Which of the following is a characteristic of a perfectly competitive market? A. Firms are price setters. B. There are few sellers in the market. C. Firms can exit and enter the market freely. D. All of these 2. Demand curve slopes upwards from left to right. A. True B) False 3. The price clasticity of demand measures the sensitivity of demand to price changes. A. True B . False 4. In economics the central problem is: A. Allocation. B. Consumption, C/Scarcity. D. Money. E. Production 5. Indicate below what is NOT a factor of production. A. Land. B? A bank loan. C. Labor. D. Capital. 6. Macroeconomics deals with: A the behavior of firms. B. Economic aggregates. C. The activities of individual units. D. The behavior of the electronics industry. 7. Microeconomics is not concerned with the behavior of A Aggregate demand. B. Consumers. C. Industries. D. Firms. 8. Demand curves may also be shifted by changes in expectations. A. True B. False 9. Which of the following will cause a change in quantity supplied? A. Technological change. B. A change in input prices. C. A change in the market price of the good. D. A change in the number of firms in the market 10. A monopoly is a market structure in which there is not only one producer/seller for a product. A. True B. False. 11. Economics deals primarily with the concept of A. Scarcity. B. Poverty. C. Change. D. Power. 12. If an increase in the supply of a product results in the decrease in the price, but no change actual quantity of product exchange then , A. price elasticity of supply is zero. B. the price elasticity of supply is infinite. C. the price elasticity of demand is unitary D. the price elasticity of demand is zero 13 If the demand for coffee decreases as income decreases, coffee ie A an inferior good. B. A normal good. C. A complementary good. D. A substitule good 14. A movement along the demand curve to the left may be caused by: A, a decrease in supply. B. rise in the price of inputs. C. A fall in the number of substitute goods. D. A rise in income 15. The demand curve will shift to the left for most consumer goods when A. Incomes decrease. B.The prices of substitutes fall. C. The prices of complements increase D. All of the above. 16. The word that comes from the Greek word for "one who manages d household is A. Market. B Consumer. C. Producer. D. Economy. 17. The production function incorporates the technically efficient method of A. production. B. process C. function D. All of these 18. A fixed input is one whose quantity cannot be varied during the time under consideration. A True B. False 19. Efficient production occurs if a firm A. cannot produce its current level of output with fewer inputs. B. given the quantity of inputs cannot produce more Output. C. maximizes profit. D. All of the above. 20. Which of the following statements best describes a production function? A. the maximum profit generated from given levels of inputs B. the maximum level of output generated from given levels of inputs C. all levels of output that can be generated from given levels of inputs D. all levels of inputs that could produce a given level of output 21. Factors of production are A. inputs and outputs. B. outputs only C. inputs only D. the minimum set of inputs that can produce a certain fixed quantity of output 22. The quantity demanded of Pepsi has decreased. The best explanation for this is that: A. the price of Pepsi increased. B. Pepsi consumers had an increase in income. C. Pepsi's advertising is not as effective as in the past. D. The price of Coca Cola has increased. 23. Demand curves are derived while holding constant: A. Income, tastes, and the price of other goods. B. Tastes and the price of other goods. C. Income and tastes. D. Income, tastes, and the price of the good. 24. When the decrease in the price of one good causes the demand for another good to decrease, the goods are: A. Normal B. Inferior C. Substitutes D. Complements 25. In the long run, all factors of production are A. variable. B. fixed. C. materials. D. rented 26. Which of the followine will NOT cause a shift in the demand curve for compact disc A. A Change in the price of pre recorded cassette tapes B. A change in income C. A change in price of compact disc D. A change in wealth 27. Market Equilibrium exists when it the prevailing price. A quantity demanded is less than quantity supplied B. quantity demanded C. quantity supplied is greater than quant demanded equals quantity supplied D quantity demand is greater than quantily supplied 28.A perfectly competitive firm will maximize profit at the quantity at which the firm's marginal revenue equals: A. price B. average revenue c. total cost d. marginal. 29. The opportunity cost of holding money is the: A .inflation rate minus the nominal interest rate B. Nominal interest rate C. R interest rate D unemployment rale 30. The 'law of demand' implies that: A.as prices fall, quantity demanded increases. B. as prices rise quantity demanded increases C. as prices fall. demand increases. D. as prices rise, demand decreases 31 .The break-even point is where A tom sales equal total variable costs B. contribution margin equals total fixed costs C.total variable costs equal total fixed costs D. total sales equal total fixed costs 32. An implicit cost is A. the cost of giving up an alternative B. the cost of a chosen alternative C. calculated by subtracting the monetary cost D. none of the above 33. The price elasticity of demand is one of four common elasticity's used in the analysis of the market. A.True B. False 34. The quantity of a good demanded rises from 1000 to 1500 units when the price falls from $1.50 to $1.00 per unit. The price elasticity of demand for this product is approximately: A. 1.5 B. 16 C.2.5 D.4.0 35. Any combination of products inside the production possibility frontier is A. A. Allocatively inefficient R. X inefficient C. Consumer inefficient D, Productively inefficient 36. When the producer receives a price higher than that needed to bring about his/her supply of the product, we call the difference 'producer surplus'. A. True B. False 37. The 'law of diminishing marginal returns' refers to the general tendency for diminish as more of the variable input is employed, given the quantity of fixed inputs A. capital B . marginal cost C.average total cost D. average product E. marginal product 38. An explicit cost is A. the cost of giving up an altemative B. the cost of a chosen alternative C. caleulated by subtracting the monetary cost of an alternative by the time invested D none of the above 39. If an economy is productively efficient A. Everyone is wealthy B. Resources are unemployed C. More of one product can only be produced if less of another product is produced D. The distribution of income is equal 40. Economic growth can be shown by: A. An inward shift of the production possibility frontier B. A movement along the production possibility frontier C. An outward shift of the production possibility frontier D. A decision by the government to produce inside the production possibility frontier