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100
Economics is best defined as the study of: a. the classification of resources used to produce final goods and services b. how decisions are made to apportion available resources among alternatives c.how technology can be used to change scarce resources into free resources
b. how decisions are made to apportion available resources among alternatives
100
Macroeconomics is the study of economics from the standpoint of: a. individual economic units b. a typical firm c. the overall economy d. a specific market
c. the overall economy
100
The use of limited resources to satisfy unlimited wants is a statement of: a. paradox of value b. the fallacy of composition c. the economizing problem d. roundabout production
c. the economizing problem
100
Assume a price ceiling is abandoned: a. supply will increase causing price to fall b. price will fall c. demand will decrease causing price to rise d. price will rise
d. price will rise
100
The economizing problem is essentially one of deciding how to make the best use of: a. limited resources to satisfy limited wants b. unlimited resources to satisfy limited wants c. limited resources to satisfy virtually unlimited wants d. virtually unlimited resources to satisfy virtually unlimited wants
c. limited resources to satisfy virtually unlimited wants
200
Which of the following would be excluded from the notion of capital in economic analysis: a. the oil refineries in New Jersey b. the dollars used to buy crude oil from OPEC c. the pipelines used to distribute the refined product d. the tankers used to transport Middle Eastern crude oil
b. the dollars used to buy crude oil from OPEC
200
In the past in our economy, women frequently entered careers as nurses, secretaries, elementary and secondary school teachers and the like. This might be considered an example of resource allocation primarily by: a. command b. tradition c. price d. scarcity e. choice
b. tradition
200
In an advanced economy, most workers do not produce all the goods they use, but limit their productive activities to narrowly defined areas. This is known as: a. exchange b. barter c. economizing d. specialization
d. specialization
200
Under a price system, the "what to produce" decision is made by: a. the government b. everybody wording consciously for the social good rather than for their own self interest c. business men d. householders
d. householders
200
Normal demand curves: a. shift as the price of the good falls b. shift as the quantity demanded increases in response to an increase in the price of the good c. slope downward from left to right d. slope downward from right to left e. slope upward from left to right
c. slope downward from left to right
300
A major reason for establishing a price ceiling is to: a. keep market prices down to help consumers b. create shortages in production c. help free markets allocate more efficiently d. increase the income of producers e. eliminate government interference in markets
a. keep market prices down to help consumers
300
For a market to exist there must be: a. buyers and sellers b. a building such as a retail store c. third parties such as brokers and agents d. perfect competition e. a homogeneous product
a. buyers and sellers
300
There is neither excess supply nor excess demand when: a. actual price equals equilibrium price b. the quantity supplied plus the quantity demanded equals total output c. price equals quantity d. surpluses equal shortages e. the number of buyers equals the number of sellers
a. actual price equals equilibrium price
300
Distribution theory in economics: a. attempts to explain how prices of factors of production are determined b. is concerned with the elimination of income inequality c. studies how prices of final goods and services are derived d. examines the various market structures in the real world
a. attempts to explain how prices of factors of production are determined
300
The demand side of the product market reflects: a. the prices of factors of production b. the tastes of consumers c. the technology available to the producer d. the supply of the product
b. the tastes of consumers
400
When a free market simultaneously experiences both an increase in demand and a decrease in supply we can definitely predict: a. the equilibrium price will rise b. the equilibrium quantity will rise c. a temporary surplus will be created d. both equilibrium prices and quantities will fall e. nothing will happen to either equilibrium prices or quantities
a. the equilibrium price will rise
400
Perfect competition means that a. there is more than one seller in a market b. a given product can be purchased at a number of different prices c. there are larger numbers of independently-acting buyers and sellers in each market d. sellers can cause artificial product scarcities and thereby manipulate prices
c. there are larger numbers of independently-acting buyers and sellers in each market
400
When the economist says that the demand for a product has increased, he/she means that: a. the demand curve has shifted to the left b. product price has fallen and as a consequence consumers are buying a larger quantity of the product c. the product has become particularly scarce for some reason d. consumers are now willing to purchase more of this product at each possible price
d. consumers are now willing to purchase more of this product at each possible price
400
The law of demand states: a. as price falls demand goes up b. as price falls the quantity demanded declines c. the more buyers in a market the lower the price d. as price rises the quantity demanded falls
d. as price rises the quantity demanded falls
400
In general supply curves slope upward to the right because: a. increases in the price of a commodity lead to rightward shifts of the supply curve b. rising prices motivate producers to offer more units for sale c. technology progresses over time, increasing the ability of firms to produce more at existing prices
b. rising prices motivate producers to offer more units for sale
500
If the demand for product X increases as the price of product Z increases, it can be concluded that: a. X and Z are inferior goods b. X and Z are substitute goods c. X and Z are complementary goods d. X is a superior good and Z is an inferior good
b. X and Z are substitute goods
500
Mary and Tom volunteer at a food pantry. They both pack bags and make sandwiches. The table shows what they can do in one hour. Which statement is true? a. Mary has the comparative advantage in packing bags b. Tom has the comparative advantage in packing bags c. Neither person has a comparative advantage in either activity d. Both persons have a comparative advantage in making sandwhiches
b. Tom has the comparative advantage in packing bags
500
Which of the following would result in a shift in the supply curve for sugar? a. the price of sugar increases dramatically b. improvements are made in the sugar-refining process c. artificial sweeteners are found to be associated with cancer d. the demand for sugar increases e. the equilibrium price of sugar falls
b. improvements are made in the sugar-refining process
500
Number 17 a. neither country has an absolute advantage in tractor or food production b. country B has an absolute advantage in the production of both tractors and food c. country B has a comparative advantage in tractor production d. country A has a comparative advantage in tractor production
c. country B has a comparative advantage in tractor production
500
"In the corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand" In which statement are the terms "demand" and "supply" used correctly? a. both b. the first statement c. the second statement d. neither statement
c. the second statement
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