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Which of the following does Economics primarily study?
how scarcity can be eliminated
how firms manipulate prices
how government influences resource allocation decisions
the problem of scarce resources relative to human wants
Suppose you have a $20 iTunes gift card with which you can buy (download) songs or videos. Songs cost $1.00 each and videos cost $2.00 each. What is the opportunity cost of one video?
It is constant and equal to ½ song
It is constant and equal to 2 songs
It is $1.00
An increases in cost as more videos are purchased
If you decide to study an extra hour tonight, what would be the economic outcome?
The marginal cost of studying an extra hour exceeds its marginal benefit.
The marginal benefit of studying an extra hour exceeds its marginal cost.
Studying harder will always improve your test scores.
You will most likely get a lower than expected grade on your last exam.
Answer the question on the basis of the data given in the following production possibilities table. According to the data in the table, what is required as indicated by increasing production of capital goods?
The increase in sacrifices of consumer goods.
The decrease in sacrifices of consumer goods.
There are no sacrifices of consumer goods.
The constant sacrifices of consumer goods.
Consider the problem Marsha faces of how to allocate her weekly allowance between books and videos. How will an increase in Marsha's allowance affect her budget on a supply and demand curve?
Rotate her budget line, allowing her to buy more books but not more videos.
Rotate her budget line, allowing her to buy more videos but not more books.
Shift her budget line to the right.
Shift her budget line to the left.
What is best illustrated by the negative slope of the production possibilities curve?
Some resources are always unemployed.
Opportunity costs are constant.
When resources are fully employed, an economy can produce more of one thing only by producing less of something else.
Businesses can sell more goods when their prices are low.
What would a microeconomist most likely study?
The relationship between the size of the money supply and the rate of inflation.
The effects of aggregate consumer debt on overall consumption spending.
The effects of an income tax reduction on the size of the national budget deficit.
How consumers respond to a change in gasoline prices.
Refer to the production possibilities diagram for the following Question.
Production of which of the points in the diagram is currently unattainable given the economy's resources?
What does the fundamental problem of economics imply?
Governments must be relied upon to supply essential goods and services.
Inflation and unemployment are unavoidable.
Growing populations will deplete natural resources.
Individuals and communities must make choices among competing alternatives.
Margaret decides to stay home and study for her exam rather than going out to a movie with her friends. Which of the following best reflects her dilemma?
The economic perspective
Refer to the diagram of a circular flow model of the economy for the following question.
What best represents consumer expenditures in the diagram?
In a market system, which of the following best answers the question, "What goods and services will be produced?"
Only those goods whose long-term profits are greater than average.
Any good for which consumers are willing to pay a positive price.
Any good whose production is characterized by the least-cost technology.
Any good that returns its producers sufficient revenue to cover its total costs.
Which of the following contributed most the failure of command systems, such as the the Soviet Union and Eastern European Communist States?
Previously abundant economic resources became scarce.
Central planners found it increasingly difficult to coordinate the economic decisions of consumers, resource suppliers, and businesses.
Firms manufactured more output than consumers could afford to buy, resulting in a general glut.
Prices were set too low in all markets.
Which of the following primarily encourages innovation and technological advance in the competitive market system?
The government's tax code.
The process of "dollar voting".
The guiding function of consumer needs and preferences.
Profitable returns to innovative firms.
What is the most likely the result of human specialization or the division of labor?
It reduces output by dehumanizing workers
It reduces output by discouraging workers from learning a wide variety of tasks
It increases output by enabling workers to take advantage of differences in their skills
It increases output by allowing workers to each perform a wide variety of tasks