Econ Chapter 1-4 Test

Which of the following will not result in a rightward shift of the market supply curve for labor? A. a decrease in non-wage income B. and increase in the working-age population C. an increase in labor productivity D. an increase in immigration

C. an increase in labor productivity

Which of the following will not result in a leftward shift of the market demand curve for labor? A. a decrease in labor productivity B. a decrease in demand for the firm's product C. an increase in the wage rate D. a decrease in the firm's product price

C. an increase in the wage rate

Why is there scarcity? A. because the opportunity set determines this B. because theory dictates it C. because our unlimited wants exceeds our limited resources D. Because human wants are limited

C. because our unlimited wants exceeds our limited resources

The labor ____________ curve(s) will shift __________ if there is an increase in productivity or an increase in the demand for the final product. A. demand; left B.supply; left C. demand; right D. supply; right

C. demand; right

Which of the following is generally accepted as a valid criticism of the production of useful goods and services? A. government involvement B. the black market C. environment pollution D. economic freedom

C. environment pollution

Improvements in the productivity of labor will tend to: A. decrease wages B. decrease the supply of labor C. increase wages D. increase the supply of labor

C. increase wages

If the demand for software engineers __________ slower than does supply, then wages of software engineers will __________. A. increases; remain constant B. increases; rise C. increases; fall D. decreases; fall

C. increases; fall

Economics refer to the relationship that a higher price leads to a lower quantity demanded as the A. income gap B. market equilibrium C. law of demand D. price model

C. law of demand

Attending college is a case where the ________________ exceeds the monetary cost. A. budget constraint B. marginal analysis C. opportunity cost D. marginal utility

C. opportunity cost

In the first chapter of the Wealth of Nations, Smith introduces the idea of the _________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are preformed by different workers. A. division of labor B. interconnected economy C.task economy D. modern economy

A. division of labor

In a command economy, the _________________ either makes most economic decisions itself or at least strongly influences how the decisions are made. A. government B. market C. firm D. business sector

A. government

Since Baltimore passed the first _______________ in 1994, several dozen cities enacted similar laws in the late 1990s and into the 2000s. A. living wage law B. price ceiling C. price floor D. minimum wage

A. living wage law

in a __________________, most economic decisions about what to produce, how to produce it, and for whom to produce it are made by buyers and sellers. A. market-oriented economy B. macroeconomy C. microeconomy D. command economy

A. market-oriented economy

The demand curve for a typical good has a(n): A. negative slope because some consumers switch to other goods as the price rises' B. negative slope because consumer income falls as the price of the good rises. C. negative slope because the good has less "snob appeal" as its price falls D. inverse slope because as the price goes up, the good has more profitability

A. negative slope because some consumers switch to other goods as the price rises'

Philosophers draw a distinction between positive statements, which describe the world as it is, and ___________________s, which describe how the world should be. A. normative statement B. budget constraint C. trade-off D. opportunity cost

A. normative statement

The "Law of Supply" functions in labor markets; that is, a higher _______________ for labor needs to a higher quantity of labor supplied A. price B. demand C. supply D. quantity

A. price

As depicted in _________________________________, it is necessary to give up some of one good to gain more of the other good. A. production possibilities frontier B. allocative efficiency C. scarcity D. utility

A. production possibilities frontier

A demand curve shows the relationship between price and on the graph A. quantity demanded B. quantity produced C. economies of scale D. costs

A. quantity demanded

As the _____________ complement for high-skill labor becomes cheaper, the demand curve for high-skill labor will shift to the right. A. technology B. low- skill labor C. market D. lower wage

A. technology

In which of the following countries will the national government have the greatest influence with respect to the nation's economy? A. China B. Cuba C. Canada D. Chile

B. Cuba

In countries like _____________ the command economy predominates. A. China and Viet Nam B. Cuba and north Korea C. South Africa and Kenya D. Germany and France

B. Cuba and north Korea

Any given demand or supply curve is based on the ceteris paribus assumption that ___________________. A. everything is variable B. all else is held equal C. no one knows which variables will change and which will remain constant D. what is true for the individual is not necessarily true for the whole

B. all else is held equal

The term "ceteris paribus" means that: A. everything is a variable B. all variables except those specified are constant C. no one knows which variables will change and which will remain constant D. what is true for the individual is not necessarily true for the whole

B. all variables except those specified are constant

Many cooks view butter and margarine to be substitutes. If the price of butter rises, then in the market for margarine: A. the equilibrium price will fall and the equilibrium quantity will fall. B. both the equilibrium price and quantity will rise C. the equilibrium price will rise and the equilibrium quantity will decrease D. the equilibrium price will rise, while the change to the equilibrium quantity is indeterminate

B. both the equilibrium price and quantity will rise

Which of the following best denotes the reason for the existence of substantial black markets? A. a market- oriented economy B. command economy C. government laws and rules D. micoreconomy

B. command economy

Because of their relatively small national economies, which of the following is most likely considered to be the most important factor for Belgium, Korea, and Canada to take full advantage of specialization? A. division of labour B. international trade C. economies of scale D. command economy

B. international trade

Many economists believe that the trend toward greater wage inequality across the U.S. economy was primarily caused by _____________. A. the recession B. new technologies C. the rise of global markets D. inflation

B. new technologies

A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and ____________, shown on the horizontal axis. A. demand B. quantity C. quantity supplied D. quantity demanded

B. quantity

_______________ refers to the total number of units that are purchased at that price A. quantity B. quantity demanded C. supply D. market quantity

B. quantity demanded

In a discussion of economics, which of the following would exert the most influence on an individual firm's decision to hire workers? A. wage levels B. the macroeconomy C. the firm's income D. household income

B. the macroeconomy

But nearly all supply curves share a basic similarity: they slope___________ A. down from left to right B. up from left to right C. up from right to left D. down from right to left

B. up from left to right

Many states do have ____________, which impose an upper limit on the interest rate that lenders can charge. A. price ceiling laws B. usury laws C. price floor laws D. minimum interest rate

B. usury laws

In economics, the demand for a good refers to the amount of the good that people, A. would like to have it if the good were free B. will buy at various prices C. need to achieve income levels D. will buy at alternate income levels

B. will buy at various prices

In the United States, a typical credit card interest rate ranges from _________ per year. A. .2% to .8% B. 2% to 8% C. 12% to 18% D. 22% to 28%

C. 12% to 18%

In contrast to good and service markets, ___________________ are rare in labor markets, because rules that prevent people from earning income are not politically popular. A. minimum wages B. price floors C. price ceilings D. living wage laws

C. price ceilings

The downward slope of the demand curve again illustrates the pattern that as ___________ rises, _________ decreases. A. quantity demanded, price B. quantity supplied, quantity demanded C. price, quantity demanded D. price, quantity supplied

C. price, quantity demanded

when economist talk about supply, they are referring to a relationship between price received for each unit sold and the ___________ A. demand schedule B. market price C. quantity supplied D. demand curve

C. quantity supplied

A straightforward example of a _____________, often used for simplicity, is the interest rate. A. price ceiling B. financial investment C. rate of return D. price floor

C. rate of return

As the __________ substitute for low-skill labor becomes available, the demand curve for low-skill labor will shift to the left. A. high-skill labor B. lower wage C. technology D. market

C. technology

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is: A. nothing, because he enjoys playing basketball more than studying B. the increase in skill he obtains from playing basketball for that hour C. the benefit to his grades from studying for an hour D. nothing, because he had a free pass into the sports complex to play basketball

C. the benefit to his grades from studying for an hour

When consumers and businesses have greater confidence that they will be able to repay in the future, _______________________. A. the quantity demanded of financial capital at any given interest rate will remain unchanged. B.the quantity demanded of financial capital at any given interest rate will shift to the left C. the quantity demanded of financial capital at any given interest rate will shift to the right D. the quantity demanded of financial capital at any given interest rate will achieve equailibruim

C. the quantity demanded of financial capital at any given interest rate will shift to the right

If labor demand is downward sloping and labor supply is upward sloping, then when labor demand rises faster than labor supply, it is expected that real wages __________. A. will stay the same B. will decrease C. will increase D. may increase, decrease or stay the same depending on the relative slopes.

C. will increase

The United States has approximately _____________ credit card holders. A. 1.8 million B. 18 million C. 80 million D. 180 million

D. 180 million

Which of the following results in a rightward shift of the market demand curve for labor? A. a decrease in labor productivity B. a decrease in the firm's product price C. an increase in the wage rate D. an increase in demand for the firm's product

D. an increase in demand for the firm's product

The nature of demand indicates that as the price of a good increases, A. suppliers wish to sell less of it B. more of it is produced C. more of it is desired D. buyers desire to purchase less of it

D. buyers desire to purchase less of it

Other things being equal, a __________ supply of workers tends to __________ real wages. A. smaller; not change B. larger; increase C. smaller; decrease D. larger; decrease

D. larger; decrease

Scarcity exists because of: A. the market mechanism B. specialization and division of labor C. the allocation of goods by prices D. unlimited wants and limited resources

D. unlimited wants and limited resources