ECON study guide questions test 1

question

c. the value of the next best alternative

answer

Economists define opportunity cost as
a. the money price of goods and services
b. the lowest price you can bargain for
c. the value of the next best alternative
d. retail prices including sales tax

question

b. are likely to create significant new problems

answer

Most economists believe that attempts to set prices by decree
a. will work best in the long run
b. are likely to create significant new problems
c. are the only way to establish fair prices
d. have a history of practical effectiveness

question

d. a country can gain by producing those goods in which it has a comparative advantage and then trading for those things in which other countries have a comparative advantage

answer

with respect to int'l trade
a. a country can gain only if its neighbors lose
b. countries should try to be self-sufficient of all goods
c. only those countries with the highest productivity levels will gain
d. a country can gain by producing those goods in which it has a comparative advantage and then trading for those things in which other countries have a comparative advantage

question

a. is likely to be mutually advantageous to both parties when it is voluntary

answer

most economists believe that exchange
a. is likely to be mutually advantageous to both parties when it is voluntary
b. only takes place when one side can extract a profit from the other
c. usually makes both parties worse off
d. is best when strictly regulated by the gov't

question

c. changes, such as the increase in cost when output increases

answer

marginal buying analysis is concerned with the study of
a. buying stocks and bonds on credit
b. those groups that operate on the fringes of the market economy
c. changes such as the increase in cost when output increases
d. an engineer's fudge factor for possible errors

question

a. market mechanisms may exist that can help remedy the situation

answer

when the actions of some economic agents impose cost on others for example the polluting smoke of a factory or power plant
a. market mechanisms may exist that can help remedy the situation
b. only answer is gov't regulation
c. there is very little one can do; such is the price of progress
d. it is always best to close down the offending action

question

b. policies to increase equality may reduce output

answer

Economic analysis suggests that
a. policies that promote the highest rate of economic growth uambiguously improve the distribution of income
b. policies to increase equality may reduce output
c. incentives for work and savings have almost no impact on people's behavior
d. there is no trade-off between the size of the economic pie and how the pie is divided

question

d. are powerful but imperfect tools to limit the swings of the business cycle

answer

monetary and fiscal policy
a. can eliminate booms and busts if used appropriately
b. have no power to influence the economy
c. are to complicated to be of practical use
d. are powerful but imperfect tools to limit the swings of the business cycle

question

c. normally require a higher rate of unemployment

answer

most economists believe that policies to reduce inflation
a. have never been successful
b. will never be adopted in democracies
c. normally require a higher rate of unemployment
d. have an immediate and lasting impact

question

b. can compound into significant differences

answer

small differences in the productivity growth rate
a. make little difference even over periods as long as a century
b. can compound into significant differences
c. can be safely ignored by citizens and politicians
d. will lead only to small differences in the standard of living between countries

question

a, d

answer

which helps to explain why the output of the American economy is as high as it is? (more than 1 answer)
a. size of the labor force
b. amount of money provided by the gov't
c. business regulation
d. productivity of American workers

question

c. exceeds that of other nat'l economies

answer

total output of the U.S. economy
a. slightly less than that of Japan
b. comparable to that of other industrialized countries
c. exceeds that of other nat'l economies
d. is among the lowest for industrialized countries

question

b,c

answer

many economists believe that the success of the American economy reflects in part our reliance on (more than 1 answer)
a. regulation
b. private enterprise
c. free markets
d. nationalization

question

d. the money value of all the goods and services produced in an economy in a year

answer

GDP measures
a. consumer spending
b. the vulgarity of many consumer goods
c. unpaid economic activity that takes place inside households
d. the money value of all the goods and services produced in an economy in a year

question

a. less than

answer

American reliance on foreign trade--exports and imports-- is ____ most other industrialized countries
a. less than
b. about the same as
c. greater than

question

c. increased considerably

answer

since 1950, the proportion of women employed in the market place has
a. declined
b. shown little change
c. increased considerably

question

a. declined

answer

since the mid 1970s the proportion of the labor force accounted for by teenagers has
a. declined
b. stayed about the same
c. increased

question

d. 67 percent more

answer

compared to high school graduates college graduates earn about
a. the same
b. 25% more
c. 50% more
d. 67% more

question

d. a period when real GDP declines

answer

the term recession refers to
a. a period of inflation
b. period of above average economic growth
c. reductions in gov't spending designed to reduce the deficit
d. period when real GDP declines

question

c. machines and buildings used to produce output

answer

when referring to inputs, the term capital refers to
a. money business firms need to borrow
b. importance of a firm's head office
c. machines and buildings used to produce output
d. all of the firm's factors of production

question

d. the bread that is made from the wheat

answer

which would not be classified as an input
a. farmer's time to grow wheat
b. farmer's tractor
c. farmer's land
d. bread that is made from the wheat

question

d. firms that produce a variety of services including retail and wholesale trade

answer

majority of American workers work for
a. manufacturing companies
b. the federal gov't
c. state and local gov'ts
d. firms that produce a variety of services including retail and wholesale trade

question

b. labor

answer

when businesses pay for factors of production which gets the largest share of income?
a. Profits
b. labor
c. interest
d. the gov't (taxes)

question

d. 27.5 million business firms for every 11 people

answer

in the U.S there are about
a. 250,000 business firms for every 1200 people
b. 1.5 million business firms or one for every 200 people
c. 5 million business firms or 1 for every 60 people
d. 27.5 million business firms for every 11 people

question

d. imports

answer

when Americans buy goods produced abroad ____ increase
a. exports
b. taxes
c. transfer payments
d. imports

question

a. exports

answer

when Americans are able to sell goods to foreigners this adds to
a. exports
b. taxes
c. transfer payments
d. imports

question

c. about 70%

answer

Consumer spending accounts for ____ of American GDP
a. about 33%
b. about 50%
c. about 70%
d. about 90%

question

d. income security

answer

the largest share of federal gov't spending is for
a. nat't defense
b. interest
c. health
d. income security

question

c. transfer payments

answer

for the most part the US has chosen to let markets determine distribution of before tax incomes and then use taxes and _____ to reduce income inequalities
a. tariffs
b. inflation
c. transfer payments
d. gov't production

question

a. among the lowest

answer

Compared to other industrialized countries taxes as a % of GDP in the US are
a. among the lowest
b. about the same as most other industrialized countries
d. among the highest

question

c. value of the next best alternative use that is not chosen

answer

Economists define opp. cost as the
a. dollar price of goods and services
b. hidden cost imposed by inflation
c. value of the next best alternative use that is not chosen
d. time spent shopping

question

c. amount of consumption goods the economy can produce

answer

position of an economy's PPF is determined by all but which
a. size of the labor force
b. labor skills and training
c. amount of consumption goods the economy can produce
d. current technology

question

d. the different combinations of goods it can produce with available resources and technology

answer

a firm's PPF shows
a. best combination of output for a firm to produce
b. its plans for increasing production over time
c. the architectural drawings of its most productive plant
d. diff. combos of goods it can produce with available resources and technology

question

d. max. amount of

answer

an efficient economy utilizes all available resources and produces the ____ output its technology permits
a. minimum amount of
b. best combo of
c. one combination of
d. max amount of

question

a. have a negative slope

answer

fact that resources are scarce implies that the PPF will
a. have a negative slope
b. be a straight line
c. shift out over time
d. bow out from the origin

question

b. most resources are more productive in certain uses than in others

answer

which statement implies that PPF's are likely to be curved rather than straight lines
a. ultimately all resources are scarce
b. most resources are more productive in certain uses than in others
c. unemployment is a more serious problem for some social groups than for others
d. economists are notoriously poor at drawing straight lines

question

c. all points on or inside the PPF

answer

the set of attainable points for a firm that produces two goods is given by
a. all points on the PPF
b. all points inside the PPF
c. all points on or inside the PPF
d. none of the above

question

b. on its PPF

answer

If an economy is operating efficiently it will be producing
a. inside its PPF
b. on its PPF
c. outside its PPF
d. the max. amount of necessities and the min. amount of luxuries

question

d. bowed-out

answer

the principle of increasing cost is consistent with a ___ PPF
a. straight-line
b. bowed in
c. shifting
d. bowed out

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d. a limited amount of productive resources

answer

inability of the economy to produce as much as everyone would like is ultimately a reflection of
a. lack of money in the economy
b. congressional gridlock
c. inability of a market economy to perform the necessary coordination tasks
d. limited amount of productive resources

question

a. slope of the PPF

answer

consider a PPF showing alternative combinations of corn and computers that can be produced in Cimonoce a small island in the South Pacific. The opportunity cost of more computers can be measured by
a. slope of the PPF
b. X-int of the PPF
c. Y-int of the PPF
d. area under the PPF

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b. borrowing money to hire more workers and buying more machines

answer

which implies a shift in the PPF for a shoe firm
a. raising prices by 10%
b. borrowing money to hire more workers and buying more machines
c. changing the composition output toward more women's shoes and fewer men's shoes
d. expanding the advertising budget

question

c. a doubling of the money supply

answer

which would not shift an economy's PPF
a. doubling of the labor force
b. doubling of the number of machines
c. doubling of the money supply
d. more advanced technology

question

c. best serves the objectives of the decision maker

answer

an optimal decision is one that
a. will win a majority if put to a vote
b. is supported unanimously
c. best serves the objectives of the decision maker
d. is supported by the New York Times

question

a. there can be mutual gain even if no new goods are produced

answer

if exchange is voluntary
a. there can be mutual gain even if no new goods are produced
b. one party will always get the better of the other
c. there can by mutual gain only if new goods are produced as the result of the trade
d. there can be mutual gain only if the gov't regulates retail trade

question

b. operating on an economy's PPF

answer

all but which are examples of waste and inefficiency
a. employment discrimination against women an people of color
b. operating on an economy's PPF
c. high levels of unemployment
d. quotas that limit the educational opportunities of particular ethnic groups

question

d. be done by planning bureaus or markets

answer

the 3 coordination tasks that all economies must perform can
a. only be done by a central planning bureau
b. only be done by markets
c. only by done inefficiently
d. be done by planning bureaus of markets

question

c. price

answer

a demand curve is a graph showing how the quantity demanded changes when ____ changes
a. consumer income
b. population
c. price
d. price of closely related goods

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a. negative

answer

the slope of a demand curve is usually ____ including that as price declines the quantity demanded increases
a. negative
b. positive
c. infinite
d. zero

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d. the size of the industry producing the good in question

answer

quantity demanded is likely to depend upon all but which
a. consumer tastes
b. consumer income
c. price
d. size of the industry producing the good in question

question

c. supply schedule

answer

supply curve is a graphical representation of info
a. demand schedule
b. equilibrium
c. supply schedule
d. balance sheet

question

c. decreases

answer

if price decreases the quantity supplied usually
a. increases
b. is unchanged
c. decreases
d. goes to 0

question

b. price

answer

entire supply curve is likely to shift when all but which change
a. size of the industry
b. price
c. price of important inputs
d. technology that reduces production costs

question

a. price

answer

there will likely be a movement along a fixed supply curve if which changes
a. price
b. technology reduces production costs
c. price of important inputs
d. size of industry

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a. price

answer

there will be a movement along a fixed demand curve when which changes
a. price
b. population
c. consumer incomes
d. consumer preferences

question

d. intersection of the demand and supply curves

answer

graphically the equilibrium price and quantity in a free market will be given by the
a. Y-axis int. of the demand curve
b. X-axis int. of the supply curve
c. point of max. vertical difference between the demand and supply curves
d. intersection of the demand and supply curves

question

b. both equilibrium price and quantity rise

answer

when the demand curve shifts to the right which is likely to occur
a. equilibrium price rises and equilibrium quantity decreases
b. both equilibrium price and quantity rise
c. equilibrium price declines and equilibrium quantity rises
d. both equilibrium price and quantity decline

question

c. demand curve has shifted to the left

answer

if equilibrium price and quantity both decrease it is likely that the
a. supply curve has shifted to the right
b. demand curve has shifted to the right
c. demand curve has shifted to the left
d. supply curve has shifted to the left

question

a. higher prices

answer

a shift in the demand curve for sailboats resulting from a general increase in incomes will lead to
a. higher prices
b. lower prices
c. shift in the supply curve
d. lower output

question

b. an increase in tariffs that forces manufacturers to import cotton cloth at higher prices

answer

which is likely to result in a shift in the supply curve for dresses
a. increase in consumer incomes
b. an increase in tariffs that forces manufacturers to import cotton cloth at higher prices
c. an increase in dress prices
d. higher prices for skirts pants, and blouses

question

b. new environmental protection measures that raise the cost of producing steel

answer

from an initial equilibrium which of the following changes will lead to a shift in the supply curve for chevrolets
a. import restrictions on japanese cars
b. new environmental protection measures that raise the cost of producing steel
c. decrease in the price of Fords
d. increases in the price of gasoline

question

b. demand curve for coal will shift to the right

answer

if the price of oil increases then the
a. supply curve for coal will shift to the right
b. demand curve for coal will shift to the right
c. equilibrium price and quantity of coal will not change
d. quantity of coal demanded will decline

question

c. shoes stores and companies will reduce prices in order to increase sales leading to a lower equilibrium price

answer

if the price of shows is initially above the equilibrium value which is likely to occur
a. stores' inventories will decrease as consumers buy more shoes than shoe companies produce
b. the demand curve for shoes will shift in response to higher prices
c. shoes stores and companies will reduce prices in order to increase sales leading to a lower equilibrium price
d. equilibrium will be reestablished at the original price as the supply curve shifts to the left

question

b. by less than the increase in the tax

answer

a new tax on backpacks that shifts the supply curve should increase the market price of backpacks
a. not at all
b. by less than the increase in the tax
c. by an amount equal to the increase in the tax
d. by more than the increase in the tax

question

a. lead to a reduction in the volume of transactions as we move along the demand curve above the equilibrium price to the higher price floor

answer

binding price floors are likely to
a. lead to a reduction in the volume of transactions as we move along the demand curve above the equilibrium price to the higher price floor
b. result in increased sales as suppliers react to higher prices
c. lead to shortages
d. be effective only if they are set at levels below the market equilibrium level

question

d. result in the development of black markets

answer

effective price ceilings are likely to
a. result in surpluses
b. increase the volume of transactions as we move along the demand curve
c. increase production as producers respond to higher consumer demand at the low ceiling price
d. result in the development of black markets

question

b. the quantity supplied exceeds the quantity demanded

answer

a surplus results when
a. the quantity demanded exceeds the quantity supplied
b. the quantity supplied exceeds the quantity demanded
c. the demand curve shifts to the right
d. effective price ceilings are imposed

question

b. the actions of individual economic decision making units

answer

microeconomics is concerned with
a. economic aggregates
b. the actions of individual economic decision making units
c. small people
d. small countries

question

d. the behavior of entire economies

answer

study of macroeconomics focuses on
a. the economic actions of large people
b. decisions by the largest 500 industrial companies
c. the prices and output of all firms in an industry
d. behavior of entire economies

question

a. the national output of haiti

answer

which is an example of a macroeconomic aggregate
a. the national output of haiti
b. total output of general motors
c. employment of wal mart
d. price of unleaded gas

question

c. how the quantity of domestic product demanded changes with changes in the price level

answer

aggregate demand curve shows
a. history of real GDP over the recent past
b. alternative levels of domestic output that policymakers might choose
c. how the quantity of domestic product demanded changes with changes in the price level
d. the demand for goods and services by the federal gov't

question

a. aggregate supply curve

answer

graph showing how the quantity of output produced by all firms depends upon the price level is called the
a. aggregate supply curve
b. phillips curve
c. PPF
d. economy's aggregate indifference curve

question

b. all final goods and services produced in the domestic economy during the past year

answer

GDP measures the sum of money values of
a. all goods sold in the domestic economy during the past year
b. all final goods and services produced in the domestic economy during the past year
c. attendance at all the worst movies during the past year
d. all payments to household domestic help during the past year

question

a. economic activity conducted through organized markets

answer

GDP is designed to be a measure of
a. economic activity conducted through organized markets
b. national well-being
c. all economic activity during the preceding year
d. all economic transactions involving cash

question

a. nominal GDP

answer

using current prices to aggregate all final output in the economy will yield
a. nominal GDP
b. real GDP
c. the cost of living
d. GDP in constant dollars

question

c. prices from an agreed-upon base year

answer

real GDP is computed by valuing output at
a. manufacturers' cost
b. current prices
c. prices from an agreed-upon based year
d. last year's rate of inflation

question

d. general motor's expenditures on steel for producing cadillacs in 2005

answer

which would not be included in GDP for 2005
a. production of refrigerators in 2005
b. gov'ts purchase of paper clips produced in 2005
c. consumer expenditures on haircuts in 2005
d. general motor's expenditures on steel for producing cadillacs in 2005

question

d. Jamal's purchase of a guitar originally used by John Lennon in 1965

answer

which would not be part of GDP for 2005
a. stacey's purchase of a 2005 chevrolet
b. Tanya's purchase of the latest iMac
c. ramon's expenditures on new furniture for his apartment
d. Jamal's purchase of a guitar originally used by John Lennon in 1965

question

b. your spending on tuition and fees for this year

answer

which is counted by the GDP statisticians
a. Jerita's purchase of Boeing stock from walter
b. your spending on tuition and fees for this year
c. Durwood's winnings from his bookie
d. value of Yvonne's volunteer time at her daughter's school

question

a. expenditures to clean up a major oil spill in Prince William sound

answer

which will be measured as an increase in GDP but need not reflect an increase in economic well-being
a. expenditures to clean up a major oil spill in Prince William sound
b. the value of the time Roland spends painting his own house
c. cost of new medical care that reduces infant mortality
d. earnings of numbers runners in Chicago

question

d. it is impossible to determine what happened to prices and output from data on nominal GDP alone

answer

in 1990 nominal GDP was $5.803 trillion in 1991 nominal GDP increased to $5.986 trillion on the basis of this info which is true
a. total output of the American economy was greater in 1991 than in 1990
b. whole increase in nominal GDP was the result of inflation
c. actual output increased by 3.15%
d. it is impossible to determine what happened to prices and output from data on nominal GDP alone

question

d. the aggregate demand curve shifts to the left

answer

recession is likely to occur
a. unemployment is falling
b. aggregate supply curve shifts to the right
c. increase in nominal GDP exceeds the increase in real GDP
d. aggregate demand curve shifts to the left

question

b. generally rising prices

answer

inflation is defined as a period of
a. rising nominal GDP
b. generally rising prices
c. falling real GDP
d. falling unemployment

question

d. aggregate supply curve shifts to the left

answer

which conditions will result in stagflation
a. aggregate demand curve shifts to the right
b. aggregate demand curve shifts to the left
c. aggregate supply curve shifts to the right
d. aggregate supply curve shifts to the left

question

c. prevent recessions and fight inflation

answer

stabilization policy refers to actions by the gov't to
a. keep real GDP from rising
b. minimize changes in gov't regulation
c. prevent recessions and fight inflation
d. equalize the rate of unemployment and inflation

question

c. the aggregate demand curve to the left

answer

successful stabilization policy to reduce inflation would shift
a. aggregate supply curve to the left
b. burden of taxes from individuals to corporations
c. aggregate demand curve to the left
d. decision making about monetary policy to Congress

question

b. an economy that appears to be more inflation prone

answer

in the period following WWII historical record shows
a. more frequent and severe recessionary dips in real output than before WWII
b. an economy that appears to be more inflation prone
c. little if any increase in real GDP
d. little increase in the price level

1 of 87

question

c. the value of the next best alternative

answer

Economists define opportunity cost as
a. the money price of goods and services
b. the lowest price you can bargain for
c. the value of the next best alternative
d. retail prices including sales tax

question

b. are likely to create significant new problems

answer

question

d. a country can gain by producing those goods in which it has a comparative advantage and then trading for those things in which other countries have a comparative advantage

answer

question

a. is likely to be mutually advantageous to both parties when it is voluntary

answer

question

c. changes, such as the increase in cost when output increases

answer

question

a. market mechanisms may exist that can help remedy the situation

answer

question

b. policies to increase equality may reduce output

answer

question

d. are powerful but imperfect tools to limit the swings of the business cycle

answer

question

c. normally require a higher rate of unemployment

answer

question

b. can compound into significant differences

answer

question

a, d

answer

question

c. exceeds that of other nat'l economies

answer

question

b,c

answer

many economists believe that the success of the American economy reflects in part our reliance on (more than 1 answer)
a. regulation
b. private enterprise
c. free markets
d. nationalization

question

d. the money value of all the goods and services produced in an economy in a year

answer

question

a. less than

answer

American reliance on foreign trade--exports and imports-- is ____ most other industrialized countries
a. less than
b. about the same as
c. greater than

question

c. increased considerably

answer

since 1950, the proportion of women employed in the market place has
a. declined
b. shown little change
c. increased considerably

question

a. declined

answer

since the mid 1970s the proportion of the labor force accounted for by teenagers has
a. declined
b. stayed about the same
c. increased

question

d. 67 percent more

answer

compared to high school graduates college graduates earn about
a. the same
b. 25% more
c. 50% more
d. 67% more

question

d. a period when real GDP declines

answer

the term recession refers to
a. a period of inflation
b. period of above average economic growth
c. reductions in gov't spending designed to reduce the deficit
d. period when real GDP declines

question

c. machines and buildings used to produce output

answer

question

d. the bread that is made from the wheat

answer

which would not be classified as an input
a. farmer's time to grow wheat
b. farmer's tractor
c. farmer's land
d. bread that is made from the wheat

question

d. firms that produce a variety of services including retail and wholesale trade

answer

majority of American workers work for
a. manufacturing companies
b. the federal gov't
c. state and local gov'ts
d. firms that produce a variety of services including retail and wholesale trade

question

b. labor

answer

when businesses pay for factors of production which gets the largest share of income?
a. Profits
b. labor
c. interest
d. the gov't (taxes)

question

d. 27.5 million business firms for every 11 people

answer

question

d. imports

answer

when Americans buy goods produced abroad ____ increase
a. exports
b. taxes
c. transfer payments
d. imports

question

a. exports

answer

when Americans are able to sell goods to foreigners this adds to
a. exports
b. taxes
c. transfer payments
d. imports

question

c. about 70%

answer

Consumer spending accounts for ____ of American GDP
a. about 33%
b. about 50%
c. about 70%
d. about 90%

question

d. income security

answer

the largest share of federal gov't spending is for
a. nat't defense
b. interest
c. health
d. income security

question

c. transfer payments

answer

question

a. among the lowest

answer

Compared to other industrialized countries taxes as a % of GDP in the US are
a. among the lowest
b. about the same as most other industrialized countries
d. among the highest

question

c. value of the next best alternative use that is not chosen

answer

Economists define opp. cost as the
a. dollar price of goods and services
b. hidden cost imposed by inflation
c. value of the next best alternative use that is not chosen
d. time spent shopping

question

c. amount of consumption goods the economy can produce

answer

position of an economy's PPF is determined by all but which
a. size of the labor force
b. labor skills and training
c. amount of consumption goods the economy can produce
d. current technology

question

d. the different combinations of goods it can produce with available resources and technology

answer

question

d. max. amount of

answer

an efficient economy utilizes all available resources and produces the ____ output its technology permits
a. minimum amount of
b. best combo of
c. one combination of
d. max amount of

question

a. have a negative slope

answer

fact that resources are scarce implies that the PPF will
a. have a negative slope
b. be a straight line
c. shift out over time
d. bow out from the origin

question

b. most resources are more productive in certain uses than in others

answer

question

c. all points on or inside the PPF

answer

the set of attainable points for a firm that produces two goods is given by
a. all points on the PPF
b. all points inside the PPF
c. all points on or inside the PPF
d. none of the above

question

b. on its PPF

answer

If an economy is operating efficiently it will be producing
a. inside its PPF
b. on its PPF
c. outside its PPF
d. the max. amount of necessities and the min. amount of luxuries

question

d. bowed-out

answer

the principle of increasing cost is consistent with a ___ PPF
a. straight-line
b. bowed in
c. shifting
d. bowed out

question

d. a limited amount of productive resources

answer

question

a. slope of the PPF

answer

question

b. borrowing money to hire more workers and buying more machines

answer

question

c. a doubling of the money supply

answer

which would not shift an economy's PPF
a. doubling of the labor force
b. doubling of the number of machines
c. doubling of the money supply
d. more advanced technology

question

c. best serves the objectives of the decision maker

answer

an optimal decision is one that
a. will win a majority if put to a vote
b. is supported unanimously
c. best serves the objectives of the decision maker
d. is supported by the New York Times

question

a. there can be mutual gain even if no new goods are produced

answer

question

b. operating on an economy's PPF

answer

question

d. be done by planning bureaus or markets

answer

question

c. price

answer

a demand curve is a graph showing how the quantity demanded changes when ____ changes
a. consumer income
b. population
c. price
d. price of closely related goods

question

a. negative

answer

the slope of a demand curve is usually ____ including that as price declines the quantity demanded increases
a. negative
b. positive
c. infinite
d. zero

question

d. the size of the industry producing the good in question

answer

quantity demanded is likely to depend upon all but which
a. consumer tastes
b. consumer income
c. price
d. size of the industry producing the good in question

question

c. supply schedule

answer

supply curve is a graphical representation of info
a. demand schedule
b. equilibrium
c. supply schedule
d. balance sheet

question

c. decreases

answer

if price decreases the quantity supplied usually
a. increases
b. is unchanged
c. decreases
d. goes to 0

question

b. price

answer

entire supply curve is likely to shift when all but which change
a. size of the industry
b. price
c. price of important inputs
d. technology that reduces production costs

question

a. price

answer

there will likely be a movement along a fixed supply curve if which changes
a. price
b. technology reduces production costs
c. price of important inputs
d. size of industry

question

a. price

answer

there will be a movement along a fixed demand curve when which changes
a. price
b. population
c. consumer incomes
d. consumer preferences

question

d. intersection of the demand and supply curves

answer

question

b. both equilibrium price and quantity rise

answer

question

c. demand curve has shifted to the left

answer

question

a. higher prices

answer

a shift in the demand curve for sailboats resulting from a general increase in incomes will lead to
a. higher prices
b. lower prices
c. shift in the supply curve
d. lower output

question

b. an increase in tariffs that forces manufacturers to import cotton cloth at higher prices

answer

question

b. new environmental protection measures that raise the cost of producing steel

answer

question

b. demand curve for coal will shift to the right

answer

question

c. shoes stores and companies will reduce prices in order to increase sales leading to a lower equilibrium price

answer

question

b. by less than the increase in the tax

answer

question

a. lead to a reduction in the volume of transactions as we move along the demand curve above the equilibrium price to the higher price floor

answer

question

d. result in the development of black markets

answer

question

b. the quantity supplied exceeds the quantity demanded

answer

question

b. the actions of individual economic decision making units

answer

microeconomics is concerned with
a. economic aggregates
b. the actions of individual economic decision making units
c. small people
d. small countries

question

d. the behavior of entire economies

answer

question

a. the national output of haiti

answer

which is an example of a macroeconomic aggregate
a. the national output of haiti
b. total output of general motors
c. employment of wal mart
d. price of unleaded gas

question

c. how the quantity of domestic product demanded changes with changes in the price level

answer

question

a. aggregate supply curve

answer

graph showing how the quantity of output produced by all firms depends upon the price level is called the
a. aggregate supply curve
b. phillips curve
c. PPF
d. economy's aggregate indifference curve

question

b. all final goods and services produced in the domestic economy during the past year

answer

question

a. economic activity conducted through organized markets

answer

question

a. nominal GDP

answer

using current prices to aggregate all final output in the economy will yield
a. nominal GDP
b. real GDP
c. the cost of living
d. GDP in constant dollars

question

c. prices from an agreed-upon base year

answer

real GDP is computed by valuing output at
a. manufacturers' cost
b. current prices
c. prices from an agreed-upon based year
d. last year's rate of inflation

question

d. general motor's expenditures on steel for producing cadillacs in 2005

answer

question

d. Jamal's purchase of a guitar originally used by John Lennon in 1965

answer

question

b. your spending on tuition and fees for this year

answer

question

a. expenditures to clean up a major oil spill in Prince William sound

answer

question

d. it is impossible to determine what happened to prices and output from data on nominal GDP alone

answer

question

d. the aggregate demand curve shifts to the left

answer

question

b. generally rising prices

answer

inflation is defined as a period of
a. rising nominal GDP
b. generally rising prices
c. falling real GDP
d. falling unemployment

question

d. aggregate supply curve shifts to the left

answer

question

c. prevent recessions and fight inflation

answer

question

c. the aggregate demand curve to the left

answer

question

b. an economy that appears to be more inflation prone

answer

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