Quiz 2

A  20 guns

B  1/50 of a gun

C  1/50 of a tank

D  50 guns

A  a positive statement

B  empirically verifiable by checking economic data

C  a normative statement

D  an incorrect positive statement

E  an indisputable statistical fact

A  does not apply to goods traded in competitive markets

B  shows that the quantity demanded is inversely related to price

C  suggests that consumers become less fashionable for those goods.

D  suggests that most goods are normal goods

E  suggests that those goods are inferior goods

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

B  both the demand and supply curves typically slope downward

C  both the demand and supply curve typically slope upward

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  market price for good X will decrease

B  demand for good X will increase

C  market price for good X will rise

D  demand for good X will decrease

A  they both usually slope downward

B  they both usually slope upward

C  they both show a relationship between quantity and price

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

A  a new market equilibrium.

B  surpluses.

C  shortages.

D  a greater number of exchanges.

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

B  a decrease in the price of steel

C  increased prices of other Ford models

D  an increase in the U.S. population

E  an increase in buyers’ incomes

A  the demand curve usually slopes downward

B  the law of demand applies to most markets

C  technical inefficiency would not exist in the long run

D  the supply curve usually slopes upward

A  price will fall and quantity will rise

B  price and quantity will fall

C  quantity will fall, but price may rise or fall

D  price will rise and quantity will fall

E  price and quantity will rise

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

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

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

D  costs of production are sky rocketing

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

B  prices determine both what firms produce and what consumers buy

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 consumers buy while the government determines what firms produce

A  rise in supply and demand together

B  increase in demand, with supply constant

C  decrease in demand, with supply constant

D  decrease in supply and demand together

E  increase in supply, with demand constant

A  determining the best level of immigration into the country

B  determining whether the government should reduce poverty

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

D  determining whether too many luxury goods are being produced

A  decrease in the number of firms in the market

B  rise in resource input prices

C  increase in quantity demanded

D  increase in price

A  economy-wide phenomena.

B  economic history.

C  how firms maximize profit.

D  individual decision-makers.

E  economic growth and GDP

A  recession and unemployment

B  tradeoffs.

C  economic growth.

D  supply and demand.

E  opportunity cost.

A  Both a and b are correct.

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

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.