_______________introduced the idea of the division of labor, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers.

Milton Freidman

Lionel Robbins

Adam Smith

Karl Marx

Question

2of50

If a change in technology is a complement to labor, the labor ______curve will shift to the _______ .

demand; right

demand; left

supply; left

supply; right

Question

3of50

A(n) _____ investment will have more predictable returns than a (n)______________ investment.

large; small

domestic; international

old; new

low risk; high risk

Question

4of50

One basic difference between macroeconomics and microeconomics is that:

microeconomics looks at aggregate markets while macroeconomics looks at the individual markets.

macroeconomics is concerned with groups of individuals while microeconomics is concerned with single countries.

microeconomics is concerned with firms while macroeconomics is concerned with governments.

microeconomics is concerned with individual markets while macroeconomics is concerned with aggregate economic activities.

Question

5of50

Adam Smith developed the concept of

division of labour.

international trade.

economies of scale

.command economy.

Question

6of50

A certificate of deposit offers lower ____ and higher ___than a savings account.

risk; liquidity

returns; liquidity

liquidity; returns

risk; returns

Question

7of50

An increase in the minimum wage:

is always bad public policy.

will always produce greater unemployment.

will always generate more benefits than costs.

may affect different sectors of the labor market differently.

Question

8of50

We can infer that Coke and Pepsi are regarded as substitutes if their ____are_____.

price elasticities; greater than one

cross-price elasticities; positive

price elasticities; less than one

cross-price elasticities; negative

Question

9of50

In the circular flow model of the labor market, households provide_____ to firms and firms provide____ to households.

workers; customers

money; good and services

labor; good and services

labor; wages

Question

10of50

Price elasticity of supply is defined as the _______ change in quantity supplied divided by the _______________ change in price.

total; percentage

percentage; marginal

marginal; percentage

percentage; percentage

Question

11of50

The price elasticity of supply measures the:

responsiveness of quantity supplied to a change in price.

responsiveness of price to a change in quantity supplied.

responsiveness of quantity supplied to a change in consumer income.

responsiveness of quantity supplied to a change in quantity demanded.

Question

12of50

For any consumer, the marginal benefit of a slice of pizza is

always more for the first slice than a second.

the difference between the value of the slice to the consumer and the price of the slice.

the total amount that the consumer is willing to pay for a whole pizza, divided by the number of slices

the maximum amount that the consumer is willing to pay for the slice.

Question

13of50

If the supply curve is perfectly elastic, then an increase in demand will result in a(n) ______________and___________________ .

decrease in the price; no change in the quantity exchanged

increase in the quantity exchanged; no change in the price

increase in the price; no change in the quantity exchanged

increase in quantity exchanged; an increase in the price

Question

14of50

The expected value of an investment is _________________.

the expected annual average return over the life of the project

the total rate of return on an investment

the risk that an investment might face

always greater than the actual return

Question

15of50

In economics, the demand for a good refers to the amount of the good that people

Would be willing and able to buy at different prices.

want.

need to achieve a minimum standard of living.

can afford.

Question

16of50

Which of the following best describes a monetary policy tool?

corporate taxation

interest rates

household savings

government spending

Question

17of50

Price elasticity of demand is measured by the percentage change in_____________ divided by the percentage change in_____________.

the slope of the demand curve; price

price; the slope of the demand curve; price

quantity demanded; price

price; quantity demanded

Question

18of50

Bob decides to spend an hour playing basketball rather than studying. His opportunity cost is:

the benefit to his grades from studying for an hour

the increase in skill he obtains from playing basketball for that hour

.nothing because the class is easy

the minimum wage.

Question

19of50

If the cross-price elasticity between two good is positive, we can infer that the goods are____

substitutes

complements

necessities

luxuries

Question

20of50

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be

a leftward shift of the demand curve.

a leftward shift of the supply curve.

both supply and demand shift to the right.

no change in the supply or demand curves.

Question

21of50

In Economics, comparing the benefits and costs of choosing a little more or a little less of a good is called:

sensible planning

marginal analysis

utility maximization

careful budgeting

Question

22of50

Specialization

can lead to greater self-sufficiency.

leads to higher wages.

can lead to an increase in overall production.

ensures less unemployment.

Question

23of50

Governments will gain more revenue if they impose sales taxes on goods with _________________________ demand than on goods with _____ demand.

elastic; unit elastic

inelastic; unit inelastic

elastic; inelastic

inelastic; elastic

Question

24of50

The demand curve for a typical good has a(n)

negative slope because people will buy less at the price of the good falls.

negative slope because consumer incomes fall as the price of the good falls.

negative slope because people will buy less of it as prices rise.

inverse slope because as the price goes up, income falls.

Question

25of50

If a coffee shop experiences an increase in the price of the coffee beans they purchase, they will be able to pass on that cost to their customers in terms of higher prices without hurting sales if:

The demand curve is elastic

The demand curve is inelastic

The demand curve is unit elastic

The demand curve is horizontal

Question

26of50

The minimum wage is an example of a _______ in the labor market.

failed policy

price floor

price ceiling

successful policy

Question

27of50

The nature of demand indicates that as the price of a good decreases,

suppliers wish to sell more of it

.more of it is produced.

buyers wish to purchase less.

buyers wish to purchase more.

Question

28of50

If some manufacturers exit the computer industry, then (ceteris paribus)

the supply curve shifts to the left.

the supply curve shifts to the right.

the demand curve shifts to the left

.some established manufacturers will make less money.

Question

29of50

Scarcity exists because of:

the market mechanism.

unlimited wants and limited resources.

greed

unemployment

Question

30of50

Which of the following will not result in a rightward shift of the market demand curve for labor?

an increase in crease in labor productivity

an increase in worker training and education levels

an increase in the wage rate

an increase in demand for the firm's product

Question

31of50

The slope of the _________________ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good.

demand curve

utility level

opportunity set

budget constraint

Question

32of50

Which of the following would most likely shift the production possibilities curve outward?

inflation

decrease in the average number of hours worked per week

an increase in the cost of capital goods

technological progress

Question

33of50

An investor will be entitled to _____ by purchasing ___ ,

part ownership; bonds

interest payments; stock

part ownership; stock

shares; bonds

Question

34of50

If the demand curve is____________ and firms lower their prices, total revenue will _____________

inelastic; riseunit elastic, riseelastic; riseelastic; fall

Question

35of50

Marginal utility refers to_______________.

the increase in total utility from consuming one more unit of a good or service

the satisfaction that people gain from consuming more goods or services

the opportunity cost of a good or service

the fact that people never spend all their income on a single good or service.

Question

36of50

Usury laws create_____ in financial markets

price-floors

price-ceilings

fairness for all

competition

Question

37of50

The economic approach assumes that people are self-interested. This assumption implies that economists think that ________.

people do not care about others

people care about themselves more than others

people act rationally

only money matters to people

Question

38of50

If foreign investors believe that the U.S. is becoming a less desirable place to put their money because of uncertainty about the U.S. public debt, the ____ curve for financial capital will shift________ .

supply; right

supply; left

demand left; right

demand; right

Question

39of50

Underground economies are more likely to be found in

market economies

.agricultural economies.

urban markets

.heavily regulated economies.

Question

40of50

The price elasticity of demand for tickets to local baseball games is estimated to be equal to 1.2. What will happen if the management raises ticket prices?

Revenue will go up.

Revenue will go down.

Profits will fall.

nothing. Fans will always come.

Question

41of50

In the market for goods and services, households exchange _________and __________ with firms.

labor; wages

goods and services; labor

payments; goods and services

wages; good and services

Question

42of50

When I purchase something, its opportunity cost is:

the same as the price

everything else I could have done with the money

zero

the value of the next best alternative

Question

43of50

If a demand curve has constant unitary elasticity, we can conclude that a change in price of ___ will result in a change in quantity demanded of_____.

5%: 5%

5%; more than 5%

5%; less than %

5%; zero

Question

44of50

The opportunity cost of an action

can be determined by considering both the benefits that flow from as well as the monetary costs incurred because of the action.

can be determined by adding up the bills incurred because of the action

.can be objectively determined only by economists.

is a subjective valuation that can be determined only by the individual who chooses the action.

Question

45of50

Households may invest in ______________ to ____________ .

tangible assets; to maintain liquidity

stocks; guarantee a consistent return

bonds; guarantee capital gains

mutual funds; minimize risk

Question

46of50

The term "Venture Capital "refers to:

buying stock in public companies

investing in risky corporate bonds

buying newly-issued government bonds

making financial investments in new companies

Question

47of50

When nations desire a healthy macroeconomy, they typically focus on three goals. Which of the following is not one of them?

growth in the standard of living

balanced budget

low inflation

low unemployment

Question

48of50

If demand is inelastic and firms ___________ their prices, their total revenue will___________.

raise; fall

raise; rise

lower, rise

lower. stay the same

Question

49of50

Why is there scarcity?

Because of poor government policies.

Because some people are unemployed.

Because of over-population

Because our unlimited wants exceed our limited resources

Question

50of50

When consumers have greater confidence that they will be able to repay loans in the future,

the interest rate will rise.

banks will offer more loans.

banks will be more cautious about lending money.

the demand for capital will shift to the right.