question

. Which of the following is not a criterion for judging the result of an economic policy a. Stability b. Employment c. Efficiency d. Equity

answer

b. Employment

question

. Economics is the study of how a. Scarce resources are used to satisfy unlimited wants b. Human choose to use unlimited resources c. Limitless resources are used to satisfy scarce wants d. Society has no choices

answer

a. Scarce resources are used to satisfy unlimited wants

question

3. The opportunity cost of choice X can be defined as a. The cheapest alternative to choice X b. The most highly valued alternative to choice X c. The price paid to obtain X d. The most highly price alternative to choice X

answer

b. The most highly valued alternative to choice X

question

. Carlo discovers when he studies for his macroeconomics tests at the bar, he earns better grades. He advises all students to study at the bar for similar results. Carlo is guilty of committing a. The fallacy of composition b. Fallacy of post hoc, ergo propter hoc c. Fallacy of correlation and causation d. Ceteris paribus

answer

a. The fallacy of composition

question

5. Households are a. Suppliers in the input market b. Demanders in the labor market c. Suppliers in the product markets d. Demanders in the input market

answer

a. Suppliers in the input market

question

The price of Good C increases and as a result, the demand for good D increases. The two goods are a. Complement b. Substitutes c. Normal d. inferior

answer

b. Substitutes

question

. Because the nation N is operating at a point inside its PPF, it a. Has full employment b. Has unemployed or inefficiently employed resources c. Must cut output of one good to increase the production of another d. Will be unable to experience economic growth

answer

b. Has unemployed or inefficiently employed resources

question

A production possibility frontier diagram illustrates all of the following concepts except a. Scarcity b. Unlimited wants c. Constrained choice d. the marginal rate of transformation

answer

b. Unlimited wants

question

Which of the following is not one of the basic economic questions? a. what will be produced b. how will it be produced c. where would it be produced d. for whom will it be produced

answer

c. where would it be produced

question

Jean &co has an increasing cost production possibility frontier. Its slope must be a. Positive and increasing b. Positive and decreasing c. Negative and increasing d. Negative and decreasing

answer

c. Negative and increasing

question

Each of the following is a basic concern of any economic system except a. The allocation of scarce resources among producers b. The mix of different types of output c. The distribution of output among customers d. The quality of resources allocated among customers

answer

d. The quality of resources allocated among customers

question

. For Jill to have a comparative advantage in the production of pins means that, relative to Jack, with the same resources a. Jill is relatively better at producing pin than at producing needles b. Jill is relatively better at producing both pins and needles c. Jill can produce fewer needles than Jack can produce d. Jill can produce more pins than jack can produce

answer

a. Jill is relatively better at producing pin than at producing needles

question

Along a given supply curve for eggs, a. Supply increases as price increases b. Supplies increases as technology improves c. Quantity supplied increases as price increases d. Quantity supplied increases as technology improves

answer

c. Quantity supplied increases as price increases

question

Consumers expect their income to rise. For a normal good, this would result in an increase in a. Quantity demanded and a fall in price b. Demand in fall in price c. Quantity demanded in rise in price d. Demand and a rise in price

answer

d. Demand and a rise in price

question

A rightward shift in the supply of U.S. cars might be due to a. An increase in the price of steel b. A reduction in foreign competition c. The introduction of cost-saving robots d. Increased popularity of foreign cars

answer

c. The introduction of cost-saving robots

question

. If the market is in equilibrium, a technological improvement will cause price to------------and quantity demanded to -------------- a. Fall; fall b. Rise; rise c. Fall; rise d. Rise; fall

answer

c. Fall; rise

question

Generic aspirin is an inferior good. As Julie's income decreases we would expect a. a decrease in Julie's demand for generic aspirin b. an increase in Julie's quantity demanded of generic aspirin c. an increase in the Julie's demand for generic aspirin d. a decrease in Julie's quantity demanded of generic aspirin

answer

c. an increase in the Julie's demand for generic aspirin

question

Among a given demand curve for corn, which of the following is not held constant a. the price of corn b. the income of corn farmers c. the income of corn demanders d. the price of wheat

answer

a. the price of corn

question

The demand curve is best illustrated by a. the price of pepsi rises leading customers to buy more coke b. increase purchases of coke of coke as the price of coke decreases c. an increase in income, which results in reduced purchases of soft drinks d. an increase in income, which results in n increased purchases

answer

b. increase purchases of coke of coke as the price of coke decreases

question

Union introduced new costly regulations in the tuna market to protect workers. We would expect the equilibrium cost of tuna to---------- and the equilibrium quantity of tuna to-------- a. Increase; increase b. Increase; decrease c. Decrease; increase d. Decrease; decrease

answer

b. Increase; decrease

question

An undergraduate student pays $ 475 for a three- credit course at Lehman College. After the official withdrawal date has elapsed, he drops the course (and cannot get back the $475). At this time, the $ 475 represents a. The benefit of gaining some knowledge from the course partially attended b. An expenditure made on the margin c. A sunk cost d. The opportunity cost of the course

answer

c. A sunk cost

question

. "Lower ticket prices would lead to more people attending ball games." This statement is a. A ceteris paribus assertion b. A normative statement c. A positive statement d. A macroeconomic statement

answer

c. A positive statement

question

Encouraging international trade will a. Slow economic growth when a country is forced to specialize and trade with other countries b. Slow economic growth as many workers lose their jobs to foreign workers c. Speed economic growth as workers diversify their knowledge and limit trade d. Speed economic growth as workers specialize and trade with others

answer

d. Speed economic growth as workers specialize and trade with others

question

If the government increases unemployment benefits, then labor a. Demand curve shifts rightward b. Demand curve shifts leftward c. Supply curve shifts rightward d. Supply curve shifts leftward

answer

d. Supply curve shifts leftward

question

. As technology advances, a. All opportunity cost decreases b. The PPF shift outward c. A country moves toward the midpoint along its PPF d. All opportunity costs increase

answer

b. The PPF shift outward

question

As a consequence of the condition of scarcity a. There is never enough of anything. b. Production has to be centrally planned. c. Things which are plentiful have relatively high prices. d. Individuals and communities have to make choices from among alternatives

answer

d. Individuals and communities have to make choices from among alternatives

question

. The opportunity cost of constructing a new public highway is the a. Money cost of hiring contractors and construction workers for the new highway. b. Value of other goods and services that must be sacrificed to construct the new highway. c. Expected cost of constructing the new highway in a future year. d. Value of shorter driving times and distances when the new highway is completed

answer

b. Value of other goods and services that must be sacrificed to construct the new highway

question

The term dollar votes means a. Consumers "vote" for certain products to be produced by how they spend their incomes. b. Households vote what companies is to be opened in their neighborhood c. Consumer vote how the government is to spend their tax dollars d. Households vote on where the products are to be made

answer

a. Consumers "vote" for certain products to be produced by how they spend their incomes

question

The circular flow model a. Illustrates the interdependence of businesses and consumers. b. Explains how goods are produced and consumed c. Justifies the agreement between buyers and sellers to get the market at equilibrium. d. Explains the importance of firms and households

answer

a. Illustrates the interdependence of businesses and consumers

question

A nation can increase its production possibilities by a. Shifting resources from investment good production to consumer good production. b. Shifting resources from private goods to public goods. c. Improving labor productivity. d. Eliminating discrimination

answer

c. Improving labor productivity

question

Which expression is another way of saying "marginal benefit"? a. Benefits given up b. Unintended gain c. Employment benefits d. Extra benefit

answer

d. Extra benefit

question

. Which is not a factor of production? a. Money b. Land c. Labor d. Capital

answer

a. Money

question

College students living off campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. When they finish school and start their careers, their consumption of both goods frequently declines. This suggests that ramen noodles and boxed macaroni and cheese are a. Superior goods b. Inferior goods. c. Consumer goods d. Producer goods

answer

b. Inferior goods

question

The Soviet Union economy of the 1980s would best be classified as a. A market system. b. Pure capitalism. c. Laissez-faire capitalism. d. A command system

answer

d. A command system

question

. By consumer sovereignty we mean that a. Government is responsible for protecting consumer interests. b. Consumers determine what goods and services are produced. c. Businesses decide what the consumer will buy. d. All goods and services are produced by consumers

answer

b. Consumers determine what goods and services are produced.

question

Laissez-faire capitalism is characterized by a. Very limited government role in the economy. b. Active government intervention in the economy. c. Individuals and firms abiding by a government economic plan. d. A very fair distribution of income and wealth

answer

a. Very limited government role in the economy

question

Which is one of the three fundamental questions that need to be dealt with in any economic system? a. What makes the rate of unemployment low? b. Who will be the richest group in the economy? c. What goods and services will be produced? d. How high should the prices of goods and services be?

answer

c. What goods and services will be produced?

question

The quantity demanded of a product increases as its price declines because the a. Lower price shifts the demand curve rightward. b. Lower price shifts the demand curve leftward. c. Lower price results in an increase in supply d. Demand curve is downward sloping

answer

d. Demand curve is downward sloping

question

A surplus of a product will arise when price is a. Above equilibrium with the result that quantity demanded exceeds quantity supplied. b. Above equilibrium with the result that quantity supplied exceeds quantity demanded. c. Below equilibrium with the result that quantity demanded exceeds quantity supplied. d. Below equilibrium with the result that quantity supplied exceeds quantity demanded

answer

b. Above equilibrium with the result that quantity supplied exceeds quantity demanded

question

An increase in demand for oil along with a 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

answer

c. Increase quantity, but whether it increases price depends on how much each curve shifts

question

For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as a. Inferior goods or giffen goods b. Direct goods. c. Average goods. d. Normal goods or superior good

answer

d. Normal goods or superior good

question

Along a production possibilities curve, an increase in the production of one type of good can be accomplished only by a. An increase in the production of the other type of good b. A decrease by the production of the other type of good. c. An increase in the consumption of the other type of good d. A decrease in the consumption of the other type of good

answer

b. A decrease by the production of the other type of good

question

"We have to decrease our dependence and consumption of fossil oil" is a----------- statement whereas "our decreased dependence and consumption of fossil oil will decrease our footprint on the environment" is a ------------ statement. a. Positive & True b. Normative & Positive c. Negative & Positive d. Positive & Normative

answer

b. Normative & Positive

question

The major "success indicator" for business managers in command economies like the Soviet Union and China in the past was a. The quantity of output. b. Product quality. c. The amount of profits. d. Worker morale.

answer

a. The quantity of output

question

Which of the following is a consequence of rent controls established to keep housing affordable for the poor? a. Less rental housing is available as prospective landlords find it unprofitable to rent at restricted prices. b. The quality of rental housing declines as landlords lack the funds and incentive to maintain properties. c. Apartment buildings are torn down in favor of office buildings, shopping malls, and other buildings where rents are not controlled. d. All of the above are consequences of rent controls

answer

d. All of the above are consequences of rent controls

question

If a country is operating at a point of production efficiency a. It enjoys growth when increasing production b. It produces on its production possibility frontier curve c. It must specialize in the production of a good d. It cannot be producing at its point of comparative advantage

answer

b. It produces on its production possibility frontier curve

question

To help unscramble cause and effect, economists a. Must use the ceteris paribus assumption b. Use the concept of opportunity cost c. Answer the "what, how and for whom" questions d. Answer the " why" question

answer

a. Must use the ceteris paribus assumption

question

Consider the market fur turkeys. In the US, because of Thanksgiving in the month of November a. There is a downward movement along the demand curve for turkeys b. There is an upward movement along the supply curve for turkeys c. The supply curve of turkeys shift leftward d. The demand curve for turkeys shifts leftward

answer

b. There is an upward movement along the supply curve for turkeys

question

An efficient market is a market a. that is always in equilibrium b. in which profit opportunities are eliminated almost instantaneously c. in which the profits are always very high and persistent d. in which opportunity costs are zero

answer

b. in which profit opportunities are eliminated almost instantaneously

question

Which of the following is a positive statement? a. There should be no unemployment in an advanced industrial society. b. Higher prices cause consumers to purchase less. c. Consumption should be distributed fairly in society. d. People should pollute as little as possible

answer

b. Higher prices cause consumers to purchase less

question

Which of the following would an economist classify as capital? a. A deposit of silver b. A share of stock c. A public corporation's employees d. A computer used by an accountant

answer

d. A computer used by an accountant

question

The four (4) criteria's that are frequently used in judging outcome of economic policy are a. Efficiency, equity, growth, and stability b. Efficiency, equity, growth, and effectiveness c. Positive, normative, descriptive, and stability d. Production, savings, consumption, and growth

answer

a. Efficiency, equity, growth, and stability

question

When two people trade a. Both of them expect to be worse off by the exchange b. They are trying to help out each other c. They know that one of them will be better off than the other d. They both expect to be made better off by the exchange

answer

d. They both expect to be made better off by the exchange

question

When Hurricane Andrew passed through Louisiana in the summer of 1992, approximately a quarter of the sugar cane crop was destroyed. Ceteris paribus, a. The supply of sugar decreased and the price of sugar increased b. The supply of sugar decreased and the price of sugar decreased. c. The demand for sugar increased and the price of sugar increased. d. The demand for sugar decreased and the price of sugar decreased

answer

a. The supply of sugar decreased and the price of sugar increased

question

Among the fundamental concepts in economics are a. Opportunity Costs b. Efficient markets c. Marginalism d. All of the above

answer

d. All of the above

question

The "Law of Demand" implies that a. As prices fall, demand increases b. As prices rise, demand increases c. As prices fall, quantity demanded increases d. As prices rise, quantity demanded increases

answer

c. As prices fall, quantity demanded increases

question

The concept of opportunity cost is based on the principle of a. Need b. Consumption c. Scarcity d. Profit

answer

c. Scarcity

question

Apples and oranges are substitute goods. A freeze in Florida destroyed a good portion of the orange crop. Ceteris paribus. a. The price of both apples and oranges will increase. b. The price of both apples and oranges will fall. c. The price of oranges will increase and the price of apples will fall d. The price of oranges will fall and the price of apples will increase

answer

a. The price of both apples and oranges will increase

question

That which we forgo, or give up, when we make a choice or decision is called a. Sunk costs b. Marginal cost c. Real costs d. Opportunity costs

answer

d. Opportunity costs

question

The study of economics: a. Is a very narrow endeavor b. Is a way of analyzing decision-making processes caused by scarcity c. Is concerned with providing that capitalism is better than socialism d. Focuses on how a business should function

answer

b. Is a way of analyzing decision-making processes caused by scarcity

question

According to the text, the reason to study economics a. To learn a way of thinking b. To understand society and global affairs c. To be an informed voted d. All of the above

answer

d. All of the above

question

The supply of labor is defined as the relationship between the real wage and the a. Quantity of labor supplied by firms b. Amount of jobs supplied by firms c. Quantity of labor supplied by households d. Amount of jobs supplied by households

answer

c. Quantity of labor supplied by households

question

The Production Possibility Frontier is used to illustrate the concept of a. The laissez-faire economy b. Opportunity costs c. Equilibrium d. aggregate demand

answer

b. Opportunity costs

question

Encouraging international trade will a. Slow economic growth when a country is forced to specialize and trade with other countries b. Speed economic growth as workers diversify their knowledge and limit trade c. Speed economic growth because international trade limits the harm done by property rights d. Speed economic growth as workers specialize and trade with others

answer

d. Speed economic growth as workers specialize and trade with others

question

The price of good X rises, which cause the demand for good Y to fall. The two goods must be complement

answer

True

question

A shift in the supply of coca cola causes its price to fall, such shift must be due to an increase in supply

answer

True- increase in supply causes surplus

question

The income of American workers rose sharply in 2003, which resulted in an increase in the price for both inferior and superior goods

answer

False- as income increase we buy more superior goods and less inferior goods

question

Both the demand and supply of pepsi cola increase at about the same time. The price of pepsi will clearly fall

answer

False- the price will remain the same

question

The price of coaca cola fall which causes an increase in the price of pepsi: The two goods are substitute

answer

False- not enough information

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