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econ2_quiz

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1: Because economic generalizations are simplifications from reality, they are impractical and useless.;A. True;B. False;2: Normative statements are expressions of facts.;A. True;B. False;3: Macroeconomics explains the behavior of individual households and business firms, microeconomics is concerned with the behavior of aggregates or the economy as a whole.;A. True;B. False;4: Marginal analysis means that decision-makers compare the extra benefits with the extra costs of a specific choice.;A. True;B. False;5: The production possibilities curve shows various combinations of two products that an economy can produce when achieving full employment.;A. True;B. False;6: The present choice of position on the production possibilities curve will not influence the future location of the curve.;A. True;B. False;7: In drawing a particular budget line, money income and the prices of the two products are fixed.;A. True;B. False;8: The lower the consumer's income, the higher his or her budget line.;A. True;B. False;9: The guiding function of prices tends to keep resources flowing toward their most highly valued uses.;A. True;B. False;10: The invisible hand refers to the many indirect controls that the Federal government imposes in a market system.;A. True;B. False;11: Central planning often suffers from a coordination problem and an incentive problem.;A. True;B. False;12: Surpluses drive market prices up, shortages drive them down.;A. True;B. False;13: Consumers buy more of normal goods as their incomes rise.;A. True;B. False;14: Producing a good in the least costly way is known as allocative efficiency.;A. True;B. False;15: A market that achieves productive efficiency is producing the quantity of goods most desired by society.;A. True;B. False;16: A government tax per unit of output reduces supply.;A. True;B. False;17: A ceiling price in a competitive market will result in persistent surpluses of a product.;A. True;B. False;18: If the elasticity coefficient of supply is 0.7, supply is elastic.;A. True;B. False;19: Antiques tend to have highly inelastic supply curves.;A. True;B. False;20: The smaller the number of good substitutes for a product, the greater will be the price elasticity of demand for it.;A. True;B. False;21: Generally speaking, the smaller the percentage of one's total budget devoted to a particular product, the more price elastic will be the demand for that product.;A. True;B. False;22: Generally speaking, the demand for luxury goods is more price elastic than is the demand for necessities.;A. True;B. False;23: If price changes and total revenue changes in the opposite direction, demand is relatively elastic.;A. True;B. False;24: The substitution effect suggests that when consumers judge product quality by price, they will substitute high-priced products for low-priced products.;A. True;B. False;25: When the price of a product falls, the income effect induces the consumer to purchase more of it while the substitution effect prompts her to buy less.;A. True;B. False;26: Firms would rather shrink package sizes than raise prices because consumers will feel less of a loss from the change.;A. True;B. False;27: Because of framing effects, a worker will be happy with a five percent raise regardless of how much of a raise her fellow employees receive.;A. True;B. False;28: The short run is a period of time during which all costs are fixed costs.;A. True;B. False;29: Economic profit is found by subtracting accounting costs from total revenue.;A. True;B. False;30: Diseconomies of scale stem primarily from the difficulties in managing and coordinating a large-scale business enterprise.;A. True;B. False;31: Variable costs are costs that change directly with output.;A. True;B. False;32: The law of diminishing returns explains why short-run marginal cost curves are upsloping.;A. True;B. False;33: The term imperfect competition refers to every market structure besides pure competition.;A. True;B. False;34: Although individual purely competitive firms can influence the price of their product, these firms as a group cannot influence market price.;A. True;B. False;35: The demand curve for a purely competitive industry is perfectly elastic, but the demand curves faced by individual firms in such an industry are downsloping.;A. True;B. False;36: A competitive firm will produce in the short run so long as its price exceeds its average fixed cost.;A. True;B. False;37: The short-run supply curve slopes upward because producers must be compensated for rising marginal costs.;A. True;B. False;38: Professor Homer Simpson decided to become a crab fisherman for one year and made as much as he usually makes in 8 weeks teaching students for the year so the rest of the time he could write. Homer, would be removed from the employment register and would be counted as unemployed.;A. True;B. False;39: The long-run supply curve for a decreasing-cost industry is downsloping.;A. True;B. False;40: Because the equilibrium position of a purely competitive seller entails an equality of price and marginal costs, competition produces an efficient allocation of economic resources.;A. True;B. False;41: The process by which new firms and new products destroy existing dominant firms and their products is called creative destruction.;A. True;B. False;42: Other things equal, the shorter the loan period and the larger the loan size, the higher is the interest rate charged by the lender.;A. True;B. False;43: In a competitive market, every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.;A. True;B. False;44: Macroeconomics explains the behavior of individual households and business firms, microeconomics is concerned with the behavior of aggregates or the economy as a whole.;A. True;B. False;45: Producing a good in the least costly way is known as allocative efficiency.;A. True;B. False;46: The invisible hand refers to the many indirect controls that the Federal government imposes in a market system.;A. True;B. False;47: Critics of the minimum wage contend that higher minimums cause employers to move up their labor demand curves, reducing employment of low-wage workers.;A. True;B. False;48: The supply of loanable funds is perfectly elastic.;A. True;B. False;49: If two resources are complementary, a decrease in the price of one will reduce the demand for the other.;A. True;B. False;50;Refer to the above diagram. The movement from curve (a) to curve (c) suggests an improvement in civilian goods technology but not in war goods technology.;A. True;B. False

 

Paper#77270 | Written in 18-Jul-2015

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