Download Review Questions 1

Review Questions 1
Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Refer to the information provided in Figure 3.7 below to answer the following questions.
Figure 3.7
1) Refer to Figure 3.7. Assume the market is initially at Point B and that pizza is a normal good. A
decrease in income would cause the market to move from Point B on demand curve D2 to
A) Point C on demand curve D2 .
B) Point A on demand curve D2 .
C) demand curve D3 .
D) demand curve D1 .
1)
2) Refer to Figure 3.7. An increase in quantity demanded is represented by movement
A) along D2 from Point B to point A.
B) along D2 from Point B to point C.
C) from D2 to D1 .
D) from D2 to D3 .
2)
Refer to the information provided in Figure 2.4 below to answer the questions that follow.
Figure 2.4
3) According to Figure 2.4, which point cannot be produced with the current state of technology?
A) A
B) B
C) C
D) F
3)
4) According to Figure 2.4, the point where only motorcycles are produced is
A) A.
B) B.
C) C.
4)
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D) E.
5) According to Figure 2.4, as the economy moves from Point A to Point E, the opportunity cost of
motorcycles, measured in terms of hybrid cars,
A) increases.
B) remains constant.
C) initially increases, then decreases.
D) decreases.
5)
6) Firms are organizations that
A) transform resources into products.
C) consumer outputs.
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B) take advantage of the public.
D) transform outputs into inputs.
7) In terms of the production possibility frontier, ________ would best be shown by the production
possibility frontier shifting outward.
A) a change in consumer tastes
B) an increase in productivity attributable to new technology
C) a shift in resources from capital goods to consumer goods
D) a decrease in the unemployment rate
7)
Refer to the information provided in Table 2.1 below to answer the following questions.
Table 2.1
Molly
6
3
Avatar Design
Tattoo Design
Pete
8
2
8) Refer to Table 2.1. For Molly, the opportunity cost of designing one tattoo is
A) 1/2 of an avatar design.
B) 1 avatar design.
C) 2 avatar designs.
D) 3 avatar designs.
8)
9) Refer to Table 2.1. Which of the following statements is true?
A) Pete has a comparative advantage in both avatar design and tattoo design.
B) Molly has a comparative advantage in both avatar design and tattoo design.
C) Molly has a comparative advantage in avatar design, and Pete has a comparative advantage
in tattoo design.
D) Pete has a comparative advantage in avatar design, and Molly has a comparative advantage
in tattoo design.
9)
10) The change in the price of a good leads to a change in ________, which leads to a ________.
A) supply; movement along a supply curve
B) supply; shift of the supply curve
C) quantity supplied; shift of the supply curve
D) quantity supplied; movement along a supply curve
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10)
Refer to the information provided in Figure 3.17 below to answer the questions that follow.
Figure 3.17
11) Refer to Figure 3.17. At a price of $90, there is an excess
A) supply of 450 sunglasses.
B) supply of 600 sunglasses.
C) demand of 600 sunglasses.
D) demand of 150 sunglasses.
11)
12) Economics is best defined as the study of
A) how consumers make purchasing decisions.
B) financial decision making.
C) choices made by people faced with scarcity.
D) inflation, unemployment, and economic growth.
12)
13) In a laissez-faire economy,
A) a centralized authority establishes what will be produced.
B) individual people and firms pursue their own self-interest.
C) the government decided how to distribute goods and services.
D) consumers do not exercise choice.
13)
14) According to the law of demand, as prices rise, ceteris paribus
A) demand increases.
B) quantity demanded increases.
C) demand decreases.
D) quantity demanded decreases.
14)
15) Which of the following statements is true?
A) Planned economies have fared very well in recent years, with many of these economies
thriving.
B) Command economies operate the most efficiently because the government makes all the
production decisions.
C) In a command economy, consumers answer the questions of what to produce, how to
produce it, and how to distribute it.
D) In command economies, consumers still exercise choice.
15)
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Refer to the information provided in Figure 3.15 below to answer the following questions.
Figure 3.15
16) Refer to Figure 3.15. An increase in the wage rate of gardenburger makers will cause a movement
from Point B on supply curve S2 to
A) Point C on supply curve S2 .
B) supply curve S1 .
C) Point A on supply curve S2 .
D) supply curve S3 .
16)
17) Which of the following is held constant along the demand curve?
A) price of the good
B) income
C) quantity
D) both A and B
17)
18) Whenever a former governor is elected president, the unemployment rate decreases; whenever a
former congressman is elected president, the inflation rate increases. This statement is an example
of
A) fallacy of composition.
B) post hoc, ergo propter hoc fallacy.
C) ceteris paribus fallacy.
D) fallacy of inductive reasoning.
18)
19) That which we forgo, or give up, when we make a choice or a decision is known as
A) causation.
B) equity.
C) correlation.
D) opportunity cost.
19)
Refer to the information provided in Table 3.1 below to answer the questions that follow.
Price per Pizza
$3
6
9
12
15
Table 3.1
Quantity Demanded
(Pizzas per Month)
1,200
1,000
800
600
400
Quantity Supplied
(Pizzas per Month)
600
700
800
900
1,000
20) Refer to Table 3.1. This market will be in equilibrium if the price per pizza is
A) $6.
B) $9.
C) $12.
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D) $15.
20)
Refer to the information provided in Figure 3.10 below to answer the questions that follow.
Figure 3.10
21) Refer to Figure 3.10. In the Rollerblade market, which is not government controlled, you accurately
predict that price will
A) increase, the quantity demanded will fall, and the quantity supplied will rise.
B) decrease, the quantity demanded will rise, and the quantity supplied will fall.
C) decrease, the quantity demanded will fall, and the quantity supplied will fall.
D) increase, the quantity demanded will rise, and the quantity supplied will fall.
21)
22) Which of the following will NOT cause a shift in the demand curve for compact discs?
A) a change in the price of downloadable online music
B) a change in income
C) a change in the price of compact discs
D) a change in wealth
22)
23) A factor market is
A) where goods are exchanged.
C) where goods are made.
23)
B) organized by government.
D) where resources are exchanged.
24) Which of the following is a question answered with normative economic reasoning?
A) If the college provided more financial aid assistance, would more students benefit?
B) Should the college cut tuition to stimulate enrollment?
C) If the college offers free parking for students, will more students drive to campus?
D) If the college increased tuition, would class size decline?
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Answer Key
Testname: REVIEW QUESTION 1
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B
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