Econ Quiz 1 Questions And Answers

question

Which of the following statements is true about scarcity?
answer

Scarcity refers to the situation in which unlimited wants exceed limited resources.
question

Economists assume that rational behavior is useful in explaining choices people make
answer

even though people may not behave rationally all the time.
question

In economics, the term ________ means “additional” or “extra.” a) optimal b) marginal c) allocative d) equity
answer

b) marginal
question

DeShawn’s Detailing is a service that details cars at the customers’ homes or places of work. DeShawn’s cost for a basic detailing package is $40, and he charges $75 for this service. For a total price of $90, DeShawn will also detail the car’s engine, a service that adds an additional $20 to the total cost of the package. What is DeShawn’s marginal benefit if he sells a basic detailing package? a) $35 b) The marginal benefit cannot be determined. c) He makes a marginal loss of $15, not a marginal benefit. d) $75
answer

a) $35
question

The three fundamental questions that any economy must address are
answer

What goods and services to produce; how will these goods and services be produced; and who receives them?
question

The highest valued alternative that must be given up to engage in an activity is the definition of
answer

opportunity cost
question

The decision about what goods and services will be produced made in a market economy is made by
answer

consumers and firms choosing which goods and services to buy or produce.
question

Political candidates often hold fund raisers by charging “per plate” for dinner. Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate. Is this transaction economically efficient? a) No, Wendy paid too much for four dinners. b) Yes, it is efficient only from the perspective of the candidate but not from the perspective of Wendy. c) No, political candidates should never be allowed to overcharge for a fund raising dinner. d) Yes, it was a voluntary exchange that benefited both parties.
answer

d) Yes, it was a voluntary exchange that benefited both parties.
question

Economic models do all of the following except a) simplify some aspect of economic life. b) portray reality in all its minute details. c) make economic ideas explicit and concrete for use by decision makers. d) answer economic questions.
answer

b) portray reality in all its minute details.
question

Which of the following is a positive economic statement? a) The standard of living in the United States is too low. b) The U.S. government should increase regulations on the banking industry. c) The government should implement a national consumption tax. d) If the price of beef falls, a larger quantity of it will be bought.
answer

d) If the price of beef falls, a larger quantity of it will be bought.
question

Which of the following are primarily macroeconomic topics? a) unemployment b) health care costs c) inflation d) gasoline prices e) economic growth f) air pollution
answer

a, c, e
question

Which of the following statements is true about profit? a) The terms “accounting profit” and “economic profit” can be used interchangeably. b) Profit refers to the revenue received from the sale of a quantity of goods. c) Profit is calculated by multiplying price and quantity sold. d) Profit is the difference between revenue and cost.
answer

d) Profit is the difference between revenue and cost.
question

Technology is defined as
answer

the processes used to produce goods and services
question

In economics, an organization that produces a good or service is called a a) business. b) company. c) firm. d) all of the above are correct
answer

d) all of the above are correct
question

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10, the slope of this line is
answer

negative seven tenths.
question

Suppose when the price of laptops fall, college students buy more laptops. This implies that a) there is a negative relationship between laptop prices and quantities purchased by college students. b) there is a direct relationship between laptop prices and quantities purchased by college students. c) there is a positive relationship between laptop prices and quantities purchased by college students. d) there is a one-to-one relationship between laptop prices and quantities purchased by college students.
answer

a) there is a negative relationship between laptop prices and quantities purchased by college students.
question

At a recent faculty meeting, Lorraine Waverly, president of Skywalker College, announced that enrollment is up by 12 percent over the previous semester. If enrollment the previous semester was 3,250 students, what is the student enrollment this semester?
answer

3,640

Get instant access to
all materials

Become a Member