MacroEconomics Chapter 3 Quiz – Flashcards

A factor market is any place or process where a) Finished goods are bought and sold. b) Land, labor, or capital is bought and sold. c) Finished services are bought and sold. d) None of the choices are correct.

A market in which final goods and services are exchanged is a a) Public goods market. b) Product market. c) Factor market. d) Labor market.

The term opportunity cost refers to the a) Value of every other good given up when a good or service is obtained. b) Financial costs of all the factors of production used to produce a good or service. c) Amount of resources used to produce a good but not a service. d) The most desired good or service given up when something is obtained.

According to the law of demand, a demand curve a) Has a negative slope. b) Is a horizontal or flat line. c) Has a positive slope. d) Exceeds the economy's ability to produce.

Ceteris paribus means a) Holding everything constant except for the variables you are interested in examining. b) Allowing the free market to decide, not government. c) Changing prices to see how demand or supply shifts. d) Holding constant the determinant of demand or supply that you are interested in examining.

The term market mechanism refers to a) The use of market prices and sales to determine resource allocation. b) The establishment of a ceiling price in a market. c) Supply curves but not demand curves. d) Government laws and regulations concerning how the market should operate.

A market shortage is a) The amount by which the quantity demanded exceeds the quantity supplied at a given price. b) The result of a price floor. c) A situation in which producers cannot sell all the goods and services that they are willing and otherwise able to sell. d) The amount by which the cost of production exceeds the price of a good.

Which of the following statements about markets is not true? a) Markets necessarily have a physical location. b) Markets have both a demand side and a supply side. c) The two types of markets include the factor and product markets. d) Every market transaction involves an exchange of money for goods or resources or a direct exchange of goods or resources without money called barter.

In The Economy Tomorrow analysis in the text stated that thousands of people were waiting for a kidney transplant. Which of the following statements is true? a) A price ceiling of zero is effectively a prohibition against donating organs. b) Allowing the sale of kidneys at a price greater than zero would likely increase the number of available kidneys. c) Allowing the sale of kidneys at a price greater than zero would decrease the number of available kidneys. d) There is not an organ shortage.

The term opportunity cost refers to a) The most a consumer is willing to exchange to get an item. b) The slope of the demand line for a consumer or slope of the supply line for the producer. c) The minimum price that a producer will accept for a product. d) All of the choices are correct.

Demand" is a statement of actual purchases. True False

Market price is the same thing as equilibrium price. True False

Optimal market outcomes are the same as perfect market outcomes. True False

In the United States, market shortages of human organs are the result of price ceilings. True False

In the United States, price ceilings on human organs have caused an increase in demand. True False