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 we gain in the process of consumption

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

C. irrelevant to economic theory

D. what is sacrificed to pursue that action

Question #2

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

A. increase in quantity demanded

B. increase in quantity supplied

C. increase in supply

D. increase in demand

Question #3

What do supply and demand curves have in common?

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

B. they both usually slope upward

C. they both show a relationship between quantity and price

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. decrease in the quantity demanded of cranberry juice

B. increase in the demand for orange juice

C. increase in the quantity demanded of orange juice

D. increase in the demand for cranberry juice

Question #5

The law of supply says that

A. price and quantity supplied are directly related

B. price and quantity supplied are inversely related

C. supply follows demand

D. quantity supplied equals quantity demanded

Question #6

Which of the following statements is correct?

A. both the demand and supply curves typically slope downward

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

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

D. both the demand and supply curve typically slope upward

Question #7

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

A. determining whether the government should reduce poverty

B. determining whether too many luxury goods are being produced

C. determining the best level of immigration into the country

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

B. the market will not be able to approach equilibrium

C. the current price exceeds the equilibrium price

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

Question #9

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

A. an increase in the price of used college textbooks

B. a decrease in the price of new college textbooks

C. a decrease in the population of college students

D. a decrease in the wealth of college students

Question #10

Under a market system of resource allocation

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

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

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

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

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

Question #11

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

A. government decree

B. prices

C. economic planning

D. tradition

E. voter consensus

Question #12

All production involves an opportunity cost because

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

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

C. costs of production are sky rocketing

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

Question #13

Which of the following would be strictly a microeconomic topic?

A. a drop in inflation

B. an increase in total production in the United States

C. a general rise in national interest rates

D. a drop in the nation's unemployment rate

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 whether the government should reduce poverty

C. determining the best level of immigration into the country

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

E. determining whether too many luxury goods are being produced

Question #16

What is economics?

A. study recession and boom

B. study supply and demand

C. study money

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

E. study the market changes

Question #17

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

A. b is an independent variable

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

C. y is the intercept for the linear slope

D. y is an independent variable

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

Question #18

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

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

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

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

D. it shows 8 is intercept for the linear equation

E. it's a non-linear equation.

Question #19

Which of the following statements about markets is false?

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

B. markets can vary in geographical size

C. markets are used to allocate resources in market systems

D. prices are used to allocate goods in markets

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

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 15%

C. increasing by 20%

D. unknown due to insufficient information.

E. increase by 5%

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