Financial Investment Quiz! Trivia Test

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Quizzes Created: 1 | Total Attempts: 116
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  • 1/12 Questions

    The monopsonistic employer hires more workers until marginal.

    • Physical product is zero
    • Revenue product equals marginal labor cost
    • Physical product equals wage
    • Revenue product equals wage
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About This Quiz


Financial investment quiz trivia test. There are a lot of things that people consider before starting a business with the main one being the ability to fill an existing gap in the market. This means a company has the ability to supply a commodity not available in the economy with a high demand. By taking this quiz you will get to test out what you know about the relationship between demand and supply in the market.

Financial Investment Quiz! Trivia Test - Quiz

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  • 2. 

    A decrease in the population can be expected to

    • Raise land rents

    • Increase the demand for land

    • Decrease the demand for land

    • Decrease the supply of land

    Correct Answer
    A. Decrease the demand for land
    Explanation
    A decrease in the population can be expected to decrease the demand for land because with fewer people, there will be less need for housing, infrastructure, and other land-dependent activities. This will result in a decrease in the overall demand for land as there will be less competition for available land resources.

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  • 3. 

    The usual shape of a labor supply curve is 

    • A horizontal line

    • A vertical line

    • Z shaped

    • Upward sloping

    Correct Answer
    A. Upward sloping
    Explanation
    The labor supply curve is usually upward sloping because as wages increase, individuals are more willing and able to supply more labor. This is because higher wages incentivize people to work more hours or enter the labor force. Additionally, as wages increase, the opportunity cost of leisure time also increases, further motivating individuals to supply more labor. As a result, the labor supply curve typically slopes upward, indicating that higher wages lead to an increase in the quantity of labor supplied.

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  • 4. 

    The supply of loanable funds

    • Is inversely related to the rate of interest

    • Is directly related to the rate of interest

    • Affects output price

    • Is equal to MRP

    Correct Answer
    A. Is directly related to the rate of interest
    Explanation
    The supply of loanable funds being directly related to the rate of interest means that as the interest rate increases, the supply of loanable funds also increases. This is because higher interest rates incentivize individuals and institutions to save more and lend their funds, as they can earn a higher return on their investments. Conversely, when interest rates are low, the supply of loanable funds decreases as there is less incentive to save and lend money. Therefore, the relationship between the supply of loanable funds and the rate of interest is directly proportional.

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  • 5. 

    If a firm uses its own funds, rather than borrowing to finance investment.

    • It makes more profit

    • It can make profit at a very low rate of return

    • It incurs an opportunity cost of capital

    • It should never do this

    Correct Answer
    A. It incurs an opportunity cost of capital
    Explanation
    When a firm uses its own funds to finance investment instead of borrowing, it incurs an opportunity cost of capital. This means that the firm is forgoing the potential earnings that could have been generated if the funds were invested elsewhere. By using its own funds, the firm misses out on the opportunity to earn a return on those funds, resulting in an opportunity cost. Therefore, although using its own funds may seem beneficial in terms of avoiding borrowing costs, it comes with the drawback of incurring an opportunity cost of capital.

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  • 6. 

    Over the past several decades, the Gini coefficient for the U.S.

    • Has been declining

    • Has been increasing

    • Has begun to look like that of Europe

    • Has remained essentially unchanged

    Correct Answer
    A. Has been increasing
    Explanation
    The correct answer is "has been increasing". This means that over the past several decades, the Gini coefficient for the U.S. has been on the rise. The Gini coefficient is a measure of income inequality, so an increasing Gini coefficient suggests that income inequality in the U.S. has been growing. This could be due to various factors such as changes in the economy, policies, or societal factors.

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  • 7. 

    A worker can earn "wage-related rent" if the worker.

    • Is in a union

    • Has unique capabilities

    • Productive

    • None of the above

    Correct Answer
    A. Has unique capabilities
    Explanation
    Wage-related rent refers to the additional income or benefits that a worker can earn based on their unique capabilities or skills that are in high demand in the labor market. This means that if a worker possesses unique capabilities that are valued by employers, they have the potential to earn wage-related rent. Being in a union or being productive may contribute to higher wages, but the key factor in earning wage-related rent is having unique capabilities.

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  • 8. 

    The labor supply curve facing an individual employer in a monopsony labor market is

    • Upward sloping

    • Downward sloping

    • Horizontal

    • Backward bending

    Correct Answer
    A. Upward sloping
    Explanation
    In a monopsony labor market, there is only one employer who has control over the wages and employment level. As the employer increases the wage rate, more workers are willing to supply their labor. This is because higher wages incentivize individuals to enter the labor market or switch from other industries. Therefore, the labor supply curve facing an individual employer in a monopsony labor market is upward sloping.

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  • 9. 

    The labor supply curve facing an individual employer in a competitive labor market is 

    • Upward sloping

    • Downward sloping

    • Horizontal

    • Backward bending

    Correct Answer
    A. Horizontal
    Explanation
    In a competitive labor market, the labor supply curve facing an individual employer is horizontal. This means that the employer can hire as many workers as they want at the prevailing market wage rate without affecting the wage rate. The reason for this is that in a competitive labor market, there are many potential workers available, and each worker is a price taker. This means that they are willing to supply their labor at the going market wage rate, and any increase in the number of workers hired by the employer does not affect the wage rate. Therefore, the labor supply curve facing the individual employer is horizontal.

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  • 10. 

    Which of the following can shift the labor demand curve to the right?

    • Decrease in product price

    • Increase in wages

    • Decrease in wages

    • Increase in productivity

    Correct Answer
    A. Increase in productivity
    Explanation
    An increase in productivity can shift the labor demand curve to the right because it means that firms can produce more output with the same amount of labor. This leads to an increased demand for labor as firms seek to hire more workers to take advantage of the higher productivity levels. As a result, the labor demand curve shifts to the right, indicating a higher quantity of labor demanded at each wage level.

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  • 11. 

    When the product demand is inelastic, labor demand is

    • Low

    • High

    • Inelastic

    • Elastic

    Correct Answer
    A. Inelastic
    Explanation
    When the product demand is inelastic, it means that changes in price have little impact on the quantity demanded. In this case, the demand for labor is also likely to be inelastic. This means that changes in wages or labor costs will have little effect on the demand for labor. The firm can still maintain a high level of labor demand even if wages increase, indicating that the labor demand is inelastic.

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  • 12. 

    The idea that the poverty level for a family of four is about $20,000 per year is an example of

    • An absolute measure of poverty

    • A relative measure of poverty

    • An excessive level of income to be considered poverty

    • None of the above

    Correct Answer
    A. An absolute measure of poverty
    Explanation
    The idea that the poverty level for a family of four is about $20,000 per year is an example of an absolute measure of poverty. This is because it sets a specific threshold, regardless of other factors, below which a family is considered to be in poverty. The $20,000 amount is not relative to other income levels or economic conditions, but rather serves as a fixed standard for determining poverty.

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  • Current Version
  • Mar 20, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Apr 29, 2011
    Quiz Created by
    Armsoflove
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