Quiz 2

A  50 guns

B  1/50 of a gun

C  1/50 of a tank

D  20 guns

A  a positive statement

B  empirically verifiable by checking economic data

C  an incorrect positive statement

D  an indisputable statistical fact

E  a normative statement

A  shows that the quantity demanded is inversely related to price

B  does not apply to goods traded in competitive markets

C  suggests that most goods are normal goods

D  suggests that those goods are inferior goods

E  suggests that consumers become less fashionable for those goods.

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

B  both the demand and supply curve typically slope upward

C  both the demand and supply curves typically slope downward

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

A  a positive statement

B  macroeconomic observation

C  a political statement

D  a normative statement

E  a financial statement

A  demand for good X will decrease

B  market price for good X will decrease

C  market price for good X will rise

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  surpluses.

C  a greater number of exchanges.

D  a new market equilibrium.

A  an increase in the U.S. population

B  an increase in buyers’ incomes

C  increased prices of other Ford models

D  a decrease in the price of steel

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

A  technical inefficiency would not exist in the long run

B  the law of demand applies to most markets

C  the supply curve usually slopes upward

D  the demand curve usually slopes downward

A  price will rise and quantity will fall

B  price will fall and quantity will rise

C  quantity will fall, but price may rise or fall

D  price and quantity will fall

E  price and quantity will rise

A  when an individual obtains more of a good, he may not be fully satisfied

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

C  costs of production are sky rocketing

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

A  prices determine both what firms produce and what consumers buy

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

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

D  the government allocates resources while prices allocate goods and services

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

A  decrease in supply and demand together

B  increase in supply, with demand constant

C  decrease in demand, with supply constant

D  rise in supply and demand together

E  increase in demand, with supply constant

A  determining whether the government should reduce poverty

B  determining the best level of immigration into the country

C  determining whether too many luxury goods are being produced

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

A  increase in price

B  increase in quantity demanded

C  rise in resource input prices

D  decrease in the number of firms in the market

A  how firms maximize profit.

B  economy-wide phenomena.

C  economic growth and GDP

D  individual decision-makers.

E  economic history.

A  opportunity cost.

B  economic growth.

C  tradeoffs.

D  recession and unemployment

E  supply and demand.

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

B  Both a and b are correct.

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

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

E  All of the above are correct.