Microeconomics Test: True and False: Chapters 1 and 4

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Posted on

May 23rd, 2023

question

Scarcity means that there is less of a good or resource available than people wish to have.

answer

True

question

Economic is the study of how fairly goods and services are distributed within society

answer

False

question

With careful planning, we can usually get something that we like without having to give up something else that we like.

answer

False

question

Equity refers to how the pie is divided, and efficiency refers to the size of the economic pie.

answer

True

question

Tuition is the single-largest cost of attending college for most students.

answer

False

question

The cost of an action is measured in terms of foregone opportunities.

answer

True

question

A marginal change is a small incremental adjustment to an existing plan of action.

answer

True

question

A rational decision-maker takes an action if and only if the marginal cost exceeds the marginal benefit.

answer

False

question

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

answer

False

question

The government can potentially improve market outcomes if market inequalities or market failure exists

answer

True

question

Market failure refers to a situation in which the market does not allocate resources efficiently

answer

True

question

Productivity is defined as the quantity of goods and services produced from each hour of a worker's time.

answer

True

question

Productivity is the primary determinant of a country's living standards.

answer

True

question

Price, which is determined by all buyers and sellers as they interact in the marketplace, allocates the economy's scarce resources.

answer

True

question

A market is a group of buyers and sellers of a particular product.

answer

True

question

In a perfectly competitive market, buyers and sellers are price setters.

answer

False

question

If a good or service has only one seller, it is called an oligopoly.

answer

False

question

The computer software industry is an example of monopolistic competition.

answer

True

question

A local cable TV company might be a monopolist.

answer

True

question

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

answer

True

question

The law of demand states that the quantity demanded of a product is positively related to price.

answer

False

question

The market demand is the average of all of the individual demands for a particular good or service.

answer

False

question

If the demand for a good falls when income falls, the good is called an inferior good.

answer

False

question

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

answer

True

question

Baseballs and baseball bats are substitute goods.

answer

False

question

An increase in the price of pizza will shift the demand curve for pizza to the left.

answer

False

question

Whenever a determinant of demand other than price changes, the demand curve shifts.

answer

True

question

A reduction in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

answer

False

question

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

answer

True

question

The law of supply states that other things equal, when the price of a good rises, the quantity supplied of the good falls.

answer

False

question

If a company making frozen orange juice expects the price of their product to be higher next month, they will supply more to the market this month.

answer

False

question

A supply curve slopes upward because, all else equal, a higher price means a greater quantity supplied.

answer

True

question

A movement along a supply curve is called a change in supply while a shift of the curve is called a change in quantity supplied.

answer

False

question

If there is an improvement in the technology of producing a product, the supply curve for that product will shift to the left.

answer

False

question

A reduction in an input price will cause a change in quantity supplied, but not a change in supply.

answer

False

question

Quantity demanded is equal to quantity supplied, at the equilibrium price.

answer

True

question

Surpluses drive price up while shortages drive price down.

answer

False

question

A shortage will occur at any price below the equilibrium price and a surplus will occur at any price above equilibrium price.

answer

True

question

It is not possible for demand and supply to shift at the same time.

answer

False

question

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

answer

True

question

The behavior of buyers and sellers drives markets toward equilibrium.

answer

True

1 of 41

question

Scarcity means that there is less of a good or resource available than people wish to have.

answer

True

question

Economic is the study of how fairly goods and services are distributed within society

answer

False

question

With careful planning, we can usually get something that we like without having to give up something else that we like.

answer

False

question

Equity refers to how the pie is divided, and efficiency refers to the size of the economic pie.

answer

True

question

Tuition is the single-largest cost of attending college for most students.

answer

False

question

The cost of an action is measured in terms of foregone opportunities.

answer

True

question

A marginal change is a small incremental adjustment to an existing plan of action.

answer

True

question

A rational decision-maker takes an action if and only if the marginal cost exceeds the marginal benefit.

answer

False

question

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

answer

False

question

The government can potentially improve market outcomes if market inequalities or market failure exists

answer

True

question

Market failure refers to a situation in which the market does not allocate resources efficiently

answer

True

question

Productivity is defined as the quantity of goods and services produced from each hour of a worker's time.

answer

True

question

Productivity is the primary determinant of a country's living standards.

answer

True

question

Price, which is determined by all buyers and sellers as they interact in the marketplace, allocates the economy's scarce resources.

answer

True

question

A market is a group of buyers and sellers of a particular product.

answer

True

question

In a perfectly competitive market, buyers and sellers are price setters.

answer

False

question

If a good or service has only one seller, it is called an oligopoly.

answer

False

question

The computer software industry is an example of monopolistic competition.

answer

True

question

A local cable TV company might be a monopolist.

answer

True

question

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

answer

True

question

The law of demand states that the quantity demanded of a product is positively related to price.

answer

False

question

The market demand is the average of all of the individual demands for a particular good or service.

answer

False

question

If the demand for a good falls when income falls, the good is called an inferior good.

answer

False

question

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

answer

True

question

Baseballs and baseball bats are substitute goods.

answer

False

question

An increase in the price of pizza will shift the demand curve for pizza to the left.

answer

False

question

Whenever a determinant of demand other than price changes, the demand curve shifts.

answer

True

question

A reduction in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

answer

False

question

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

answer

True

question

The law of supply states that other things equal, when the price of a good rises, the quantity supplied of the good falls.

answer

False

question

If a company making frozen orange juice expects the price of their product to be higher next month, they will supply more to the market this month.

answer

False

question

A supply curve slopes upward because, all else equal, a higher price means a greater quantity supplied.

answer

True

question

A movement along a supply curve is called a change in supply while a shift of the curve is called a change in quantity supplied.

answer

False

question

If there is an improvement in the technology of producing a product, the supply curve for that product will shift to the left.

answer

False

question

A reduction in an input price will cause a change in quantity supplied, but not a change in supply.

answer

False

question

Quantity demanded is equal to quantity supplied, at the equilibrium price.

answer

True

question

Surpluses drive price up while shortages drive price down.

answer

False

question

A shortage will occur at any price below the equilibrium price and a surplus will occur at any price above equilibrium price.

answer

True

question

It is not possible for demand and supply to shift at the same time.

answer

False

question

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

answer

True

question

The behavior of buyers and sellers drives markets toward equilibrium.

answer

True

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