East Los Angeles College » Economics » Econ 001 - Microeconomics Principles » Fall 2020

Econ 001 - Microeconomics Principles » Fall 2020 » Quiz 1

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Question #1

The opportunity cost of any action is

A. what is sacrificed to pursue that action

B. limited to the out-of-pocket cost incurred

C. what we gain in the process of consumption

D. irrelevant to economic theory

Question #2

A decrease in the price of a commodity results in a(n)

A. increase in demand

B. increase in quantity demanded

C. increase in supply

D. increase in quantity supplied

Question #3

What do supply and demand curves have in common?

A. they both usually slope upward

B. they both show a relationship between quantity and price

C. neither of them is influenced by the size of the population

D. they both usually slope downward

Question #4

Orange juice and cranberry juice are substitute goods. An increase in the price of orange juice results in a(n)

A. increase in the demand for cranberry juice

B. increase in the quantity demanded of orange juice

C. increase in the demand for orange juice

D. decrease in the quantity demanded of cranberry juice

Question #5

The law of supply says that

A. price and quantity supplied are inversely related

B. quantity supplied equals quantity demanded

C. supply follows demand

D. price and quantity supplied are directly related

Question #6

Which of the following statements is correct?

A. the demand curve typically slopes upward; the supply curve typically slopes downward

B. both the demand and supply curve typically slope upward

C. the demand curve typically slopes downward; the supply curve typically slopes upward

D. both the demand and supply curves typically slope downward

Question #7

Which of the following is most closely associated with positive economics?

A. determining whether the government should reduce poverty

B. determining the best level of immigration into the country

C. determining whether too many luxury goods are being produced

D. determining the impact of government spending on the actual level of total employment

Question #8

An excess supply of rice in a competitive market would indicate that

A. the current price exceeds the equilibrium price

B. the problem of scarcity has been solved in that market

C. the entire supply curve must shift to the left in order to attain equilibrium

D. the market will not be able to approach equilibrium

Question #9

Which of the following would shift the demand curve for new college textbooks to the right?

A. a decrease in the wealth of college students

B. an increase in the price of used college textbooks

C. a decrease in the population of college students

D. a decrease in the price of new college textbooks

Question #10

Under a market system of resource allocation

A. the government, producers, and consumers work together and allocate resources while prices allocate goods and services

B. the government allocates resources while prices allocate goods and services

C. prices determine both what firms produce and what consumers buy

D. prices determine what consumers buy while the government determines what firms produce

E. prices determine what firms produce while the government determines what consumers buy

Question #11

Under market economy (capitalism), resources are allocated primarily through

A. economic planning

B. tradition

C. prices

D. voter consensus

E. government decree

Question #12

All production involves an opportunity cost because

A. when an individual obtains more of a good, he may not be fully satisfied

B. to produce more of one thing, we must produce more of everything

C. to produce more of one thing, we must produce less of something else

D. costs of production are sky rocketing

Question #13

Which of the following would be strictly a microeconomic topic?

A. an increase in total production in the United States

B. a drop in the nation's unemployment rate

C. a general rise in national interest rates

D. a drop in inflation

E. an increase in the price of the Ford Focus GT

Question #14

The principle of increasing cost is also called as

A. increase in demand

B. increasing in monetary cost

C. rising in resource (input) prices

D. increasing opportunity cost

E. increasing in market price

Question #15

Which of the following is most closely associated with positive economics?

A. determining the ideal level of immigration to the country

B. determining the best level of immigration into the country

C. determining whether too many luxury goods are being produced

D. determining whether the government should reduce poverty

E. determining the impact of government spending on the actual level of total employment

Question #16

What is economics?

A. study how to efficiently allocate scare resources to maximize societal goals.

B. study supply and demand

C. study money

D. study recession and boom

E. study the market changes

Question #17

Given y = mx + b, which of the following statement is correct?

A. m=change of y over change of x.

B. b=change of y over change of x.

C. b is an independent variable

D. y is the intercept for the linear slope

E. y is an independent variable

Question #18

Given y=8+9x, which of the following is correct?

A. it shows 8 is intercept for the linear equation

B. it suggests that x depending on the changes of y.

C. it's a non-linear equation.

D. it suggests that it's a time-series analysis

E. it shows that its slope is equal to 8.

Question #19

Which of the following statements about markets is false?

A. markets are used to allocate resources in market systems

B. markets can vary in geographical size

C. markets are used to allocate resources in centrally-planned socialist economic systems

D. supply and demand explains how prices are set in competitive markets

E. prices are used to allocate goods in markets

Question #20

If Irene graduated from Channel Island State U. and found a $45,000 annual income job in 2017 and she projected that her 2018 income will be $50,000. What's Irene's income growth rate from 2017 to 2018? (round up the answer if needed)

A. increasing by 11%

B. increasing by 20%

C. increase by 5%

D. increasing by 15%

E. unknown due to insufficient information.

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