Macroeconomics: Definition & Principles Quiz

21 Questions | Total Attempts: 59

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Macroeconomics Quizzes & Trivia

This is to test your knowledge on material covered in chapter 5. Good Luck.


Questions and Answers
  • 1. 
    Macroeconomics deals with:
    • A. 

      Bits and pieces of the economy.

    • B. 

      The question of how a business unit should operate profitably.

    • C. 

      The working of the entire economy or large sectors of it.

    • D. 

      How individuals make decisions.

  • 2. 
    Which of the following would be a part of macroeconomics?
    • A. 

      A study of the change in automobile sales due to a change in the price of automobiles

    • B. 

      A study of the impact of a tax reduction on the profits of a business

    • C. 

      A study of recessions

    • D. 

      A study of the unemployment of workers displaced by technological change in the typesetting industry

  • 3. 
    A price control is:
    • A. 

      When a firm controls the price of the good it produces.

    • B. 

      A legal restriction on how high or low a price in a market may go.

    • C. 

      An upper limit on the quantity of some good that can be bought or sold.

    • D. 

      A tax placed on the sale of a good which controls the market price.

  • 4. 
    Rapidly increasing health costs have been a major political concern since at least 1992. Suppose that to control rising health costs the government sets the maximum price for a normal doctor's visit at $20, but the current market price is $40. Then:
    • A. 

      More people will try to visit the doctor, but the doctor will see fewer patients.

    • B. 

      The same number of people will try to visit the doctor, and the doctor will see the same number of patients.

    • C. 

      More people will be able to see the doctor, since the price is lower.

    • D. 

      Fewer people will try to see the doctor, and the doctors will see fewer patients.

  • 5. 
    The government decides to impose a price ceiling on a good, because it thinks the market-determined price is “too high.” If the government imposes the price ceiling below the equilibrium price:
    • A. 

      Consumers will respond to the lower price and therefore wish to purchase more of the good than at the equilibrium price.

    • B. 

      Producers will respond to the lower price and therefore offer more units for sale.

    • C. 

      Consumers will be able to purchase more of the good after the price ceiling is imposed.

    • D. 

      It will not be binding.

  • 6. 
    The government imposes a price ceiling below the equilibrium price. The price ceiling will cause:
    • A. 

      Quantity demanded to decrease.

    • B. 

      Quantity supplied to increase.

    • C. 

      A shortage of the good.

    • D. 

      An increase in the quality of the good.

  • 7. 
    • A. 

      $400.

    • B. 

      $1,500.

    • C. 

      The monetary price paid to obtain the ticket.

    • D. 

      $1,100 less than the opportunity cost of a ticket.

  • 8. 
    One of the ways rent control is inefficient is that it leads to:
    • A. 

      Higher-quality apartments.

    • B. 

      High opportunity costs associated with wasted time.

    • C. 

      Markets that maximize total surplus.

    • D. 

      The construction of more apartments.

  • 9. 
    Suppose the government of the oil-rich country of Oiland sets gasoline prices at $0.25 per gallon, when the market price is $1.50. The Oiland government's actions will:
    • A. 

      Improve efficiency since the low prices will force producers to find cheaper production methods.

    • B. 

      Result in gasoline surpluses even in an oil-rich country.

    • C. 

      Cause gasoline shortages even in an oil-rich country.

    • D. 

      Improve equality between rich and poor since the poor can now afford gasoline.

  • 10. 
    Table: Market for Fried TwinkiesPrice Quantity Demanded Quantity Supplied1.10 9000 30001.2 8000 50001.3 7000 70001.4 6000 9000 1.5 5000 1100(Table: Market for Fried Twinkies) In response to popular anger over the high price of fried Twinkies and the extreme wealth of fried Twinkie producers, the government imposes a price ceiling of $1.20 per fried Twinkie. From this table, the price ceiling causes:
    • A. 

      A shortage of 3,000 fried Twinkies.

    • B. 

      A shortage of 5,000 fried Twinkies.

    • C. 

      A surplus of 8,000 fried Twinkies.

    • D. 

      A surplus of 3,000 fried Twinkies.

  • 11. 
    Suppose the government of Coffeeland sets coffee prices at $1 per pound, when the market price is $10. The government's actions will:
    • A. 

      Improve efficiency since the low prices will force producers to find cheaper production methods.

    • B. 

      Result in coffee surpluses even in a coffee-rich country.

    • C. 

      Cause coffee shortages even in a coffee-rich country.

    • D. 

      Improve equality between rich and poor since the poor can now afford coffee.

  • 12. 
    The government decides to impose a price ceiling on a good because it thinks the market-determined price is “too high.” If it imposes the price ceiling above the equilibrium price:
    • A. 

      Consumers will respond to the higher price and therefore wish to purchase less of the good than at the equilibrium price.

    • B. 

      Producers will respond to the higher price and therefore offer fewer units for sale.

    • C. 

      Consumers will purchase less of the good after the price ceiling is imposed.

    • D. 

      There will be no change to either the price or quantity in the market.

  • 13. 
    If New York City had no medallion system for taxicabs, the price of a taxicab ride would:
    • A. 

      Increase because of the higher safety hazards.

    • B. 

      Not change from its current level.

    • C. 

      Decrease.

    • D. 

      Increase, but only slightly.

  • 14. 
    If the government imposes rationing and price controls on the item being offered, which of the five points shown is the most likely resulting position of the market?
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

    • E. 

      E

  • 15. 
    Consider the diagram, if the government artificially limits the price of the item offered so that it cannot rise above .75, it will result in
    • A. 

      An excess supply

    • B. 

      The market clearing

    • C. 

      A consumer surplus of 1.00

    • D. 

      An excess surplus of 240 units

    • E. 

      An excess demand of 240 units

  • 16. 
    A legal maximum price at which a good can be sold is a a. price floor. b. price stabilization. c. price support. d. price ceiling.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 17. 
    A taxi medallion system is a form of
  • 18. 
    Typically, the government limits quantity in a market by issuing
  • 19. 
    The wedge, has a special name known as
  • 20. 
    The most well known example of a price floor is
  • 21. 
    A place where illegal activity is performed due to price controls is known as