Basic Economic Concepts

1.Which Of the following is not a criterionfor Judging the result of an economic policy

b.Employment

2.Economicsis the study ofhow

a.Scarce Resources are used to satisfy unlimited wants

3.The Opportunity cost of choice X can be defined as

b.The Most highly valued alternative to choice X

4.Carlo Discovers when he studies for his macroeconomics tests at the bar, he earns Better grades. He advises all students to study at the bar for similar results. Carlo his guilty of committing

a.The Fallacy of composition

5.Households Are

a.Suppliers In the input market

6.The price of Good C increases and as a result, The demand for good D increases. The two goods are

b.Substitutes

7.Because The nation N is operatingat a point Inside its PPF, it

b.Has Unemployed or inefficiently employed resources

8.A Production possibility frontier diagram illustrates all of the following Concepts except

b.Unlimited Wants

9.Which Of the following is not one of the basic economic equation

c.Where Would it be produced

10.Jean &co has an increasing cost production Possibility frontier. Its slope must be

c.Negative Andincreasing

11.Each Of the following is a basic concern of any economic system except

d.The Quality of resources allocated among customers

12.For Jill to have a comparative advantage inn the production of pins means that, Relative to Jack, with the same resources

a.Jill Is relatively better at producing pin than at producing needles

13.Along A given supply curve for eggs

c.Quantity Supplied increases as price increases

14.Consumers Expect their income to rise. For a normal good, this would result in an increase in

d.Demand And a rise in price

15.A Rightward shift in the supply of U.S. Cars might be due to

c.The Introduction of cost-saving robots

16.If The market is in equilibrium, a technological improvement will cause price To------------and quantity demanded to --------------

c.Fall; Rise

17.Generic Aspirin is an inferior good. As Julie’s income decreases we would expect

c.An Increase in the Julie’s demand for generic aspirin

18.Among A given demand curve for corn, which of the following is not held constant

a.The Price of corn

19.The Demand curve is best illustrated by

b.Increase Purchases of coke as the price of coke decreases

20.Union introduced new costly regulations in the Tuna market to protect workers. We would expect the equilibrium cost of tuna To---------- and the equilibrium quantity of tuna to--------

b.Increase; Decrease

21.An Undergraduate student pays $ 475 for a three- credit course at Lehman College. After the official withdrawal date has elapsed, he drops the course (and cannot Get back the $475).At this time, the $ 475 represents

c.A Sunk cost

22.“Lower ticket prices would lead to more People attending ball games.” This statement is

c.A Positive statement

23.Encouraging international trade will

d.Speed Economic growth as workers specialize and trade with others

24.If The government increases unemployment benefits, then labor

d.Supply Curve shifts leftward

25.As Technology advances,

b.The PPF shift outward

26.If A country is operating at a point of production efficiency

b.It Produces on its production possibility frontier curve

27.To Help unscramble cause and effect, economists

a.Must Use the ceteris paribus assumption

28.Consider The market fur turkeys. In the US, because of Thanksgiving in the month of November

b.There Is an upward movement along the supply curve for turkeys

29.Which of the Following is NOT a topic studied in Macroeconomics?

b.Rapid increase in The general price level

30.An efficient market is a market

b.in which profit Opportunities are eliminated almost instantaneously

31.Which Of the following is a positive statement?

b.Higher prices Cause consumers to purchase less.

32.Which Of the following would an economist classify as capital?

d.A computer used by Anaccountant

33.If There is a surplus in the money market, the Fed can eliminate it by

d.Decreasing money Supply

34.The four (4) Criteria’s that are frequently used in judging outcome of economic policy are

a.Efficiency, Equity, growth, and stability

35.When two people Trade

d.They both expect To be made better off by the exchange

36.When Hurricane Andrew passed through Louisiana in the summer of 1992, approximately a quarter Of the sugar cane crop was destroyed. Ceteris paribus,

a.The supply of sugar decreased and the price of Sugar increased.

37.Among the Fundamental concepts in economics are

All of the above

38.The “Law of Demand” implies that

c.As prices fall, Quantity demanded increases

39.An increase in the Overall price level is known as

b. Inflation

40.The Concept of opportunity cost is based on the principle of

c.Scarcity

41.The amount that Households have accumulated out of past income through savings and inheritance Is

b.Wealth

42.Apples And oranges are substitute goods. A freeze in Florida destroyed a good portion Of the orange crop. Ceteris paribus.

a.The price of both Apples and oranges will increase.

43.Depreciation is

c.The amount of used Up machinery in a year

44.That which we Forgo, or give up, when we make a choice or decision is called

d.Opportunity costs

45.The study of Economics:

b.Is a way of Analyzing decision-making processes caused by scarcity

46.Any transaction That involves exchanging one good for another without using money is considered A

b.Barter transaction

47.According to the text, the reason to study Economics

d.All of the above

48.The Supply of labor is defined as the relationship between the real wage and the

c.Quantity Of labor supplied by households

49.The Production Possibility Frontier is used to illustrate the concept of

b.Opportunity costs

50.Encouraging International trade will

h.Speed Economic growth as workers specialize and trade with others