Multiple
Choice
Identify
the letter of the choice that best completes the statement or answers the
question.
____1.In
every economy people vie for the economy's rationing device, a process
called
|
a.
|
competition.
|
|
b.
|
entrepreneurship.
|
|
c.
|
marginal
benefit.
|
|
d.
|
positive
economics.
|
____2.If
variable X goes down as variable Y goes down, then X and Y are
|
a.
|
directly
related.
|
|
b.
|
negatively
related.
|
|
c.
|
inversely
related.
|
|
d.
|
independent.
|
____3.Scarcity
is defined as the condition in which
|
a.
|
both
wants and resources are limited.
|
|
b.
|
wants
are finite and resources infinite.
|
|
c.
|
both
wants and resources are infinite.
|
|
d.
|
wants
are infinite and resources finite.
|
____4.Economists
use the ceteris paribus assumption in order to
|
a.
|
make
their analyses easier for them to conduct.
|
|
b.
|
designate
what they believe is the correct relationship between two variables.
|
|
c.
|
explain
why people sometimes consume more of a good when its price rises.
|
|
d.
|
explain
why those things that come first do not necessarily cause those things
that come later.
|
|
e.
|
designate
the difference between normative and positive economics.
|
____5.Income
elasticity of demand for a normal good is
|
a.
|
less
than zero.
|
|
b.
|
greater
than zero.
|
|
c.
|
equal
to zero.
|
|
d.
|
none
of the above
|
____6.Price
elasticity of supply is the percentage change in the quantity __________
of a good divided by the percentage change in __________.
|
a.
|
demanded,
the price of the good.
|
|
b.
|
supplied,
the price of the good.
|
|
c.
|
demanded,
the price of another good.
|
|
d.
|
supplied,
the price of another good.
|
|
e.
|
demanded,
income.
|
____7.If
total revenue does not change as a result of a rise in price, it follows
that demand is
|
a.
|
perfectly
elastic.
|
|
b.
|
perfectly
inelastic.
|
|
c.
|
unit
elastic.
|
|
d.
|
inelastic.
|
|
e.
|
elastic.
|
True/False
Indicate
whether the sentence or statement is true or false.
____8.The
branch of economics that studies the decisions made by individuals and
firms is called macroeconomics.
____9.Economists
use the word utility to describe the satisfaction one receives from
a good.
____10.If
variable X rises as variable Y falls, then X and Y have an inverse relationship.
____11.Economists
use the terms resource and input as synonyms.
____12.Most
countries are either purely capitalistic or purely socialistic.
____13.Consumer
surplus is the difference between the maximum price the buyer is willing
and able to pay for a good and the actual price paid.
____14.The
law of diminishing marginal utility helps to explain the direct relationship
between price and quantity supplied.
____15.Both
consumers' surplus and producers' surplus are maximized at equilibrium.
____16.If
hot dogs are an inferior good, a decrease in income will cause the equilibrium
price of hot dogs to rise.
____17.Scarcity
and shortage are synonyms.
____18.Cross
elasticity of demand measures consumer responsiveness to a change in the
price of one good, in terms of the quantity demanded of some other good.
c1-3/18
Answer
Section
MULTIPLE
CHOICE
1.ANS:A
2.ANS:A
3.ANS:D
4.ANS:B
5.ANS:B
6.ANS:B
7.ANS:C
TRUE/FALSE
8.ANS:F
9.ANS:T
10.ANS:T
11.ANS:T
12.ANS:F
13.ANS:T
14.ANS:F
15.ANS:T
16.ANS:T
17.ANS:F
18.ANS:T