Econ Final Part 1

20 Questions

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Economics Quizzes & Trivia

Part 1


Questions and Answers
  • 1. 
    Economic growth causes the production possibilities curve to
    • A. 

      Shit inward

    • B. 

      Shit outward

    • C. 

      Remain constant

    • D. 

      Become a straight line

  • 2. 
    All societies must ration because
    • A. 

      Demand curves slope downwards

    • B. 

      Scarcity exists in all societies

    • C. 

      Government requires it

    • D. 

      Without rationing, production would be limited

  • 3. 
    An advance in technology
    • A. 

      Causes a rightward shift in the supply curve

    • B. 

      Causes a leftward shift in the supply curve

    • C. 

      Has no effect on the supply curve

    • D. 

      Causes scarcity to no longer be a problem

  • 4. 
    If the demand curve shifts leftward
    • A. 

      Quantity demanded is less at each price

    • B. 

      Quantity demanded is greater at each price

    • C. 

      Quantity is unchanged

    • D. 

      None of the above

  • 5. 
    If Jackie's demand for jewelry rises as her income falls, then jewelry is a 
    • A. 

      Special good

    • B. 

      Normal good

    • C. 

      Neutral good

    • D. 

      Inferior good

  • 6. 
    As the price of good X rises, the demand for good Y falls. The goods are
    • A. 

      Substitutes

    • B. 

      Normal goods

    • C. 

      Complements

    • D. 

      Inferior goods

  • 7. 
    Which of the following business organizations has an advantage in raising large sums of capital?
    • A. 

      Partnership

    • B. 

      Proprietorship

    • C. 

      Corporation

    • D. 

      Nonprofit corporation

  • 8. 
    An agreement to pay periodic interest and a principal sum later is called
    • A. 

      A bond

    • B. 

      A stock

    • C. 

      A future

    • D. 

      A derivative

  • 9. 
    Which of the following statements is true
    • A. 

      A corporation is a legal entity separate from the owners

    • B. 

      Corporate profits are taxed only once

    • C. 

      Owners have unlimited liability

    • D. 

      Corporations cannot sell bonds

  • 10. 
    The law of marginal utility says
    • A. 

      Total utility normall falls

    • B. 

      Marginal utility falls as more units are consumed

    • C. 

      Marginal utility usually stays constant

    • D. 

      None of the above

  • 11. 
    Which of the following is true
    • A. 

      It is possible for total utility to rise as marginal utility falls

    • B. 

      Marginal utility is the same as total utility

    • C. 

      Marginal utility usually remains constant

    • D. 

      The marginal utility of water is usually high

  • 12. 
    Because there are so few diamonds in the world, the consumption of diamonds
    • A. 

      Takes priority over the consumption of water

    • B. 

      Takes place at high marginal utility

    • C. 

      Takes place at low marginal utility

    • D. 

      Is more important than the consumption of water

  • 13. 
    A fall in the price of a good leads to
    • A. 

      A rise in real income

    • B. 

      A fall in real income

    • C. 

      A negative substitution effect for the good

    • D. 

      A negative income effect for the good

  • 14. 
    The price elasticity of demand is highest for
    • A. 

      Bread

    • B. 

      Rice

    • C. 

      Soft drinks

    • D. 

      Pepsi-Cola

  • 15. 
    Price elasticity of demand measures responsiveness of quantity to 
    • A. 

      Interest rate changes

    • B. 

      Changes in income

    • C. 

      Price changes

    • D. 

      Supply changes

  • 16. 
    If quantity demanded is completely unresponsive to changes in price, demand is
    • A. 

      Inelastic

    • B. 

      Unit elastic

    • C. 

      Elastic

    • D. 

      Perfectly inelastic

  • 17. 
    Because of a price ceiling, the quantity demanded for gasoline exceeds the quantity supplied. If the gas station owner decides to let customers line up to buy, this would be an example of
    • A. 

      A surplus

    • B. 

      Cutthroat competition

    • C. 

      A black market

    • D. 

      A nonprice rationing method

  • 18. 
    An effect of a price floor is
    • A. 

      A surplus

    • B. 

      A shortage

    • C. 

      More satisfied customers

    • D. 

      Higher quality of goods

  • 19. 
    A legal minimum wage is an example of
    • A. 

      A price ceiling

    • B. 

      A price floor

    • C. 

      Criminal politics at work

    • D. 

      A price cushion

  • 20. 
    At a price floor above equilibrium price
    • A. 

      A shortage will result

    • B. 

      Fewer goods will be exchanged in the market

    • C. 

      More goods will be exchanged in the market

    • D. 

      None of the above