Macroeconomics Quizzes for Test 1
A firm's overall productive capacity; hence, the position of the firm's supply curve on a graph depends on: A. product prices and profitability associated with production alternatives. B. factor prices, including wages, interest, and rent. C. the availability of labor resources. D. All
D
Which of the following are legal forms of business? A. Sole proprietorship B. Partnership C. Corporation D. All
D
Refer to the graph below. (line graph quiz 2) An decrease in supply is shown by a shift from ______ to _______
S2 to S1
The provision of public goods and services is an _____________ function of the government.
allocative
Which of the following would not shift the demand curve for beef? a reduction in the price of ____________ __________
cattle feed
In the ______________ __________ model, producers spend earnings from resource sales on goods and services in the product market.
circular flow
The ________ demonstrates the roles played by households and firms in the market system.
circular flow model
If the demand for product C shifts to the right, this might be caused by a decrease in the price of a product that is _____________________ to C.
complementary
If two goods are _____________________, a decrease in the price of one will increase the demand for the other.
complements
An price increase will reduce the amount of a good demanded because ________________ seek substitutes for that good that is more expensive.
consumers
The flow of ___________ and ____________ is separate from the flows in the circular flow model
costs; revenue
a ____________ curve shows the relationship between price and quantity supplied.
demand
If X is a normal good, an increase in income will shift the ______________ curve for X to the __________
demand; right
The income and substitution effects explain the ________________ ___________ of the demand curve
downward sloping
Other things equal, which of the following might shift the demand curve for gasoline to the left? the development of a low-cost _______________ automobile
electric
Because of unseasonably cold weather, the supply of oranges has substantially decreased. This statement indicates that the supply of oranges has _____________
fallen
A flow in the circular flow includes: the flow of income earned by ________ and the flow of expenditures earned by ________________
firms; households
__________________ sell their labor services in the resource market.
households
When the price of a product falls, the purchasing power of our money income rises and thus permits consumers to purchase more of the product. This statement describes the
income effect
The law of demand states that price and quantity demanded are _____________ related
inversely
The income earned by those who supply ________ is called wages.
labor
A firm's supply curve is upward sloping because of the ____________ of ___________________ _____________
law of diminishing returns
Holding everything else constant, if the price of a key resource used to produce good X falls, the supply curve of X will shift to the _________
left
a decrease in the number of firms participating in the market will shift to the supply curve to the ___________
left
The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.
market
An economist for a bicycle company predicts that (other things equal) a rise in consumer incomes will increase the demand for bicycles. This prediction is based on the assumption that bicycles are ________________ ___________
normal goods
Which of the following will not cause the demand for product K to change? Change in K ____________
price
When you purchase a new pair of jeans you do so in the
product market
As planned output increases within a given productive capacity, which of the following is not held constant?
product price
For a given demand relationship, the most important factor in determining a consumer's planned purchase is:
product price
Households ________ final goods and services in the ________ market.
purchase; product
Land resources used in production are made available in the
resource market
An improvement in production technology will shift the supply curve to the
right
If the price of K declines, the demand curve for the complementary product J will shift to the ____________
right
If the price of product L increases, the demand curve for close-substitute product J will shift to the _____________
right
production technology is a determinant of ____________
supply
the law of _____________ reflects the amounts of output that firms are willing and able to produce at various prices.
supply
The _____________ ____________ shows the relationship between price and planned output (quantity supplied).
supply curve
(line graph quiz 2) Refer to the graph below. An increase in quantity supplied or planned output is depicted by a move from point _____ to _____
x to y
