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- 1. Multiple ChoiceEconomics is the study of...how businesses produce goods and servicesthe efficient use of scarce resourcesthe equitable distribution of wealththe printing and circulation of money
- 2. Multiple Choice"There is no such thing as a free lunch means?"marginal benefit is greater than marginal costbusinesses can increase market share by offering free lunchscarce resources have alternative uses or opportunity costsconsumers often ask for free lunch
- 3. Multiple ChoiceA major principle of economic thinking isweighting marginal benefit vs.marginal costequating self interestvalidity of normative economicsrecognizing the abundance of economic resources
- 4. Multiple ChoiceThe lower the price of the product, the greater the quantity consumed is based onpost hoc fallacyceteris parabislaw of demandmarginal utlity
- 5. Multiple ChoiceThe production of more goods, the development of new technology, and the development of a higher standard of living are associated with what economic goalEconomic EquityEconomic EfficiencyFull EmploymentEconomic Growth
- 6. Multiple ChoiceWhich economic goal is associated with the idea we want to get the maximum benefit at the minimum cost from the limited productive resourcesEconomic SecurityEconomic FreedomEconomic GrowthEconomic Efficiency
- 7. Multiple ChoiceWhen two economic goals are in direct conflict with one anotherits impossible to quantify both goalsthere is a trade off between goalsthe two goals are not accepted as importantthe attainment of one goals results in the additional attainment of the other goal
- 8. Multiple ChoiceWhen we look at the aggregate of the economy the analysis at the level would be calledmicroeconomicspositive economicsmacroeconomicsnormative economics
- 9. Multiple ChoiceWhich would be studied in microeconomicsthe output of the entire economytotal number of workers employed by the entire economygeneral price levels in the USthe output and price of wheat in the US
- 10. Multiple ChoiceWhich of the following is a normative economic statementthe CPI rose 5.6% last monththe unemployment rate of 6.8% is too highthe average loan IR is 8.6%the economy grew at an average rate of 2.6%
- 11. Multiple ChoiceIf a farmer grows a large crop one year, he or she will likely receive more income, therefore, if all farmers grew larger crops they would likely receive more income is an example ofafter this, therefore b/c of thisfallacy of compositioneconomic biasloaded terminology
- 12. Multiple Choicemore education is associated with more income and you conclude that more income leads to more education, this is an example ofcorrelation and causationfallacy of compositionpost hoc fallacyloaded terminology
- 13. Multiple ChoiceWhat is true of a PPC curve that is concave to the originresources are split equally between the two productsmore than two products can be analyizedprices of the two products can be the sameas more of one is produced, more of the other good is produced
- 14. Multiple ChoiceThe most fundamental economic problem isScarcityTaxationUnemploymentFreedom
- 15. Multiple ChoiceIf a country has a comparative advantage over another country it is said thatCountry A can produce more than Country BCountry A should not trade with Country BCountry A can produce at a lower opportunity cost than Country BCountry A and Country B have no direct relationship to each other
- 16. Multiple Choice
What does this curve represent?demandsupplyequilibriumshortage - 17. Multiple ChoiceWhat does this curve represent?supplyequilibriumdemandsurplus
- 18. Multiple ChoiceAn increase in the price of aspirin is likely to be paired with a(n) ___________________ in the demand for Tylenol because the two goods are __________________.
increase; complements
increase; substitutesdecrease; complementsdecrease; substitutes - 19. Multiple ChoiceIf the price of printers goes down, what happens in the market for ink cartridges?Supply increases.Supply decreases.Demand increases.Demand decreases
- 20. Multiple ChoicePrinters and ink cartridges are typically purchased together. Economists would call theseStubstituesComplementsElasticInelastic
- 21. Multiple ChoiceAssume the image is showing the market for apples. Which of the headlines could indicate the pictured shift is occurring in the market?Pesticides on apples linked to mouth cancer.Storms destroy apple orchards.An apple a day really does keep the doctor away.New genetic strain leads to apple trees that produce twice as many apples.
- 22. Multiple ChoiceThe following is a factor that will not cause the demand curve to shift:AdvertisingPopulationPriceConsumer expectations
- 23. Multiple ChoiceA change in quantity demanded is shownat various points on the demand curvewith a new demand curve drawn above or below the original demand curvewith a vertical line
- 24. Multiple ChoiceConsuming more of one good because of a change in price of another good is known as theincome effectsubstitution effectelasticity effectdemand effect
- 25. Multiple ChoiceIf a consumer knows that a product will be going on sale this week, how will his/her CURRENT demand be affected?it will go upit will go downit will stay the samewhat does this have to do with the price of tea in China?
- 26. Multiple ChoiceA table that lists the quantity of a good that a single person will buy at each price in a market.demand schedulemarket demand scheduleelasticity chartsupply and demand graph
- 27. Multiple ChoiceGenerally speaking, the lower the price, the greater the quantity demand.TrueFalse
- 28. Multiple ChoiceFor the law of demand, as price rises, what happens to quantity demanded?it goes upit goes downit stays the sameit is not effected
- 29. Multiple ChoiceFor the law of supply, as price rises, what happens to quantity supplied?it goes upit goes downit stays the sameit is not effected
- 30. Multiple ChoiceIf sandals suddenly became very popular, what would happen to the market for basketball shoes? This would cause the ___________ curve for basketball shoes to shift ____________.demand.........rightdemand.........leftsupply.......rightsupply....... left
- 31. Multiple ChoiceIf Michael Jordan did advertisements for Steak and Shake, this would cause the ___________ curve for Steak and Shake to shift ____________.demand.........rightdemand.........leftsupply.......rightsupply....... left
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