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Exam
Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1)Economics is the study of 1) A)the distribution of surplus goods to those in need. B)the choices we make because of scarcity. C)affluence in a morally bankrupt world. D)ways to reduce wants to eliminate the problem of scarcity.
2)When an economy produces more houses and fewer typewriters, it is answering the ________ 2) question. A)"for whom" B)"how" C)"what" D)"where"
Point Production of grain(tons) Production of cars(cars) A 0 30 B 2 28 C 4 24 D 6 18 E 8 10 F 10 0
3)The table above lists six points on the production possibilities frontier for grain and cars. Given this 3) information, which of the following combinations is unattainable? A)4 tons of grain and 26 cars B)7 tons of grain and 10 cars C)2 tons of grain and 27 cars D)6 tons of grain and 18 cars
4)The table above lists six points on the production possibilities frontier for grain and cars. From this 4) information you can conclude that production is inefficient if this economy produces A)6 tons of grain and 18 cars. B)8 tons of grain and 10 cars. C)2 tons of grain and 27 cars. D)4 tons of grain and 26 cars.
5)The table above lists six points on the production possibilities frontier for grain and cars. What is 5) the opportunity cost of moving from point D to point E? A)2 cars B)16 cars C)6 cars D)8 cars
6)When the production possibilities frontier bows outward from the origin, 6) A)some of society's resources are unemployed. B)opportunity costs are decreasing. C)opportunity costs are constant. D)opportunity costs are increasing.
7)Generally, opportunity costs increase and the production possibilities frontier bows outward. Why? 7) A)Technology is slow to change. B)Labor is scarcer than capital. C)Resources are not equally useful in all activities. D)Unemployment is inevitable.
8)An expansion of the production possibilities frontier is 8) A)something that has occurred only rarely in history. B)called economic growth. C)a free gift of nature. D)proof that scarcity is not a binding constraint.
9)The law of demand implies that if nothing else changes, there is 9) A)a negative relationship between the price of a good and the quantity demanded. B)an exponential relationship between price of a good and the quantity demanded. C)a linear relationship between price of a good and the quantity demanded. D)a positive relationship between the price of a good and the quantity demanded.
10)The demand for a good increases when the price of a substitute ________ and also increases when 10) the price of a complement ________. A)falls; rises B)falls; falls C)rises; rises D)rises; falls
11)If a good is an inferior good, then purchases of that good will decrease when 11) A)the price of a substitute rises. B)income increases. C)the demand for it increases. D)population increases.
12)Which of the following isNOTone of the factors that influences the supply of a product? 12) A)income B)technology C)number of suppliers D)expected future prices
19)Using the data in the above table, at the price of $80 a phone, a 19) A)surplus of 25 thousand cellular telephones occurs. B)shortage of 25 thousand cellular telephones occurs. C)shortage of 55 thousand cellular telephones occurs. D)surplus of 80 thousand cellular telephones occurs.
20)If good A is a normal good and income increases, the equilibrium price of A ________ and the 20) equilibrium quantity of A ________. A)rises; decreases B)falls; increases C)falls; decreases D)rises; increases
21)Assume that beef and pork are substitutes for consumers. There is a drought in the cattle grazing 21) areas. The drought will shift the A)supply curve of pork rightward. B)supply curve of pork leftward. C)demand curve for pork leftward. D)demand curve for pork rightward.
22)The equilibrium price will rise and the equilibrium quantity might increase, decrease, or stay the 22) same when the A)demand for a good increases and the supply of it decreases. B)demand and the supply of a good both decrease. C)demand and the supply of a good both increase. D)demand for a good decreases and the supply of it increases.
23)The equilibrium price will fall and the equilibrium quantity might increase, decrease, or stay the 23) same when the A)demand and the supply of a good both increase. B)demand and the supply of a good both decrease. C)demand for a good decreases and the supply of it increases. D)demand for a good increases and the supply of it decreases.
