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ECO Multiple Choice Questions




Question;Question 11. The economic surplus of a particular action is:Answer The value of the action The cost of the action The difference between the benefit and the cost of the action The average of the benefits and costs2 points Question 21. For many students, the opportunity cost of taking an 8:00 a.m. Monday, Wednesday, and Friday class is the value of one hour's worth of:Answer Studying Dental work Washing Sleeping 2 points Question 31. Dillon purchased his nonrefundable, nontransferable ticket to see the M. C. Hammer/Vanilla Ice Career Revival show for $30 last week, while Bob has yet to buy his ticket but wants to go. In deciding whether to go to the show, the price of the ticket is a ________ to Dillon and a _________ to Bob.Answer sunk cost, sunk cost relevant cost, sunk cost sunk cost, variable cost fixed cost, variable cost2 points Question 41. If a given production combination is known to be attainable, then it must be:Answer On the production possibilities curve Beyond the production possibilities curve An inefficient point Either an inefficient or efficient point2 points Question 51. Application of the principle of comparative advantage leads to:Answer Greater and greater specialization of labor and other factors of production Lesser and lesser specialization of labor Societies where everyone can do a little of everything Lower total output2 points Question 61. According to the textbook, the largest factor explaining the variance in the performance of the economies of the world is the:Answer Degree of specialization Size of government Location of the country Type of government2 points Question 71. In order to understand how the price of a good is determined in the free market, one must account for:Answer The desires of demanders exclusively The desires of suppliers exclusively The desires of lobbyists exclusively The desires of demanders and suppliers2 points Question 81. The statement "Holding all other relevant factors constant, consumers will purchase more of a good as its price falls" reflects the behavior underlying:Answer The demand curve An increase in demand The supply curve A decrease in the demand curve2 points Question 91. The market for a good is comprised of:Answer Only buyers of the good Only sellers of the good Both buyers and sellers of the good Only the price at which the good is sold2 points Question 101. If the percentage change in quantity demanded is less than the corresponding percentage change in price, demand is price _________.Answer inelastic elastic unit elastic perfectly elastic2 points Question 111. The demand for a specific brand of juice will be _______ the demand for juice in general.Answer more elastic than less elastic than as elastic as as inelastic as2 points Question 121. Which of the following is most likely to have a negative income elasticity of demand?Answer Generic drugs Luxurious overseas vacations New SUVs New computers2 points Question 131. The property of diminishing marginal utility means that as more units of a good are consumed:Answer Total utility falls The marginal utility of the extra units is negative The marginal utility of the extra units becomes smaller and smaller Total utility diminishes2 points Question 141. Joe has a fixed amount of income and buys two different goods, M and N, in accordance with the rational spending rule. If the price of M were to rise, one could predict that Joe would buy:Answer The same amount of M and reduce purchases of N The same amount of N and reduce purchases of M More N and less M Less of both M and N2 points Question 151. The cost of any particular good or service is equal to the:Answer Monetary cost divided by any nonmonetary costs Monetary cost minus any nonmonetary costs Monetary cost plus any nonmonetary costs Difference between the list price and the price one actually pays2 points Question 161. A price taker confronts a demand curve that is:Answer Vertical at the market price Upward sloping Downward sloping Horizontal at the market price2 points Question 171. The common goal shared by all private firms is to:Answer Be a responsible member of the community Treat workers fairly Maximize profit Be environmentally friendly2 points Question 181. In which of the following short-run scenarios should a firm shut down?Answer Price is less than average cost. Price is less than marginal cost. Price is less than average variable cost. Price is less than average revenue.2 points Question 191. The reduction in total economic surplus that results from the adoption of a policy is called:Answer Deadweight loss Externality loss Collateral damage Rent-seeking loss2 points Question 201. When the supply curve for a good is perfectly ________, the burden of a tax collected from sellers falls entirely on _______.Answer elastic, buyers elastic, sellers inelastic, buyers vertical, buyers2 points Question 211. The rationing and allocative functions of price:Answer Work in opposition to each other Are mutually exclusive Work together to guide resources to their highest value Produce disequilibrium in the market2 points Question 22?not sure1. Applying the no cash on the table principle to the stock market means new information:Answer Provides opportunities to the first few who act on it Provides opportunities to all investors Was already contained in the stock price Fails to affect the market2 points Question 23?B or D 1. A more efficient alternative to restricting trade is:Answer To compensate the winners To compensate the losers To repeal the principle of comparative advantage A system of voluntary export restraints2 points Question 241. Who loses from import quotas?Answer Consumers of imported goods Consumers of exported goods Producers of imported goods Firms that hold import licenses2 points Question 251. Which of the following is not correct about the effects of the voluntary export restraints (VERs) that the U.S. imposed on Japanese automobiles in the 1980s?Answer It benefited the U.S. automakers. It hurt the U.S. auto consumers. It benefited the Japanese automakers. It hurt the U.S. government.2 points


Paper#57108 | Written in 18-Jul-2015

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