Which of the following is located at the point where the supply and demand curves intersect?
answer
B. The equilibrium price.
question
Which of the following are needed to determine the equilibrium price of a good or service?
answer
A. A supply curve and a demand curve.
question
Which of the following is shown by the intersection of the supply curve and the demand curve?
answer
C. The equilibrium price of a good or service.
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Which of the following accurately describes a shortage?
answer
D. Consumer demand for a certain car is greater than the number of cars that can be produced.
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Which of the following accurately describes a surplus?
answer
A. Consumer demand for a certain car is below the
number of cars that are produced.
question
Which of the following accurately describes the effect of a situation of scarcity?
answer
B. There's a shortage of oil, pushing car companies
into researching alternative fuels.
question
In which of the following situations would the price of a good be most likely to increase?
answer
A. An increase in production costs results from a rise in wages.
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In which of the following situations would the price of a good be most likely to increase?
answer
B. A rise in demand happens too quickly for producers to increase production to keep up.
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In which of the following situations would the price of a good be most likely to decrease?
answer
C. The development of a new energy source reduces production costs for a company.
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When someone buys a fourth television for his or her house, what is the result?
answer
C. There's a decrease in the marginal utility of the television.
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What happens when someone orders a second dessert when he or she is already full from the first dessert?
answer
D. The second dessert has less utility than the first dessert.
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Which of the following occurs when someone buys a third winter coat?
answer
A. Decreasing marginal utility
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Which of the following accurately describes a situation in which substitution occurs?
answer
A. A restaurant starts using margarine instead of butter because butter becomes more expensive.
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Which of the following accurately describes a situation in which consumers have inelastic demand?
answer
C. People cannot quit drinking coffee even though they want to cut down on caffeine intake.
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Which of the following accurately describes a situation in which consumers have elastic demand?
answer
B. People give up eating pasta and bread because
they want to lose weight
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Which of the following is a trait of public goods?
answer
A. Non-excludability
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Which of the following is a problem for the production of public goods?
answer
A. The possibility of free riders.
question
Which of the following accurately describes one way that individual goods differ from public goods?
answer
A. People can be excluded from using individual
goods if they don't pay.
question
Which of the following is one of the major factors determining the level of wages?
answer
C. The law of supply and demand.
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All of the following factors affect the level of wages except which of the following?
answer
D. The production possibilities frontier.
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All of the following factors affect the level of wagesexcept which of the following?
answer
C. The gross domestic product
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Which of the following limits the freedom of workers in the labor market?
answer
A. The inflexibility of the work force.
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Which of the following limits the freedom of both employers and workers in the labor market?
answer
C. The existence of a minimum wage.
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Which of the following best explains one of the restrictions on producers that keeps the labor market from being a completely free market?
answer
C. Workers don't always have the education required to perform certain jobs.
question
Because immigration can result in an increase in the supply of labor, immigration can result in which of the following?
answer
D. A general decrease in wages.
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Which of the following is most likely to lead to a general decrease in wages?
answer
A. Immigration
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Immigration can result in a general decrease in wages because immigration does which of the following?
answer
A. Increases the supply of labor.
question
Which of the following leads to an increase in bargaining power for workers?
answer
D. The existence of unions.
question
Which of the following best explains how unions help workers get better wages?
answer
A. The collective bargaining power of unions puts
workers on a more equal level with employers.
question
Which of the following best explains why unions give workers more power in contract negotiations?
answer
B. Employers can't fire an entire union because of the difficulty of replacing every worker.
question
Which of the following is intended to demonstrate to an employer the importance of cooperating with workers?
answer
C. A work slowdown.
question
Which of the following actions can a union take to get an employer to submit to collective bargaining?
answer
B. Call a strike.
question
Which of the following can employers use to prevent an industrial action by a union from affecting production?
answer
A. Strikebreakers
question
Which of the following has led to greater competition among workers looking for jobs?
answer
A. Globalization
question
Which of the following results of globalization has led to wage cuts for workers in the United States?
answer
B. Outsourcing
question
Which of the following results from outsourcing jobs from the United States to other countries?
answer
A. Lower wages for U.S. workers.
question
Match each type of policy with the example that best fits its definition.
A. Protectionist policy
B. Fiscal policy
C. Monetary policy
answer
B. The government goes into debt to buy a large number of vehicles for the military.
A. The government limits the number of foreign cars that can be sold in the United States.
C. The government decreases the interest rates on loans charged to car companies.
question
Match each type of policy with the example that best fits its definition.
A. Protectionist policy
B. Fiscal policy
C. Monetary policy
answer
A. A high tax on cars imported from other countries.
B. Reduced taxes on corporate profits.
C. Increased interest rates on loans.
question
Match each type of policy with the example that best fits its definition.
A. Protectionist policy
B. Fiscal policy
C. Monetary policy
answer
C. The government restricts the amount of money that can be loaned to farmers.
B. The government purchases a large amount of domestically grown grain.
A. The government limits the amount of European grain that can be sold in the United States.
question
Which of the following housing decisions provides a person with both housing and an investment?
answer
D. Buying a single-family home.
question
Which of the following housing decisions gives a person the best chance to make a profit on his or her investment?
answer
A. Buying a single-family home in a city.
question
Which of the following best explains why buying a single-family home in a city is a good investment?
answer
B. Housing prices in cities generally increase more
quickly than anywhere else.
question
Which of the following commodities has the most inelastic supply?
answer
A. Housing
question
Which of the following results from the fact that housing is expensive and time-consuming to build?
answer
B. The supply of housing is inelastic.
question
Which of the following best explains why the supply of housing often cannot keep up with increases in demand?
answer
C. Housing is expensive and time-consuming to build
question
The selling price of houses would be most likely to increase if there were a decrease in which of the following?
answer
D. Mortgage interest rates.
question
Consumers are most likely to be priced out of the option to buy a home when there's an increase in which of the following?
answer
C. Mortgage interest rates.
question
The selling price of houses would be most likely to decrease if there were first a decrease in which of the following?
answer
A. Construction workers' wages
question
A rapid increase in the population of a city or town is most likely to lead to which of the following?
answer
C. A seller's market
question
A factory laying off a lot of workers in a town is most likely to lead to which of the following?
answer
B. A buyer's market.
question
If the price of building materials suddenly increased by a large amount, there would most likely be which of the following?
answer
A. Shift to a seller's market.
question
Which of the following areas gives people access to both high-paying jobs and more living space?
answer
D. The suburbs
question
Which of the following areas provides residents with close access to high- paying jobs and cultural attractions?
answer
A. The city
question
Which of the following has the lowest housing prices and the smallest population density?
answer
C. Rural areas
question
A calculation of the amount that the average person can afford to buy is a way of measuring which of the following?
answer
A. Standard of living
question
An increase in the standard of living results from an increase in which of the following?
answer
C. Income
question
When either prices go down or income goes up, there is an increase in which of the following?
answer
A. The standard of living
question
Which of the following is most likely to create new markets?
answer
D. Free trade
question
What is the most direct result of free trade supplying productive resources to areas where they're most needed?
answer
B. Enhanced efficiency
question
Which of the following is most necessary for specialization among producers to take place?
answer
A. Free trade
question
Which of the following best describes the effect of a tariff on the import of cars from a foreign country?
answer
B. Foreign cars become more expensive.
question
Which of the following best states the purpose of a government subsidy?
answer
A. To protect domestic producers against
international competition.
question
Which of the following best states the purpose of an import quota?
answer
A. To reduce competition from foreign producers.
question
Which of the following leads to the end of a boom period in the business cycle?
answer
A. A reduction in consumer demand resulting from inflation.
question
Which of the following best explains how a recovery period leads to a boom?
answer
C. An increase in consumer demand resulting from a reduction in prices.
question
Which of the following best explains what happens when unemployment increases during a recession?
answer
C. The recession worsens into a depression.
question
Which of the following is the cause of demand-pull inflation?
answer
B. Consumers want more and more goods and services.
question
Which of the following is the most direct cause of cost-push inflation?
answer
B. Rising production costs.
question
Which of the following would lead to an increase in the inflation rate?
answer
A. Rapidly rising production costs.
question
Which of the following is an example of a fiscal policy?
answer
A. Raising taxes in order to cover a budget deficit.
question
Which of the following is an example of a fiscal policy?
answer
C. Increasing taxes to pay for greater military spending.
question
Which of the following is an example of the use of fiscal policy by the U.S. government?
answer
A. The Department of Transportation increases
spending on highway repairs
question
Which of the following results from a large company's ability to take advantage of economies of scale?
answer
A. The company can offer goods more cheaply than smaller retailers.
question
Which of the following best explains why large companies have an advantage over smaller companies?
answer
D. Economies of scale make it possible to offer lower prices.
question
Which of the following best explains why wholesalers can offer lower prices to larger customers?
answer
A. Large companies can buy all or most of a wholesaler's stock, reducing the wholesaler's
administrative costs.
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