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quiz-ch1-3
| Question | Answer |
|---|---|
| Which of the following questions relates most directly to consumer sovereignty? | Consumers desire to purchase less of this product at each possible price |
| An increase in consumer income will: | Increase the demand for a normal good but decrease the demand for an inferior good. |
| Which of the following best describes an inferior good? | A good for which income and quantity demanded are inversely related. |
| If the supply of a product decreases and the demand for that product simultaneously increases, then the equilibrium: | price must rise |
| Which will not cause supply to increase? | An increase in demand. |
| A change in quantity demanded reflects: | a movement along the demand curve as a result of a change in price. |
| The Law of Demand states that: | there is an inverse or negative relationship between price and quantity. |
| Scarcity: | occurs as a result of unlimited wants and limited resources available to fulfill these wants. |
| Economics is the social science concerned with: | how individuals, institutions and society makes choices under conditions of scarcity. |
| Which of the following is not a factor of production? | $10,000 |
| A nation's production possibilities curve "bowed out" from the origin because: | resources are not perfectly shiftable production and goods. |
| A microeconomist would most likely study: | how consumers respond to a change in gasoline prices. |
| The production possibilities frontier or curve: | shows attainable combinations of two products that may be produces with available resources. |
| You have a history and economics exam schedule for tomorrow, but find that you only have time to study for only one of them, what are you facing | a tradeoff. |
| Economists make the following assumption about humans: | People are rational and respond to economic incentives. |
| Which of the four fundamental questions relates most directly to consumer sovereignty? | What goods and services will be produced. |
| The market system is characterized by: | private property rights. |
| The term "consumer sovereignty" means: | consumer choices ultimately determine which goods and services are produced? |
| Which of the following does not distinguish a market form a command system? | the widespread use of money. |
| According to Adam Smith, the "invisible hand:" | promotes the public interest when people pursue their self-interests. |
| The competitive market system encourages innovation and technological advance, primarily through: | profitable returns to innovative firms. |
| In terms of the circular flow diagram, fims receive in the ________ market and incur costs in the ________ market. | product; resource |
| Which of the following is a capital good? | A steel fabrication facility. |
| Human specialization, or the division of labor: | increases output by enabling workers to take advantage of differences in their skills. |
| Competition is characterized by: | freedom of buyers to enter or leave markets. |
| A public good exhibits the characteristics of: | nonrevalry and noneexcludability. |
| Most states tax gasoline and use the proceeds to build and maintain highways. This tax best reflects: | the benefits-received principle. |
| An externality is; | a cost or benefit incurred by someone who is not directly involved in the production of a good or service. |
| Which oif the following markets is likely to be characterized by substantial positive externalities (spillover benefits)? | flu vaccine. |
| Variable cost: | Costs that increase of decrease with a firm’s output. |
| Fixed cost: | Costs that do not change in total when the form changes its output. |
| Firms in purely competitive markets: | are "price takers". |
| A particular firm would most likely be classified a monopoly if: | entry into the industry is blocked. |
| In order to sell more output, the monopolist: | has to lower the product's price. |
| A monopolistically competitive market structure is characterized by al of the following except: | all firms are price takers. |
| In an oligolopolistic industry: | firms behave strategically. |
| Economies of scale: | Reduction in the average total cost of producing a product as the firm expands the size of its operations (output) in the long run. |
| Diseconomies of scale: | Increases in the average total cost of producing a product as the firm expands the size of its operations |
Created by:
vjambriz
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