Question 3(1 point)

The concept of opportunity cost:

Question 3 options:

	applies to consumers, but not to businesses
	applies to businesses, but not to consumers
	is relevant to any economic choice
	would disappear if we were able to eliminate poverty
	does not apply to governments

Question 4(1 point)

Given the above graph, if this country is producing 5 bicycles and 8 computers:

Question 4 options:

	this country is experiencing inflation
	bicycles are cheaper to produce than computers in this country
	this country is not fully using all of its available resources
	computers are cheaper to produce than bicycles in this country
	this country has experienced economic growth

Question 5(1 point)

Given the above graph, what is the opportunity cost of moving from point C to point B?

Question 5 options:

	there is no opportunity costs because they are still on the production possibilities curve
	3 bicycles
	4 computers
	12 bicycles
	2 computers

Question 6(1 point)

The demand curve shows the relationship between:

Question 6 options:

	consumer preferences and quantity demanded
	consumer income and quantity demanded
	market price and production costs
	price and quantity demanded
	the price of a certain product and the price of another closely related product

Question 7(1 point)

When there is a change in the price of a product:

Question 7 options:

	there is a change in the demand for the product, but not the quantity demanded
	the effect on demand depends on the reason for the price change
	there is no change in either the demand for the product or the quantity demanded
	there is a change in both demand for the product and the quantity demanded
	there is a change in the quantity of the product demanded, but not in demand

Question 8(1 point)

Saved

On a graph, we would show an increase in demand by:

Question 8 options:

	moving up and to the left, along the existing demand curve
	moving down and to the right, along the existing demand curve
	shifting the demand curve to the right
	changing the slope of the demand curve
	shifting the demand curve to the left

Question 9(1 point)

Which of the following is NOT a determinant of demand?

Question 9 options:

	consumer preferences
	price of a related good
	consumer incomes
	price of the good
	number of buyers

Question 10(1 point)

The law of supply:

Question 10 options:

	reflects the direct relationship between price and quantity supplied, ceteris paribus
	is reflected in a downward-sloping supply curve
	reflects the amounts businesses will demand at each price in a series of prices
	shows that the relationship between price and quantity supplied is inverse
	reflects the amounts consumers will supply at each price in a series of prices

Question 11(1 point)

A leftward shift of a product's supply curve might be caused by a(n):

Question 11 options:

	decrease in the number of businesses in an industry
	increase in consumer incomes
	decline in the prices of needed resources
	change in consumer preferences
	improvement in the relevant technique of production

Question 12(1 point)

Consider the market depicted in the accompanying figure. At a price of P₂the quantity traded in the market would be:

Question 12 options:

	Q2-Q1
	Q3-Q2
	Q3
	Q1
	Q2

Question 13(1 point)

When the quantity demanded changes in the same proportion as the price, demand is:

Question 13 options:

	independent
	unit elastic
	inelastic
	elastic
	proportional

Question 14(1 point)

When quantities demanded change very little over a range of different prices, we say that demand is:

Question 14 options:

	elastic
	inelastic
	unit elastic
	unresponsive
	independent

Question 15(1 point)

If a product has many substitutes:

Question 15 options:

	it is likely that its price elasticity of demand is low
	it is likely that its price elasticity of demand is high
	it is likely that its supply elasticity is high
	it is likely that its income elasticity is high
	it is likely that it is an inferior product

Question 16(1 point)

If theStudentsUnion decides to raisethe price of ticketstotheir eventsin orderto acquire more funds, theStudents Unionis assuming that the demand for tickets is:

Question 16 options:

	parallel to the horizontal axis
	unit-elastic
	shifting to the left
	inelastic
	elastic

Question 17(1 point)

Assume that the price of product X rises by 13 percent and the quantity supplied of X increases by 15 percent. The supply for good X is:

Question 17 options:

	inelastic
	perfectly elastic
	perfectly inelastic
	elastic
	unit-elastic

Question 18(1 point)

If the income elasticity of a product is negative, we can conclude that

Question 18 options:

	the product is a complement for another product
	the product is a substitute for another product
	it is a normal good
	it is an inferior good
	it is a luxury

Question 19(1 point)

The quantityof smartphonesdemanded increases from 22.5 million phonesto 37.5 million phoneswhentheprice drops from $500 to $300.Theprice elasticity of demandis:

Question 19 options:

	0.80
	1.00
	1.67
	1.20
	0.67

Question 20(1 point)

Average annual consumer incomes rise from $50 000 to $60 000, pushing up the quantity demanded for cars in a given region from 750 000 to 1.25 million. The income elasticity of cars is therefore:

Question 20 options:

	0.36
	2.75
	-0.36
	3.33
	0.33

Question 21(1 point)

Which of the following definitions is correct?

Question 21 options:

	Accounting profit + economic profit = normal profit
	Economic profit - accounting profit = explicit costs
	Economic profit = accounting profit - implicit costs
	Economic profit - implicit costs = accounting profit
	Economic profit - accounting profit = normal profit

Question 22(1 point)

Consider the following income statement for the first year of operations for Anna's Sandwich Shop.

Income Statement:Anna's Sandwich Shop
	Revenue		Expenses
Total sandwich sales	$25,600	Bread	$2,600
		Condiments	850
		Vegetables	450
		Meat	950
		Rent	2500
		Insurance	1200
Total Revenue	S25,600	Total Expenses	$8,550

Anna withdrew $25,000 from her savings account last year to open the business after quitting her job as an equity analyst. Her annual salary was $125,000 and her bank pays 4.5% interest on saving accounts. An economist would calculate Anna's profit to be:

Question 22 options:

	$17,050 and would advise her to stop running the business.
	$15,925 and would advise her to keep running the business.
	$9,675 050 and would advise her to stop running the business.
	-$109,075 and would advise her to stop running the business.
	-$132,950 and would advise her to keep running the business.

Question 23(1 point)

For the following output data, assume that the amounts of all non-labour resources are fixed.

	A	B	C	D	E	F	G
Number of Workers	0	1	2	3	4	5	6
Output(units)	0	40	90	126	150	165	174

The marginal product of the sixth worker is:

Question 23 options:

	174 units of output
	29 units of output
	9 units of output
	15 units of output
	negative

Question 24(1 point)

For the following output data, assume that the amounts of all non-labour resources are fixed.

	A	B	C	D	E	F	G
Number of Workers	0	1	2	3	4	5	6
Output(units)	0	40	90	126	150	165	174

The law of diminishing marginal returns becomes evident with the addition of the:

Question 24 options:

	fifth worker
	fourth worker
	third worker
	second worker
	first worker

Question 25(1 point)

Which of the following is most likely to be a fixed cost?

Question 25 options:

	shipping charges
	property insurance premiums
	wages for unskilled workers
	expenditures for raw materials
	wages for skilled workers

Question 27(1 point)