Download Use a scantron. Mark “A” for “True” and “B” for “False.” 1) EBay A

Use a scantron. Mark “A” for “True” and “B” for “False.”
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1) EBay
A) will be considered a market when the Internet firms are profitable.
B) is a market because buyers and sellers are brought together to buy and sell.
C) would be a market if there was only one physical location.
D) cannot function as a market.
E) is not a market because buyers can buy from only one seller at any point in time.
2) The "quantity demanded" of any good or service is ________ during a specified time period
and at a specified price.
A) the amount people are willing to buy
B) the amount people are able to buy
C) the amount people are willing and able to offer
D) the amount people are willing and able to buy
E) the amount people are willing to buy because it is the amount sellers are willing to sell
3) Which of the following describes the law of demand? When other things remain the same, as
A) the price of gas falls, the quantity demanded of gas increases.
B) the quantity demanded of bread increases, the price of bread falls.
C) the price of peanut butter increases, the quantity demanded of jelly decreases.
D) your income increases, you'll buy more hamburgers.
E) more people decide to eat pizza, the demand for pizza increases.
4) A demand schedule
A) shows the quantity demanded at one price.
B) is a graph showing a relationship between the quantity demanded and the price of a
good.
C) is a list of the quantities demanded at each different price when all other influences on
buying plans remain the same.
D) shows that demand is on schedule.
E) shows how the demand changes when the supply changes.
5) The market demand curve for mangos is
A) the same as the demand curve of one buyer in a market with many buyers.
B) upward sloping because rich people can afford more mangos than poor people can buy.
C) the horizontal sum of the individual demand curves of all the buyers.
D) the vertical sum of the individual demand curves of all the buyers.
E) the horizontal average of the individual demand curves of all the buyers.
6) A change in the demand for apples could result from any of the following EXCEPT
A) a change in the number of buyers.
B) increased preferences for fresh fruit consumption for health reasons.
C) a change in the price of an apple.
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D) a change in the price of a banana.
E) a change in income.
7) Which of the following shifts the demand curve for movies rightward?
A) an increase in the price of NetFlix, a substitute for movies
B) an increase in the price of movie tickets
C) a decrease in the price of move tickets
D) an increase in movie star salaries
E) an increase in the price of HDTV sets
8) A popular dinner among college students today is sushi, green tea, and wasabi dip. So these
foods are complements. If the price of green tea increases and the price of wasabi dip
increases, what would be the effect on demand for sushi at lunch?
A) The demand for sushi would increase.
B) The demand for sushi would be unaffected, but the price would increase.
C) The demand for sushi could increase or decrease.
D) The demand for sushi would decrease.
E) The demand for sushi would be unaffected, but the price would decrease.
9) People consume more soup as temperatures falls. So, as cold weather approaches,
A) the quantity of soup demanded increases.
B) the demand for soup increases.
C) people move closer to their demand curve for soup.
D) people move farther beyond their demand curves.
E) both the demand and the quantity demanded of soup increase.
10) Which of the following events will increase the quantity demanded of bottled water?
A) a fall in the price of soda
B) a rise in the price of a fitness club membership
C) an increase in the number of buyers of bottled water
D) a fall in the price of bottled water
E) a rise in the price of bottled water
11) To be part of the supply for a good, a producer must be
A) only able to supply the good.
B) only willing to supply the good.
C) both able and willing to supply the good.
D) both able and willing to supply the good, and have already identified a buyer.
E) both able and willing to supply the good, and have already sold the good.
12) Which of the following helps explain why the law of supply exists?
A) Larger outputs result in lower costs of production.
B) The law of increasing opportunity cost.
C) The costs of production remain constant throughout all levels of output.
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D) Sellers realize that if the price increases, they make larger profits and do not need to
change their production.
E) The law of demand.
13) A supply curve
A) slopes downward.
B) slopes upward.
C) is a graph of the relationship between quantity supplied of a good and its price.
D) Both answers B and C are correct.
E) Both answers A and C are correct.
14) A decrease in the price of a complement in production leads to
A) a decrease in the supply of the good in question.
B) an increase in the supply of the good in question.
C) no change in the supply of the good in question.
D) a decrease in the quantity supplied of the good in question.
E) an increase in the supply of the good in question and a decrease in the quantity supplied
of the good in question.
15) It is expected that the price of a bushel of wheat will increase in one month. This belief will
result in
A) an increase in the current supply of wheat.
B) a decrease in the current supply of wheat.
C) a decrease in the future supply of wheat.
D) no change in the current or future supply of wheat.
E) an increase in the current quantity supplied of wheat.
16) If the number of sellers decreases, then the supply curve ________ and the supply
________.
A) shifts rightward; increases
B) shifts rightward; decreases
C) shifts leftward; increases
D) shifts leftward; decreases
E) does not shift; does not change but there is a decrease in the quantity supplied
17) Researchers have found a hybrid of corn that is cheaper to grow. This technological
breakthrough
A) increases the demand for corn.
B) increases the supply of corn.
C) decreases the supply of corn.
D) Both answers A and C are correct.
E) Both answers A and B are correct.
18) If the price of carrots is below the equilibrium price, the
A) quantity demanded of carrots exceeds the quantity supplied and a surplus exists.
B) quantity supplied of carrots exceeds the quantity demanded and a surplus exists.
C) quantity demanded of carrots exceeds the quantity supplied and a shortage exists.
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D) quantity supplied of carrots exceeds the quantity demanded and a shortage exists.
E) quantity supplied of carrots equals the quantity demanded.
19) Assume a market is in equilibrium. There is an increase in supply, but no change in demand
As a result the equilibrium price ________, and the equilibrium quantity ________.
A) rises; increases
B) rises; decreases
C) rises; does not change
D) falls; decreases
E) falls; increases
20) Assume the scooter market is in equilibrium. Next, suppose that people decide riding
scooters is no longer fun. The equilibrium price of a scooter _____ and the equilibrium
quantity of scooters _____.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; decreases
21) Plywood is used in home construction. If the price of plywood (an input) increases, what
happens to the supply of houses?
A. The supply increases so that the supply curve shifts rightward.
B. The supply decreases so that the supply curve shifts leftward.
C. The quantity supplied increases but there is no shift in the supply curve.
D. The quantity supplied decreases but there is no shift in the supply curve.
E. There is not enough information here to answer this question.
Supply
$10
Dollars Per Unit
$8
$6
$4
$2
$0
Demand
10
20
30
40
50
Quantity
22) If the actual market price was $4 per unit in the figure above:
A) There would be a surplus of 50 units.
B) There would be a surplus of 40 units.
C) There would be a shortage of 30 units.
D) There would be a shortage of 20 units.
E) The market is in equilibrium.
Figure 1 (Shifts of supply and demand) - Choose the letter of the diagram in Figure 1 that
best describes the type of shift that would occur in each situation for the market listed at the left
in bold, ceteris paribus.
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23.Donuts: People become more health-wise and prefer power bars over donuts.
A. A
B. B
C. C
D. D
24. Decaffeinated coffee: Consumers accept the results of a recent study that drinking decaf
coffee lowers their risk of type 2 diabetes.
A. A
B. B
C. C
D. D
25. Orange juice: An icy winter freezes a large portion of the farmers’ citrus crop in Florida.
A. A
B. B
C. C
D. D
26) The circular flow model shows the flow of
A) expenditure and income throughout the economy.
B) only money throughout the economy.
C) only funds in stock and bond markets.
D) only tax payments and government expenditures.
E) goods market and factor markets as they move through the economy.
27) In the circular flow model, there are two types of markets: the ________ market and the
________ market.
A) producers; consumers
B) households; firms
C) service; goods
D) goods; factor
E) supply; demand
28) If the demand for a good is elastic, then
A) people do not change the quantity they demand when the price of the good changes.
B) a change in price leads to a smaller percentage change in the quantity demanded.
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C) people substantially decrease the quantity of the good they buy if its price increases by a
small percentage.
D) a change in the quantity demanded is smaller than the change in price.
E) the quantity demanded divided by the price exceeds 1.00.
29) If a 30 percent price increase generates a 20 percent decrease in quantity demanded, then
demand is
A) perfectly elastic.
B) perfectly inelastic.
C) unit inelastic.
D) elastic.
E) inelastic.
30) Which of the following is correct?
A) The short run for a firm can be longer than the long run for the same firm.
B) The short run is the same for all firms.
C) The long run is the time frame in which all resources are fixed.
D) The long run does not exist for some firms.
E) The long run is the time frame in which the quantities of all resources can be varied.
31) Which of the following is an explicit cost of production?
A) wages paid to workers
B) the electric bill
C) purchases of raw material
D) Only answers A and B are explicit costs because the purchases of raw material is only an
opportunity cost.
E) Answers A, B, and C are all correct.
32) Which of the following is an implicit cost?
i. wages paid to workers
ii. the normal profit
iii. the electric bill
A) i only
B) ii only
C) i and ii
D) ii and iii
E) i, ii, and iii
33) Which of the following is correct about marginal and average products?
A) When the marginal product is increasing, the average product must be increasing.
B) When the marginal product exceeds the average product, the average product must be
increasing.
C) When the average product is increasing, the marginal product must be decreasing.
D) When the marginal product is decreasing, the average product must be decreasing.
E) When the marginal product is increasing, the average product must be decreasing.
34) Which of the following is a consumption good or service?
A) a personal computer purchased in order to play games at home
B) a United Airline ticket counter
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C) the Endeavor space shuttle
D) a United Parcel Service truck delivering Christmas gifts
E) a satellite dish installed by Cox Cable to download programs that are then distributed
through its cable system
35) An import good is a good produced
A) in the United States and sold to foreigners living in the United States.
B) by foreigners in the United States and purchased by U.S. households.
C) in another country and purchased by U.S. residents.
D) in the United States and sold in other countries.
E) in another country and purchased by foreigners not residing in the United States.
36) If 9 workers can produce 1,550 units of output and 10 workers can produce 1,700 units of
output, then the average product of 10 workers is
A) 1,700 units.
B) 1,550 units.
C) 170 units.
D) 150 units.
E) 155 units.
37) Total revenue equals
A) price × quantity sold.
B) profit - cost.
C) price.
D) quantity sold - cost.
E) cost × price.
38) If the price elasticity of demand for moose hunting lessons is .73, then the demand for
moose hunting lessons is
A) elastic.
B) unit elastic.
C) inelastic.
D) perfectly unit elastic.
E) perfectly elastic.
39. From an economic perspective, when a consumer decides to buy more life insurance, the
consumer has most likely concluded that the:
A) marginal costs of more insurance coverage have decreased.
B) marginal benefits of more insurance coverage have increased.
C) marginal benefits of more insurance coverage are greater than the marginal costs.
D) opportunity costs of more insurance coverage are greater than the payment for more
insurance coverage.
40. A price floor:
A) will not cause black markets.
B) is a legal maximum price that can be charged for a good.
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C) is a government-imposed price on a good that is welcomed by firms that sell that good.
D) is a legal minimum price that must paid for a resource.
41. A point outside the production possibilities curve is attainable.
T
42. In the circular flow model, the money flow moves in a counter-clockwise direction.
T
43) Capital, as a factor of production, refers to
A) money, stocks, and bonds.
B) the production technology used by firms.
C) the tools and instruments used to produce other goods and services.
D) the production factors imported from abroad.
E) stocks and bonds but not money.
F
F
44. Increases in resources or improvements in technology will tend to cause a society's
production possibilities curve to:
A) shift inward or to the left.
B) shift outward or to the right.
C) become horizontal.
D) become vertical.
45. The role of the entrepreneur in society is to:
A) provide capital to the firm which the management combines with labor.
B) bring the factors of production together and take the risks of producing.
C) provide capital to the firm which the management combines with labor.
D) control the land upon which all production takes place to get the most rent.
E) work with other elected officials to determine what goods are produced.
46) Whether a company produces fishing rods mostly by hand or using high-tech machinery is a
question of
A) for whom will goods be produced.
B) when will the goods be produced.
C) where will the goods be produced.
D) how will the goods be produced.
E) why will the goods be produced.
47) Which of the following is a microeconomic topic?
i. K-Mart's decision to close stores that are not making a profit
ii. Home Depot's choice to hire more full-time employees because its sales increased
iii. Delta Airlines changes its fares.
A) i only
B) ii only
C) i and iii
D) ii and iii
E) i, ii, and iii
48) Scarcity means that
A) what we can produce with our resources is greater than our material wants.
B) resources are unlimited.
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C) wants are greater than what we can produce without resources.
D) governments must make up for shortages in resources.
E) choices made in self-interest cannot be the same as those made in the social interest.
49) Which of the following statements is a positive statement?
A) Our country must increase military spending.
B) There should be a computer in every elementary school classroom.
C) We need to spend less on luxury items for the wealthy, and more on necessities for the
less fortunate.
D) Online shopping increased by 50 percent this Christmas season.
E) Too many people are unemployed.
50) The income paid for the use of physical capital is called
A) rent.
B) wages.
C) interest.
D) profit.
E) land capital.
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