Econ Chapter 1-4 Quizzess

An individual has 8 hours to spare. She has to divide her time between two activities: reading and writing. Which of the following allocations will completely exhaust the individual's budget? A: 4 hours of reading and 6 hours of writing B: 2 hours of reading and 2 hours of writing C: 5 hours of reading and 3 hours of writing D: 3 hours of reading and 4 hours of writing

c

Why do economists study perfectly competitive markets even though few, if any, markets in the real world are perfectly competitive? A: Because the perfectly competitive market is a good approximation to many markets in the real world and helps us understand how real markets work. B: Because the perfectly competitive market is the most relevant model for actual government economic policies. C: Because the behavior of buyers and sellers can be studied theoretically only in the perfectly competitive market model. D: Because insights we gain from studying the perfectly competitive market are directly applicable to real markets, even though they are not perfectly competitive.

a

Consider a market where the demand curve is downward sloping and the supply curve is upward sloping (so they are neither vertical nor horizontal). If the consumers' willingness to pay for the hundredth unit and the seller's willingness to accept for the 175th unit are both $5.00, then ________. A: the equilibrium price is $5.00 B: the equilibrium quantity is 100 units C: there is an excess demand of 75 units at the price of $5.00 D: there is an excess supply of 75 units at the price of $5.00

d

Empiricism refers to using ________ to analyze the world. A: traditions B: value judgments C: beliefs D: data

d

If the net benefit of Project A is $5 and that of Project B is $8, switching from Project A to Project B ________. A: increases the net benefit by $8 B: decreases the net benefit by $8 C: reduces the net benefit by $3 D: increases the net benefit by $3

d

Making choices by selecting the best feasible option, given the available information, is referred to as ________. A: actualization B: delegation C: imposition D: optimization

d

A seller's willingness to accept is the same as his ________ cost of production. A: total B: fixed C: marginal D: average

c

Economic reasoning allows economic agents to make decisions ________. A: by comparing the costs and benefits of various options B: solely on the basis of tastes and preferences for various options C: by replicating the choices made by other economic agents D: by random selection

a

Optimization can be achieved using either of two techniques of cost-benefit analysis. Which of the following correctly identifies the techniques? A: Optimization using total value and optimization using marginal analysis B: Optimization using total value and optimization using profits C: Optimization using marginal analysis and optimization using costs D: Optimization in revenues and optimization using costs

a

The scientific method refers to the process by which economists and other scientists ________. A: develop models of the world and test those models with data B: collect data for further use in research C: develop models to explain the past but not to predict the future D: plot graphs to illustrate relationships between different economic variables

a

Which of the following best describes scarce resources? a: Resources for which the quantity that people want exceeds the quantity that is freely available b: Resources that most people cannot afford to buy c: Resources for which the quantity demanded is the same for all economic agents d: Resources that can only be distributed efficiently by the government

a

Which of the following best describes the difference between a demand curve and a demand schedule? A: A demand curve is a graphical representation of the relationship between the quantity of a good and its price, whereas a demand schedule is a tabular representation. B: A demand curve shows the different quantities of a good demanded at different prices, whereas a demand schedule shows the different quantities of a good demanded at different incomes. C: A demand curve can be derived from a demand schedule, but a demand schedule cannot be derived from a demand curve. D: A demand curve shows the different quantities of a good demanded at different incomes, whereas a demand schedule shows the different quantities of a good demanded at different prices.

a

Which of the following is an example of a positive economic statement? A: Higher interest rates will encourage more savings. B: The pricing policies followed in single-producer markets should be strictly supervised. C: Pollution is one of the most serious economic problems. D: Unemployment is more harmful than inflation.

a

Which of the following is not a required characteristic of a market? A: Government setting the price of the good or service B: Rules and arrangements for trading C: Trade or exchange of a good or service D: A collection of economic agents (e.g., buyers and sellers)

a

A price ceiling imposed by the government ________. A: helps establish equilibrium in case of a shortage or surplus B: can create situations of excess demand C: is a tax that increases the market price of a good D: involves pricing a commodity above the market price

b

In a marketplace, prices ________. A: are determined through auctions B: act as incentives that allow for the efficient allocation of resources C: act as a measure of value and do not affect the allocation of resources D: are determined by politicians and regulators

b

John has to choose between a camping holiday and a holiday in Las Vegas. If he evaluates the total net benefit of both alternatives before coming to a decision, he is using the technique of ________. A: optimization using marginal analysis B: optimization using total value C: marginal analysis D: mean analysis

b

When the objective of an experiment or a study is to understand the changes in the attributes of a variable on a month-to-month basis, a ________ is most useful. A: pie chart B: time series graph C: bar chart D: histogram

b

Which of the following is NOT a key principle of economics? A: Empiricism B: Substitution C: Optimization D: Equilibrium

b

A supply schedule is a table that reports the ________. A: profits earned by producers at different levels of production B: different quantities of a good that producers are willing to sell at different income levels C: different quantities of a good that producers are willing to sell at different prices D: expected excess supply in the market at different prices

c

A variable that is potentially affected by an experimental treatment is referred to as a(n) ________. A: compulsory variable B: omitted variable C: dependent variable D: independent variable

c

Data show that in 2012, the college enrollment in Lithasia increased. In the same year, the sale of hot dogs in Lithasia also increased. The relationship between college enrollment and the sale of hot dogs exhibits ________. A: a negative correlation B: a zero correlation C: a positive correlation D: a causal relationship

c

The Law of Demand states that ________. A: the quantity demanded of a commodity is the same for all consumers in a perfectly competitive market B: the demand for a commodity is directly related to consumers' income, all other things remaining constant C: the quantity demanded of a commodity varies inversely with the price of the commodity, all other things remaining constant D: the demand for a commodity always equals the supply of the commodity

c

Which of the following statements correctly indicates a property of good economic questions? A: A good economic question should always be positive and not normative. B: A good economic question must always include arithmetic calculations and graphical solutions. C: A good economic question addresses topics that are important to economic agents and/or to society. D: A good economic question should always be easy to answer.

c

Which of the following statements is true of data? A: Data are not important for evaluating theories. B:The fewer data that are available, the better the empirical analysis will be. C: Data help verify causal relationships. D: Anecdotes are good substitutes for data.

c

The best alternative use of a resource is referred to as its ________. A: market price B: social cost C: optimization cost D: opportunity cost

d

Which of the following is a property of a good economic question? A: A good economic question should never incorporate elements from disciplines other than economics. B: A good economic question should always have a single solution. C: A good economic question always addresses topics that are important to the whole society and not to an individual economic agent. D: A good economic question can be answered.

d

Which of the following is a topic studied by microeconomists? A: National income calculations B: Interest rate determination C: Measures to combat inflation D: Price determination by a firm

d

Which of the following is most likely to be an example of causation? A: A student wins money by scratching a ticket with a particular coin. He decides to scratch all tickets with the same coin in the future. B: A soccer player scores four goals when he wears red socks. He concludes that the red socks helped him score the goals. C: The crime rate is high in a country. The literacy rate is high as well. D: A firm producing compact fluorescent light bulbs installs new machinery. Their per-day production of light bulbs increases.

d