Quiz 2

A  50 guns

B  1/50 of a gun

C  1/50 of a tank

D  20 guns

A  an indisputable statistical fact

B  an incorrect positive statement

C  a positive statement

D  a normative statement

E  empirically verifiable by checking economic data

A  does not apply to goods traded in competitive markets

B  suggests that those goods are inferior goods

C  suggests that consumers become less fashionable for those goods.

D  shows that the quantity demanded is inversely related to price

E  suggests that most goods are normal goods

A  both the demand and supply curve typically slope upward

B  both the demand and supply curves typically slope downward

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

D  the demand curve typically slopes downward; the supply curve typically slopes upward

A  macroeconomic observation

B  a positive statement

C  a political statement

D  a financial statement

E  a normative statement

A  demand for good X will decrease

B  demand for good X will increase

C  market price for good X will rise

D  market price for good X will decrease

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

A  shortages.

B  a new market equilibrium.

C  a greater number of exchanges.

D  surpluses.

A  increased prices of other Ford models

B  an increase in buyers’ incomes

C  a decrease in the price of steel

D  an increase in the U.S. population

E  increase in price of similar model produced by Chevy and Dodge

A  the demand curve usually slopes downward

B  the law of demand applies to most markets

C  the supply curve usually slopes upward

D  technical inefficiency would not exist in the long run

A  price and quantity will rise

B  price will rise and quantity will fall

C  price and quantity will fall

D  quantity will fall, but price may rise or fall

E  price will fall and quantity will rise

A  costs of production are sky rocketing

B  to produce more of one thing, we must produce more of everything

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

A  the government allocates resources while prices allocate goods and services

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

C  prices determine both what firms produce and what consumers buy

D  prices determine what firms produce while the government determines what consumers buy

E  prices determine what consumers buy while the government determines what firms produce

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

A  determining whether too many luxury goods are being produced

B  determining whether the government should reduce poverty

C  determining the impact of government spending on the actual level of total employment

D  determining the best level of immigration into the country

A  increase in price

B  decrease in the number of firms in the market

C  increase in quantity demanded

D  rise in resource input prices

A  economy-wide phenomena.

B  how firms maximize profit.

C  economic growth and GDP

D  economic history.

E  individual decision-makers.

A  recession and unemployment

B  supply and demand.

C  economic growth.

D  tradeoffs.

E  opportunity cost.

A  only if the family is not in economic competition with other families.

B  by allowing the family to buy a greater variety of goods and services at a lower cost.

C  by allowing each person to specialize in the activities he or she does best.

D  Both a and b are correct.

E  All of the above are correct.