Quiz 2

1.

1 point

Free trade increases the global output and consumption of goods in all participating nations

True

False

2.

1 point

From Figure 1 (above) which of the lines is generated by the Consumer and which by the Producer

both lines (S and D) are generated by both consumers and producers

Consumers - S and Producers - D

Consumers - D and Producers - S

lines S and D are both independent of consumers and producers

none of the above

3.

1 point

Opportunity cost as defined in Economic theory as:

the cost of not taking a deal when it is the best deal available

the cost of not selecting the 'next-best" alternative

the cost taking a deal then finding a better deal afterwards

the cost of not recognizing an opportunity when one is presented

the cost making no purchase at any price and receiving no benefit

4.

1 point

For complementary goods, an increase in the price of one results in a decrease in the supply for the other

True

False

5.

1 point

Inflation causes:

an increase in prices

an increase in the actual value of debt

a short-term increase in unemployment

a long term decline in unemployment

a and d

6.

1 point

When the marginal utility of a product is less than zero, the consumer should:

sell commodities, but buy equities

consume more of the product

continue production, but only at the level identified by set costs

wait until the demand goes down

none of the above

7.

1 point

?=(Change in Total Utility)/Quantity

P

ceteris paribus

TU

BTU

MU

8.

1 point

Which of the following statements is/are false? CHECK

A higher expected future price will increase current demand

A lower expected future price will decrease current demand

A higher expected future income will increase the demand for all normal goods

A lower expected future income will reduce the demand for all normal goods

all of the above

9.

1 point

What is the acronym for the relationship described in this phrase plan (graph)?

MU

MC

Q

PPC

10.

1 point

The theory of demand postulates that in general _______

as the price of a product falls, less will be demanded

if a product is manufactured someone will buy it

as the price of a product rises, more will be demanded

as the price of a product falls, less will be demanded

as the price of a product falls, less will be supplied

11.

1 point

According to Clark's Sector Model (Figure 2) is best identified as:

multicultural

sector-based

democratic

the world's second largest country by area

post-industrial

12.

1 point

The "Invisible Hand" that operates to cause market system to behave in a manner that benefits both buyers and sellers by increasing market efficiency was a term coined by:

Adam Smith

Leonardo De Vinci

Milton Friedman

Thomas Maltus

Ronald Regan

13.

1 point

For Figure 5 and without government intervention, and given the consumer's desire for this product, what is the optimum quantity produced for the consumer?

40

100

60

80

20

14.

1 point

Economic theory assumes that individuals will select options that:

minimize cost

maximize efficiency

maximize benefits

reduce overhead and fixed costs

maximize benefit - cost

15.

1 point

The relationship of supply, demand, and price is:

If demand increases and supply remains unchanged then higher equilibrium price and higher quantity

If demand decreases and supply remains the same then lower equilibrium price and lower quantity

If supply increases and demands remains unchanged then lower equilibrium price and higher quantity

If supply decreases and demand remains the same then higher price and lower quantity

all of the above

16.

1 point

How much (best answer) over the equilibrium price is the price floor identified in Figure 5?

1

37.5

60

3.75

80

17.

1 point

If the US opportunity cost for a cell phone is 4 unites of paper, and Canada's opportunity cost for a cell phone is 1 unit of paper, when does it make sense for the US to trade cell phones for Canadian lumber?

never

when Canada and the US can agree on set price of (4-1)/2 or 1.5 units of paper per cell phone

when Canada produces and trades lumber to the US for more than 1 cell phone in trade

when the US produces and trades cell phones to Canada for less than 4 units of paper

c and d

18.

1 point

The PPC is the

Price Probability Curve

Production Possibility Curve

Precautionary Principle Conundrum

Price Productivity Curve

none of the above

19.

1 point

For substitute goods, an increase in the price of one results in an increase in the demand for the other

True

False

20.

1 point

Limited Liability is a characteristic of:

private ownership

corporations

partnerships

multi-nationals

B and d

21.

1 point

Wage and price controls are an example of:

monopolies

the "Invisible Hand"

Reganomics

none of the above

oligopolies

22.

1 point

If the Y axis "Cost per Order" in dollars and the X axis is "Number of Items per Order", and the slope is 0.75 and the intercept is 0...how much less does an item cost if 17 are ordered than if only one is ordered?

$0.00

$5.00

$10.00

$7.50

not enough information to calculate

23.

1 point

What is the Law that this statement describes: "output will ultimately increase by progressively smaller amounts when the use of a variable input increases while other outputs are held constant"

Neoliberalism

Law of Diminishing Returns

Second Law of Thermodynamics

Murphy's Laugh

Law of Inverse Relationships

24.

1 point

Economics is:

the study of the class struggle between socialism and capitalism

the main reason that humans continue to over-exploit the earth

the study of how individuals and societies use limited resources to satisfy unlimited wants

the easiest and best way to keep a home or make a dollar

none of the above

25.

1 point

With reference to Figure 1, if the y axis is in dollars per item, what is the cost of 7 items at market equilibrium?

none of the above

$28.00

$14.00

$7.00

$21.00