefits of your education. b. compare the total cost of your education to the benefits of staying one more semester. c. compare the cost of staying one more semester to the benefits of staying one more semester. d. compare the total benefits of your education to the cost of staying one more semester.
A
QN=36 (17173) Another term for factors of production is a. inputs. b. output. c. goods. d. services.
D
QN=37 (17162) An economic theory about international trade that is based on the assumption that there are only two countries trading two goods a. is useless, since the real world has many countries trading many goods. b. can be useful only in situations involving two countries and two goods. c. can be useful in the classroom, but is useless in the real world. d. can be useful in helping economists understand the complex world of international trade involving many countries and many goods.
D
QN=38 (17184) Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram? a. a landowner leases land to a farmer b. a farmer hires a teenager to help with harvest c. a retired farmer sells his combine to a new farmer d. a woman buys corn for dinner
C
QN=39 (17156) When two variables have a positive correlation, a. (i) when the x-variable increases, the y-variable decreases. b. (ii) when the x-variable decreases, the y-variable increases. c. (iii) when the x-variable increases, the y-variable increases. d. More than one of (i), (ii), and (iii) is correct.
B
QN=40 (17164) The slope of a steep upward-sloping line will be a a. small positive number. b. large positive number. c. small negative number. d. large negative number.
D
QN=51 (17157) Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 50 units of food and 30 machines. This year it experienced a technological advance in its machine-making industry. As a result, this year the society wants to produce 55 units of food and 30 machines. Which of the following statements is correct? a. Because the technological advance occurred in the machine-making industry, it will not be possible to increase food production without reducing machine production below 30. b. Because the technological advance occurred in the machine-making industry, increases in output can only occur in the machine industry. c. In order to increase food production in these circumstances without reducing machine production, the economy must reduce inefficiencies. d. The technological advance reduced the amount of resources needed to produce 30 machines, so these resources could be used to produce more food.
A
QN=52 (17167) Refer to Figure 2-7. In order to reach point C, the economy would have to a. (i) acquire more resources or experience a technological advance. b. (ii) begin using its available resources more efficiently than it is currently using them. c. (iii) shift resources away from the production of ribeye steaks and toward production of books. d. None of (i), (ii), and (iii) are correct; the economy will never be able to reach point C.
A
QN=53 (17172) Factors of production are a. used to produce goods and services. b. also called output. c. abundant in most economies. d. assumed to be owned by firms in the circular-flow diagram.
D
QN=53 (17172) Factors of production are a. used to produce goods and services. b. also called output. c. abundant in most economies. d. assumed to be owned by firms in the circular-flow diagram.
D
QN=55 (17183) A model can be accurately described as a a. theoretical abstraction with very little value. b. device that is useful only to the people who created it. c. realistic and carefully constructed theory. d. simplification of reality.
A
QN=56 (17185) Refer to Table 2-2. What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300? a. 75 waffles b. 150 waffles c. 250 waffles d. 325 waffles
C
QN=57 (17174) The production possibilities frontier is a graph that shows the various combinations of output that an economy a. should produce. b. wants to produce. c. can produce. d. demands.
A
QN=58 (17163) Refer to Figure 2-9, Panel (a). In order to gain 2 radios by moving from point S to point T, society must sacrifice a. (i) 6 televisions. b. (ii) employment. c. (iii) efficiency. d. More than one of (i), (ii), and (iii) is correct.
D
QN=59 (17176) The field of economics is traditionally divided into two broad subfields, a. national economics and international economics. b. consumer economics and producer economics. c. private sector economics and public sector economics. d. microeconomics and macroeconomics.
A
QN=60 (17159) Economists use models in order to a. learn how the economy works. b. make their profession appear more precise. c. make economics difficult for students. d. make sure that all of the details of the economy are included in their analysis.
C
QN=61 (17154) Positive statements are a. prescriptive. b. claims about how the world should be. c. claims about how the world is. d. made by economists speaking as policy advisers.
C
QN=62 (17181) Which of the following is correct? a. A horizontal line has an infinite slope, and a vertical line has a zero slope. b. A horizontal line has a slope of 1, and a vertical line has a slope of -1. c. A horizontal line has a zero slope, and a vertical line has an infinite slope. d. A horizontal line has a slope of -1, and a vertical line has a slope of 1.
B
QN=63 (17179) In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production? a. goods and services b. land, labor, and capital c. dollars spent on goods and services d. wages, rent, and profit
C
QN=64 (17169) The production possibilities frontier is a graph that shows the various combinations of output that an economy a. should produce. b. wants to produce. c. can produce. d. demands.
D
QN=65 (17171) In the circular-flow diagram, firms produce a. (i) goods and services using factors of production. b. (ii) output using inputs. c. (iii) factors of production using goods and services. d. Both (i) and (ii) are correct.
C
QN=66 (17178) Economists build economic models by a. generating data. b. conducting controlled experiments in a lab. c. making assumptions. d. reviewing statistical forecasts.
B
QN=67 (17168) In the circular-flow diagram, a. (i) firms own the factors of production. b. (ii) the factors of production are labor, land, and capital. c. (iii) the factors of production are also called "output." d. All of (i), (ii), and (iii) are correct.
B
QN=68 (17161) Refer to Figure 2-2. Boxes C and D represent a. households and firms. b. the goods and services market and the factors of production market. c. the goods and services market and the financial market. d. households and government.
C
QN=69 (17150) A demand curve shows the relationship a. between income and quantity demanded. b. between price and income. c. between price and quantity demanded. d. among income, price, and quantity demanded.
B
QN=70 (17151) Refer to Figure 2-2. Alisha regularly buys fruits and vegetables at a grocery store. Santo regularly pays a lawn-care company to mow his lawn. If the flow of fruits and vegetables from the grocery store to Alisha is represented by an arrow from Box C to Box B of this circular-flow diagram, then the money paid by Santo to the lawn-care company is represented by an arrow a. from Box A to Box D. b. from Box B to Box C. c. from Box C to Box B. d. from Box D to Box A.
B
QN=71 (17180) The slope of a line is equal to a. the change in the value of x divided by the change in the value of y. b. the change in the value of y divided by the change in the value of x. c. the horizontal distance divided by the vertical distance. d. the value of y divided by the value of x.
A
QN=85 (17186) In a market economy, supply and demand determine a. both the quantity of each good produced and the price at which it is sold. b. the quantity of each good produced, but not the price at which it is sold. c. the price at which each good is sold, but not the quantity of each good produced. d. neither the quantity of each good produced nor the price at which it is sold.
D
QN=86 (17191) In a market economy, a. supply determines demand and demand, in turn, determines prices. b. demand determines supply and supply, in turn, determines prices. c. the allocation of scarce resources determines prices and prices, in turn, determine supply and demand. d. supply and demand determine prices and prices, in turn, allocate the economy's scarce resources.
A
QN=87 (17214) Two goods are substitutes when a decrease in the price of one good a. decreases the demand for the other good. b. decreases the quantity demanded of the other good. c. increases the demand for the other good. d. increases the quantity demanded of the other good.
C
QN=88 (17189) A movement downward and to the left along a supply curve is called a. an increase in supply. b. a decrease in supply. c. a decrease in quantity supplied. d. an increase in quantity supplied.
C
QN=89 (17192) Which of these statements best represents the law of demand? a. When buyers' tastes for a good increase, they purchase more of the good. b. When income levels increase, buyers purchase more of most goods. c. When the price of a good decreases, buyers purchase more of the good. d. When buyers' demands for a good increase, the price of the good increases.
A
QN=9 (17131) Moira decides to spend two hours taking a nap rather than attending her classes. Her opportunity cost of napping is a. the value of the knowledge she would have received had she attended class. b. the $30 she could have earned if she had worked at her job for those two hours. c. the value of her nap less the value of attending class. d. nothing, since she would valued sleep more than attendance at class.
C
QN=90 (17193) Which of the following is not held constant in a demand schedule? a. Income b. Tastes c. Price d. Expectations
D
QN=91 (17215) Two goods are complements when a decrease in the price of one good a. decreases the quantity demanded of the other good. b. decreases the demand for the other good. c. increases the quantity demanded of the other good. d. increases the demand for the other good.
B
QN=92 (17222) What will happen in the rice market now if sellers expect higher rice prices in the near future? a. The supply of rice will increase. b. The supply of rice will decrease. c. The supply of rice will be unaffected. d. The demand for rice will decrease.
C
QN=92 (17222) What will happen in the rice market now if sellers expect higher rice prices in the near future? a. The supply of rice will increase. b. The supply of rice will decrease. c. The supply of rice will be unaffected. d. The demand for rice will decrease.
A
QN=94 (17196) In a market economy, supply and demand determine a. both the quantity of each good produced and the price at which it is sold. b. the quantity of each good produced, but not the price at which it is sold. c. the price at which each good is sold, but not the quantity of each good produced. d. neither the quantity of each good produced nor the price at which it is sold.
C
QN=95 (17210) The forces that make market economies work are a. work and leisure. b. politics and religion. c. supply and demand. d. taxes and government spending.
D
QN=96 (17218) An increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, a. (i) the demand for tires decreases and the supply of tires increases. b. (ii) the demand for tires is unaffected and the supply of tires decreases. c. (iii) the demand for tires is unaffected and the supply of tires increases. d. None of (i), (ii), and (iii) is necessarily correct.
C
QN=97 (17198) In a competitive market, the quantity of a product produced and the price of the product are determined by a. (i) buyers. b. (ii) sellers. c. (iii) both buyers and sellers. d. None of (i), (ii), and (iii) is correct.
C
QN=98 (17190) Which of the following would most likely serve as an example of a monopoly? a. a bakery in a large city b. a bank in a large city c. a local cable television company d. a small group of corn farmers
D
QN=99 (17200) In a free market, who determines how much of a good will be sold and the price at which it is sold? a. suppliers b. demanders c. the government d. suppliers and demanders together
A
Refer to Figure 2-1. Which arrow shows the flow of spending by households? a. A b. B c. C d. D
D
Refer to Figure 2-2. Malika works as an attorney for a corporation and is paid a salary in exchange for the legal services she performs. Jarel owns office buildings and rents his buildings to companies in exchange for rent payments. If Malika's income is represented by a flow of dollars from Box D to Box B of this circular-flow diagram, then Jarel's income is represented by a flow of dollars A. from Box A to Box C. B. from Box C to Box A. C. from Box B to Box D. D. from Box D to Box B.
