Question 1

Opportunity cost is:

Select one:

a. the costs of all sacrifices not chosen when a choice is made.

b. the highest valued other choice that could have been made.

c. the result of having made a bad choice.

d. the result of not making choices at the margin.

Question 3

The intersection of the supply and demand curves indicates:

Select one:

a. the equilibrium solution in the market.

b. a surplus that will cause the price to fall.

c. a shortage that will cause the price to rise.

d. the quantity demanded exceeds the quantity supplied.

Question 4

Scarcity exists when:

Select one:

a. a choice must be made among two or more alternatives.

b. we face the notion of "all other things unchanged."

c. countries and people find themselves facing poverty.

d. the notions of normative economics come into play.

Question 5

A simplified representation of a particular problem is a:

Select one:

a. model.

b. constant.

c. hypothesis.

d. law.

Question 6

The slope and location of the demand curve depend on:

Select one:

a. the number of buyers.

b. production costs.

c. the number of producers.

d. all of the above.

Question 7

An answer to the question "How are goods produced?" determines:

Select one:

a. who receives the goods that are produced.

b. how tastes and preferences are determined.

c. how resources are combined in the production of goods.

d. the types and quantities of goods and services produced.

Question 8

Consumer preferences, prices of related goods, income, and demographic characteristics are often termed:

Select one:

a. market technologies.

b. demand prices.

c. demand shifters.

d. supply determinants.

Question 9

A negative relationship between the quantity demanded and price is called the law of ______.

Select one:

a. demand

b. diminishing marginal returns

c. market clearing

d. supply

Question 10

Factor prices, returns from alternative activities, technology, number of firms, producer expectations, and natural events are often termed:

Select one:

a. demand determinants.

b. demand quantities.

c. supply prices.

d. supply shifters.