Test 1 Ch 1-3

Navigation » List of Schools » Los Angeles Mission College » Economics » Econ 001 – Principles of Economics » Fall 2022 » Test 1 Ch 1-3

Need help with your exam preparation?

Existing Quiz Clients Login here

Below are the questions for the exam with the choices of answers:

Try The Exam

Question #1

The “law of demand” implies that as prices fall, the demand shifts.

A True

B False

Question #2

In economics, capital refers to physical objects, not money.

A True

B False

Question #3

Suppose you are deciding whether to spend your tax rebate check on a new iPod player or a new digital camera. You are dealing with the concept of

A opportunity costs.

B equity.

C the fallacy of composition.

D comparative advantage.

Question #4

The “law of demand” implies that as prices decrease, the quantity demanded increases.

A False

B True

Question #5

Efficiency in production refers to a situation in which it is possible, given available productive resources and existing knowledge, to produce more of one good without forgoing the opportunity to produce other goods.

A False

B True

Question #6

A change in the quantity demanded of pizza is the same as a change in demand for pizza.

A True

B False

Question #7

Which of the following would an economist classify as capital?

A a $50 bill

B a corporate bond

C a post office employee

D a bull dozer used by a construction company

Question #8

Spontaneous order and hierarchy coordinate economic activity similarly.

A True

B False

Question #9

Elastic demand means the price has little or no effect on quantity demanded.

A True

B False

Question #10

Someone has a comparative advantage in producing a good if they can produce that good

A in greater quantities.

B at a lower opportunity cost.

C using more capital and less labor.

D using more labor and less capital.

Question #11

If you own a building and you decide to use that building to open a book store,

A the opportunity costs always equal $100.

B the only cost relevant to this decision is the taxes paid to the local government.

C there is never an opportunity cost of using this building for a book store.

D there is an opportunity cost of using this building for a book store because it could have been used in other ways.

Question #12

The rate of economic growth or the level of poverty in a country are topics related to microeconomics.

A False

B True

Question #13

Investments never require a trade-off of present consumption for future consumption.

A True

B False

Question #14

What does demand mean?

A The willingness and ability to purchase goods

B Willingness to purchase goods

C The numerical utility

D The ability to purchase goods

Question #15

For the company to produce at a point beyond its current Production Possibility Frontier, the firm must

A be more efficient.

B increase its factors of production

C waste less.

D reduce inputs.

Question #16

Inflation and unemployment

A are a focus of macroeconomics.

B are a focus of positive economics.

C are the focus of normative economics.

D are a focus of microeconomics.

Question #17

The “law of supply” states that as prices decrease, the quantity supplied increases.

A False

B True

Question #18

That which we forgo, or give up, when we make a choice or decision is called

A real cost.

B marginal cost.

C opportunity cost.

D out-of-pocket cost.

Question #19

The production possibility frontier is drawn on which of the following the assumptions?

A Consumption preferences are known and fixed.

B All scarce resources are being used efficiently.

C Resources can be increased or decreased as needed.

D The economy has a steady rate of growth.

Question #20

If the elasticity of demand for electricity is 0.13, the demand for electricity is:

A inelastic

B elastic

C unit elastic

D perfectly inelastic

Question #21

The value of the best alternative foregone is the opportunity cost of making a decision.

A False

B True

Question #22

If an increase in the price of gasoline causes a movement upward along the gasoline demand curve, it is anticipated that it will also cause a shift for the demand of SUVs.

A False

B True

Question #23

If more people become interested in reading an economics book, what will happen to the demand curve?

A It will shift to the left.

B It will disappear

C It will shift to the right.

D It will remain constant.

Question #24

In economics, investment refers to which of the following?

A Buying goods, such as video game systems and clothing for the winter

B Printing more money

C Increasing the stock of capital

D Buying stock on the stock market

Question #25

The focus on the human dimension of scarcity and choice is part of what makes economics a social science.

A True

B False

Question #26

The reason that opportunity costs arise is that

A resources are scarce.

B there are never alternative decisions that could be made.

C people never have wants.

D an economy relies on money to facilitate exchange of goods and services.

Question #27

Society’s wants cannot fully be satisfied with our existing resources. This issue is the problem of _____.

A comparative advantage

B efficiency in distribution

C opportunity cost

D scarcity

Question #28

The three factors of production include natural resources, capital, and freedom.

A True

B False

Question #29

The demand curve is always upward sloping.

A True

B False

Try The Exam

Fresh Grad Lands Job as Real Estate Agent With Help from Professional Writers

Need help with your exam preparation?

Below are the questions for the exam with the choices of answers:

Christian S.

Tyra

Linda

Manush

We accept payment