Econ 101 » Spring 2020 » Econ Timed Quiz 1

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Question #1
Natural resources, or land, can include the fertility of the land, minerals below it, and what other aspects?
A.   human resources
B.   livestock
C.   human capital resources
Question #2
When certain assumptions are used to create a model of reality, its value can be tested and determined by
A.   producing data.
B.   graphing equations.
C.   predicting outcomes.
Question #3
The distinguishing feature of economic capital (as opposed to financial capital, like money) is that it is
A.   productive.
B.   profitable.
C.   expensive.
Question #4
The ability of a model to predict outcomes (accurately) is an indicator that
A.   the model is valuable.
B.   the assumptions of the model are generally accurate.
C.   the theory behind the model needs to be refined.
Question #5
Financial capital, like money, is simply a tool. Once financial capital is converted to economic capital (invested), it produces a resource that is
A.   expensive.
B.   productive.
C.   profitable.
Question #6
In the case of an inverse relationship between two variables, all else remaining constant
A.   the value of the two variables will move in opposite directions from each other.
B.   the values of the two variables will move in the same direction.
C.   graphically, the data line representing the relationship between the variables has a positive slope.
Question #7
In economics, functions often describe cause and effect. In an economic function, the variable being described on the left-hand side represents a(n) ________?
A.   effect
B.   result
C.   cause
Question #8
If a data line on a graph has a slope of zero it means there
A.   is a constant relationship between x and y.
B.   is no relationship between x and y.
C.   are two variables that are negatively related.
Question #9
If a graph data line indicates that there is a zero slope, this means there
A.   is no relationship between x and y.
B.   is a constant relationship between x and y.
C.   are two variables that are negatively related.
Question #10
From the graph above, one could conclude that, all else remaining constant
A.   the relationship between X and Y is direct.
B.   the relationship between X and Y is indirect.
C.   there is a trade-off between X and Y.
Question #11
Normative statements are based upon
A.   conjecture.
B.   facts.
C.   value judgements.
Question #12
A budget constraint model differs from production possibilities model in that, typically
A.   the production possibilities model demonstrates diminishing returns.
B.   the budget constraint depicts an inverse relationship, or a trade-off.
C.   the budget constraint demonstrates diminishing returns.
Question #13
The production possibilities model is illustrated with a negatively sloped line because
A.   the opportunity cost of producing more of something will rise.
B.   of diminishing returns.
C.   production of different types will compete for limited resources.
Question #14
Rational decision-making considers all of the following except
A.   sunk costs.
B.   opportunity costs.
C.   monetary costs.
Question #15
Marginal cost is necessary to consider in a rational decision, and should be compared to
A.   opportunity cost.
B.   total benefit.
C.   marginal benefit.
Question #16
Self-interest is not necessarily selfish, some say. In fact, self-interest likely includes an individual’s consideration for
A.   strangers.
B.   close friends and family.
C.   humankind as a whole.
Question #17
A non-linear (“bending”) production possibilities model assumes that
A.   technology can advance.
B.   some land or labor is more productive in one use than another.
C.   the opportunity cost of producing more of something will remain constant.
Question #18
Down at the water plant, there is a proposal for a new filtration system to serve the entire city’s needs. The cost of the new system will double water rates. A rational city council should deliberate which following question on behalf of the city’s residents?
A.   Is it worth paying twice as much for the same amount of water?
B.   Are the total benefits of having a city water supply greater than the total cost?
C.   Are the benefits of cleaner water greater than the additional costs of the new filtration system?
Question #19
A rock star intentionally sets her ticket prices below what would be necessary to sell out her shows. How might this be justified by a manager whose goal is to maximize long-term profit?
A.   The revenue sacrificed will help to make the audience more diverse.
B.   The revenue sacrificed represents a very small share of the show’s revenues.
C.   The revenue sacrificed is worth the boost it gives to her image as lines form for tickets.
Question #20
Scarcity is imposed on individual households in the form of,,
A.   income (budget) limitations.
B.   the prices of the goods that we may purchase.
C.   utility.
Question #21
Good weather and heavy winter rain increases the supply of agricultural products. This means that at any given price, a higher quantity will be supplied. Conversely, a drought would shift the
A.   Good weather and heavy winter rain increases the supply of agricultural products. This means that at any given price, a higher quantity will be supplied. Conversely, a drought would shift the
B.   supply curve to the right.
C.   supply curve to the left.
Question #22
Economists refer to the relationship that a higher price leads to a higher quantity supplied as the
A.   price and supply model.
B.   law of supply
C.   market equilibrium.
Question #23
Market economies are based on private enterprise, which means
A.   economic decision-making happens through markets.
B.   there is no private property.
C.   private companies control the government.
Question #24
Which of the following will shift the supply curve to the right?
A.   Government regulation of production.
B.   A change in consumer tastes and preferences.
C.   A decrease in the price of inputs to production.
Question #25
If price was $2.00 per gallon and decreased to $1.40 per gallon, how does quantity demanded of gasoline change?
A.   600 million gallons to 460 million gallons
B.   460 million gallons to 700 millions gallons
C.   460 million gallons to 600 million gallons
Question #26
According to the law of demand, assuming other factors are held constant
A.   As the demand for milk increases, the price of milk will also increase.
B.   As the price of milk increases, the quantity of milk demanded will increase.
C.   As the price of milk decreases, the quantity of milk demanded will increase.
Question #27
If price was $1.40 per gallon and increased to $2.00 per gallon, how does quantity demanded of gasoline change?
A.   600 million gallons to 460 million gallons
B.   460 million gallons to 700 millions gallons
C.   460 million gallons to 600 million gallons
Question #28
A drought decreases the supply of agricultural products. This means that at any given price, a lower quantity will be supplied. Conversely, especially good weather would shift the
A.   supply curve to the right.
B.   supply curve to the left.
C.   demand curve to the right.
Question #29
The one unique point in which quantity demanded equals quantity supplied is called
A.   equilibrium.
B.   supply schedule.
C.   market stability.
Question #30
If a decrease in the price of MP3 players decreases the demand for CD players, this means that
A.   MP3 players and CD players are normal goods.
B.   MP3 players and CD players are inferior goods.
C.   MP3 players and CD players are substitutes.

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