Test 1
According to this production possibilities table, the opportunity cost of going from 120 to 160 million units of consumer goods is:
16 million units of capital goods.
If the quantity of prerecorded CDs demanded is equal to 600 - 10 (price of the CD), at a price of $16 each, the number of CDs demanded would be:
440
Which is NOT an example of a model?
A list of key economic indicators for a year.
Which of the following is an example of an economic theory?
An explanation as to why raising the price of a product would cause people to buy less of that product.
Which of the following is an economic policy?
Giving families a tax break on college tuition in order to encourage more degrees.
Which of the following statements is true?
Organizing other resources is one function of an entrepreneur.
Which of the following statements best describes the relationship among scarcity, economic decisions, and economic systems?
Scarcity imposes basic economic decisions on a society that are made through the type of economic system it chooses.
which of the following transactions would occur in a resource market?
Taking a job designing websites.
Which of the following statements about price elasticity is False
The demand for a necessity should be more price elastic than the demand for a luxury
Which of the following statements about price elasticity is FALSE?
The demand for a necessity should be more price elastic than the demand for a luxury.
Which of the following would cause the demand curve for a product to shift to the right today
The expectation that the product will be unavailable in the future
which of the following would cause the demand curve for a product to shift to the right today
The expectation that the product will be unavailable in the future.
Which of the following is NOT one of the three basic economic decisions?
When goods and services should be produced, and when their producers should be paid.
the supply of a product is price elastic if a 10 percent increase in price leads to
a 12 percent increase in quantity supplied
When developing a demand schedule, nonprice factors such as buyer taste are held constant because:
a demand schedule focuses on how a product's price influences the amount buyers would purchase.
you are given the following price-quantity information ($10 and 180 units), ($15 and 150 units), ($20 and 120 units). this information would graph as
a downward sloping line and conform to the law of demand
a decrease in income would result in
a leftward shift of a buyers demand curve for a new car
the minimum wage law is an example of
a price floor
Economic growth is illustrated using a production possibilities curve by:
a rightward shift of the curve.
A surplus occurs when the price charged in a market is
above the equilibrium price
a surplus occurs when the price changed in a market is
above the equilibrium price
You would expect a society with a traditional economy to have most of its economic activity directed toward:
agriculture.
the expected reaction to a shortage is:
all of the above
The expected reaction to a shortage is
all of the above.
Distinctions between the different factor incomes are important because they affect:
all of these answers are correct.
The strength of a market system is:
all of these answers are correct.
When deciding on a method of production, a firm in a pure market economy selects the method that:
all of these answers are correct.
The concept of opportunity cost is illustrated in a production possibilities model by the:
amount of one good that must be given up to get more of the other good while moving along the production possibilities curve.
an increase in the equilibrium price and quantity in a market would be caused by
an increase in the number of buyers in the market.
which of the following would not cause an increase in the supply of a product
an increase in the price of the product
you are given the following price quantity information ($20 and 140 units), ($15 and 120 units), ($10 and 80 units) the information would graph as
an upward sloping line and conform to the law of supply
A decrease in the number of buyers in a market would cause equilibrium price
and quantity to decrease.
a decrease in the number of buyers in a market would cause equilibrium price:
and quantity to decrease.
"Muckrakers" were:
authors, journalists, and others who drew public attention to social, labor, and other problems in the early 20th century.
The purpose of a price ceiling is to keep the actual price charged in a market:
below an equilibrium price that is considered too high, and shortages may develop.
equilibrium price and equilibrium quantity are the price and quantity
both of the above
According to the circular flow model, rent, wages, interest, and profit flow from:
businesses to households in input markets.
An auto repair shop, a corn field, and a person managing a coffee shop that they own are, respectively, examples of:
capital, land, and entrepreneurship.
The Employment Act of 1946 gave the federal government the power to change each of the following to influence the economy, EXCEPT:
court rulings
Which of the following countries would rely most on central planning for economic decisions?
cuba
If the price of a good or service decreases and all nonprice factors are held constant, the quantity supplied will:
decrease
if there were a decrease in the market demand for a product with no change in market supply, the equilibrium price would:
decrease and the equilibrium quantity decrease.
if there were an increase in the market supply of a product with no change in market demand the equilibrium price would
decrease and the equilibrium quantity increase
A local sports team began selling season tickets this week. There is a rumor that season tickets will decrease in price by 25 percent in three weeks. This rumor should:
decrease the current demand for tickets.
The choices that are made because of scarcity:
depend on the decision maker's value judgments about the relative importance of different alternatives.
The world's economies:
differ from one another in terms of how they mix individual and collective decision making.
the world's economies
differ from one another in terms of how they mix individual and collective decision making.
The way a society is organized to make the basic economic decisions is referred to as its:
economic system.
If there were no scarcity:
equity and efficiency would no longer be important concerns.
According to the circular flow model, payments for goods and services flow from:
households to businesses in output markets.
in a planned economy:
how goods and services are produced is determined by what resources planners make available to producers.
Given that Q = 300 - 60P, where Q is quantity and P is price:
if P = $2, then Q = 180 and if P = $5, then Q = 0
If there were an increase in the market demand for a product with no change in market supply, the equilibrium price would
increase and the equilibrium quantity increase
if there were an increase in the market demand for a product with no change in market supply the equilibrium price would
increase and the equilibrium quantity increase
A demand schedule:
indicates the amounts of a product a buyer would purchase at different prices in a defined time period.
Microeconomics is the study of:
individual decision-making units, such as households and business firms.
When classifying factors of production, capital refers to
machinery and equipment to produce goods and services
When classifying factors of production, capital refers to:
machinery and equipment to produce goods and services
The study of the U.S. economy as a whole, and how all households in the economy interact with all businesses and the government is:
macroeconomics.
Two variables are directly related when:
one variable decreases as the other decreases.
Two variables are inversely related when:
one variable decreases as the other increases.
a usury law on interest rates is an example of a
price ceiling
Changes in the quantity supplied of a good or service are caused by changes in the
price of the good or service.
a change in the demand for product would not be caused by a change in the
price of the product
If supply increases and demand falls the equilibrium
price will decrease, but the effect on equilibrium quantity will depend on the magnitudes of the shifts in supply and demand
A country that allows no market activity in making the basic economic choices has a
purely planned economy.
The relative importance a person assigns to various actions or alternatives
reflects the person's value judgments.
all resources are
scarce relative to the wants and needs they must satisfy, but many resources are abundant in absolute terms.
The Law of Supply states that as the price of a product increases:
sellers will offer more of the product for sale.
Based on the information in this production possibilities table, the opportunity cost of going from 0 to 40 million units of consumer goods is:
smaller than the opportunity cost of going from 40 to 80 million units of consumer goods.
A point inside, or to the left of, a production possibilities curve indicates that:
some of the economy's resources are unemployed.
One reason buyers demand less of a product as its price increases is
substitute goods are usually available.
f producers in this market charged a price of $6, there would be a:
surplus of 200 units.
Legislation giving the federal government the responsibility to provide an environment for achieving full employment, full production, and stable prices was:
the Employment Act of 1946.
at a price of $50 a ticket, the local hockey team discovers that there are many empty seats. this is evidence that
the current price is higher than the equilibrium price. use the following figure
which of the following statements about price elasticity is false
the demand for a necessity should be more price elastic than the demand for a luxury
the opportunity cost of working rather than going to school is
the higher wages that come with additional education.
If all goods and services were produced efficiently:
the largest attainable output would be produced from available resources.
Macroeconomics is the study of:
the operation of the economy as a whole, and economic topics such as total output, employment, and inflation.
The term "market clearing price" is used to identify
the price at which quantity demanded equals quantity supplied in a market
If, in a market, a price ceiling is set above the equilibrium price, then:
the price ceiling will have no impact on market price or quantity.
if, in a market, a price ceiling is set above the equilibrium price, then:
the price ceiling will have no impact on market price or quantity.
if the price changed in a market was $10 and the equilibrium price in that market was $8, you would expect
the price changed in the market to decrease to $8
If the price charged in a market was $7 and the equilibrium price in that market was $11, you would expect:
the price charged in the market to increase to $11.
The demand for iPods would increase if there were a decrease in:
the quality of products that compete with iPods.
the demand for iPods would increase if there were a decrease in:
the quality of products that compete with iPods.
A direct relationship occurs when two variables move in:
the same direction, and graph as an upward-sloping line.
The basic concern of economics is:
the scarcity problem created because people's desires for material things exceed the ability to produce them.
An increase in a seller's employees' wages would cause:
the seller's supply curve to shift to the left.
an increase in sellers employees wages would cause
the sellers supply curve to shift to the left
Econometrics is:
the use of the statistical techniques to determine the relationship between economic variables.
According to the Law of Demand:
there is an inverse relationship between a change in a product's price and a change in the quantity demanded.
according to the law of demand
there is an inverse relationship between price and quantity demanded
If there were a decrease in both demand and supply in a market
there would be a decrease in equilibrium quantity but it would not be certain how equilibrium price would change
if there were a decrease in both demand and supply in a market
there would be a decrease in equilibrium quantity but it would not be certain how equilibrium price would change
if there were no scarcity:
there would be no opportunity costs and no need to make tradeoffs.
The entry of new sellers into a market would cause equilibrium price:
to decrease and equilibrium quantity to increase.
The economic systems of people such as some early Native American tribes that were small, focused on agriculture, and operated with production methods not changed for generations are best characterized as:
traditional or agrarian economies.
The basic reason we study economics is because material wants and needs are
unlimited but resources are not.
The three basic economic decisions are:
what to produce, how to produce, and who receives what has been produced.
