1.Which of the following is NOT an example of scarcity?

a. Due to a lack of rainin San Diego, California, the amount of water for families is limited.

b. Crude oil was in short supply in the 1970s, leading to a quantity demandedbeing greater than the quantity supplied.

c. After textbook buyback season, Amazon received an influx of used textbooks into their inventory.

d. Fresh water bass are on the decline due to disease.

2.What is the benefit of havingeconomies of scale?

a.Tasks are broken down into smaller pieces and done by a larger number of workers, instead of all the tasks of production being done by one person.

b Production costs increase as the number of goods produced increases.

c. The production of a good or service is divided into tasks and each task is distributed among different workers.

d. For many goods, as the level of production increases, the average cost of producing each individual unit declines.

3.Which of the following can be determined from theCircular Flow Diagram?

Circular diagram with arrows that represent inputs and outputs from firms and households that show how they interact. Firms provide goods and services and households pay for the goods and services.Households providelabor and in return firms provide wages, salaries, and benefits.

Select all that apply:

a. Households often provide firms with capital for free.

b. Households often receive freebies from firms.

c. Households pay for goods and services and providelabor to firms

d. Firms provide households with goods and services.

4.What is the best definition of an undergroundeconomy?

a. an economy where the government decides what methods of production will be used and how much workers will be paid

b. the oldest economic system

c. a market where the buyers and sellers make transactions without the government's approval.

d. an economy based onprivate enterprise

5.Define opportunity cost.

a. All possible consumption combinations of goods that someone can afford when all income is spent.

b. A cost that is made in the past and cannot be recovered.

c. All possible combinations of consumption that someone can afford given the prices of goods and the individual's income.

d. The measure of cost by what is given up in exchange for what is obtained.

6.Which of the following is anan example of a sunk cost?

a.Jossie purchases a textbook online but returns it because it is the wrong edition.

b. Maria goes to a lunch vending machine to get a quick snack.Inher haste, she mistakenly pushes the wrong buttons and gets a wheatgrass sandwich instead of hot pocket she was craving.

c. Kenny's new smartphone stops working, but it is still under warranty, so he is able to have it repaired at no cost.

d. Antonio goes to the movies.After the opening credits, he realizes he is in the wrong theater.He informs the manager and is able to get a refund.

QUESTION 7

The principle of diminishing marginal utility states that __________ .

a. people don't enjoy consuming more of a good

b. as a person receives more of a good, the additionalutility from each additional unit of the good increases

c. peopleenjoy consuming more of a good

d. as a person receives more of a good, the additionalutility from each additional unit of the good declines

QUESTION 8

Which of the following is a major difference between a budget constraint and production possibilities frontier?

a. A production possibilities frontier conveys the relative prices of the two goods, whereas a budget constraint accounts for diminishing returns.

b. A production possibilities frontier is usually straight, whereas a budget constraint is typically curved.

c. A budget constraint typically has a constant slope, whereas the slope of a production possibilities frontier is usually different at various points.

d. There is no difference. They convey the same information.

QUESTION 9

In which of the following cases is productive efficiencyimproved?

a. producingmore output using the same input resources

b. producingless output using the same input resources

c. producingthe same output using fewer input resources

d. producingthe same output using more input resources

QUESTION 10

At one point in time, Germany produced watches, only sold them in their nation, and did not participate in watch trading. Today, Germany both imports and exports watches.How cancomparative advantageexplain this data?

a. It cannot; comparative advantage predicts that a country either exports a product or imports it, not both.

b. The pattern is not due to comparative advantage but to government restrictions on production.

c. Germany has a comparative disadvantage in watches.

d. Germany specializes in the production of high-end watches, which it exports, and imports low-end watches that can be produced at lower cost elsewhere.

QUESTION 11

In principle, economists test positive statements as true or not true.Positive statements___________________.

a. are meant to be encouraging.

b. define the world as as it should be

c. define the world as it is.

d. are not used in economics.

QUESTION 12

Quantity demandedis________________ at a specific price, whiledemand________________.

a. expressed graphically;cannot be expressed graphically

b. the entire curve; isa point on a supply-demand graph

c. the number of units consumers demand; isa table or function linkingquantity demanded and price

d. demand; isa theoretical representation across a whole range of prices

QUESTION 13

When trying to understand supply and quantity supplied, quantitysuppliedrefers to the _____________ and supply refers to the_____________.

a. curve; point on the supply curve

b. point on the supply curve; curve

c. supply schedule; curve

d. relationship between a range of prices and the quantities supplied at those prices; curve

QUESTION 14

Equilibrium price occurs when ______________ .

a. quantity demanded is greater than quantity supplied

b. quantity demanded is less than quantity supplied

c. quantity demanded is equal to the quantity supplied

d. none of the above

QUESTION 15

____________________ leads to a surplus.

a. Excess demand

b. A price below the equilibrium price

c. A price above the equilibrium price

d. A quantity supplied less than the quantity demanded

QUESTION 16

If we use "ceteris paribus" when plotting a demand curve forcanned beans, all of these factors are constant except for one. Select the variable that isnot constantin this scenario.

a. the price of cannedbeans

b. the price of cannedtomatoes

c. the income of consumers

d. the costs of production of cannedbeans

QUESTION 17

The demand curve for a normal good is sloped _______________.The demand curve for an inferior good is sloped _______________.

a. upwards, downwards

b. upwards, upwards

c. downwards, upwards

d. downwards, downwards

QUESTION 18

For normal goods, there is a _________________ relationship between income and demand levels, and there is an ______________ relationship for inferior goods.

a. positive, positive

b. positive,inverse

c. inverse, inverse

QUESTION 19

A _______________ good is one that can be used in place of another good or service and has an effect on the demand curve for the original good.

a. alternative

b. complimentary

c. substitute

c. normal

QUESTION 20

Suppose there is a decrease in the price of butter. What do we expect to happen to the demand for bread? Assume that bread and butter are often consumed together.

a. There will be a decrease in demand for bread.

b. There will be an increase in demand for bread.

c. There will be no change in the demand for bread and no movement along the demand curve.

d. There will be no change in the demand for bread, but there will be a movement up along the demand curve for bread.

QUESTION 21

Which of the following would likely cause a rightward shift in demand for solar power?

Select all that apply:

a. a widely-seen documentary touts thebenefits of solar power

b. the price of kitchen sinks increases

c. the price of coal power increases

d. the population decreases

QUESTION 22

Factors that increase supply include:

Select all that apply:

a. lower taxes on the cost of goods

b. an increase in the number of producers

c. a rise in input costs

d.changes in technology that increase firm costs without increasing productivity

QUESTION 23

Demand isdifferentfrom quantity demanded because ___________________________________.

a. "quantity demanded" can be expressed graphically while "demand" cannot

b. "demand" is comprised of a series ofquantity demanded at different prices, while "quantity demanded" is the number of units consumers demand at a specific price

c. "demand" is a point on a supply-demand graph, and "quantity demanded" is the entire curve

d. they are one and the same; "demand" is just economics shorthand for "quantity demanded"

QUESTION 24

A price ceiling is a legal __________price that one pays for some good or service.

a. equilibrium

b. maximum

c. minimum

d. fair

QUESTION 25

Consumer surplus is defined as the _______________________________________________________.

a. the fall in total surplus that occurs when the economy produces at an inefficient quantity

b. the minimum price one is able to charge for a good or service

c. the gap between the price for which producers are willing to sell a product, based on their costs, and the market equilibrium

d. the gap between the price consumers are willing to pay, based on their preferences, and the market equilibrium price

QUESTION 26

In relation to supply and demand, what area of the graph does producer surplus occupy?

a. Above the demand curve but under the price.

b. Under the demand curve but above the price.

c. Above the supply curve but under the price.

d. Under the supply curve but above the price.

QUESTION 27

Which of the following wouldnotaffect labor supply?

a. immigration laws

b. government programs that provide childcare to working mothers

c. an increase in wage

d. long-term unemployment benefits

QUESTION 28

Assume that the labor market for retail workers is generally unskilled.If a minimum wage is set in the labor market for retail workers and that this minimum wage is above the equilibrium wage in this particular labor market, then __________ .

a. there will be a shortage of retail workers in this labor market

b. there will be a surplus of retail workers in this labor market.

c. there will be a non-binding price floor

d. there will be a non-effective minimum wage

QUESTION 29

Which statement best characterizes the impact education and training have on the demand for labor?

a. With higher levels of education and training, workers are unwilling to do more work, so

output decreases and labor demand shifts to the left.

b. An educated and trained workforce shifts demand to the right because employers want workers with specialized training.

c. Low levels of education reduce expectations for higher wages. Therefore, demand for labor shifts to the right.

d. With low levels of education and training, producers are forced to pay for an educated workforce in order to shift labor demand to the right.

QUESTION 30

Demand for financial capital will _____________ when businesses are confident they will be doing well in the future and will be able to pay back investments.

a. decrease

b. increase

c. remains the same

d. depend on rates of return

QUESTION 31

Which of the followingmeasures how responsive one variable is to changes in another variable?

a. reactiveness

b. relateability

c. elasticity

d. correlation

QUESTION 32

An elasticity greater than1

is called __________.

a. unitary elastic

b. elastic

c. inelastic

d. infinitely elastic

QUESTION 331 POINT

Total revenue equals the price multiplied by the quantity. The relative change price and quantity is given by the concept of ________________.

a. profit margin

b. relative value

c. elasticity

d. economies of production

QUESTION 34

When demand is elastic and price increases, what happens to bothrevenueandquantity?

(Select 2 answers)

a. revenue decreases

b. revenue increases

c. quantitydecreases

d. quantityincreases

QUESTION 35

For most products, most of the time, the income elasticity of demand is __________ .

a. positive

b. negative

c. remains stable

d. diminishes over time

QUESTION 36

What is the relationship between two goods that are complements?

a. The cross-price elasticity of demand is positive because the goods are interchangeable.

b. The cross-price elasticity of demand is negative because the goods are typically purchased together.

c. The cross-price elasticity of demand is positive for one good and negative for the other.

d. The cross-price elasticity of demand is zero.

QUESTION 37

The term firm is synonymous with a __________ or a __________.

a. producer, business

b. expender, provider

c. producer, expender

d. business, provider

QUESTION 38

Examples ofexplicit costs include __________.

a. an out of pocket cost

b. rent

c. opportunity costs

d. salary and wages

QUESTION 39

What costsdo economists include when calculating profit?

a. explicit costs

b. implicit costs

c. variable costs

d. fixed costs

QUESTION 40

Variable costs refer to the costs of __________that can easily be increased or decreased in a__________ period.

a. outputs, long

b. outputs, short

c. inputs, long

d. inputs, short

QUESTION 41

In addition to rent and profit for entrepreneurship , what else dofactor payments include?

a. raw material prices

b. profit

c. interest and dividends

d. wages and salaries

e. all of the above

QUESTION 42

Physical ________ and ________ can often substitute for each other.

a. capital, inventory

b. Inventory, output

c. capital, labor

d. output, labor

QUESTION 43

Which of the following is the best description of what is shown by the long-run average cost (LRAC) curve?

a. the firm's average of total fixed and total variable costs at each level of output

b. the firm's total variable costs averaged for each level of input

c. the firm's total cost at each level of output

d. the firm's least expensive average total cost for any level of output

QUESTION 44

If someone was to conduct a study in the field ofmicroeconomics, which of the following questions might theyattempt to answer?

a. What causes the economy to grow over the long term?

b. What determines the level of economic activity in a society?

c. What determines how many jobs are available in an economy?

d. When will a firm decide to expand, downsize, or close?

QUESTION 45

Why do businesses typically support globalization?

a. It allows businesses to create monopolies.

b. It allows businesses to have greater control over prices.

c. It givesbusinesses more access to more markets.

d. It allows businesses to have a more centralized managementstyle.

QUESTION 46

The law of diminishing returns states that as additional increments of resources ______________, the marginal benefit from those additional increments _______________.

a. are reduced,will declineeventually

b. are added;will decline eventually

c. are added;will increase eventually

d. are reduced;will remain the same

QUESTION 47

Which of the following factors wouldresult in a change in the supply of farm equipment?

a. An increase in the price of gasoline

b. A decrease in the price of steel

c. An increase in the number of people who want to buy farm equipment.

d. None of the above.

QUESTION 48

An effective price floor is set ___________ equilibrium and is meant to help the producer and results in a ______________.

a. below, surplus

b. below, shortage

c. above, surplus

d. above, shortage

QUESTION 49.

Which of the factors of production contributes to the business by having ideas on how to combineinputs to produce a set ofoutputs?

a. Labor

b. Capital

c. Entrepreneurship

d. Technology