QUESTION 1

1. the collection and use of data to test economic theories is .................

descriptive economics

empirical economics

a variable

an example of the post hoc fallacy

economic policy

1 points
QUESTION 2
1. the term producers refers to.......
those who take resources and transform them into usable products

private manufacturing firm only

the public sector

those who transform resources into usable products

none of the above

1 points
QUESTION 3
1. the term resources refers to
usable products

land and minerals only

all usable inputs to the production process

all usable inputs to the production process owned by the private sector

all usable inputs to the production process that are not manufactured

1 points
QUESTION 4
1. if we wish to observe the effect of an increase in X has on Y as long as nothing else is changing then we are
making assumption of.........

composition
ceteris paribus

false cause

opportunity cost
 Ockham's razor

1 points
QUESTION 5
1. Choosing the mix out means answering the question(s) of............
what to produce

how to produce

for whom to produce

both how to produce and for whom to produce

both what to produce and how to produce

1 points
QUESTION 6
1. The choice of the distribution of output means answering the question(s) of.........
what to produce

how to produce

for whom to produce

both how to produce and for whom to produce

both whom to produce and how to produce

1 points
QUESTION 7//
1. which of the following will occur when there is a simultaneous decrease in demand and a decrease in
supply?
an increase in equilibrium quantity

an increase in equilibrium quantity, a decrease in equilibrium price, a decrease in equilibrium quantity

a decrease in equilibrium price

a decrease in equilibrium quantity

1 points
QUESTION 8
1. A movement along the demand curve to the left may be caused by a.......
rise in income

fall in the number of substitute goods

decrease in supply

fall in the price of inputs

 1 points
QUESTION 9
1. Which of the following will occur when there is an increase in the supply of and increase in demand
for casette tapes?
an increase in the equlibrium price

a decrease in equilibrium price

an increase in the equilibrium quantity

a decrease in equilibrium quantity

1 points
QUESTION 10
1. Which of the following will occur when there is an increase in demand for and a dcrease in supply of milk
an increase in equlibrium price

a decrease in equilibrium price

an increase equilibrium quantity

a decrease in equilibrium quantity

1 points
QUESTION 11
1. Apples and oranges are substitute goods. A freeze in Florida destroyed a good portion of the orange
crop. Ceteris paribus.....
the price of both apples and oranges will increase

the price of both apples and oranges will fall

the price of oranges will increase and the price of apples will
fall
the price of oranges will fall and the price of apples will
increase

1 points
QUESTION 12
1. An insect that is resistant to currently used pesticides has infested the cotton crop, and this year's crop is
only half of what was produced last year. You accurately predicted that this.........
will shift the supply curve of cotton to the right, the equilibrium price of cotton will increase, and the
demand for cotton will fall
will shift the supply curve of cotton to the right, the equilibrium price of cotton will increase and the
quantity demanded for cotton will decrease

will shift the supply curve of cotton to the left, the erquilibrium price price of cotton will
increase and the quantity demanded of cotton will decrease
will shift the supply curve of cotton to the left, the equilibirum price of cotton will increase and the
demand for cotton will fall

1 points
 QUESTION 13 //
1. the more substitute there are for the product....
the less price elastic the demand for the product is

the more price elastic the demand for the product is

the more price elastic the demand of the product is

the greater rhe imcome elasticity for the product

the smaller the income elasticity for the product

1 points
QUESTION 14
1. utility
is the satisfaction yielded by the consumption of a good or service

is measurable

is used to compare different people's likes and dislike

all of the above

1 points
QUESTION 15
1. the law of diminishing marginal utility implies....
supply curve always slope upward
total utility will always increase by an increasing amount as consumption increases

a consumer will always buy positive amounts of all goods

demand curve will always slope downward to the right

1 points
QUESTION 16
1. a perfectly elastic demand curve implies that, ceteris paribus........
a firm can sell more by lowering its price
if a firm raises its price above the market price, quantity demanded will
equal to zero
the price a firm charges is irrelevant as it will sell the same amount regardless of the price
charged
a firm can raise its price and not lose all its customers
 1 points
QUESTION 17
1. choosing the mix output means answering the question(s) of.......

what to produce

how to produce

for whom to produce

both what to produce and for whom to produce

1 points
QUESTION 18
1. the law of demand states that as the price of goods increases, the ....
quantity demanded decreases

quantity demanded increases

demand curve shifts right
demand curve shifts left

1 points
QUESTION 19
1. tax is
enforceable contribution

generally payable in money

for public purpose
all of the above

1 points
QUESTION 20
1. Society answers the question "For whom" when it chooses...
the mix outputs

the mix inputs

the distribution of output

the level of output

 1 points
QUESTION 21
1. the concept of opportunity cost applies only to.....
individuals

large group of people in complex societies

choices between work and leisure

choices between alternative occupations

the concept applies to all of the above

1 points
QUESTION 22
1. the theory of comparative advantage states that......
specialization and free trade will benefit only the more efficient producers

more efficient producers will have an advantage over others and will not seek to trade

a producer must have an absolute advantage in order to have a comparative advantage

specialization and free trade will benefit all trading partners
when we make a choice we forego something else

1 points
QUESTION 23
1. In an economist's view, investment involves the process of....

using resources to produce new capial

using capital to produce new resources

using capital to replace labor

buying ownership of a company

1 points
QUESTION 24
1. the law of demand refers to.....
negative relationship between price and quantity demanded

positive relationship between price and quantity demanded

positive relationship between expectation and and quantity demanded

none of the above

 1 points
QUESTION 25
1. if there is an increase in the price of hamburger......
the quantity demanded of hamburger would decrease
the demand for catsup will decrease

the demand for hamburger rolls would decrease

all of the above

1 points
QUESTION 26
1. the law of demand states that asthe price of goods increases.........
the quantity demanded increases

the quantity demanded decreases

demand curves shifts right

demand curves becomes flatter

1 points
QUESTION 27
1. the law of supply refers to.....

positive relationship between price and the quantity supplied

negative relationship between price and quantity supplied

negative relationship between technology and quantity supplied

positive relationship between expectation and demenad

 1 points

QUESTION 28
1. a market is in equilibrium when there is......
excess demand

excess supply

a shortage

a surplus

none of the above

1 points
QUESTION 29 //
1. an increased in the equilibrium price could be caused by..........
a decrease in supply or a decrease in demand

an increase in the supply or an increase in the demand

a decrease in supply or an increase in demand

a increase in supply or a decrease in demand

none of the above

1 points
QUESTION 30
1. an increase in the price of a normal good could be the result of ........
an increase in the price of a substitute product

an increase in the price of a complimentary goods

a decrease in consumer income

expectations of price decline

all of the above

 1 points
QUESTION 31 //
1. an increase in the equilibrium price of a good could be the result of .............

an increase in demand

an increase in supply

a decrease in demand

a surplus

none of the above

1 points
QUESTION 32
1. an increase in the equilibrium price of a good could be the result of....
an increase in supply

a decrease in supply

a decrease in demand

a surplus

none of the above

1 points
QUESTION 33
1. a decrease in the equilibrium price of a normal good could be the result of.......
an increase in the price of a substitute good

an increase in income

an increase in worker productivity in that market

an increase in the number of people who used the goods

none of the above

1 points
QUESTION 34
1. an increase in the equilibrium quantity of a normal good could be the result of.......
a decrease in income

a decrease in the price of a compliment

an increase in the price of a substitute

none of the above

 1 points
QUESTION 35
1. chalk and eraser are complimentary products, if the price of chalk were to increase becuase of a decrease in
the supply, the price of eraser would..
decrease

increase

remain constant

it is not possible to tell without knowing what the price of erasers had been

1 points
QUESTION 36
1. suppose the government were to eliminate all restrictions on the fishing industry, as a result, the
equilibrium price of sea food would ___ and the euqilibrium quantity of seafood would _______
increase, increase

increase, derease

decrease, increase

decrease, decrease

1 points
QUESTION 37
1.
1. suppose that automobile workers were to negotiate a very large wage increase, as a result, the equilibrium
price of automobile would ____ and the equilibrium quantity of automobiles ____.

increase, increase

increase,
decrease

decrease, increase
decrease, decrease

1 points
QUESTION 38
1. a decrease in the equilibrium price of a normal good could be the result of.......
an increase in the price of a substitute good

an increase in income

an increase in worker productivity in that market

an increase in the number of people who used the goods

1 points
 QUESTION 39
1. Suppose that the technological improvements make certain types of plastic to be just as strong as certain
types of steel, as a result, the equilibrium price of steel would ____ and the equilibrium quantity of steel
would _____
increase, increase

increase, decrease

decrease, increase

decrease, decrease

decrease, does not change

1 points
QUESTION 40 //
1. Suppose that a boom in stock market prices raises the level of household wealth,as a rsult, the equilibrium
price of vacation home would ____ and the equilibrium quantity of vacation homes would ______.
increase, increase

increase, decrease

decrease, increase

decrease, decrease

decrease, not
change

1 points
QUESTION 41
1. suppose that drought kills half of the nations corn crop, as a result, the equilibrium price of corn would
____ and the equilibrium quantity of corn would ____
increase, increase

increase, decrease

decrease, increase

decrease, decrease

decrease, not change

1 points
QUESTION 42
1. opportunity cost can be best defined as
the cost of malking one additional unit

the value of the best alternative given up to when making a choice

the cost of finding-profit making oppurtunities

 all sunk costs

the explicit cost of an activity

1 points
QUESTION 43 //
1. which of the following is an example of opportunity cost?
the value of other things you could have done with the same time and money it cost you to go to
the movies

the income that could have been earned by working full time instead of going to college

the value of the next best bundle of goods and services that could have been produced instead of using
those resources to put astronauts on the moon

the decline of the grades of a student athlete that occurs because she decides to spend more time
practicing sports than on her academic work

all of the above

1 points
QUESTION 44
1. marginal cost is best defined as
the up-front cost that can not be avoided

the total value of the next best alternative

the cost of producing one more unit

the sunk cost of production divided by the number of units produced

the sunk cost of prodcution divided by the number of units sold

1 points
QUESTION 45
1. the concerns of microeconomics include all the following except.......
production / output in the individual industries and businesses of the economy

levels of consumer prices in the economy

the distribution of income and wealth

employment by individual businesses and industries

poverty
 1 points
QUESTION 46 //
1. the concerns of macroeconomics include all the following, except......

consumer prices

gross domestic output

the structure of the steel industry

the number of jobs in the country

the unemployment rate

1 points
QUESTION 47 //
1. normative economics ........

examines the outcomes of economic system without making judgments about whether they are
good or bad

is value free economic analysis

is often called policy economics

considers questions like "What would happen if we abolished corporate income tax?"

1 points
QUESTION 48
1. descriptive economics......
one of two sections into which normative economics is divided

the compilation of data that describe the phenomena and facts

an attempt to generalize about data and interpret them

part of microeconomics but not microeconomics

the formal statement of a theory

 1 points
QUESTION 49 //
1. the law of demand is an example of.......
normative economics

descriptive economics

economic theory

a variable

the fallacy of post hoc

ergo proper hoc

QUESTION 50
1. free entry implies that
a perfectly competitive firm can never earn a profit
if firms in an industry are making excessively high profits,
new firms are likely to enter the industry
the governmemt regulates the number of firms that are allowed in the
industry
firms will always earn a profit as new firms can enter the industry at any
time they like