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QUESTION 1 Which of the following best describes a fiscal policy tool? government spending bank lending financial capital markets household spending QUESTION 2 Which of
QUESTION 1
- Which of the following best describes a fiscal policy tool?
government spending | ||
bank lending | ||
financial capital markets | ||
household spending |
QUESTION 2
- Which of the following is generally accepted as a valid criticism of the production of useful goods and services?
government involvement | ||
the black market | ||
environmental pollution | ||
economic freedom |
QUESTION 3
- In the circular flow diagram model:
households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses. | ||
businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households. | ||
households receive revenue for selling goods and services to businesses, and use that revenue to buy inputs from businesses. | ||
Both (a) and (b) are correct. |
QUESTION 4
- Scarcity exists because of:
the market mechanism. | ||
specialization and division of labor. | ||
the allocation of goods by prices | ||
unlimited wants and limited resources. |
QUESTION 5
- Refer to Figure 2-2. At Point A in the production possibilities graph shown above, the economy:
is not using its resources efficiently. | ||
is using its resources efficiently while producing clothing but no food. | ||
is using its resources efficiently while producing food but no clothing. | ||
is using its resources efficiently to produce both food and clothing. |
QUESTION 6
- The law of ____________________________ explains why people and societies rarely make all-or-nothing choices.
consumption | ||
marginal analysis | ||
diminishing marginal utility | ||
utility |
QUESTION 7
- Which of the following lies primarily within the realm of macroeconomics?
a study of the demand for gasoline | ||
a study of how tax cuts stimulate aggregate production | ||
an analysis of supply and demand conditions in the electricity market | ||
a study of the impact of "mad cow" disease on the price of beef worldwide |
QUESTION 8
- Which of the following would reduce the supply of microcomputers?
a technological improvement that lowers the cost of producing the computers | ||
higher wage rates for the workers that assemble the computers | ||
a reduction in the price of computer chips used to produce the computers | ||
a reduction in the price of computers. |
QUESTION 9
- The term "ceteris paribus" means that:
everything is variable. | ||
all variables except those specified are constant. | ||
no one knows which variables will change and which will remain constant. | ||
what is true for the individual is not necessarily true for the whole. |
QUESTION 10
- The general pattern that consumption of the first few units of any good tends to bring a higher level of _______ to a person than consumption of later units is a common pattern.
utility | ||
marginal benefit | ||
opportunity cost | ||
sunk costs |
QUESTION 11
- The 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 12
- The demand schedule for a good:
indicates the quantity that people will buy at the prevailing price. | ||
indicates the quantities that suppliers will sell at various market prices. | ||
is determined primarily by the cost of producing the good. | ||
indicates the quantities that will be purchased at alternative market prices. |
QUESTION 13
- The demand for a product is unit elastic. At a price of $20, 10 units of a product are sold. If the price is increased to $40, then one would expect sales to equal:
20 units. | ||
10 units. | ||
5 units. | ||
0 units. |
QUESTION 14
- The choice on a production possibilities set that is socially preferred, or the choice on an individual's budget constraint that is personally preferred, will display _____________________.
allocative efficiency | ||
the production possibilities frontier | ||
trade-offs | ||
scarcity |
QUESTION 15
- When economists are sketching examples of a demand or supply curve that is close to horizontal, they refer to that demand or supply curve as ____________.
elastic | ||
inelastic | ||
having zero elasticity | ||
price inelasticity |
QUESTION 16
- When economists are sketching examples of demand and supply, it is common to sketch a demand or supply curve that is close to vertical, and then to refer to that curve as _________.
inelastic | ||
elastic | ||
unitary elasticity | ||
income elasticity |
QUESTION 17
- __________ is the change in what is on the horizontal axis (quantity) divided by the change in what is on the vertical axis (price).
Elasticity | ||
Demand | ||
Supply | ||
Revenue |
QUESTION 18
- Youth smoking seems to be more __________ than adult smoking-that is, the quantity of youth smoking will fall by a greater percentage than the quantity of adult smoking in response to a given percentage increase in price.
unitary elastic | ||
inelastic | ||
elastic | ||
cross-price elastic |
QUESTION 19
- Saving money is a(n) ____________________, because it involves less consumption in the present, but the ability to consume more in the future.
budget constraint | ||
intertemporal choice | ||
risk premium | ||
opportunity cost |
QUESTION 20
- Refer to the diagram Fig 6-3 below. Which of the following is a true statement?
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