ECON312 Week 2 Quiz latest 2018 september

Week 2 Quiz

Question 1

People eat at restaurants less often when their incomes fall because of a recession. Eating at restaurants must be

a substitute for other goods.

a complement to other goods.

an inelastic good.

an inferior good.

a normal good.

Question 2

In stores, it is common to find seasonal products marked down when the season ends. What explains this behavior?

The store is trying to sell the goods and realizes that they are substitutes for other goods whose prices have risen.

The store is trying to increase its customers' incomes by increasing their purchasing power.

The store is trying to increase its customers' demand for the product.

The store manager must be trying to drive away customers by selling low quality products.

The law of demand is being used to increase the quantity demanded.

Question 3

As a person increases his or her caloric intake, the person's weight increases, ceteris paribus. The relationship between the person's caloric intake and the person's weight is an example of

a trended relationship.

unrelated variables.

a negative relationship.

a single point on a graph.

a positive relationship.

Question 4

When the percentage change in the quantity supplied is twice the percentage change in price, then supply is

perfectly inelastic.

inelastic.

unit elastic.

elastic.

perfectly elastic.

Question 5

Suppose you eat two hamburgers for lunch. The marginal benefit of the first burger is ________ of the second burger.

smaller than the marginal benefit

equal to the marginal benefit

equal to the marginal cost and the marginal benefit

not related to the marginal benefit

larger than the marginal benefit

Question 6

The price elasticity of demand measures the extent to which the quantity demanded changes when

the price of the good changes.

consumer preferences change.

the price of a related good changes.

the expected future price of a good changes.

both the demand and supply of the good change.

Question 7

Matt pays a $50 a month membership fee at Bruno's Gym. He can exercise at the gym as many times as he wishes. If the membership fee is measured along the vertical axis and the number of times he exercises is measured along the horizontal axis, the graph between his membership fee and the number of times he exercises will

be negatively sloped.

be positively sloped.

be a horizontal line.

start out positively sloped and then, as Matt loses interest, become negatively sloped.

be a vertical line.

Question 8

An increase in the quantity demanded is shown as

a movement toward the demand curve.

a leftward shift of the demand curve.

both a movement along the demand curve and a shift of the demand curve.

a rightward shift of the demand curve.

a movement along the demand curve.

Question 9

Researchers have found a hybrid of corn that is cheaper to grow. This technological breakthrough

increases the demand for hybrid corn.

decreases the supply of hybrid corn.

Both answers A and C are correct.

Both answers A and B are correct.

increases the supply of hybrid corn.

Question 10

Suppose the relationship between a person's age and his or her height is plotted with the age measured along the x-axis and the height measured along the y-axis. Then, the curve showing this relationship is

negatively sloped and becoming less steep.

positively sloped and becoming more steep.

positively sloped and becoming less steep.

a straight line with a positive slope.

a straight line with a negative slope.

Question 11

Assume a market is in equilibrium. There is an increase in supply, but no change in demand As a result the equilibrium price ________, and the equilibrium quantity ________.

rises; increases

rises; does not change

rises; decreases

falls; decreases

falls; increases

Question 12

What is an inferior good?

a product that is complementary

a product of low quality that we do not want to purchase

a product for which demand increases when income decreases, and demand decreases when income increases

a product that is a substitute for another, better good

a product for which demand increases when income increases, and demand decreases when income decreases

Question 13

A time series graph

shows how a certain variable changes over time.

depicts a series of good economic times a nation had.

is not useful if the goal is to determine a variable's trend.

shows points that are scattered.

uses bars rather than lines.

Question 14

In the diagram above, which figure(s) show(s) an inverse relationship between the variables?

only C

only B

both A and C

both B and C

only D

Question 15

When a landscaping company decides to use drafting software and computers instead of hiring designers to draw design plans by hand, it is answering the ________ question.

why

for whom

opportunity cost

what

how

Question 16

The cross elasticity of demand is a measure of how

total revenue changes when the price of a product changes.

demand for a product changes when the price of a substitute or complement changes.

responsive consumers are to changes in the price of a product.

demand for a product changes when income changes.

responsive suppliers are to changes in the price of a product.

Question 17

In the above figure, the shift in the demand curve from D to D2 can be the result of

an increase in the price of soda, a complement to pizza.

an increase in income if pizza is a normal good.

a decrease in the supply of pizza that raises the price of pizza.

a change in quantity demanded.

an increase in the price of a sub sandwich, a substitute for pizza.

Question 18

When you make the decision to spend your time attending class, which economic question are you answering?

Is this in the social interest?

For whom?

How?

What?

Why?

Question 19

Going skiing will cost Adam $80 a day. He also loses $40 per day in wages because he has to take time off from work. Adam still decides to go skiing.

His decision is rational if Adam's marginal benefit of spending a day skiing is greater than his marginal cost.

Adam is definitely making a decision that is in the social interest.

Adam's lost $40 per day in wages is not an opportunity cost and so did not affect his decision.

He loses a total of $120 per day, so his decision is irrational.

The $80 price of skiing is not an opportunity cost and so did not affect Adam's decision.

Question 20

Suppose the equilibrium price of oranges is $2.00 per pound. If the actual price is above the equilibrium price, a

surplus exists and the price rises to restore equilibrium.

shortage exists and the price falls to restore equilibrium.

shortage exists and the price rises to restore equilibrium.

surplus exists but nothing happens until either the demand or the supply changes.

surplus exists and the price falls to restore equilibrium.

Question 21

The production possibilities frontier illustrates the

maximum combinations of goods and services that can be produced.

goods and services that people want.

limits to people's wants.

resources the economy possess, but not its level of technology.

amount of each good that people want to buy.

Question 22

The above figure shows the production possibility frontier for an economy. The point or points that are attainable are

points A, B, and C.

points A and D.

points B and C.

point E.

points A, B, C, and D.

Question 23

Wichita is building a convention center and financing it with revenues raised from a city hotel tax. Local politicians assert that the convention center is essentially free for Wichita residents because out-of-town visitors are paying for it. Someone who is practicing the economic way of thinking would disagree because

there are other projects that could be undertaken with the tax funds.

the convention center may not pass a marginal cost-benefit test.

the hotel tax may reduce commercial property values in the area.

they believe that Wichita does not need a new convention center.

the hotel tax may lead to a decline in visits to Wichita.

Question 24

Which figure above shows the effect if research is published claiming that eating pizza is healthy?

Figure D

Both Figure A and Figure D

Figure B

Figure A

Figure C

Question 25

The United States can use all its resources to produce 250 DVDs or 500 shoes. China can use all of its resources to produce 30 DVDs or 300 shoes. The opportunity cost of producing a DVD in the United States is

2 shoes.

500 shoes.

1 DVD.

20 shoes.

1/2 of a shoe.

Question 26

Proponents of cuts in income tax rates argue that when income tax rates are cut, workers have an incentive to increase their work hours. This argument is based on the assumption that

workers make decisions based on the social interest.

the marginal cost of each additional work hour is not important to most workers.

workers are irrational.

the opportunity cost of working is negative.

workers make decisions based on the marginal benefit of each hour worked compared to the marginal cost of work.

Question 27

The slope of the line shown in the above figure is

5/2.

2/5.

5.

2/3.

2.

Question 28

Which figure above shows the effect of an increase in the cost of the tomato sauce used to produce? pizza?

Figure D

Both Figure B and Figure C

Figure C

Figure B

Figure A

Question 29

A student at New York University used to take the Redhound bus when she visited her grandmother in Boston. After graduating, although the bus fare and the plane fare were the same as they were when she was a student, with a well-paid job on Wall Street she now takes the plane to Boston to visit her grandmother. For this student, travel by Redhound bus is

a substitute good.

a good with negative preferences.

a normal good.

a complement good.

an inferior good.

Question 30

A graph shows that the number of U.S. tourists visiting a Caribbean island increases as the temperature in the northeastern United States falls. The graph shows

a direct relationship.

an invalid relationship.

a negative relationship.

a positive relationship.

no relationship.

Question 31

The income elasticity of demand is a measure of

how responsive suppliers are to changes in the price of a product.

how demand for a product changes when the price of a substitute or complement product changes.

the extent to which the supply of a good changes when the demand changes as a result of a change in income.

how responsive consumers are to changes in the price of a product.

the extent to which the demand for a good changes when income changes.

Question 32

Moving from one point to another on a production possibilities frontier implies

increasing the production of one good and decreasing the production of another.

decreasing the production of both goods.

changing the amount of factors of production that are employed.

increasing the production of both goods.

holding the production levels of both goods constant.

Question 33

Suppose the Chicago Bears football team raises ticket prices by 13 percent and as a result the quantity of tickets demanded decreases by 21 percent. This response means that the demand for Bears tickets is

unit elastic.

elastic.

inelastic.

perfectly elastic.

perfectly inelastic.

Question 34

The American Dairy Association starts a highly successful advertising campaign that makes most people want to drink more milk. As a result,

the demand for milk increases.

the demand for milk is not affected.

the demand for milk decreases because the price of milk rises.

the quantity demanded of milk increases.

the price of milk falls to encourage people to drink more milk.

Question 35

The table above shows the situation in the gasoline market in Tulsa, Oklahoma. If the price of a gallon of gasoline is $2.30 then

Without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa.

there is a shortage of gasoline in Tulsa.

the gasoline market in Tulsa is in equilibrium.

there is a surplus of gasoline in Tulsa.

There is neither a surplus nor a shortage, but the market is NOT in equilibrium.

Question 36

The law of supply states that, other things remaining the same,

if the price of a good increases, firms buy less of it.

if the price of a good increases, the supply increases.

demand increases when supply increases.

as people's income increase, the supply of goods increases.

if the price of a good increases, the quantity supplied increases.

Question 37

Milk can be used to produce cheese or butter. If the price of a pound of butter rises, what happens to the supply of cheese?

The supply of cheese decreases.

The supply of cheese increases.

The supply of cheese stays the same, and there is no change in the quantity supplied of cheese.

The supply of cheese could increase, decrease, or stay the same depending on what happens to the supply of butter.

The supply of cheese stays the same, and there is a decrease in the quantity supplied of cheese.

Question 38

A trend is

the minimum value of a variable.

a general tendency for a variable to rise or fall.

the difference between the maximum value of a variable and the minimum value of the variable.

a measure of closeness on a scatter diagram.

the maximum value of a variable.

Question 39

The figure above shows a

trend diagram.

cross-section graph.

time-series graph.

slope.

scatter diagram.

Question 40

The question "Should economics majors or sociology majors earn more after they graduate?" is an example of a ________ question.

for whom

why

where

how

what