Quiz 2

A  1/50 of a tank

B  20 guns

C  1/50 of a gun

D  50 guns

A  a positive statement

B  an indisputable statistical fact

C  a normative statement

D  an incorrect positive statement

E  empirically verifiable by checking economic data

A  suggests that those goods are inferior goods

B  suggests that consumers become less fashionable for those goods.

C  shows that the quantity demanded is inversely related to price

D  suggests that most goods are normal goods

E  does not apply to goods traded in competitive markets

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 financial statement

B  a political statement

C  a normative statement

D  a positive statement

E  macroeconomic observation

A  demand for good X will decrease

B  market price for good X will rise

C  demand for good X will increase

D  market price for good X will decrease

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 greater number of exchanges.

C  a new market equilibrium.

D  surpluses.

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

B  increased prices of other Ford models

C  an increase in the U.S. population

D  an increase in buyers’ incomes

E  a decrease in the price of steel

A  the demand curve usually slopes downward

B  the supply curve usually slopes upward

C  technical inefficiency would not exist in the long run

D  the law of demand applies to most markets

A  price and quantity will fall

B  quantity will fall, but price may rise or fall

C  price and quantity will rise

D  price will fall and quantity will rise

E  price will rise and quantity will 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  prices determine what consumers buy while the government determines what firms produce

B  prices determine both what firms produce and what consumers buy

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

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

E  the government allocates resources while prices allocate goods and services

A  rise in supply and demand together

B  increase in supply, with demand constant

C  decrease in supply and demand together

D  increase in demand, with supply constant

E  decrease in demand, with supply constant

A  determining whether too many luxury goods are being produced

B  determining the best level of immigration into the country

C  determining whether the government should reduce poverty

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

A  increase in quantity demanded

B  rise in resource input prices

C  decrease in the number of firms in the market

D  increase in price

A  economy-wide phenomena.

B  economic history.

C  economic growth and GDP

D  individual decision-makers.

E  how firms maximize profit.

A  supply and demand.

B  economic growth.

C  opportunity cost.

D  tradeoffs.

E  recession and unemployment

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.