question

A country's standard of living is closely correlated with it: A) Physical size B) Population density C) Mineral Resources D) Cultural diversity E) Labor force Productivity

answer

E) labor force productivity

question

Economic analysis is: A) widely understood by all in our society B) important for solving problems in developing and socialist societies but of little use in western capitalist systems C) a set of mathematical rules to ensure a society's happiness and prosperity D) a framework for understanding issues that arise because societies need to make allocation decisions E) a natural science concerned with biological growth and change of the social system

answer

D) a framework for understanding issues that arise because societies need to make allocations decisions.

question

Economics is best defined as the study of how: A) to classify resources used to produce final goods and services B) resources are apportioned to satisfy human wants C) modern businesses have grown and prospered D) tech can be used to change scarce resources into free resources E) pure capitalism has become the best system for satisfying basic human wants.

answer

B) resources are apportioned to satisfy human wants

question

Economists generally classify economic resources into the following three categories: A) men, money, and machines B) savings, spending, and investment C) land, labor, and capital D) physical, human, and tech E) employed, unemployed, and free

answer

C) land, labor, and capital

question

Society's pool of knowledge concerning the industrial arts is called: A) Labor B) Land C) capital D) opportunity cost E) technology

answer

E) Technology

question

The purpose of an economic model is to: A) be a complex, exact replica of reality B) demonstrate which values and beliefs are best for the economy C) make predictions about the real world D) manage the economy like an automatic pilot E) set the prices in a price system

answer

C) Make predictions about the real world

question

When Adam Smith described the invisible hand, he was talking about: A) the price system B) central planning C) opportunity cost D) the division of labor E) disguised unemployment

answer

A) the price system

question

For this economy to produce 5 million units of consumer goods and 3 million units of defense goods: A) resources must be used inefficiently B) the production possibilities curve must be pushed outward C) unemployment must grow D) income inequality must increase E) society's resources must shrink

answer

B) the production possibilities curve must be pushed outward (See worksheet)

question

The U.S. economy may be best characterized as an example of: A) market socialism B) opportunistic imperialism C) militaristic capitalism D) pure capitalism E) mixed capitalism

answer

E) Mixed capitalism

question

In the US about 90% of all goods and services are produced by: A) government B) consumers C) unions D) firms E) nonprofits

answer

D) firms

question

A market demand curve: A) shifts as the price falls B) slopes upward from left to right C) is unaffected by changes in consumers' tastes and incomes D) measures the rate of growth of per-capita output E) shows the amount buyers would like to purchase at various prices

answer

E) shows the amount buyers would like to purchase at various prices

question

A decrease in demand: A) results from a decrease in supply B) means that the demand curve has shifted to the left C) increases the quantity sold in the market D) reflects an increasing consumer preference for the item E) causes the equilibrium price to rise

answer

B) means that the demand curve has shifted to the left

question

In General, supply curves slope upward to the right because: A) increases in the price of a commodity lead to rightward shifts of the supply curve B) rising prices motivate producers to offer more units for sale C) technology progresses over time, increasing the ability of firms to produce more at existing prices. D) of increases in input prices as production is increased E) empirical studies almost show that this is the case

answer

B) rising prices motivate producers to offer more units for sale

question

For a market to exhibit excess demand: A) supply must exceed demand B) the equilibrium price must be too high to clear the market C) the actual price must be below the equilibrium price D) the demand curve must slope upward E) the market must be growing

answer

C) the actual price must be below the equilibrium price

question

The equilibrium price is: (SEE GRAPH)

answer

C) $9/lb ( SEE graph)

question

At the price of $1 per bushel, there would be an excess (SEE GRAPH)

answer

B) demand of 300 million bushels (see graph)

question

The easiest and most inexpensive form of business organization to establish is a: A) firm B) corporation C) partnership D) foundation E) proprietorship

answer

E) Proprietorship

question

An advantage of proprietorship is that the owner is faced with: A) complete control B) easy-to-obtain financing C) unlimited liability D) limited liability E)lower tax rates than those applicable to a partnership

answer

A) complete control

question

A business that requires a new agreement whenever an owner leaves or a new owner arrives is a: A) firm B) corporation C) partnership D) foundation E) proprietorship

answer

C) Partnership

question

The standard assumption in economic analysis is that firms attempt to maximize: A) sales B) profits C) Costs D) reliability E) production

answer

B) profits

question

The distinction between the short run and the long run is: A) strictly a calendar matter; the long run is over 10 years B) dependent solely on the time period necessary to vary all relevant inputs C) that in the short run neither inputs nor output can be changed D) that the law of diminishing marginal returns is operational in the long run but not in the short run E) operationally meaningless since the firm is continually planning for the future in the short run

answer

B) dependent solely on the time period necessary to vary all relevant input

question

In this production function: (See page 6)

answer

see page 6

question

The marginal product of the fourth worker is (see page 7)

answer

see page 7

question

A Variable input is one that: A) is undependable B) will be used as a last resort C) is unnecessary in a production function D) can be increased or decreased as output rises or falls E) is unaffected by changes in production

answer

D) can be increased or decreased as output rises or falls

question

In a market economy, consumer purchase depend on their: A) costs and what they can charge B) production decisions C) income, tastes, and market prices D) expenses, supply, and level of activity E) past outlook and state of technology

answer

C) income, tastes, and market prices.

question

The additional satisfaction received from consuming an additional unit of a commodity is called the: A) marginal product B) quotient of satisfcation C) marginal propensity to consumer D) elasticity of demand E) marginal utility

answer

E) marginal utility

question

In addition to preferences, a consumer's choice is further constrained by: A) nothing B) a rising marginal utility curve C) income and commodity price D) an equilibrium market where utility is minimized E) the fact that the optimal market basket is ravely the equilibrium market basket.

answer

C) income and commodity prices

question

If a utility-maximizing teenager has $6 to spend on lunch and burgers cost (see page 8)

answer

see page 8

question

Opportunity costs: A) the variable cost a firm incurs by increasing output one unit B) the value of the best alternative use of a firm's resources C) the output opportunities a firm gains when average fixed cost decline D) another name for explicit costs E) the difference between fixed cost and variable cost

answer

B) the value of the best alternative use of a firm's resources

question

The basic difference between explicit and implicit costs A) explicit costs are measurable, implicit costs are not B) implicit costs are measurable, explicit costs are not C) explicit cost private costs, implicit costs are social costs D) explicit costs are fixed costs, implicit costs are variable costs E) explicit costs reflect externally supplied resources, implicit costs reflect owner-supplied resources.

answer

E) Explicit costs reflect externally supplied resources, implicit costs reflect owner-supplied resources.

question

Average fixed costs equals A) total cost divided by output B) total costs minus total variable cost C) average total cost plus average variable cost D) total fixed cost minus total variable cost E) total fixed cost divided by output

answer

E) Total fixed cost divided by output

question

The Easy Rider Surfboard Company produces 11,000 surfboards annually at a total cost of $484,000. Its total fixed costs are $198,000. The average variable cost of a surfboard must be A) $18 B) $26 C) $44 D) $62 E)$70

answer

B) $26

ECON 1 B – SJCC – Flashcards

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