Multiple Choice Questions

study of economy as a whole, large-scale
  • macroeconomics
  • market economy
  • opportunity costs
  • economic growth
potatoes and the rancher should specialize in the production of meat
  • The opportunity cost of 1 pound of meat for the farmer is
  • Which of the three supply curves represents the least elastic supply?
  • The farmer has an absolute advantage in the production of
  • The farmer should specialize in the production of
a decrease in income, assuming the good is inferior
  • The movement from D' to D could be caused by
  • quantity demanded vs. demand
  • The movement from D to D' could be caused by
  • imports vs exports
the price needs to match the quantity in a reasonable order
  • quantity demanded vs. demand
  • Which supply schedules obey the law of supply?
  • The law of demand states that, all other things equal
  • Which of the three supply curves represents the least elastic supply?
prescriptive, make a claim about how the world ought to be (opinion)
  • normative statements
  • trade-offs
  • opportunity costs
  • competitive market
8 units (
  • Suppose the government imposes a price ceiling of $1 on this market. What will be the size of the shortage in this market?
  • Which of the following price ceilings would be binding in this market
  • Using the midpoint method, at a price of $16, what is the income elasticity of demand when income rises from $5,000 to $10,000
  • Suppose a tax of $5 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?
if the economy is getting all it can from the scarce resources it has available, no resources are being wasted (on the curve)
  • microeconomics
  • trade-offs
  • macroeconomics
  • efficient PPF
A decrease in the price of a substitute
  • The movement from D to D' could be caused by
  • comparative advantage
  • imports vs exports
  • The disagreement between these economists is most likely due to
visual model of the economy that is simplified into two decision makers: firms and households
  • All else equal assumption
  • Competitive market
  • Circular-flow diagram
  • Microeconomics
graph that shows the various combinations of output that the economy can possibly produce given the available factors of production and the available production technology that firms use to turn these factors into output
  • Production possibilities frontier (PPF) model
  • Law of demand
  • Law of positive economics
  • Zero-sum game
Frances's labor, The $225 Dmitri spends to purchase air travel to Hawaii from Flyaway Airlines
  • Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply.
  • Which of the following price ceilings would be binding in this market
  • Despite their differences, with which proposition are two economists chosen at random most likely to agree?
  • If the price elasticity of demand for a good is 10.0, then a 4 percent increase in price results in a
Supply is more inelastic than the demand
  • A normative economic statement such as "The minimum wage should be abolished"
  • Suppose that a tax is placed on books. If the sellers pay the majority of the tax, then we know that the:
  • Assume that the farmer and the rancher each has 40 labor hours available. If each person divides his equally between the production of meat and potatoes, then total production is:
  • A positive economic statement such as "pollution taxes decrease the quantity of pollution generated by firms"
1.00 (
  • Suppose that a decrease in the price of good X results in fewer units of good Y being sold. This implies that X and Y are:
  • Using the midpoint method, at a price of $16, what is the income elasticity of demand when income rises from $5,000 to $10,000
  • Which of the following price ceilings would be binding in this market
  • Suppose the government imposes a price ceiling of $1 on this market. What will be the size of the shortage in this market?
Resource Market
  • Based on this model, households earn income when blank purchase blank in resource markets.
  • Dmitri spends $225 to purchase air travel to Hawaii from Flyaway Airlines.
  • Which of the following concepts cannot be illustrated by PPF?
  • Dmitri earns $475 per week working for Dinah's Diner.
so many buyers and sellers that each has a negligible impact on the market price. Seller has limited control over price because there are other sellers offering similar products for buyers to go to and buyers can't influence the price because they are only purchasing small amounts
  • competitive market
  • price takers
  • monopoly
  • market economy
between 25 units and 50 units
  • Suppose the government imposes a price ceiling of $1 on this market. What will be the size of the shortage in this market?
  • Suppose a tax of $5 per unit is imposed on this market. What will be the new equilibrium quantity in this market?
  • Despite their differences, with which proposition are two economists chosen at random most likely to agree?
  • Suppose a tax of $5 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?
factors of production (land, labor, capital)
  • what do households own and what do they consume?
  • Which markets are represented in the simple circular-flow diagram?
  • The farmer should specialize in the production of
  • What do households sell and firms buy?
markets for goods and services and markets for factors of production
  • Which of the three supply curves represents the least elastic supply?
  • Which markets are represented in the simple circular-flow diagram?
  • A normative economic statement such as "The minimum wage should be abolished"
  • The opportunity cost of 1 pound of meat for the rancher is
between $5 and $10
  • Suppose a tax of $5 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?
  • Suppose that a tax is placed on books. If the sellers pay the majority of the tax, then we know that the:
  • The shift from D to D' is called (D is shifted farther right on the x-axis but the slope is the same)
  • Suppose that a decrease in the price of good X results in fewer units of good Y being sold. This implies that X and Y are:
the loss of potential gain from other alternatives when one alternative is chosen
  • trade-offs
  • opportunity costs
  • macroeconomics
  • economic growth
because of the different opportunity costs, both parties get a bargain. Each of them benefits from trade by obtaining a good at a price that is lower than his or her opportunity cost of that good-allows people to specialize in activities in which they have a comparative advantage
  • absolute advantage
  • opportunity cost
  • leading indicator
  • benefits of trade
meat
  • The rancher has an absolute advantage in the production of
  • Which of the following concepts cannot be illustrated by PPF?
  • The disagreement between these economists is most likely due to
  • Which of the following price ceilings would be binding in this market
A decrease in demand
  • Suppose a tax of $5 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?
  • The shift from D to D' is called (D is shifted farther right on the x-axis but the slope is the same)
  • Suppose that a decrease in the price of good X results in fewer units of good Y being sold. This implies that X and Y are:
  • If the price elasticity of demand for a good is 10.0, then a 4 percent increase in price results in a
Would require values and data in order to be evaluated
  • A normative economic statement such as "The minimum wage should be abolished"
  • Which of the following is a correct statement about production possibilities frontiers?
  • A positive economic statement such as "pollution taxes decrease the quantity of pollution generated by firms"
  • Despite their differences, with which proposition are two economists chosen at random most likely to agree?
They own the factors of production and consume all the goods and services produced by the firms
  • What do households buy and firms sell?
  • what do households own and what do they consume?
  • What do firms produce and how?
  • The opportunity cost of 1 pound of meat for the farmer is
if the economy is producing less than it could from the resources it has available (inside the curve)
  • Perfectly Competitive Market
  • the price of a trade
  • unattainable PPF
  • inefficient PPF
trade allows each person to specialize in what they do best. you spend more time focusing on what you are best at and are able to consume more of both products without working any more hours
  • economic growth
  • property rights and protection of private property
  • specialization and trade
  • perfectly competitive market
-comparing inputs (like time and production capabilities)-the producer that requires a smaller quantity of inputs to produce a good
  • mowing the lawn example
  • positive statements
  • Absolute advantage
  • economists as scientists
When the price of a good falls, the quantity demanded of the good rises
  • The movement from D' to D could be caused by
  • what do households own and what do they consume?
  • The law of demand states that, all other things equal
  • The farmer should specialize in the production of
substitute goods
  • Suppose that a decrease in the price of good X results in fewer units of good Y being sold. This implies that X and Y are:
  • Assume that the farmer and the rancher each has 40 labor hours available. If each person divides his equally between the production of meat and potatoes, then total production is:
  • Suppose a tax of $5 per unit is imposed on this market. What will be the new equilibrium quantity in this market?
  • Dmitri spends $225 to purchase air travel to Hawaii from Flyaway Airlines.
only way of producing more of one good is to produce less of the other, doing this leads to opportunity costs
  • trade-offs
  • macroeconomics
  • opportunity costs
  • economic growth
The fact that there are only two goods produced in this theoretical economy is a simplifying assumption that still allows economists to demonstrate key economic concepts.
  • efficient PPF
  • ejjj
  • specialization and trade
  • opportunity cost explained
1) the goods offered for sale are all exactly the same 2) the buyers and sellers are so numerous that no single buyer or seller has any influence over the market price
  • Oligopoly
  • Monopoly
  • Perfectly Competitive Industry
  • Perfectly Competitive Market
as scientists and policy-makers
  • normative statements
  • Soup is an inferior good if
  • how do economists work?
  • macroeconomics
a market with only one seller who sets the price ex: local cable company
  • Oligopoly
  • Perfectly Competitive Market
  • Monopoly
  • Economic Growth
goods and services
  • Based on this model, households earn income when blank purchase blank in resource markets.
  • What do households sell and firms buy?
  • What do households buy and firms sell?
  • how do economists work?
revolve around trying to improve the world, not just explain it
  • normative statements
  • economists as policy-makers
  • What do firms produce and how?
  • positive statements
the demand for soup falls when income rises
  • economists as policy-makers
  • how do economists work?
  • Soup is an inferior good if
  • shifting on the PPF
imports are goods produced abroad and sold domestically and exports are goods produced domestically and sold abroad
  • goods vs services
  • health care vs agriculture
  • military goods vs consumer goods
  • imports vs exports
$2 (
  • Which of the following price ceilings would be binding in this market
  • Which markets are represented in the simple circular-flow diagram?
  • Suppose the government imposes a price ceiling of $1 on this market. What will be the size of the shortage in this market?
  • Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply.
40 percent decrease in the quantity demanded (just multiple the demand of goods to the increase in price)
  • If the price elasticity of demand for a good is 10.0, then a 4 percent increase in price results in a
  • A normative economic statement such as "The minimum wage should be abolished"
  • Despite their differences, with which proposition are two economists chosen at random most likely to agree?
  • the price of a trade
shows the trade-off between the outputs of different goods at a given time, but this can change over time.
  • Perfectly Competitive Market
  • The opportunity cost of 1 pound of meat for the farmer is
  • what do households own and what do they consume?
  • more on opportunity costs
Serena has an absolute advantage in mowing lawns because she can do the work with a lower input of time (2 hours versus 4). Her opportunity cost of mowing the lawn is much greater than Forrest's (30,000 vs 50) so he has the comparative advantage in mowing lawns
  • more on opportunity costs
  • mowing the lawn example
  • economists as scientists
  • opportunity cost explained
amount of the good that buyers are willing and able to purchase vs. consumers willingness to pay a price for a specific good or service
  • quantity demanded vs. demand
  • The law of demand states that, all other things equal
  • The movement from D' to D could be caused by
  • Perfectly Competitive Market
-comparing opportunity costs-the producer who gives up less of other goods to produce Good X has the smaller opportunity cost and the comparative advantage -impossible for only one person to have a CA in both goodsPrinciple: each good should be produced by the country that has the smaller opportunity cost of producing that good
  • Absolute advantage
  • mowing the lawn example
  • normative statements
  • comparative advantage
rely on models- simplifications of economic reality, devise theories, collect data, analyze data in attempts to verify or refute their theories
  • Circular-flow diagram
  • specialization and trade
  • economists as policy-makers
  • economists as scientists
Would require data but not values in order to be evaluated
  • A normative economic statement such as "The minimum wage should be abolished"
  • A positive economic statement such as "pollution taxes decrease the quantity of pollution generated by firms"
  • Which of the three supply curves represents the least elastic supply?
  • Suppose a tax of $5 per unit is imposed on this market. What will be the new equilibrium quantity in this market?
Employers should not be restricted from outsourcing work to foreign nations.
  • A positive economic statement such as "pollution taxes decrease the quantity of pollution generated by firms"
  • Despite their differences, with which proposition are two economists chosen at random most likely to agree?
  • Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply.
  • If the price elasticity of demand for a good is 10.0, then a 4 percent increase in price results in a
a group of buyers and sellers of a particular good or service. Buyers as a group determine the demand for the product, sellers determine the supply
  • The movement from D' to D could be caused by
  • imports vs exports
  • What is a market?
  • competitive market
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Multiple Choice Questions
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