QUESTION 26 Which of the following will not shift the production possibilities curve outward? O a, a decrease in capacity utilization of existing factories O b. additions to the stock of physical capital O c. the discovery of significant oil reserves in Alaska O d. an improvement in technology, which increases the efficiency of inputs QUESTION 27 The function of an entrepreneur is to: O a. bear business risks. O b. organize the other factors of production. c. innovate. Od. do all of the above QUESTION 28 Which of the following is the correct way to describe equilibrium in a market? O a. At equilibrium, quantity demanded equals quantity supplied. O b. At equilibrium, demand equals supply. O c. At equilibrium, market forces no longer apply. O d. At equilibrium, the "fairest" price for output is achieved. QUESTION 29 Assume there is a price floor imposed on a good which is above the equilibrium price. Which of the following changes would reduce the size of the surplus? O a. An increase in demand. O b. A decrease in demand. O c. An increase in supply. O d. Any of the above.QUESTION 30 Exhibit 7-12 Supply Price Floor b P Price Demand Q2 Q1 Qs Quantity Refer to Exhibit 7-12. Consumer surplus before the price floor is area Oa.atbte Ob. at b + c O c. a Ode+f QUESTION 31 The expression, "There's no such thing as a free lunch" implies that: O a. costs must be incurred when resources are used to produce goods and services. O b. no one has time for a good lunch anymore. O c. the person consuming a good must always pay for it. O d. everyone has to pay for his/her own lunch. QUESTION 32 Which of the following statements most likely lies within the realm of microeconomics? a. Unemployment rises during a recession and falls during an expansion. O b. A rapid acceleration of the supply of money may create inflation. O c. An increase in government spending will increase the aggregate demand for goods and services in the economy. O d. An increase in labor costs will increase the additional cost of producing another airplane.QUESTION 39 Pork from pigs can be used to produce bacon or sausage, but not both. If the price of bacon falls for some reason, then, everything else equal: O a, the price of sausage will fall. b. the price of sausage will rise. O c. the demand for bacon will increase. O d. the resources used to raise pigs will become more expensive. QUESTION 40 An example of an intangible good is: O a. a new house. O b. a snowplow. c. friendship. Od. an automobile. QUESTION 41 Which of the following is an example of an unintended consequence? O a. first time tax credits that cause more home sales O b. a price ceiling on gasoline that causes a gas shortage and leads some gas stations to go out of business. O c. increased parking fines that lead to fewer violators O d. all of the aboveQUESTION 42 Exhibit 3-4 C G D Capital Goods A Consumption Goods Refer to Exhibit 3-4. Other things being equal, the economy will achieve the greatest economic growth over time if it currently operates at: O a. Point A. O b. Point D O c. Point B. O d. none of the above QUESTION 43 Assuming that the demand and supply of a good have moved in opposite directions, but by the same amount, the new equilibrium would represent: a. no change in price and an increase in quantity exchanged. O b. an increase in price and an increase in quantity exchanged. O c. an indeterminate change in price, but no change in quantity exchanged. O d. a decrease in price and a decrease in quantity exchanged. QUESTION 44 If there are both external benefits and external costs associated with the production and consumption of a good, and the external benefits are less than the external costs, a. Taxing it could bring us closer to the efficient solution O b. Subsidizing it could bring us closer to the efficient solution O c. Neither a tax or a subsidy could bring us closer to the efficient solution O d. None of the above is true.QUESTION 45 Assuming that the demand for a good has decreased and the supply of a good has increased by the same amount, then: O a. The change in price is determinate but the change in quantity is indeterminate. O b. The change in quantity is determinate but the change in price is indeterminate. O c. Neither the change in price nor the change in quantity will be indeterminate. O d. Both the change in price and the change in quantity will be indeterminate. QUESTION 46 A major grocery store chain switches from bagging groceries in paper sacks to bagging them in plastic bags. As a result, the grocery chain demands more plastic bags than are available at the current market price. As a result: a. the market price for paper sacks is likely to increase. O b. the market price for plastic bags is likely to increase. c. the quantity of paper sacks purchased by the chain is likely to increase. O d. none of the above QUESTION 47 Resources are O a, abundant for households and the whole economy. O b. scarce for households and scarce for the whole economy. O c. scarce for households but abundant for the whole economy O d. abundant for households but scarce for the whole economy QUESTION 48 In economics, which of the following is considered part of "land"? O a. A 500 acre forest. O b. bauxite deposits. O c. underground pools of crude oil. O d. All of the above are included in the category, "land."QUESTION 49 Which of the following is true? O a, A lower price will increase your consumer surplus by the amount you were buying originally, times the reduction in the price. b. A lower price will leave unchanged your consumer surplus for each of the units you were already consuming, but will increase consumer surplus from increased purchases at the lower price. C. A lower price will decrease your producer surplus for each of the units you were producing, but will not change producer surplus by changing the quantity sold. O d. None of the above is true. QUESTION 50 To an economist, a decrease in supply means a: a. movement down along the supply curve. b. movement up along a supply curve. c, leftward shift of the supply curve. O d. rightward shift of the supply curve