Quiz 2

A  50 guns

B  1/50 of a gun

C  20 guns

D  1/50 of a tank

A  a positive statement

B  an indisputable statistical fact

C  an incorrect positive statement

D  a normative statement

E  empirically verifiable by checking economic data

A  shows that the quantity demanded is inversely related to price

B  suggests that consumers become less fashionable for those goods.

C  does not apply to goods traded in competitive markets

D  suggests that those goods are inferior goods

E  suggests that most goods are normal goods

A  both the demand and supply curve typically slope upward

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

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

D  both the demand and supply curves typically slope downward

A  a positive statement

B  a political statement

C  a financial statement

D  a normative statement

E  macroeconomic observation

A  demand for good X will decrease

B  market price for good X will rise

C  market price for good X will decrease

D  demand for good X will increase

A  they both usually slope upward

B  neither of them is influenced by the size of the population

C  they both usually slope downward

D  they both show a relationship between quantity and price

A  shortages.

B  a new market equilibrium.

C  a greater number of exchanges.

D  surpluses.

A  a decrease in the price of steel

B  increased prices of other Ford models

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

D  an increase in buyers’ incomes

E  an increase in the U.S. population

A  the supply curve usually slopes upward

B  the demand curve usually slopes downward

C  the law of demand applies to most markets

D  technical inefficiency would not exist in the long run

A  price and quantity will rise

B  price will fall and quantity will rise

C  price will rise and quantity will fall

D  price and quantity will fall

E  quantity will fall, but price may rise or fall

A  to produce more of one thing, we must produce less of something else

B  costs of production are sky rocketing

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 more of everything

A  the government allocates resources while prices allocate goods and services

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

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 both what firms produce and what consumers buy

A  increase in supply, with demand constant

B  decrease in demand, with supply constant

C  rise in supply and demand together

D  increase in demand, with supply constant

E  decrease in supply and demand together

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

B  determining whether the government should reduce poverty

C  determining whether too many luxury goods are being produced

D  determining the best level of immigration into the country

A  increase in quantity demanded

B  increase in price

C  rise in resource input prices

D  decrease in the number of firms in the market

A  economy-wide phenomena.

B  how firms maximize profit.

C  economic growth and GDP

D  economic history.

E  individual decision-makers.

A  supply and demand.

B  economic growth.

C  tradeoffs.

D  opportunity cost.

E  recession and unemployment

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

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

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

D  Both a and b are correct.

E  All of the above are correct.