Question 1

2. In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made.

Accepted Answer

government

Question 2

3. 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

Accepted Answer

b

Question 3

4. 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

Accepted Answer

A

Question 4

5. 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. environmental pollution-- D. economic freedom

Accepted Answer

c

Question 5

7. If macroeconomics looks at the economy as a whole, it focuses on which of the following? A. households B. business firms C. unemployed people D. the division of labor

Accepted Answer

c

Question 6

8. In the ______________, households receive goods and services and pay firms for them A. labor market B. financial capital market C. goods and services market-- D. savings market

Accepted Answer

c

Question 7

9. When nations desire a healthy macroeconomy, they typically focus on three goals, one of these being: A. labor market B. financial capital market C. goods and services market D. savings market

Accepted Answer

c

Question 8

10. The basic difference between macroeconomics and microeconomics is A. microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade. B. microeconomics concentrates on the behaviour of individual consumers while macroeconomics focuses on the behaviour of firms. C. microeconomics concentrates on the behaviour of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.---- D. microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment

Accepted Answer

c

Question 9

11. Which of the following is most likely a topic of discussion in macroeconomics A. an increase in the price of a hamburger B. a decrease in the production of DVD players by a consumer electronics company C. an increase in the wage rate paid to automobile workers D. a decrease in the unemployment rate

Accepted Answer

D

Question 10

Specialization  A. leads to greater self-sufficiency. B. can lead to an increase in overall production.--- C. allows workers to develop skills by working on a large number of tasks D. is always the result of an inefficient use of resources

Accepted Answer

b

Question 11

13. In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction o fA. all consumers. B. buyers and sellers. C. producers and input suppliers. D. producers and government planning committees

Accepted Answer

b

Question 12

14. Which of the following statements most likely lies within the realm of macroeconomics A. An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. B. Due to process innovations in computer chip manufacturing, the market supply of computers increased. C. Due to an economic recession, manufacturing firms began implementing layoffs of their workforces.--- D. Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook.

Accepted Answer

c

Question 13

15. The basic difference between macroeconomics and microeconomics is that A. microeconomics looks at the forest (aggregate markets) while macroeconomics looks at the trees (individual markets). B. macroeconomics is concerned with groups of individuals while microeconomics is concerned with single countries. C. microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets).--- D. macroeconomics is concerned with generalization while microeconomics is concerned with specialization

Accepted Answer

c

Question 14

16. The circular flow diagram of economic activity is a model of the A. flow of goods, services, and payments between households and firms. B. influence of government on business behaviour. C. role of unions and government in the economy. D. interaction among taxes, prices, and profits

Accepted Answer

a

Question 15

17. Which of the following best characterizes the circular flow of incomeA. Businesses buy resources from the government, and households buy goods and services from businesses. B. Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses. C. The government purchases resources from businesses and households and then sells goods and services to businesses and households. D. Households buy factors of production from businesses, and businesses buy goods and services from households.

Accepted Answer

b

Question 16

18. In the circular flow diagram modelA. households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses. B. businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households. C. households receive revenue for selling goods and services to businesses, and use that revenue to buy inputs from businesses. D. Both (a) and (b) are correct.

Accepted Answer

d

Question 17

19. _____________ - a term referring to the fact that for many goods, as the level of production increases, the average cost of producing each individual unit declines A. Skill B. Specialization C. Economies of scale D. Division of labor

Accepted Answer

C

Question 18

20. Economic models like the _____________________ are not physical models, but instead are diagrams or graphs or even mathematical equations that represent economic patterns or theories A. financial capital market B. circular flow diagram C. financial investment market D. Specialization Model

Accepted Answer

b

Question 19

1. 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

Accepted Answer

A. normative statement

Question 20

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

Accepted Answer

A. the production possibilities frontier

Question 21

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

Accepted Answer

c

Question 22

7. 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

Accepted Answer

c

Question 23

8. \"If I didn\'t have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour.\" The opportunity cost of attending class this evening is A. $0 B. $4 C. $40 D. $44

Accepted Answer

D

Question 24

9. Most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good. A. utility B. marginal analysis C. the budget constraint D. consumption

Accepted Answer

B

Question 25

10. Marginal thinking is best demonstrated by: A. choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time. B. deciding to never purchase a coat made with animal skins or furs C. acquiring the information relevant to a choice before making that choice D. measuring all of the costs of a meal against all of the benefits when deciding whether to order a second milkshake

Accepted Answer

A.

Question 26

11. The marginal benefit of a slice of pizza is the: A. total amount that a consumer is willing to pay for a whole pizza, divided by the number of slices B. difference between the value of the slice to the consumer and the price of the slice. C. maximum amount that a consumer is willing to pay for the slice. D. price of the slice of pizza

Accepted Answer

c

Question 27

12. The general pattern that consumption of the first few units of any good tends to bring a higher level of _______ to a person than consumption of later units is a common pattern. A. utility B. marginal benefit C. opportunity cost D. sunk costs

Accepted Answer

A.

Question 28

13. The lesson of __________ is to forget about the money that\'s irretrievably gone and instead to focus on the marginal costs and benefits of future options.  A. marginal utility  B. sunk costs C. marginal analysis D. budget constraints

Accepted Answer

B

Question 29

14. The law of ____________________________ explains why people and societies rarely make all-or-nothing choices .A. consumption B. marginal analysis C. diminishing marginal utility D. utility

Accepted Answer

C

Question 30

15. As a person receives more of a good, the _______________ from each additional unit of the good declines. A. utility B. sunk costs C. marginal utility D. budget constraint

Accepted Answer

C

Question 31

16. Which of the following would most likely shift the production possibilities curve inward? A. an increase in the number of hours factories are in use B. a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time C. an increase in the production of capital goods D. technological progress

Accepted Answer

B

Question 32

17. In deciding how many hours to work, Beulah will make a choice that maximizes her _______; that is, she will choose according to her preferences for leisure time and income. A. budget constraint B. opportunity set C. utility D. production possibilities frontier

Accepted Answer

C

Question 33

18. The model that economists use for illustrating the process of individual choice in a situation of scarcity is the budget constraint, sometimes also called the _______________, a diagram which shows what choices are possible. A. opportunity set B. consumption choice C. time value of money D. risk premium

Accepted Answer

A.

Question 34

19. Economists refer to this pattern, the ___________________________________, which means that as a person receives more of a good, the additional or marginal utility from each additional unit of the good declines. A. law of trade-offs B. law of diminishing marginal utility C. production possibilities frontier D. law of increasing marginal utility

Accepted Answer

B

Question 35

20. The choice on a production possibilities set that is socially preferred, or the choice on an individual\'s budget constraint that is personally preferred, will display _____________________. A. allocative efficiency B. the production possibilities frontier C. trade-offs D. scarcity

Accepted Answer

A.

Question 36

1. 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

Accepted Answer

C

Question 37

2. 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.

Accepted Answer

B

Question 38

3. Economists 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

Accepted Answer

C

Question 39

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

Accepted Answer

B

Question 40

5. When economists 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

Accepted Answer

C

Question 41

6. When quantity demanded decreases in response to a change in price: A. the demand curve shifts to the right. B. the demand curve shifts to the left. C. there is a movement down along the demand curve. D. there is a movement up along the demand curve.

Accepted Answer

D

Question 42

7. The ___________ is the only price where quantity demanded is equal to quantity supplied. A. equilibrium price B. horizontal axis intercept C. vertical axis intercept D. market price

Accepted Answer

A.

Question 43

8. After widespread press reports about the dangers of contracting \"mad cow disease\" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is A. no change; only the supply curve for beef is likely to be affected. B. a shift of the demand curve for beef to the left. C. a movement down along the demand curve for beef to the right. D. a shift of the demand curve for beef to the right.

Accepted Answer

B

Question 44

12. When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right. A. prices rise B. equilibrium is achieved C. costs of production fall D. there is a population increase

Accepted Answer

C

Question 45

13. A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of:

Accepted Answer

the supply curve.--

Question 46

17. Which of the following would reduce the supply of microcomputers?

Accepted Answer

higher wage rates for the workers that assemble the computers

Question 47

18. Interpret the following statement: \"An increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market.\"

Accepted Answer

The statement is correct

Question 48

19. ______________ are enacted when discontented sellers, feeling that prices are too low, appeal to legislators to keep prices from falling.

Accepted Answer

Price floors

Question 49

20. Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect:

Accepted Answer

Andy\'s demand for beer to increase.

Question 50

1. GDP is A. the sum of all currency and coins in circulation. B. the value of all final goods and services produced by a government. C. the value of all final good and services produced anywhere in the world by a nation\'s firms. D. the value of all final goods and services produced domestically.

Accepted Answer

D

Question 51

Consumption in the United States is about ____________ of GDP, and it moves relatively little over time. A. 10% B. 33% C. 68% D. 90%

Accepted Answer

C

Question 52

3. The demand measure of GDP accounting adds together A. wages and salaries, rent, interest, and profit. B. consumption, investment, government purchases, and trade balance. C. consumption, government purchases, wages and salaries, and trade balance. D. consumption, interest, government purchases, and trade balance

Accepted Answer

b

Question 53

4. Consumption is the purchase of goods and services by: A. households.-- B. government. C. business firms. D. foreign buyers.

Accepted Answer

A

Question 54

5. ___________ is a small category that refers to the goods produced by one business that have yet to be sold to consumers, and are either still sitting in warehouses and on store shelves. A. Inventories-- B. Services C. Structures D. Durable goods

Accepted Answer

A.

Question 55

6. Which of the following is included in the calculated Gross Domestic Product?  A. Farmer Freddie sells his second tractor to his son. B. Suzanne buys a love seat and chair for $85 at the yard sale on the corner. C. A local ice cream store sells $17,000 worth of cones and sundaes on July 1.-- D. Mr. Farkle buys a used lawn mower from his neighbor, Mr. Sparkle.

Accepted Answer

C

Question 56

7. Which of the following is not counted as a part of GDP? A. the purchase of 100 shares of AT&T stock by your grandfather.-- B. the purchase of a snow plough by the city of Minneapolis. C. the unsold additions to inventory at an appliances store D. the purchase of a loaf of bread by a consumer

Accepted Answer

A.

Question 57

8. _________ are now the largest single component of the supply side of GDP, representing over half of GDP. A. Durable goods B. Services-- C. Nondurable goods D. Structures

Accepted Answer

B

Question 58

9. GDP in the United States in 2012 was about __________. A. $162 billion B. $1.62 trillion C. $16.2 trillion-- D. $162 trillion

Accepted Answer

C

Question 59

10. Investment (I) includes: A. the amount spent on new factories and machinery.-- B. the amount spent on stocks and bonds. C. the amount spent on consumer goods that last more than one year. D. the amount spent on purchases of art.

Accepted Answer

A

Question 60

11. Middle-income countries, which include much of Latin America, Eastern Europe, and some countries in East Asia, have per capita GDP in the range of ___________. A. $60 to $120 B. $600 to $1200 C. $6,000 to $12,000 D. $60,000 to $120,000

Accepted Answer

C

Question 61

12. A business cycle reflects changes in economic activity, particularly real GDP. The stages of a business cycle are (in order): A. trough, expansion, recession, peak B. contraction, recession, expansion, boom C. expansion, trough, recession, peak D. expansion, peak, recession, trough--

Accepted Answer

D

Question 62

13. If imports exceed exports, as in recent years, then __________ exists. A. a trade surplus B. a trade deficit-- C. a trade imbalance D. trade disequilibrium

Accepted Answer

B

Question 63

14. In 1980 Denmark had a GDP of $70 billion (measured in U.S. dollars) and a population of 5.1 million. In 2000, Denmark had a GDP of $160 billion (measured in U.S. dollars) s and a population of 5.3 million. By what percentage did Denmark\'s GDP per capita rise between 1980 and 2000? A. 45.4% B. 219% C. 128% D. 120%---

Accepted Answer

D

Question 64

15. The gap between exports and imports in a nation\'s economy is called the ___________.

Accepted Answer

trade balance

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