Question 1

3pts

Which of the following is the best definition of economics?

Group of answer choices

It is the study of being boring

The study of how to drink two quick shots of Tequila without falling over

The study of how to smoke marijuana without getting caught by your parents

The study of decision-making of how to allocate a limited amount of resources

Flag question: Question 2

Question 2

3pts

What is the definition of microeconomics?

Group of answer choices

The study of money, GDP and the stock market

The science of being boring at a national level

The study of decision-making of how to distribute scarce resources by individual people and firms

None of the above

Flag question: Question 3

Question 3

3pts

Which of the following is a possible opportunity cost of taking this test?

Group of answer choices

The electricity used to take this exam

Gaining knowledge about economics

Watching a Netflix movie with your friends

Raising your grade in the course from getting a good grade on the exam

Flag question: Question 4

Question 4

3pts

In terms of the net benefit of buying a landline phone, what is the effect of a decrease in the tastes and preferences for landline phones on the decision to purchase a landline phone?

Group of answer choices

Increases the opportunity cost

Decreases the benefit

Increases the benefit

Decreases the explicit cost

Flag question: Question 5

Question 5

3pts

Consider the following decision:whether to go to community college. Suppose there is a decrease in the incomes for full time jobs requiring only a high school diploma. In terms of the net benefit equation, how is the choice of whether to go to community college affected?

Group of answer choices

The benefit of going to community college decreases

The explicit cost of going to community college increases

The opportunity cost of going to community college decreases

The Nazar cost of going to community college decreases

Flag question: Question 6

Question 6

3pts

An example of a marginal decision is whether to move to New York City or not.

Group of answer choices

True

False

Flag question: Question 7

Question 7

3pts

Consider the principles of economics. Which of the following can be inferred from one of these principles of economics?

Group of answer choices

The best way to allocate resources is for the supply to follow the demand

When you decided whether to take this class, you did not need to consider alternative uses of your time

An increase in a country's income means its education level will fall

The government can never improve on market outcomes

Flag question: Question 8

Question 8

3pts

For the Circular Flow Model, who supplies the outputs?

Group of answer choices

International traders

The government

Households

Firms

Flag question: Question 9

Question 9

3pts

The Circular Flow Model's purpose is to show how a country's government and banks interact with each other.

Group of answer choices

True

False

Flag question: Question 10

Question 10

3pts

If there is no trade, what does the Circular Flow Model look like?

Group of answer choices

There are no firms nor markets

It includes a sector of the economy known as the public sector

It looks more like a circle

The diagram looks larger and has many more arrows

Flag question: Question 11

Question 11

3pts

Which of the following is an example of a normative statement about microeconomics?

Group of answer choices

The national government should increase its spending to increase GDP

A tax causes a decline in the quantity of a good or service

A tax on gas should be removed

The unemployment rate for October 2020 is 6.9%

Flag question: Question 12

Question 12

3pts

Asking if it is supply or demand that determines the price is like asking which blade of a scissor cuts paper. It is both.

Group of answer choices

True

False

Flag question: Question 13

Question 13

3pts

What is the definition of the demand curve?

Group of answer choices

The curve that tells us what a country is capable of producing if it uses all its resources

The curve that tells us the quantity demanded at a given price

The curve that tells us how much a certain economics instructor's enrollment will fall when the students realize how boring he is

None of the above

Flag question: Question 14

Question 14

3pts

Recall how gas stations also sell snacks in their convenience store. In fact, they make most of their profit from selling snacks. How would gas station owners react to a major fall in the price of gas?

Group of answer choices

They would like it

They would hate it

They would not care one way or the other

Gas station owners are not interested in making money

Flag question: Question 15

Question 15

3pts

Consider the market for dialysis services in the US. A current trend is for patients requiring these services to live longer so more people need these services. What is the effect of this trend on this market's demand curve?

Group of answer choices

It shifts right

It shifts left

It does not shift

It is unclear

Flag question: Question 16

Question 16

3pts

Consider the market for primary medical care - e.g., recognizing the early symptoms of a major disease. We know that primary care doctors receive much less pay than specialists, and the pay for primary care doctors is not likely to rise anytime soon. For the market for primary care, what do you think is a possible result?

Group of answer choices

Few people want primary care services

There is an effective price floor applied in this market

The number of people who want to become primary care doctors far exceeds the demand

There is a shortage of primary care doctors

Flag question: Question 17

Question 17

3pts

Consider the coronavirus. Think about face masks. Due to the virus, people's tastes and preferences for these masks has increased a lot. Applying the three-step process, what would happen in this market?

Group of answer choices

Price is unclear and quantity is unclear

Price decreases, quantity decreases

Price increases, quantity decreases

None of the above

Flag question: Question 18

Question 18

3pts

Recall from the PowerPoint slides the video game console market where tastes and preferences are moving away from the consoles to mobile devices and where the cost (of the computing chips needed for the consoles) has been increasing. Which of the following is true regarding what happened to the video game console industry in the past few years?

Group of answer choices

Supply curve shifts to the right; Demand curve shifts to the left

Supply curve shifts to the right; Demand curve shifts to the right

Price is unclear, quantity decreases

Price increases, quantity unclear

Flag question: Question 19

Question 19

3pts

Suppose for the market for housing that both buyers and sellers expected the price to fall. Which of the following would result?

Group of answer choices

Price rises and quantity rises

Price falls and quantity is unclear

Price rises and quantity is unclear

None of the above

Flag question: Question 20

Question 20

3pts

What is a price ceiling?

Group of answer choices

A legalized minimum price for a good or service

A legalized maximum price for a good or service

A limit on the quantity of a good or service

A tax placed on a good or service

Flag question: Question 21

Question 21

3pts

Consider the market for agricultural products like corn where there is a minimum price determined by the government.

In this market, what type of government policy applies?

Group of answer choices

An Arelleno-Sanchez Tariff

Tax

Price floor

None of the above

Flag question: Question 22

Question 22

3pts

We have the following table for humidifiers:

PriceQuantity suppliedQuantity demanded

$2003,5000

$1753,0000

$1502,500500

$1252,0001,000

$1001,5001,500

$751,0002,000

$505002,500

$2503,000

$003,500

What is the equilibrium price?

Group of answer choices

$75

$100

$150

$175

Flag question: Question 23

Question 23

3pts

Use the table from the previous problem. Suppose the government sets a price ceiling of $200. What is the amount bought and sold?

Group of answer choices

0

1,500

3,500

4,000

Flag question: Question 24

Question 24

3pts

Whatis an example of a price ceiling?

Group of answer choices

Rent control

Ad valorem subsidy

Minimum wage

None of the above

Flag question: Question 25

Question 25

3pts

What is the effect of a tax?

Group of answer choices

The price buyers pay decreases

The price sellers receive increases

The quantity decreases

Consumers of this good are made happier by the tax

Flag question: Question 26

Question 26

3pts

Suppose the tax per unit falls. From what you learned in this class, what would be the effect on the tax revenue?

Group of answer choices

Increase

Decrease

Stays the same

Unclear

Flag question: Question 27

Question 27

3pts

What is thegeneraldefinition of the PES?

Group of answer choices

The Price Elasticity of Supply

The change in quantity supplied from a given change in the price

The percentage change in quantity supplied from a 1% increase in the price

The unit change in quantity supplied from a $1 increase in the price

Flag question: Question 28

Question 28

3pts

Consider the market for American cereals (e.g., Cheerios). Due to a reduction in trade, there are fewer cereals produced abroad that are available to American consumers. What do you think would be the effect of this decline in cereal choices from other countries on the PED for American cereals?

Group of answer choices

Increase in its magnitude

Decrease in its magnitude

Unchanged

Unclear

Flag question: Question 29

Question 29

3pts

Suppose a good has a PED of -2. What can be inferred from this number?

Group of answer choices

Buyers will buy the product even if the price rises by a small amount

An increase in the price will cause the revenue to decline

The good has no substitutes

The good likely has many complements