Macro Final

"because the outputs of many industries are the inputs to other industries the failure of any single industry to fulfill the output quantities specified in the central plan caused a chain reaction of adverse repercussions on production" this quotation best identifies the: a. incentive problem under central planning b. self sufficiency dilemma under communism c. resource overcommitment problem under communism d. coordination problem under central planning

d

A higher price reduces the quantity demanded for a product because: a. The purchasing power of individuals increases b. The financial assets of individuals increase c. Individuals Will buy more of the product and less of its substitutes d individuals can afford less of the product and or switch to substitutes

d

Even though local newspapers are very inexpensive, people rarely buy more than one of them each day. This fact: a. is an example of irrational behavior b. Implies it electronic media sources are displacing print sources for many consumers c. Contradicts the economic perspective D. Implies that for most people the marginal benefit of reading a second newspaper is less than the marginal cost

d

The competitive market system: a. encourages innovation because government provides tax breaks and subsidies to those who develop new products or new productive techniques b. discourages innovation because it is difficult to acquire additional capital in the form of new machinery and equipment c. discourages innovation because firms want to get all the profits possible from existing machinery and equipment d. encourages innovation because successful innovators are rewarded with economic profits

d

Answer the question based on the following supply and demand schedules in Units per week for a product if the government introduce a guaranteed price floor of $40 and open route to purchase surplus out put them in the governments total support payments to producers would be: a. $3000 per week b. $3500 per week c. $4000 per week d. $2500 per week

c

Black markets are associated with: a. Price floors in the resulting product surpluses b. Price floors in the resulting product shortages c. ceiling prices in the resulting product shortages d. ceiling prices in the resulting products surpluses

c

McDonald's introduce the big Mac in 1968 and it turned out to be a hit however the arch deluxe introduced in 1996 was not a success or failure of a product in the market system is determined by a. capitalism and entrepreneurship b. specialization and exchange c. consumer sovereignty and dollar votes d. Capital goods and roundabout production

c

The division of labor means that: a. Labor markets are geographically segmented b. unskilled workers outnumber skilled workers c. workers specialize in various production tasks d. each worker performs a large number of tasks

c

The government may impose industrial safety regulations in occupational licensing requirements in which of the following economic systems? a. laissez fair economy b. pure capitalism c. mixed market economy d. macroeconomic system

c

The main mechanism that regulates the market system is: a. self interest b. private property c. competition d. freedom of enterprise and choice

c

With a downsloping demand curve and absorbing supply curve for a product a decrease in resource prices will a. Increase equilibrium price and quantity b. decrease equilibrium price and quantity c. decrease equilibrium price and increase equilibrium quantity d. increase equilibrium price and decrease equilibrium quantity

c

a market: a. reflects upsloping demand and downsloping supply curves b. entails the exchange of goods but not services c. is an institution that brings together buyers and sellers d. Always requires face-to-face contact between buyer and seller

c

allocative efficiency involves determining a. which output mix will result in the most rapid rate of economic growth b. which production possibilities curve reflects the lowest opportunity cost c. The mix of output that will maximize society satisfaction d. The optimal rate of technological progress

c

Refer to the above ground which shows the market for beef where the man shifted from D1 to D2. The change in equilibrium price from E1 to E2 is most likely to result from: a. a decrease in consumer incomes b. an increase in the cost of cattle feed c. an increase in the price of pork d. A decrease in the tax on beef products

a

The decrease in the price of digital cameras would lead to a: a. increase in the price and quantity sold of memory cards b. decrease in the price and quantity sold of memory cards c. Increase in the price and a decrease in quality sold of memory cards d. decrease in the price and increase in quantity sold of memory cards

a

The dynamic pricing model used by the ride sharing firm Uber along with a few other firms illustrates which of the following? a. when there is a shortage in the market the equilibrium price will rise b. once the equilibrium price is reached it or remain there for at least several days c. since actual quantity for always equals actual quantity sold the market is always equilibrium d. when there is a surplus in a market equilibrium price will rise

a

The supply curve shows the relationship between: a. price and quantity supplied b. production costs and the amount demanded c. total business revenues and quantity supplied d. physical inputs of resources and the resulting units of output

a

The table below shows the weekly demand for hamburgers in a market where there are just three fires at a price of $6 the weekly market quantity demand it for hamburgers is: a. 17 b. 23 c. 18 d. 24

a

allocative efficiency is concerned with a. Producing the combination of goods most desired by society b. achieving the full employment of all available resources c. producing every good with the least cost combination of inputs d. reducing the concavity of the production possibilities curve

a

an increase in consumer desire for strawberries is most likely to: a. increase the number of strawberry pickers needed by farmers b. reduce the supply of strawberries c. reduce the number of people willing to pick strawberries d. Reduce the need for strawberry pickers

a

an increase in product price will cause: a. quantity demanded to decrease b. quantity supplied to decrease c. quantity demanded you increase d. the supply curve to shift to the left

a

as a result of a fall in the price of gasoline consumers can afford to buy more gasoline for driving trips this is an illustration of: a. the income effect b. the substitution effect c. diminishing marginal utility d. consumer sovereignty

a

because of increasing opportunity cost the production possibilities curve: a. is bowed out from or concave to the origin b. can be either downward or upward sloping c. At first rises then falls eventually d. is a straight downward sloping line

a

definition is initially on its production possibilities curve then it can increase its production of one good only by: a. decreasing the production of the other good b. increasing the production of the other good c. holding constant the production of the other good d. decreasing the price of the other good

a

if demand increases and supply simultaneously decreases equilibrium price will rise a. true b. false

a

if price is above the equilibrium level competition among sellers to reduce the resulting: a. surplus will increase quantity demanded and decrease quantity supplied b. shortage will decrease quantity demand it increase quantity supplied c. surplus will decrease quantity demanded and increase quantity supplied d. shortage will increase quantity demand and decreased quality supplied

a

in cases where the supply curve is vertical any change in demand will cause only a change in price but no change in quantity a. true b. false

a

in moving along a given budget line: a. The prices of both products and money income or assumed to be constant b. each point on the line will be equally satisfactory to consumers c. money income varies but the price of the two goods are constant d. The prices of both products or seem to vary but money income is constant

a

in the following question you were asked to determine other things equal the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for or supply (S) of X (2) the equilibrium price (P) of X and (3) the equilibrium quantity (Q) of X. if x is a normal good an increase in the income will a. increase d increase p increase q b. increase d increase p and decrease q c. increase s increase p increase q d. decrease d increase p increase q

a

refer to the provided graph which curve shows a direct relationship between price and quantity? a. a b. b c. c d. d

a

referred to the above table if demand decreased by 4 units at each price what would the new equilibrium price and quantity be? a. $3 and 5 units b. $4 and 6 units c. $5 and 7 units d. $6 and 8 units

a

referred to the provided graph the slope of the line tangent to the curve at point A is: a. 0 b. .5 c. 2 d. 4

a

when a nation is under allocating resources to the production of a good then the: a. marginal benefit is greater than the marginal cost of the good b. marginal benefit is less than the marginal cost of the good c. marginal cost of producing the good is decreasing d. Marginal benefit of producing the good is increasing

a

which of the following is an example of a price ceiling? a. limits on interest rates charged by credit card companies b. subsidies for apartment rent in major cities c. minimum wage laws for unskilled workers d. Price supports for agricultural products

a

which of the following is considered to be an entrepreneur? a. a self employed person b. an MBA graduate hired by a firm to be its CEO c. a production line worker d. a customer of a firm

a

A decrease in supply holding demand constant will cause: a. higher prices and a larger quantity sold b. higher prices and a smaller quantity sold c. lower prices and a smaller quantity sold d. lower prices and a larger quantity sold

b

A surplus indicates that the quantity demanded is greater than the quantity supplied at that price a. true b. false

b

Advanced analysis the demand for a commodity X is represented by the equation P = 100 minus 2Q supply by the equation P = 10+ 4Q the equilibrium price is a. $50 b. $70 c. $80 d. $130

b

If the production possibilities curve is a straight line: a. the two goods will sell at the same market prices b. economic resources are perfectly substitutable between the production of two goods c. the two goods are equally important to consumers d. equal quantities of the two goods will be produced at each possible point on the curve

b

Microeconomics is concerned with: a. The aggregate or total levels of income employment and output b. A detailed examination of specific economic units that make up the economic system c. positive economics but not normative economics d. establishing an overall view of the operation of the economic system

b

The decrease in the demand for recreational fishing boats might be caused by an increase in the: a. income of sports fishers b. Price of outboard motors c. size and number of fish available d. price of sailing boats

b

The graph above represents a competitive market for a product where the government now has introduced a price floor of 0C which area in the graph represents the producers sales revenue after the imposition of the price floor? a. 0CFL b. 0CEJ c. 0BGK d. 0BHL

b

a demand curve: a. shows the relationship between price and quantity supplied b. indicated the quantity demanded at each price in a series of prices c. graphs an upsloping line d. shows the relationship between income and spending

b

all markets involve the following elements except: a. demand or buyers b. Face to face negotiation c. prices of goods and services d. supply or sellers

b

all of the following would affect the position and shape of a nations production possibilities curve except: a. the amount of labor available b. the level of unemployment c. the amount of the capital resources d. the rate of technological processes

b

an economic system: a. requires a grouping of private markets linked to one another b. is a particular set of institutional arrangements in a coordinating mechanism used to respond to the economizing problem c. require some sort of centralized authority such as government to coordinate economic activity d. is a plan or scheme that allows a firm to make money at some other firms expense

b

and effective price ceiling will lower the equilibrium price and cause a surplus a. true b. false

b

answer the question on the basis of the following five data sets when it is assumed that the variable shown on the left is the independent variable in the one on the right is the dependent variable assume in graphing these data that the independent variable is shown on the horizontal axis and the dependent variable on the vertical axis referred to the data sets the vertical intercept is positive for a. all five data sets b. data sets 1 and 3 only c. data sets 1, 3, and 5 only d. data set 2 only

b

answer the question on the basis of the following five data sets where it is assumed that the variables shown on the left is in the independent variable in the one on the right is the dependent variable assume in graphing these data that the independent variable is shown on the horizontal axis and the dependent variable on the vertical axis. refer to the data sets for which data set is the vertical intercept zero? a. data set 4 b. data set 5 c. data sets 2 and 3 d. data sets 1, 2, 4, and 5

b

answer the question using the following data which show all available techniques for producing 20 units of a particular commodity if a new production technique is developed that enables a firm to produce 20 units of output with 3 units of land 3 of labor 1 of capital and 2 of entrepreneurial ability this technique would: a. not be adopted because although it reduces production cost it does not increase profit b. be adopted because it would lower production costs and increase economic profit c. not be adopted because it entails higher production costs then other available techniques d. be adopted even though economic profits would be reduced slightly

b

competition means that a. sellers can manipulate market price by causing products scarcities b. there are independently acting buyers and sellers in each market c. A product can be purchased at a number of different prices d. there is more than one seller in a market

b

economist would classify all of the following as land except: a. two thousand acres of virgin forest b. a hydroelectric dam c. crude oil reserve d. iron ore deposits

b

if economic theories are solidly based on relevant facts, then appropriate economic policy becomes obvious and uncontroversial a. true b. false

b

if the price of gasoline increases significantly and would expect the demand curve for large trucks and SUVs to: a. shift to the right b. shift to the left c. become upward sloping d. not shift but there will be a movement along the demand curve

b

in a market system as one industry experience while another contracts resources will flow a. away from the expanding industry toward the contracting one b. across industries driven by the changes in resource prices paid by firms c. toward the industry where the product demand is declining d. because resource allocation will have to equalize between the two industries

b

post hog ergo propter hoc fallacy consists of: a. Using an example to prove a different point b. inferring casualty from chronological sequence c. jumping to conclusions from an inadequate number of cases d. arguing for or against a person's character rather than his view or opinion

b

refer to the above graph showing the market for a product which of the following could not explain the indicated increase in equilibrium price from P1 to P2: a. an increase in consumer incomes b. an increase in production cost c. A decrease in the price of a complementary product d. an increase in the price of a substitute product

b

referred to the diagram the slope of curve ZZ at point A is approximately: a. +2 b. +2 1/2 c. -2 1/2 d. +4

b

suppose that tacos and pizza are substitutes and that soda and pizza are complements. we would expect and increase in the price of pizza to: a. reduce the demand for tacos and increase the demand for soda b. reduce the demand for soda and increase the demand for tacos c. Increase the demand for both soda and tacos d. reduce the demand for both soda and tacos

b

when economists talk about the capital resources in the economy they are referring to the amount of money circulating in the economy a. true b. false

b

which of the following is a distinguishing feature of a command system? a. private ownership of all capital b. Central planning c. heavy reliance on markets d. widespread dispersion of economic power

b

which of the following is associated with macroeconomics? a. an examination of the incomes of professional athletes b. an empirical investigation of the general price level and unemployment rates since 1990 c. a study of the trend of pecan prices since the second world war d. a case study of pricing and production in the textbook industry

b

which of the following is not one of the five fundamental questions that an economy must deal with? a. how will the goods and services be produced? b. Why should the goods and services produced? c. Who is to receive the goods and services produced in the economy? d. in what ways will progress be promoted?

b

an economic hypothesis: a. has the same meaning as an economic principle or economic law b. is usually a normative statement c. is a possible explanation of cause and effect d. is a stronger generalization than an economic law

c

an increase in demand for oil along with simultaneous increase in supply of oil will: a. decrease price and increase quantity b. increase price and decrease quantity c. increase quantity but whether it increases price depends on how much each curve shifts d. increase price but whether it increases quantity depends on how much each curve shifts

c

as a result of a decrease in the price of online streaming movies consumers download more movies online and buy fewer DVDs this is an illustration of: a. consumer sovereignty b. The income effect c. The substitution effect d. diminishing marginal utility

c

freedom of enterprise: a. is a characteristic that is common to most economic systems b. in a market system means that entrepreneurs can obtain and use economic resources without any legal restraint c. Allows businesses within broad limits to choose what goods to produce d. Refers primarily to the right of consumers to purchase what they want

c

graphically, the market demand curve is a. steeper than any individual demand curve that is part of it b. greater than the sum of the individual demand curves c. the horizontal sum of individual demand curves d. the vertical sum of individual demand curves

c

if producers must obtain higher prices than before to produce a given level of output then the following has occurred: a. a decrease in demand b. an increase in demand c. a decrease in supply d. an increase in supply

c

in a competitive market illustrated by the diagram above for a price floor to be effective and altered the market situation it must be set: a. at $15 b. below $15 c. above $15 d. at $10

c

in a market system more resources will move toward an industry and expand its production if the industry has: a. positive revenues b. positive costs c. TC < TR d. TC > TR

c

in line to on the provided graph the variables X and y are: a. nonlinearly related b. directly related c. not correlated d. inversely related

c

innovation live in the centrally planned economies because: a. there was too much domestic business competition b. there is too much competition from foreign firms c. Enterprises resisted innovation in fear that their production targets would be raised d. Exports had to equal importance for the plant to work

c

one basic problem faced by central planners but hardly present in a market system has to do with: a. determining the production goals or targets in a factory b. having limited resources and trying to match them with Unlimited wants c. coordinating production in various industries so that bottlenecks do not develop d. providing financial resources for increasing the real flows of products in the economy

c

other things equal, which of the following would shift an economy's PPC to the left? a. the discovery of a low-cost means of generating and storing solar energy b. the entrance of more women into the labor force c. a law requiring mandatory retirement from the labor force at age 55 d. an increase in the proportion of total output that consists of capital or investment goods

c

private property: a. discourages cooperation because people don't want to part with what they own b. discourages innovation as people are often afraid to risk losing their own property c. encourages owners to maintain or improve their property so as to preserve or enhance value d. does everything indicated by the other answers

c

refer to the diagram. a decrease in demand is depicted by a: a. move from point x to point y b. shift from D1 to D2 c. shift from D2 to D1 d. move from point y to point x

c

refer to the diagram. as it relates to the production possibilities analysis, the law of increasing opportunity cost is reflected in curve a. a b. b c. c d. d

c

refer to the tables. opportunity costs are a. constant in both Duckistan and Herbania b. larger in Duckistan than in Herbania c. increasing in both Duckistan and Herbania d. increasing in Duckistan and constant in Herbania

c

referred to the diagram a government price support program for a farmers is best illustrated by: a. quantity E b. price C c. price A d. price B

c

referred to the four graphs above select the graph best shows the changes in demand and supply in the market specified in the following situation the market for music CDs sold in stores if more consumers switch to music downloads from the Internet in the cost of making music CDs decreases because of technological improvement in production: a. graph a b. graph b c. graph c d. graph d

c

the production possibilities curve illustrates the basic principle that a. the production of more of any one good will in time require smaller and small sacrifices of other goods b. an economy will automatically obtain full employment of its resources c. if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced d. an economy's capacity to produce increases in proportion to its population size

c

which of the diagrams illustrates the effect of a government subsidy on the market for AIDS research? a. a only b. b only c. c only d. d only

c

which of the following statements about self interest in a market system is false? a. self interest usually motivates an individual to deliver something of value to others b. self interest of entrepreneurs imply seeking maximum profit or minimum losses c. self interest applies only to Capitalist and entrepreneurs not to workers employed by others d. in a market system consumers are just like firms self interest is what motivates them

c

which of the following would best be classified as a complement for new houses and homes? a. lumber or Steel b. construction equipment c. mortgage loans d. Rental apartments

c

which statement best illustrates the concept of diminishing marginal utility? a. as one consumes more hamburgers per week one would be willing to pay a higher price for additional hamburgers b. some consumers will receive less satisfaction from consuming hamburgers then from consuming fried chicken c. A typical consumer will receive less satisfaction from consuming the fourth hamburger then from the third hamburger in a week d. A decrease in the price of hamburgers will cause consumers to buy more hamburgers because they can afford to buy more

c

a product market is in equilibrium: a. whenever there is no surplus of the product b. whenever there is no shortage of the product c. when consumers want to buy more of the product than producers offer for sale d. where the demand and supply curves intersect

d

and increase in the excise tax on cigarettes raises the price of cigarettes by shifting the: a. demand curve for cigarettes rightward b. demand curve for cigarettes leftward c. supply curve for cigarettes rightward d. supply curve for cigarettes leftward

d

any point inside the production possibilities curve indicates a. The presence of technological change b. that resources are imperfectly substitutable among alternative uses c. The presence of inflationary pressures d. that more output could be produced with the available resources

d

economic growth may be represented by: a. A movement from one end of the production possibilities curve to the other b. and upward sloping production possibilities curve c. A movement from a point inside to a point on the production possibilities curve d. A rightward shift of the production possibilities curve

d

economist have difficulty applying the scientific method because: a. economics has a short history b. The scientific method does not really apply to economics c. people are the focus of economics in their behavior is highly predictable d. controlled laboratory experiments in economics are often not feasible

d

economists use the term "demand" to refer to: a. a particular price quantity combination on a stable demand curve b. the total amount spent on a particular commodity over a fixed period c. an upsloping line on a graph that relates consumer purchases and product price d. a schedule of various combinations of market prices and amount/quantities demanded

d

in moving along a supply curve which of the following is not held constant? a. The number of firms producing this good b. expectations about the future price of the product c. techniques used in producing this product d. The price of the product itself

d

over A period of time the equilibrium price of a good increases in the quantity decreases. all of the following could account for this situation except a. an increase in the cost of production b. The removal of a subsidy on the good or service c. The imposition of the sales tax on the good or service d. a decrease in the price of an alternative good or service that producers could also produce

d

refer to the diagram a decrease in quantity demand it is depicted by a: a. move from point x to point y b. shift from D1 to D2 c. shift from D2 to D1 d. move from point y to point x

d

referred to the diagram the shortage of 160 units would be encountered if Price was: a. $1.10 that is $1.60 minus $.50 b. $1.60 c. $1 d. $.50

d

referred to the diagram this economy will experience unemployment if it produces at point: a. a b. b c. c d. d

d

unemployment: a. causes the production possibilities curve to shift outward b. can exist at any point on a production possibilities curve c. is illustrated by a point outside the production possibilities curve d. is illustrated by a point inside the production possibilities curve

d

which of the diagrams illustrates the effect of an increase in automobile worker wages on the market for automobiles? a. a only b. b only c. c only d. d only

d

which of the following does not illustrate the idea of creative destruction? a. Digital downloads have shrunk the market for CDs and DVDs b. online retail sales have increased while brick-and-mortar sales have slowed down c. The opening of a new mall reduces the traffic in another mall d. A firm has to destroy some of the expired product in its inventory

d