Econ 001 - Microeconomics Principles » Fall 2020 » Quiz 2

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Question #1
Trade can benefit a family
A.   by allowing each person to specialize in the activities he or she does best.
B.   only if the family is not in economic competition with other families.
C.   Both a and b are correct.
D.   by allowing the family to buy a greater variety of goods and services at a lower cost.
E.   All of the above are correct.
Question #2
When a production possibilities frontier shifts outward, it is demonstrating the concept of
A.   tradeoffs.
B.   supply and demand.
C.   economic growth.
D.   recession and unemployment
E.   opportunity cost.
Question #3
Macroeconomics is the study of
A.   individual decision-makers.
B.   economy-wide phenomena.
C.   economic growth and GDP
D.   how firms maximize profit.
E.   economic history.
Question #4
An increase in quantity supplied can be caused by a(n)
A.   decrease in the number of firms in the market
B.   increase in price
C.   rise in resource input prices
D.   increase in quantity demanded
Question #5
Which of the following is most closely associated with positive economics?
A.   determining whether too many luxury goods are being produced
B.   determining the impact of government spending on the actual level of total employment
C.   determining the best level of immigration into the country
D.   determining whether the government should reduce poverty
Question #6
An decrease in both equilibrium price and quantity could be produced by a(n)
A.   increase in demand, with supply constant
B.   decrease in supply and demand together
C.   decrease in demand, with supply constant
D.   increase in supply, with demand constant
E.   rise in supply and demand together
Question #7
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.   prices determine what consumers buy while the government determines what firms produce
C.   the government allocates resources while prices allocate goods and services
D.   prices determine what firms produce while the government determines what consumers buy
E.   prices determine both what firms produce and what consumers buy
Question #8
All production involves an opportunity cost because
A.   to produce more of one thing, we must produce more of everything
B.   costs of production are sky rocketing
C.   when an individual obtains more of a good, he may not be fully satisfied
D.   to produce more of one thing, we must produce less of something else
Question #9
If the supply of coffee falls due to bad weather conditions in coffee-exporting countries, then the
A.   price will rise and quantity will fall
B.   price and quantity will fall
C.   price will fall and quantity will rise
D.   price and quantity will rise
E.   quantity will fall, but price may rise or fall
Question #10
Since producers must be compensated for the rising opportunity cost that accompanies increases in output,
A.   the demand curve usually slopes downward
B.   the law of demand applies to most markets
C.   technical inefficiency would not exist in the long run
D.   the supply curve usually slopes upward
Question #11
All of the following except one would increase the amount of a particular model of a Tesla automobile that buyers would like to buy. Which is the exception?
A.   increased prices of other Ford models
B.   an increase in the U.S. population
C.   a decrease in the price of steel
D.   increase in price of similar model produced by Chevy and Dodge
E.   an increase in buyers' incomes
Question #12
Price ceilings set below the equilibrium price cause
A.   surpluses.
B.   a greater number of exchanges.
C.   shortages.
D.   a new market equilibrium.
Question #13
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 downward
C.   they both usually slope upward
D.   they both show a relationship between quantity and price
Question #14
If the price of a substitute to good X increases, then the
A.   market price for good X will decrease
B.   market price for good X will rise
C.   demand for good X will decrease
D.   demand for good X will increase
Question #15
"The stock market was freaking out by the surge of Sen. Bernie Sanders's popularity in democratic party's presidential primary campaign" from MarketWatch.com (January 2020) is
A.   a financial statement
B.   macroeconomic observation
C.   a normative statement
D.   a political statement
E.   a positive statement
Question #16
Which of the following statements is correct?
A.   both the demand and supply curve typically slope upward
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 curves typically slope downward
Question #17
"As income rises, the demand for some goods falls." This statement
A.   does not apply to goods traded in competitive markets
B.   suggests that most goods are normal goods
C.   suggests that consumers become less fashionable for those goods.
D.   suggests that those goods are inferior goods
E.   shows that the quantity demanded is inversely related to price
Question #18
Suppose that the Director of White House National Economic Policy, Larry Ludlow, told President Trump in January 2019 that "the unemployment rate is 4 percent." The President responds, "That is still too high. let's get it down to 3." The President's statement is
A.   a normative statement
B.   an incorrect positive statement
C.   a positive statement
D.   empirically verifiable by checking economic data
E.   an indisputable statistical fact
Question #19
In one year, a weapons plant can manufacture either 1,000 more guns or 50 more tanks. The plant's opportunity cost of an extra tank is approximately
A.   50 guns
B.   1/50 of a gun
C.   1/50 of a tank
D.   20 guns

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