Economics Weekly Quizes PDF

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ECONOMICS WEEKLY QUIZES Week 1

Marginal thinking is best demonstrated by: choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time. Also called the opportunity set—a diagram which shows what choices are possible— which of the following is the model that economists use to illustrate the process of individual choice in a situation of scarcity? budget constraint Most real-world choices aren't about getting all of one thing or another; instead, most choices involve _________________, which includes comparing the benefits and costs of choosing a little more or a little less of a good. marginal analysis Forgetting about the money that's irretrievably gone and instead focusing on the marginal costs and benefits of future options, is the lesson of which of the following? sunk costs Scarcity implies that: it is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available.

Which of the following best describes macroeconomics? It is concerned with the expansion and contraction of the overall economy.

In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of: buyers and sellers. Which of the following are not typically considered macroeconomic topics? the profit-maximizing decisions of an individual manufacturer.

In a discussion of economics, which of the following would exert the most influence on an individual firm's decision to hire workers? the macroeconomy What is the basic difference between macroeconomics and microeconomics? Microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets).

ECONOMICS WEEKLY QUIZES

Week-2

Question 1

In economics, the demand for a good refers to the amount of the good that people: Selected Answer: Answers:

will buy at various prices. would like to have if the good were free. will buy at various prices. need to achieve a minimum standard of living. will buy at alternative income levels.

Question 2

When economists talk about supply, they are referring to a relationship between price received for each unit sold and the _________________. Selected Answer:

quantity supplied

Answers:

demand schedule market price quantity supplied demand curve

Question 3

What is the term economists use to refer to the relationship that a higher price leads to a lower quantity demanded? Selected Answer: Answers:

law of demand income gap market equilibrium

ECONOMICS WEEKLY QUIZES

law of demand price model Question 4

The ____________ is the quantity where quantity demanded and quantity supplied are equal at a certain price. Selected Answer:

equilibrium quantity

Answers:

quantity produced equilibrium quantity demand schedule supply schedule

Question 5

If a firm faces ________________________, while the prices for the output the firm produces remain unchanged, a firm's profits will increase. Selected Answer:

lower costs of production

Answers: higher demand lower costs of production equilibrium

a shift in demand Question 6

If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. What is this known

ECONOMICS WEEKLY QUIZES

as? Selected Answer:

excess demand

Answers:

excess supply excess demand ceteris paribus a price ceiling

Question 7

A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and ____________, shown on the horizontal axis. Selected Answer:

quantity

Answers: demand

quantity quantity supplied quantity demanded

Question 8

What is enacted when discontented sellers, feeling that prices are too low, appeal to legislators to keep prices from falling? Selected Answer:

Price floors

ECONOMICS WEEKLY QUIZES

Answers:

Rent controls Price ceilings Price floors Subsidies

Questi 9 on The nature of demand indicates that as the price of a good increases:

Selected Answer:

buyers desire to purchase less of it.

Answers:

suppliers wish to sell less of it. more of it is produced. more of it is desired. buyers desire to purchase less of it.

Question 10

What is the term for the total number of units that are purchased at that price? Selected Answer:

quantity demanded

Answers:

quantity quantity demanded

Week 3 Quiz Question 1 "Constant returns to scale" describes a situation where: Selected Answer:

expanding all inputs does not change the average cost of production.

Answers:

expanding all inputs does not change the average cost of

ECONOMICS WEEKLY QUIZES

production. a larger-scale firm can produce at a lower cost than a smaller-scale firm. expanding all inputs changes the average cost of production. the quantity of output rises and the average cost of production falls.

Question 2 Which of the following are all of the costs of production that increase with the quantity produced? Selected Answer: Answers:

Variable costs

Fixed costs Variable costs Average costs Average variable costs

Question 3 Which term describes a situation where the quantity of output rises, but the average cost of production falls? Selected Answer:

economies of scale

Answers:

diminishing marginal returns marginal cost output economies of scale

ECONOMICS WEEKLY QUIZES

diseconomies of scale

Question 4 In order to determine the average variable cost, the firm's variable costs are divided by _______________________. Selected Answer:

the quantity of output

Answers:

its fixed costs the quantity of output its average costs diminishing marginal costs

Question 5 In microeconomics, which of the following is synonymous with economies of scale? Selected Answer:

increasing returns to scale

Answers:

diminishing marginal returns increasing returns to scale decreasing returns to scale constant returns to scale

Question 6 If a perfectly competitive firm is a price taker, then which of the following is true?

ECONOMICS WEEKLY QUIZES

Selected Answer:

Pressure from competing firms will force acceptance of the prevailing market price.

Answers:

Pressure from competing firms will force acceptance of the prevailing market price. The firm must be a relatively small player compared to its competitors in the overall market. The firm can increase or decrease its output without affecting the overall quantity supplied in the market. Quality differences will be very perceptible and will play a major role in purchasers' decisions.

Question 7 Why are some producers forced to sell their products at the prevailing market price? Selected Answer:

They have a high degree of similarity to competitorsí products.

Answers:

Price takers find market analysis to be too costly. They are very small players in the overall market. They have a high degree of similarity to competitorsí products. They can increase output without affecting quality.

Question 8 In the ________, the perfectly competitive firm will react to profits by __________________________. Selected Answer: Answers:

long run; increasing its production

short run; increasing the quality of products

ECONOMICS WEEKLY QUIZES

long run; tailoring their quality controls short run; reducing its labor inputs long run; increasing its production

Question 9 In the _________, if profits are not possible, the perfectly competitive firm will seek out the quantity of output where _____________________. Selected Answer: Answers:

short run; losses are smallest

long run; production increases short run; fixed costs can be reduced short run; losses are smallest long run; fixed costs can be eliminated

Question 10 Idaho farmers can sell as large a quantity of their potato crop as they wish, if which of the following is true? Selected Answer: Answers:

Each farmer willingly accepts the prevailing market price.

They set their own price in the short run, but in the long run, the market sets the price. Each farmer willingly accepts the prevailing market price. They set their own price in the long run, but in the short run, the market sets the price. Quality is perceptible and determines the market price.

Week 4 Quiz

ECONOMICS WEEKLY QUIZES

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Question 1 If monopolists are able to produce fewer goods and sell them at a higher price than they could under perfect competition, what will the result be? Selected Answer:

abnormally high sustained profits

Answers:

elimination of barriers to entry irregularly high unsustainable profits government deregulation abnormally high sustained profits

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Question 2 Which of the following is most likely to be a monopoly? Selected Answer:

local electricity distributor

Answers:

local fast-food restaurant local electricity distributor local bathroom fixtures shop local television broadcaster

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Question 3

Which of the following will be least concerning to a firm that has a monopoly over a particular industry? Selected

the competitive actions of other business

ECONOMICS WEEKLY QUIZES

Answer:

firms

Answers:

whether consumers will purchase its product

whether consumers will spend on different products the competitive actions of other business firms

barriers to entry and competitors' patent protection

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Question 4

For a pure monopoly to exist, which statement must be true? Selected Answer:

There is a single seller in a particular industry.

Answers:

There is a single seller in a particular industry.

There is only one seller and therefore no industry.

There are a few sellers in a given industry.

There are limited sellers in a particular industry.

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Question 5

ECONOMICS WEEKLY QUIZES In a monopolistic competitive industry, firms can try to differentiate their products by Selected Answer: Answers:

all of the above

creating optimal perceptions of the product. choosing optimal locations from which the product is sold. enhancing the intangible aspects of the product. all of the above

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Question 6 Shopping malls typically lease retail space to many clothing stores. When these retailers compete to sell similar but not completely identical products, they engage in which of the following? Selected Answer:

monopolistic competition

Answers:

a cartel collusion monopolistic competition perfect competition

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Question 7 If a monopoly or a monopolistic competitor raises their prices, then: Selected Answer:

the decline in quantity demanded will be larger for the monopolistic competitor.

Answers:

the decline in quantity demanded will be larger for the monopoly.

ECONOMICS WEEKLY QUIZES

the decline in quantity demanded will be larger for the monopolistic competitor. the quantity demanded for the monopoly product falls to zero. the quantity demanded for the monopolistic competitor falls to zero.

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Question 8 Which of the following poses a difficult challenge for U.S. competition policy? Selected Answer: Answers:

natural monopoly

monopoly monopolistic competition perfect competition natural monopoly

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Question 9 The fundamental belief behind the market-oriented US economy is that firms are in the best position to know if their actions will Selected Answer:

the right answer is both b and c.

Answers:

contravene antitrust regulations. lead to attracting more customers. let them produce more efficiently. the right answer is both b and c.

ECONOMICS WEEKLY QUIZES

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Question 10

What role does the U.S. government play with respect to market competition? Selected Answer:

policing anticompetitive behavior and prohibiting contracts that restrict competition

Answers:

policing anticompetitive behavior and prohibiting contracts that restrict competition

preserving competition by regulating price and/or quantity of output

intervening in the price and output decision of businesses

maintaining abundant government-owned firms to ensure consumer friendly pricing

Week 5 Quiz 

Question 1 Many economists believe that the trend toward greater wage inequality across the U.S. economy was primarily caused by _____________. Selected Answer: Answers:

new technologies

the recession new technologies the rise of global markets inflation

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Question 2

ECONOMICS WEEKLY QUIZES In contrast to goods and services markets, _____________ are rare in labor markets, because rules that prevent people from earning income are not politically popular. Selected Answer:

price ceilings

Answers:

minimum wages price floors price ceilings living wage laws

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Question 3

The "law of supply" functions in labor markets; that is, a higher __________ for labor leads to a higher quantity of labor supplied. Selected Answer:

price

Answers:

price

deman d

supply

quantit y

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Question 4

ECONOMICS WEEKLY QUIZES How do apple growers react to the news of medical research findings that suggest that eating apples leads to greater health benefits than were previously known? Selected Answer:

They increase the quantity of apples supplied.

Answers:

They increase the supply of apples. They increase the quantity of apples supplied. They decrease the supply of apples. They decrease the quantity of apples supplied.

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Question 5 Improvements in the productivity of labor will tend to: Selected Answer: Answers:

increase wages.

decrease wages. decrease the supply of labor. increase wages. increase the supply of labor.

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Question 6 Many cooks view butter and margarine to be substitutes. If the price of butter rises, then in the market for margarine: Selected Answer: Answers:

both the equilibrium price and quantity will rise.

the equilibrium price will fall and the equilibrium quantity will

ECONOMICS WEEKLY QUIZES

fall. both the equilibrium price and quantity will rise. the equilibrium price will rise and the equilibrium quantity will decrease. the equilibrium price will rise, while the change to equilibrium quantity is indeterminate.

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Question 7 Whenever there is a shortage at a particular price, the quantity sold at that price will equal: Selected Answer:

the quantity supplied at that price.

Answers:

the quantity demanded at that price. the quantity supplied minus the quantity demanded. the quantity supplied at that price. (quantity demanded plus quantity supplied)/2.

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Question 8 A straightforward example of a _______________, often used for simplicity, is the interest rate. Selected Answer: Answers:

rate of return

price ceiling financial investment rate of return

ECONOMICS WEEKLY QUIZES

price floor

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Question 9 Since Baltimore passed the first _______________ in 1994, several dozen cities enacted similar laws in the late 1990s and into the 2000s. Selected Answer:

living wage law

Answers:

living wage law price ceiling price floor minimum wage

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Question 10 Many states do have ____________, which impose an upper limit on the interest rate that lenders can charge. Selected Answer: Answers:

usury laws

price ceiling laws usury laws price floor laws minimum interest rate

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Question 1

Which of the following does GDP not directly include? Selected

The value of intermediate goods sold during a period

ECONOMICS WEEKLY QUIZES

Answer: Answers:

The value of goods produced domestically and sold abroad The value of intermediate goods sold during a period

The value of services rendered during a period

The value of final goods and services produced, but not sold, during a period

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Question 2 Which of the following is included in Investment (I)? Selected Answer:

the amount spent on new factories and machinery

Answers:

the amount spent on new factories and machinery the amount spent on stocks and bonds the amount spent on consumer goods that last more than a year the amount spent on purchases of art

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Question 3 For most high-income countries of the world, GDP _________________ over time. Selected Answer:

has risen gradually

Answers:

has proven to be stable has risen

ECONOMICS WEEKLY QUIZES

gradually has declined slightly has sharply risen

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Question 4 Consumption is the purchase of goods and services by: Selected Answer:

household s.

Answers:

household s. government. business firms. foreign buyers.

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Question 5 Which of the following statements is true? Selected Answer:

The expansions and contractions of real-world business cycles last varying lengths of time and often differ in magnitude.

Answers:

A depression is a mild and relatively brief recession. The expansions and contractions of real-world business cycles last varying lengths of time and often differ in magnitude. The timing of business fluctuations is regular and therefore easily predictable. During the contractionary phase of the business cycle, the rate of unemployment is generally quite low.

ECONOMICS WEEKLY QUIZES

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Question 6 Which of the following is included in GDP calculations? Selected Answer: Answers:

the university tuition paid to enroll in a course

sales revenue received from a garage sale cash income received by a self-employed landscaper that is not reported to the IRS a $100 bill received on your graduation the university tuition paid to enroll in a course

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Question 7 Which is now the largest single component of the supply side of GDP, representing over half of GDP? Selected Answer: Answers:

Services

Durable goods Services Nondurable goods Structures

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Question 8 Which of the following is included in the calculated...