chapter ten principles of economics multiple choice the word that comes from the greek word for “one who manages household” is market. consumer. producer. additional sample questions with sample answers. Peggy G. grade The NAEP economics assessment includes items classified across three interrelated. Witztum: Economics - An Analytical Introduction. Questions and answers. The author has written two extra sets of questions and answers, which are available.
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answer questions, how to skip questions, how to go back to questions you skipped, . The Economics test is designed for candidates who want to become high. and answer notes. Introduction. The examination questions that follow are actual finals papers from the Economics course within the torwordvanquiding.cf honours degree. Economics question and answer was published in The file is available in PDF format. It is for the preparation of Economics. Solutions are not available.
Fixed costs exceed variable costs. Average fixed costs are rising. Marginal cost is above average variable cost. Fixed costs exceed sunk costs. Average fixed cost is rising. Revenue from production is less than total costs. Drive down market prices. Drive down profits of existing firms in the market. Decrease the quantity of goods supplied in the market. All of the above are correct. Firms are operating with excess capacity.
Firms are making zero economic profit. Firms experience decreasing marginal revenue. Price is equal to marginal cost. Lower than in monopoly markets and higher than in perfectly competitive markets. Lower than in monopoly markets and lower than in perfectly competitive markets. Higher than in monopoly markets and higher than in perfectly competitive markets.
Higher than in monopoly markets and lower than in perfectly competitive markets. A bank loan. The behavior of firms. Economic aggregates. The activities of individual units. The behavior of the electronics industry. Aggregate demand. Normative economics. Descriptive economics. Produced by the government. Of products produced by a given industry. Of labor supplied by all households. Of goods and services produced in an economy.
National demand. Economy-wide demand. Gross national product. More of the activity. Less of the activity. No more of the activity. More or less, depending on the benefits of other activities.
Points outside the production possibility curve. Points inside the production possibility curve. Points on the production possibility curve. Either points inside or outside the production possibility curve. Income and money. Wages and salaries. Goods and services. Firms and households. Wage and interest income. Income and wealth. Division of work. Motivation 9 A Theory Y approach is more suitable where a job offers: a.
The ability to exercise initiative. An element of problem solving. All of the above. They are planning, control, co- ordination and: a. The division of work. Larger or smaller.
Interest rate guarantee a. Floor b. Swap c. Cap d. All of the above are interest rate derivatives 16 An agreement which guarantees an investor a minimum return on a principal amount is called a: a. Cap b. Executive stock option c. Stock option d. Floor 17 Which of the factors listed below is not a reason for decision making in organizations being a complex process?
Modern information systems enable people to evaluate a range of possible outcomes b.
Factors in the current context of the organization affect the decision c. Several stakeholders will have an interest in the decision d. People have to make decisions in a historical context 18 The overall process of decision making in, for example, staff selection includes which of these stages?
Deciding which candidate to appoint b. Identifying the need for a new member of staff c. Agreeing the job specification d. All of the above 19 A manager who is helping a customer return some shoes they downloadd last week is dealing with what type of decision? Uncertainty b. Non-programmed decision c. Bounded rationality d. Programmed decision 20 Decision making situations can be categorized along a scale which ranges from: a. Uncertainty to certainty to risk b.
Certainty to uncertainty to risk c. Certainty to risk to uncertainty d. The best explanation for this is that: a. The price of Pepsi increased. Pepsi consumers had an increase in income. Pepsi's advertising is not as effective as in the past.
The price of Coca Cola has increased. Income, tastes, and the price of other goods. Tastes and the price of other goods. Income and tastes. Income, tastes, and the price of the good. Normal b. Inferior c. Substitutes d. Complements 4 Suppose the demand for good Z goes up when the price of good Y goes down.
We can say that goods Z and Y are: a. Unrelated goods. Perfect substitutes. An inferior good. A normal good. A complementary good. A substitute good. A change in the price of pre-recorded cassette tapes. A change in income. A change in the price of compact discs. A change in wealth. Quantity supplied to decrease.
Quantity demanded to increase. Price to rise. Price to fall. A decrease in supply. A rise in the price of inputs. A fall in the number of substitute goods. A rise in income. Gross Domestic Product b. Gross Deistic Product c. Gross dynamic product d. All of these 16 GNP stands for a.
Gross national product b. Gross natural product c. Both a and b d. None of these 17 When the demand for a product is tied to the download of some parent product, its demand is called induced or derived.
As prices fall, quantity demanded increases. As prices rise, quantity demanded increases. As prices fall, demand increases. As prices rise, demand decreases. This process is known as: a. Price rationing. Price fixing. Quantity adjustment. Quantity demanded will increase. Quantity supplied will increase. Demand will increase. Demand will decrease. An decrease in the price of golf balls. An increase in the price of golf clubs. A decrease in the cost of producing golf balls.
An increase in average household income when golf balls are a normal good. Quantity supplied will decrease. Supply will increase. Supply will decrease. A decrease in the price of pesticides. An increase in the demand for wheat. A rise in the price of wheat. An increase in the price of corn. The quantity of this wine demanded. The quantity of this wine supplied. The demand for this wine. The supply of this wine. Technological change.
A change in input prices.
A change in the market price of the good. A change in the number of firms in the market. Demand decreases and supply decreases. Demand remains constant and supply increases. Demand decreases and supply increases. Demand increases and supply increases. Incomes rise for a normal good or fall for an inferior good b.
The price of a complement falls c. The price of a substitute rises d. All of these 14 Two explanations for the law of demand are a Price and quantity effects. When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. In this range of prices, demand for this product is: a. If the price elasticity of demand for a product is equal to 0. This is best explained by the fact that: a.
Cheerios are a luxury. A state government wants to increase the taxes on cigarettes to increase tax revenue. Sony is considering a 10 percent price reduction on its color television sets.
If the demand for sets in this price range is inelastic: A revenues from color sets will remain constant. B revenues derived from color sets will decrease. C revenues derived from color sets will increase. D the number of television sets sold will decrease 13 Elasticity of demand for a commodity with respect to change in its price.
A positive cross elasticity of demand coefficient indicates that: a. The price elasticity of demand for this product is approximately: a. The higher the level of income. The larger the proportion of monthly income spent on it. The fewer the good substitutes available. The higher the price of complementary goods.
The higher the income. The lower the price. The shorter the passage of time after a permanent price increase. The more substitutes available for the good. The two goods are luxury goods. The two goods are complements. The two goods are substitutes. The two goods are normal goods. Assume the product has a straight-line, downward sloping demand.
The product has no close substitutes. A very small proportion of income is spent on the good. A lower price 3 For a given normal supply curve, the amount of a tax paid by the downloader will be larger a.
The supply is perfectly elastic. The supply is perfectly inelastic. The demand is unit elastic. For them, revenue equ. An economist estimated that the cost function of a single-product firm is: Based on this information, determine the following: The term inferior goods refers to what kind of goods?
D X is the price, in dollars per unit, that consumers are willing to pay for x units of an item, and S X is the price, in dollars per unit that producers are willing to accept for X units. Demand f. What does the term elastic describe in business? Value Total bank reserves: An inelastic demand for labor means that an increase in the wage rate causes a less than proportionate decrease in the quantity of labor demanded. Which is NOT an example of bundling?
An extra value meal at Wendy's B. A download-one-get-one-half-off sale at Foot Locker C. Microsoft Office D. A large tub of popcorn at the movie theatre. Using policy to stabilize the government.
Define quitclaim deed. Note that the winnings are nominal figures unadjusted for inflation. Frank Gunter owns an apple orchard. If Frank is maximizing profits, what is the marginal revenue p. A Advocates of active stabilization policy believe that the government can adjust monetary and fiscal policy to counteract waves of excessive optimism and pessimism among consumers and businesses.
What is another term for a market economic system? A business owned and managed by a single individual is called. The intere. The term normal goods refers to what kind of goods?
Show that the marginal product of any given quantity of labor increases as capital is increased. Suppose Japanese a. What invisible hand regulates the free market economy? Question 2. Briefly explain your answer. What does the term human capital refer to?
The fixed cost of producing 10 u. What are the advantages and disadvantages of markup pricing? The meaning of saving and investment Classify each of the following based on the macroeconomic definitions of saving and investment. Beth downloads new bulldozers for her construction firm.
BusinessWeek, in an article dealing with management, wrote, "When he took over the furniture factory three years ago Small "Mom and Pop firms," like inner city grocery stores, sometimes exist even though they do not earn economic profits. How can you explain this? In economics, what does the term market refer to? What are the three parts of the federal reserve system?
Suppose that France and Austria both produce jeans and olives. France's opportunity cost of producing a crate of olives is 4 pairs of jeans while Austria's opportunity cost of prod. The first nation to build its economy on capitalism was. Round your answers to 2 decimals a. If you assign one worker per computer, what is the cost of inventorying?
What if you assign two workers per computer? What is the cost of inventorying a single i. What does too much money in the economy lead to? The fixed cost of producing 10 uni. B Are banks fully utiliz. What type of economy does North Korea have? What happens to supply, price, and quantity when the following conditions occur: A new technology is developed to pick peaches b. The government allows more furniture imports from China c. Apply the concepts of monopoly, monopolistic competition and oligopoly to current economic news.
What happens when too much money is in circulation? Four categories of income are. As the price of samosas a kind of food in India was raised from 2 to 3 rupees Indian currency , their quantity demanded fell from 15, to 12, Rounding to the nearest tenth, the elasticity of. Suppose there is a policy debate regarding the United States imposing trade restrictions on imported tires: Domestic producers of tires send a lobbyist to the U.
What will an effective price floor do? How does globalization hurt the United States Economy? Resources are efficiently allocated when production occurs where? When the government runs a deficit, which of the following is true?
Inflation makes it harder to download things because.
What are the advantages of domestic trade? When there is excess demand there is? Import restrictions on a product protect domestic industries by: When Congress increases taxes, private investment is: A crowded out causing AD to shift less than expected.
B crowded out causing AD to shift more than expected. C crowded in causing AD to shift l. Taxes differ from tariffs because taxes are what?
Calculate the market equilibrium. Mike and Leah can pump and sell as much water as they wan. An example of complementary goods would be. What is private enterprise?
A negative income elasticity of demand coefficient indicates that.
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FYI-to hire someone to shovel s. Why are economists concerned about inflation? Matt derives all of his utility from consuming milk shakes. Compute Matt's Equivalent. Who sets prices in a capitalist system?
Economics Questions and Answers
Economics is best defined as the study of how. Economic profit is: Which of the following statements is true? The higher the average cost, the lower the profit-maximizing price b.
The more elastic the demand, the higher is the desired markup c. The higher the. Suppose the graph below represents demand and marginal cost for a firm that is able to engage in perfect price discrimination. What is the firms profit? What happens if there is more supply than demand? Complete the following table: The simple circular flow model shows that. The graph shows the cost structure of a firm in a perfectly competitive market. If this year the CPI is and last year it was , then we know that: All goods have become more expensive.
The price level has increased. The inflation rate has increased. All of the. What is the difference between seasonal unemployment and structural unemployment?
Economics Objective & Practice Questions (HOT & Expected Questions for 2019) for Competitive Exams
Which of the following are discretionary fiscal policies that could bring the economy closer to natu. The fixed cost of producing 10 units. Externalities can have a positive or a negative effect on society members.
Come up with a creative example of a market good or services in which all of the costs are not born by suppliers negative. Government intervention in a modern economy is useful because. During the mon. Is this the best price to charge in order to maximize revenues?
Categories of expenditures. What is seasonal unemployment? What two things does GDP measure? Which of the following are macroeconomic problems? Raw material inventory control, Cyclical unemployment, Externalities that have negative effects on society,.
The two main characteristics of a public good are. How does supply and demand affect consumers? Describe a stock market bubble. What political system calls for government control of the economy? The meaning of saving and investment. Classify each of the following based on the macroeconomic definitions of saving and investment. List, define, and explain, the component parts of the formula.
Would you consider our Economy at Full Employment now? Why or why not? In the country of Euroland, the velocity of money is constant. What is the growth rate of nomi. What is the Legal Tender Act of ? The production possibilities frontier model shows that. The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement to whether the government should attempt to stabilize the. According to Laissez-Faire economists, the cure for poverty was.
Is United States currency officially backed today? How are funds allocated efficiently in a market economy? Classify each of the following based on the macroeconomic definitions of saving and investment: Hilary downloads new ovens for her cupcake-baking business, Maria downloads stock in Goohoo, an informat. Currency risk is based on what assumption? Define externalities.
A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 8 percent. What i. What economic indicator measures inflation? You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below. Who opposed the loaning of money at interest?
For them, revenue e. How do functional tactics compare to business strategies? Which of the following topics does economics study: Gomez runs a small pottery store. Gomez could have e. Is economics classified as a social science? In December a man in Ohio decided to deposit all of the 8 million pennies he'd been saving for nearly 65 years. With a reserve requirement of 10 percent, what will be the cumulative.
Would it be advantageous to borrow money if you expected prices to rise? Would you want to take out a fixed-rate loan or one with an adjustable interest rate?
Why are resources also called factors of production? A favorable balance of trade exists when a country. The meaning of savings and investment Classify each of the following based on the macroeconomic definitions of saving and investment. Suppose a company incurs the following costs: What is the total accounting c.
Identify whether each of the following belongs in M1 and M2. Be sure to state if it belongs in both. Why do oligopolies exist? In , the stock market crashed because.
Assume a simple, closed economy with no government. Assume that firms expect the future sales and profits to fall, and they suddenly cut back unintend. Refer to the figure above. Moving from demand curve D2 to demand curve D1 could be caused by a n: Explain Global Production Networks.
What are scholars talking about when they discuss economics? The most recent recession in the United States took place when? The paper currency in the United States has value because. What does an exchange rate tell you? Why does a monopoly cause a deadweight loss?
Scarcity exists because of what? Money aggregates Identify whether each of the following examples belongs in M1 or M2. If an example belongs in both, be sure to check both boxes. How can a country respond to a trade embargo?
What is the diameter of a quarter? Money for investment is called. The marginal benefit of reducing pollution A Rises as the environment gets cleaner B Falls as the environment gets cleaner C Is Constant D Is not an issue in determining the optimal rate of pollu. What is the global marketplace? Stagflation exists when prices. How many nickels are in a roll?
What was a push factor in the Great Migration from the rural South? Dozens of companies offer tutoring services, and they view the quality of the tutoring at the different companies to be. Which organization attempts to promote free trade around the world?
What does market cap mean? The table below shows the four-firm concentration ratio of various industries. Industry Four-firm concentration ratio Petroleum and coal products What happens to a consumer's optimal choice of goods if all prices and the consumer's income double?
What happens to the intercepts of the budget constraint? All revenues are received, and costs. How did most industrialists feel about the laissez faire theories when they first became widespread?
What is the Sherbert Test? A demand schedule shows. Describe an important difference in the way an economist and a businessperson might view a monopoly. What is an externality? Give an example of a positive externality and an example of a negative externality. What is the difference between private costs and social costs? From an economic perspective,.
Round your answers to 2 decimal spaces. If you assign one worker per computer, what is the cost of inventorying a single item? If you assign two workers per computer, what is the cost of inventory. The normal rate of profit in the economy is 5 percent. Four components of GDP are. You can lead a horse to water, but you can't make it drink. How might this adage be relevant to expansionary monetary policy? For economists, the word utility means. What type of economy is also known as capitalism?
Market structure is defined by the: Define regulatory environment. Intellectual property refers to. The total cost in dollars to produce q units of a product is C q. Find the cost of increasing production from 50 to What was the Federal Reserve Act of ? Countries engage in trade because a. For the cost functions below find:The firm should do nothing - it wants to maximize the difference. Deciding which candidate to appoint b.
None of these 20 MRTS stands for…….. Tastes and the price of other goods. The government has the ability to influence the level of output in the short run using monetary and fiscal policy.
In the country of Wiknam, the velocity of money is constant. Social responsibility 15 A concept that implies that the firm should consider issues such as protecting the consumer, paying fair wages, maintaining fair hiring practices, supporting education, and considering environmental issues. A change in the price of pre-recorded cassette tapes.
All of the above are interest rate derivatives 16 An agreement which guarantees an investor a minimum return on a principal amount is called a: a. What kind of economic system does Canada have?
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