ECON FINAL

1.

1 point

Price and quantity of demand are said to be in an inverse relationship, according to the Law of Demand, because

They increase and decrease together

As one increases the other decreases

We cannot predict how a change in one will affect the other

A change in one doesn't affect the other

2.

1 point

In microeconomics, demand means the

desire to have or own a certain product

desire, willingness, and ability to buy something

area of economics that deals with small units

ability to determine prices and make decisions

3.

1 point

____ refers to the number of units of a good produced and offered for sale at a specific price.

production possibilities frontier

quantity supplied

quantity demanded

demand curve

4.

1 point

The demand for VCRs has decreased because of

advertising

news sports

changes in seasons

the introduction of new products

5.

1 point

The Law of Supply states that if the price of tables increases, the supply of tables wil

decrease

increase

remain the same

fluctuate wildly

6.

1 point

A period of production that allows producers to adjust the quantities of all their resources, including capital, is a

marginal product

diminishing returns

short run

long run

7.

1 point

Which of the following causes a change in the quantity supplied?

technology

number of sellers

substitutes

price

8.

1 point

The profit maximizing quantity of output is found where the

marginal revenue from sales is greater than marginal cost of production

marginal cost of production is equal to the marginal revenue from sales

marginal cost of production is greater than the marginal revenue from sales

minimum number of workers produce the maximum output of units

9.

1 point

An example of a negative externality is when

people who have more education earn more money

an airport expands and nearby residents suffer from noise and congested traffic

few buyers can be found to purchase space shuttles and super computers

an accountant at an auto factory earns less than an accountant in an insurance office

10.

1 point

When the price of Reese’s Pieces goes up, consumers buy fewer Reese’s Pieces and more M&Ms. This is an example of the

substitution effect

income effect

wealth effectt

supply effect

11.

1 point

The principle that suppliers will normally offer more for sale at higher prices and less at lower prices is

supply elastic

quantity supplied

the law of supply

the supply schedule

12.

1 point

In economics, marginal means

extra or additional

more

total or overall

opportunity

13.

1 point

Which of the following would cause the supply curve for hot dog buns to shift to the left?

an increase in the price of hot dog buns

a decrease in the price of hot dog buns

a decrease in the price of hamburger

an increase in the price of flour

14.

1 point

The market equilibrium price is derived by

applying the Law of Supply

applying the Law of Demand

predicting the actions of buyers and seller

trial and error

15.

1 point

The condition that results from society not having enough resources to produce all the things people would like to have is known as

capitalism

scarcity

free enterprise

TINSTAAFL

16.

1 point

The resources needed to produce things we would like to have are known in economics as

TINSTAAFL

factors of production

gifts of nature

17.

1 point

The fact that some necessities have little monetary worth, while some non-necessities have a much higher price tag is called

factor market

paradox of value

product market

productivity

18.

1 point

If a certain combination of goods and services lies outside of the production possibilities curve of an economy, which of the following is true?

effective trade barriers have reduced foreign imports into the economy

new technology is being used in production

resources are not available to achieve that combo of goods and services

resources aren't being used effectively to achieve combo of goods or services

19.

1 point

The main focus of the study of economics is to

ensure that business maximizes profit

show that free market economies are superior to command economies

analyze choices regarding the use of scarce resources

decide the best way to distribute society's scarce resources equally

20.

1 point

The concept of opportunity cost would no longer be relevant if

poverty no longer existed

the supply of all resources were unlimited

resources were allocated efficiently

real wages were flexible

21.

1 point

A production possibility curve shows

a combo of capital and labor required to produce products

the maximum amount of two goods that can be produced assuming the full employment of resources

that ppl demand more of some goods and less of others

the number of units that can be produced with unlimited resources

22.

1 point

Which of the following will not result in an outward (rightward) shift of the production possibility curve?

improvement in nation's human capital

a decrease in unemployment

technological breakthrough that improves productivity

increase in quantity of society's resources

23.

1 point

Unlike a market economy, a command economy uses

more centralized planning in economic decision making

consumer sovereignty to make production decisions

its resources more efficiently

price signals in economic decision making

24.

1 point

Which of the following is not one of the three basic questions faced by a new economy?

what to produce

when to produce

how to produce

for whom to produce

25.

1 point

Which of the following correctly describes a traditional economy?

buyers and sellers decide what to produce

the US is an example of a traditional economy

basic economic questions are answered based on ritual, habit, or custom

A central planning authority decides what goods and services to produce and produces them

26.

1 point

When the owner of a business is personally and fully responsible for all losses and debts of the business, it is known as

bankruptcy

limited life

unlimited liability

unlimited partnership

27.

1 point

A major advantage or a corporation is

limited life and unlimited liability

the ease of financial capital

federal and state tax breaks

the fact that owners share equally in profits and losses

28.

1 point

Host countries welcome multinationals because they

produce tax revenues

pay low wages

export scarce resources

interfere with local business

29.

1 point

Two grocery chains might wish to merge for all of the following reasons EXCEPT

to increase outlets and improve efficiency

to reduce number of competitors

create a new corporate identity

to diversify corporate holdings

30.

1 point

The most important measure of a country’s overall economic performance is

GNP

GDP

NNP

NI

31.

1 point

Which of the following means that GDP has been adjusted for inflation?

current gnp

nominal gdp

current gdp

real gdp

32.

1 point

When evaluating distribution of income, economists take all of the following steps EXCEPT

ranking incomes of all families from highest to lowest

factoring in income supplements such as food stamps

dividing the ranking into fifths

plotting a Lorenz curve

33.

1 point

A series of largely systematic ups and downs of real GDP is a

business fluctuation

recession

business cycle

peak

34.

1 point

The rise and fall of real GDP over time in a nonsystematic manner is called

business cycle

eccentric model

business fluctuation

depression scrip

35.

1 point

The demand-pull theory of inflation states that

as people converge on stores...

as the federal government's deficit...

as the cost of inputs rise...

as the money supply gross faster...

36.

1 point

The kind of unemployment that certain groups of workers experience every year is called

frictional

structural

cyclical

seasonal

37.

1 point

A seller accepting money for a service reflects the use of money as a

medium of exchange

store of value

measure of value

unit of barter

38.

1 point

Under a fractional reserve banking system, banks

hold more reserves than deposits

generally lend out a majority of the funds deposited

cause the money supply to fall by lending out reserves

all of the above

39.

1 point

If the Fed wants to expand the money supply it can

raise the reserve requirement

lower the reserve requirement

do away with reserve requirement

keep requirement stable

40.

1 point

When the Fed expands the money supply, the short-run impact is

increased interest rates

decreased interest rates

increased inflation

decreased inflation

41.

1 point

We only count goods once in determining GDP. So, we can only count ______ otherwise the goods would be counted twice.

intermediate

final

raw

national

42.

1 point

How is real GDP different than nominal GDP?

Real GDP uses current value of currency

Real GDP uses the CPI

Real GDP uses a base year price

Real GDP uses the prices from both years

43.

1 point

How do we change GDP into Per Capita GDP?

divide by civilian labor

divide by population

divide by union labor

divide by equilibrium wage

44.

1 point

The two variables for GDP are

import and export sending

income investment

supply and demand

price and quantity

45.

1 point

What is the difference between GDP and GNP?

GNP includes goods within a nations borders, GDP includes all goods

GDP includes goods within a nation’s borders, but doesn't include goods produced by foreign companies. GNP includes foreign companies and all other products.

GDP includes goods within a nation’s borders and goods produced by foreign companies within the country’s borders. GNP does not include foreign companies.

46.

1 point

What items are included in GDP?

illegal goods and services

transactions w no records

non marker goods and services

gov spending

47.

1 point

What items are omitted from GDP?

stock transactions

final goods

investments

export spending

48.

1 point

How do we calculate GDP

Y = T + E + G + I

Y = C + I + E + G

Y = P + Q + E - I

Y = S x D

49.

1 point

If required reserves are $150 and deposits are $1000, what is the required reserve ratio?

5%

10%

15%

85%

50.

1 point

Controlling the quantity of money and interest rates to influence aggregate economic activity is called

monetary policy

bank antitrust policy

fiscal policy

foreign policy