10) Opportunity cost is best defined as
A) the amount given up when choosing one activity over the next best alternative.
B) the opportunity to earn a profit that is greater than the one currently being made.
C) the amount that is given up when choosing an activity that is not as good as the next best alternative.
D) the amount given up when choosing one activity over all other alternatives.
11) In a market economy, which of the following is the most important factor affecting scarcity?
A) the needs and wants of consumers
B) the price of the product
C) the degree to which the government is involved in the allocation of resources.
D) All of the above are equally important.
12) Which of the following is not considered by economists to be a basic resource or factor of production?
B) machinery and equipment
D) unskilled labor
13) Select the group that best represents the basic factors of production.
A) land, labor, capital, entrepreneurship
B) land, labor, money, management skills
C) land, natural resources, labor, capital
D) land, labor, capital, technology
14) The best definition of economics is
A) how choices are made under conditions of scarcity.
B) how money is used.
C) how goods and services are produced.
D) how businesses maximize profits.
15.Complete the statement with "supply" or "demand": A maximum price below the equilibrium price causes excess ________, while a minimum price above the equilibrium price causes excess ._________.
a. Supply , Demand
b. Demand, Supply
c. Demand, Demand
c. Supply, Supply
17.Complete the statement with "right" or "left": An increase in the price of cassette tapes will shift the demand curve for CDs to the a. _________________; an increase in the price of CD players will shift the demand curve for CDs to the b. _____________________.
a. left, right
b. right, right
c. right, left
d. left, left
e. none of the above
18.Which of the following items go together?
A. Change in quantity supplied D. Shifting the supply curve
B. Change in production cost E. Change in price
C. Change in supply F. Movement along the supply curve
a. A,C,F; B,E,D.
b. A,C,D; BEF
c. A,E,F; B,C,D
d. A,D,C; BEF
e. D,E,F; A,C,D
19.Complete the statement with "supply" or "demand": If the price and quantity change in the same direction, ____________ is changing; if the price and quantity change in opposite directions, __________ is changing.
a. Supply , Demand
b. Demand, Supply
c. Supply, Supply
d. Demand, Demand
e. None of the above
20.Consider the market for personal computers. Suppose that the demand is stable: the demand curve doesn't change. Predict the effects of the following changes on the equilibrium price of computers. The cost of memory chips (one component of a computer) decreases.
a. Supply increases, so price falls and quantity rises.
b. quantity falls.
c. Supply decreases, so price rises and quantity falls.
d. Nothing would happen because demand is stable and so supply would be stable
e. Not enough information to predict what would happen
The solution has the correct answers for all the given questions. Go and check this master piece. :)
ECO MULTIPLE CHOICE
ECON 4. Microeconomics.
Directions. Select the best answer. Use a 50 item Scantron Answer Sheet. Write your name, "Micro Test 1," and class day and time on the front side of the Answer Sheet. Use a #2 pencil. The grading machine will pick up incomplete erasures. Erase completely or get a new Answer Sheet. Do this test at home, including putting your name on it. Do NOT work on this in class. Hand the Answer Sheet in as soon as you come into class. Mail the Answers in if you cannot make it to class. (See Class Rules.) 50 questions. 10 points.
For Questions 1-4:
A) scarcity B) economics C) microeconomics D) macroeconomics
E) factors of production
1. The social science that seeks to understand the choices people make in using scarce resources to meet their wants.
2. The basic inputs of labor, capital, and natural resources used in producing all goods and services.
3. The branch of economics that studies large-scale economic phenomena, particularly inflation, unemployment, and economic growth
4. A situation in which there is not enough of a resource to meet all of everyone's wants.
5. What is not the one of the four basic economic choices?
A) How to produce it. B) For whom to produce it. C) When to produce it.
D) What to produce. E) Who will produce it.
For Questions 6-9:
A) labor B) capital C) natural resources D) opportunity cost E) economic efficiency
6. The contributions to production made by people working with their minds and muscles.
7. A state of affairs in which it is impossible to make any change that satisfies one person's wants more fully without causing some other person's wants to be satisfied less fully.
8. All means of production that are created by people, including tools, industrial equipment, and structures.
9. The cost of a good or service measured in terms of the forgone opportunity to pursue the best possible alternative activity with the same time or resources.
10. What is the difference between out-of-pocket costs and opportunity costs in Applying Economic Ideas (AEI) 1.1?
A) forgone income B) room and board C) personal expenses D) all of the above E) NOTA
For Questions 11 - 14:
A) efficiency in production B) investment C) entrepreneurship D) comparative advantage E) efficiency in distribution
11. A situation in which it is not possible, by redistributing existing supplies of goods, to satisfy one person's wants more fully without causing some other person's wants to be satisfied less fully.
12. The process of looking for new possibilities - making use of new ways of doing things, being alert to new opportunities and overcoming old limits.
13. The ability to produce a good or service at a relatively lower opportunity cost than someone else.
14. A situation in which it is not possible, given available knowledge and productive resources, to produce more of one good without forgoing the opportunity to produce some of another good.
For Questions 15 - 18:
A) positive economics B) normative economics C) market D) theory E) model
15. The area of economics that is concerned with facts and the relationships among them.
16. A synonym for theory; in economics, often applied to theories that are stated in graphical or mathematical form.
17. A representation of the way in which facts are related to one another.
18. The area of economics that is devoted to judgments about whether economic policies or conditions are good or bad.
19. Who coined the term, "the invisible hand"?
A) Smith B) Malthus C) Ricardo D) Mill E) Marx
For Questions 20-23:
A) production possibility frontier B) empirical C) econometrics D) conditional forecast
20. The statistical analysis of empirical economic data.
21. A graph that shows possible combinations of goods that can be produced by an economy given available knowledge and factors of productions.
22. A prediction of future economic events in the form "If A, then B, other things being equal."
23. For a straight line, the ratio of the change in the y value to the change in the x value between any two points on the line.
For Questions 24-27:
A) positive slope B) direct relationship C) negative slope D) inverse relationship
24. A relationship between two variables in which an increase in the value of one variable is associated with an increase in the value of the other.
25. A slope having a value greater than zero.
26. A slope having a value less than zero.
27. A relationship between two variables in which an increase in the value of one variable is associated with a decrease in the value of the other.
28. What was the unemployment rate (1992-2003) for people with no high school diploma?
A) 2.4% B) 3.9% C) 4.8% D) 8.5% E) 12.1%
29. What is the death rate per 100,000 for 50 year old men producing 300 (mg/dl) of serum cholesterol?
A) 250 B) 500 C) 700 D) 850 E) 1000
For Questions 30-33:
A) supply B) demand C) law of demand D) demand curve
E) change in quantity demanded
30. The principle that an inverse relationship exists between the price of a good and the quantity of that good that buyers demand, other things being equal.
31. The willingness and ability of sellers to provide goods for sale in a market
32. A graphical representation of the relationship between the price of a good and the quantity of that good that buyers demand.
33. A change in the quantity of a good that buyers are willing and able to purchase that results from a change in the good's price, other things being equal; shown by a movement from one point to another along a demand curve.
34. What does Figure 2.2, Graph (a), illustrate?
A) change in price B) change in quantity C) change in the quantity demanded
D) change in demand E) change in tastes
For Questions 35-38:
A) substitute goods B) complementary goods C) normal goods D) inferior good
E) supply curve
35. A graphical representation of the relationship between the price of a good and the quantity of that good that sellers are willing to supply.
36. A good for which an increase in consumer incomes results in a decrease in demand.
37. A good for which an increase in consumer incomes results in an increase in demand.
38. A pair of goods for which an increase in the price of one results in a decrease in demand for the other.
39. What does Figure 2.3 illustrate?
A) price effect B) quantity effect C) taste effect D) income effect E) total effect
For Questions 40-43:
A) change in quantity supplied B) change in supply C) equilibrium D) shortage
40. A change in the quantity of a good that suppliers are willing and able to sell that results from a change in some condition other than the good's price; shown by a shift in the supply curve.
41. A stock of a finished good awaiting sale or use.
42. A change in the quantity of a good that suppliers are willing and able to sell that results from a change in the good's price, other things being equal; shown by a movement along a supply curve.
43. A condition in which buyers' and sellers' plans exactly mesh in the marketplace, so that the quantity supplied exactly equals the quantity demanded at a given price.
44. In Figure 2.7, at a price of $3.50 there is:
A) shortage B) equilibrium C) surplus D) cannot be determined
45. A condition in which the quantity of a good supplied at a given price exceeds the quantity demanded.
A) excess quantity demanded B) excess price established C) excess quantity supplied
D) surplus E) C and D
46. In Figure 2.8, which graph illustrates a supply shift?
A) graph (a) B) graph (b) C) graphs (a) and (b) D) neither graph
47. What contributed to high prices in Economics in the News (EN) 2.1?
A) increase in demand B) decrease in supply C) mad cow disease
D) high protein diets E) all of the above
48. What results from a price support?
A) shortage B) surplus
49. What results from a price ceiling?
A) shortage B) surplus
50. What did Marshall study at Cambridge?
A) economics B) theology C) philosophy D) math E) law