question

Which question is an example of a microeconomics question?

answer

Will the merger of two airlines likely lead to higher airline ticket prices.

question

Which is NOT a factor of production?

answer

Money

question

A point ON the production possibilities curve is:

answer

Attainable and resources are FULLY employed

question

Which would NOT be a characteristic of a capitalist economy?

answer

Government ownership of most factors of production

question

Which is an illustration of macroeconomic question?

answer

Are increasing wage demands by workers contributing to price inflation?

question

In the circular flow model, households earn their incomes in the:

answer

Resource markets

question

Which is NOT a determinant of a change in demand?

answer

The cost of inputs in production

question

If the price of gasoline increases and car dealers suffer a decrease in demand for sport utility vehicles, then gasoline and sport utility vehicles are:

answer

Complements

question

Refer to the above diagram, which shows 2 supply curves for corn. Which of the following would cause the change in the supply of corn illustrated by the shift from S1 to S2?

answer

The development of a more effective insecticide for corn rootworm

question

All the following statements describe a market economy EXCEPT:

answer

Government prescribes the desired prices for goods and services

question

When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls and fewer Adidas soccer balls. Which of the following best explains Ronaldo's decision to buy more Nike soccer balls?

answer

The substitution effect.

question

A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana. We can conclude that:

answer

beer and marijuana are complementary goods

question

If two goods are complements:

answer

a decrease in the price of one will increase the demand for the other.

question

Which of the following statements is correct?

answer

An increase in the prince of C will decrease the demand for complementary product D.

question

A decrease in the price of digital cameras will: (Remember memory cards are used with digital cameras)

answer

shift the demand curve for memory cards to the right.

question

Refer to diagram. A decrease in quantity demanded is depicted by a:

answer

move from point y to point x

question

Which of the following is one of the Five Fundamental Questions?

answer

What goods and services will be producted?

question

Suppose that a university decides to spend $1 million to upgrade personal computers and scientific equipment for faculty rather than spend $1 million to expand parking for students. This example illustrates:

answer

Opportunity costs

question

Macroeconomics approaches the study of economics from the viewpoint of:

answer

the entire economy.

question

Which of the following statements pertains to MACROECONOMICS?

answer

National income grew by 2.7 percent last year.

question

An economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. This prediction assumes that:

answer

bicycles are normal goods.

question

Which of the following would most likely increase the demand for gasoline?

answer

The expectation by consumers that gasoline prices will be higher in the future.

question

Which of the following will cause the demand curve for product A to shift to the left?

answer

An increase in money income if A is an inferior good.

question

Suppose that tacos and pizza are substitutes and that soda and pizza are complements. We would expect and increase in the price of pizza to:

answer

Reduce the demand for soda and increase the demand for tacos

question

The law of supply indicates that, other things equal:

answer

producers will offer more of a product at high prices than at low prices

question

An improvement in production technology will:

answer

shift the supply curve to the right

question

The supply curve shows the relationship between:

answer

Price and quantity supplied

question

The income and substitution effects account for:

answer

the downward-sloping demand curve.

question

The Latin term "ceteris paribus" means:

answer

other things equal.

question

Which of the following is associated with Macroeconomics?

answer

An empirical investigation of the general price level and unemployment rates since 1990

question

A production possibilities curve shows:

answer

the maximum amounts of two goods that can be produced, assuming the full use of available resources

question

Answer the question on the basis of the data given in the following production possibilities table. If the economy is producing alternative C, the opportunity cost of the 12th unit of consumer goods will be:

answer

1/3 of a unit of capital goods.

question

In a command system:

answer

The government makes production and allocation decisions

question

In the circular flow diagram, firms get their ability to pay for the cost of production from the:

answer

Revenues they receive for their products.

question

The circular flow model shows that workers and capital owners offer their services to firms through the:

answer

Resource markets

question

Which of the following would be primarily determined in the resource markets?

answer

The wage rates for computer programmers and engineers.

question

All of the following statements describe a market economy except:

answer

Government prescribes the desired prices for goods and services

question

The relationship between quantity supplied and price is_________ and the relationship between quantity demanded and price is ___________.

answer

direct; inverse

question

College students living off campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. When they finish school and start careers, their consumption of both goods frequently declines. This suggests that ramen noodles and boxed macaroni and cheese are:

answer

Inferior goods.

question

A person should consume more of something when its marginal:

answer

Benefit exceeds or equals its marginal cost

question

In deciding whether to study for an economics quiz or go to a movie, one is confronted by the idea of:

answer

scarcity and opportunity costs

question

A recent study found that an increase in federal tax on beer (and thus an increase in the prince of beer) would reduce the demand for marijuana. We can conclude that:

answer

beer and marijuana are complementary goods.

question

Which of the following is a positive statement?

answer

The temperature is 92 degrees today.

question

Real GDP is 2008 was $14,834 billion. Real GDP in 2009 was $14,418 billion. The percentage change in real GDP from 2008 to 2009 was:

answer

2.8%

question

Comparative advantage is:

answer

the ability to produce more a good or service at a lower opportunity cost than others.

question

One can say with certainty that equilibrium price will decline when supply:

answer

Increases and demand decreases

question

Since their introduction, prices of Blu-ray players have fallen and the quantity purchased has increased. This statement:

answer

suggest that the supply of Blu-ray players has increased.

question

When the price of product rises, consumers with a given money income shift their purchases to other products whose prices are now relatively lower. This statement describes:

answer

the Income effect.

question

If an increase in the supply of a product in the market results in decrease in price, but no change in the quanatity traded, then:

answer

The price elasticity of supply is zero

question

If the price elasticity of demand for a product is equal to 0.5, then a 10 percent decrease in price will increase quantity demanded by:

answer

5 percent

question

If property rights are not well enforced, fewer goods and services will be produced

answer

True

question

If the demand for bacon is relatively elastic, a 10 percent decline in the price of bacon will:

answer

increase the amount demanded by more than 10 percent.

question

When the price of a product is increase 15 percent, the quantity demanded decreases 10 percent. We can therefore conclude that the demand for this product is:

answer

Inelastic

question

The demand for Cheerios cereal is more price-elastic than the demand for cereals as a whole. This is best explained by the fact that:

answer

There are more substitutes for Cheerios than for cereals as a whole.

question

If quantity demanded is completely unresponsive to price changes, demand is:

answer

perfectly inelastic

question

The price of season tickets to a performing arts theater decreases by 3%. As a result, the quantity demanded increases by 6%. The price elasticity of demand for season tickets is:

answer

2

question

When the price of candy bars decreased from $0.55 to $0.45 the quantity demanded changed from 19000 per day to 21000 per day. In this price range, the price-elasticity coefficient (based on the midpoint formula) for candy bars is:

answer

0.05

question

The area of the triangle shown in the figure below is:

answer

22,500

question

If pizza is normal good, a price decrease will cause you to consume more pizza because of:

answer

Income effect

question

In terms of the circular flow diagram, households make expenditures in the _________ market and receive income through the _______________ market.

answer

product; factor

question

Which of the following statements are correct?

answer

An increase in the price of C will decrease the demand for complementary product D.

question

Consider the following statement: "An increase in supply decreases the equilibrium price. The decrease in price increases demand." The statement is:

answer

false: decreases in price affect the quantity demanded, not demand

question

The distinction between a normal and an inferior good is:

answer

when income increases, demand for normal good increases, while demand for an inferior good falls.

question

All else equal, the decrease in consumer preference predicted by Apple for its iPhone 5 would be represented by a:

answer

shift of the demand curve for Iphones to the left.

question

If, in response to an increase in the price of chocolate, the quantity of chocolate demanded decreases, economists would describe this as:

answer

a decrease in quantity demanded

question

If, for a product, that quantity supplied exceeds the quantity demanded, the market price will fall until:

answer

quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.

question

If the income elasticity of SUVs is greater than 1, what is the good considered?

answer

a luxury

question

Trade offs force society to make choices, particularly when answering the following 3 fundamental questions:

answer

1. what goods/services will be produced? 2. how will the goods/services be produced? 3. who will receive the goods and services produced?

question

The production possibilities frontier shows the ____________ combinations of two products that may be produced in a particular time period with available resources.

answer

maximum attainable

question

In the circular flow model, producers:

answer

hire resources sold by households in the factor market.

question

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve. As a result

answer

both the equilibrium price and quantity of MP3 players will increase.

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