Econ 001 - Microeconomics Principles » Fall 2020 » Quiz 2

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Question #1
Trade can benefit a family
A.   only if the family is not in economic competition with other families.
B.   Both a and b are correct.
C.   by allowing the family to buy a greater variety of goods and services at a lower cost.
D.   by allowing each person to specialize in the activities he or she does best.
E.   All of the above are correct.
Question #2
When a production possibilities frontier shifts outward, it is demonstrating the concept of
A.   economic growth.
B.   opportunity cost.
C.   tradeoffs.
D.   supply and demand.
E.   recession and unemployment
Question #3
Macroeconomics is the study of
A.   how firms maximize profit.
B.   economic growth and GDP
C.   economic history.
D.   economy-wide phenomena.
E.   individual decision-makers.
Question #4
An increase in quantity supplied can be caused by a(n)
A.   rise in resource input prices
B.   increase in quantity demanded
C.   decrease in the number of firms in the market
D.   increase in price
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 best level of immigration into the country
C.   determining whether the government should reduce poverty
D.   determining the impact of government spending on the actual level of total employment
Question #6
An decrease in both equilibrium price and quantity could be produced by a(n)
A.   decrease in demand, with supply constant
B.   decrease in supply and demand together
C.   rise in supply and demand together
D.   increase in supply, with demand constant
E.   increase in demand, with supply constant
Question #7
Under a market system of resource allocation
A.   prices determine both what firms produce and what consumers buy
B.   the government allocates resources while prices allocate goods and services
C.   the government, producers, and consumers work together and allocate resources while prices allocate goods and services
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 #8
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 #9
If the supply of coffee falls due to bad weather conditions in coffee-exporting countries, then the
A.   price and quantity will fall
B.   quantity will fall, but price may rise or fall
C.   price and quantity will rise
D.   price will rise and quantity will fall
E.   price will fall and quantity will rise
Question #10
Since producers must be compensated for the rising opportunity cost that accompanies increases in output,
A.   technical inefficiency would not exist in the long run
B.   the supply curve usually slopes upward
C.   the demand curve usually slopes downward
D.   the law of demand applies to most markets
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 buyers' incomes
C.   increase in price of similar model produced by Chevy and Dodge
D.   a decrease in the price of steel
E.   an increase in the U.S. population
Question #12
Price ceilings set below the equilibrium price cause
A.   a greater number of exchanges.
B.   shortages.
C.   surpluses.
D.   a new market equilibrium.
Question #13
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 #14
If the price of a substitute to good X increases, then the
A.   demand for good X will increase
B.   market price for good X will decrease
C.   demand for good X will decrease
D.   market price for good X will rise
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 normative statement
B.   a political statement
C.   macroeconomic observation
D.   a financial statement
E.   a positive statement
Question #16
Which of the following statements is correct?
A.   the demand curve typically slopes upward; the supply curve typically slopes downward
B.   the demand curve typically slopes downward; the supply curve typically slopes upward
C.   both the demand and supply curves typically slope downward
D.   both the demand and supply curve typically slope upward
Question #17
"As income rises, the demand for some goods falls." This statement
A.   shows that the quantity demanded is inversely related to price
B.   suggests that those goods are inferior goods
C.   suggests that most goods are normal goods
D.   suggests that consumers become less fashionable for those goods.
E.   does not apply to goods traded in competitive markets
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.   an indisputable statistical fact
B.   empirically verifiable by checking economic data
C.   an incorrect positive statement
D.   a normative statement
E.   a positive statement
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 tank
C.   20 guns
D.   1/50 of a gun

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