Economics Test 1 Macroeconomics

41 Questions | Total Attempts: 184

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Economics Quizzes & Trivia

Questions and Answers
  • 1. 
    In a market economy, both parties in a transaction expect to gain from any exchange of goods and services.
    • A. 

      True

    • B. 

      False

  • 2. 
    If both supply and demand decrease, then the change in equilibrium quantity is indeterminate.
    • A. 

      True

    • B. 

      False

  • 3. 
    If a country has a comparative advantage in the production of a good, it can produce that good with fewer resources than another country.
    • A. 

      True

    • B. 

      False

  • 4. 
    By virtue of government controls, command economies can ensure productive efficiency. Market economies have no mechanism to promote such efficiency.
    • A. 

      True

    • B. 

      False

  • 5. 
    Even if two individuals go to the movies at the same time and pay the same price, they will probably not have the same opportunity cost.
    • A. 

      True

    • B. 

      False

  • 6. 
    The demand curve for Good X shifts to the left whenever there is an increase in the price of Good X.
    • A. 

      True

    • B. 

      False

  • 7. 
    In the absence of trade, a country's PPF determines both what it can produce and what it can consume.
    • A. 

      True

    • B. 

      False

  • 8. 
    If 2 variables are positively correlated we can say that an increase in one causes an increase in the other.
    • A. 

      True

    • B. 

      False

  • 9. 
    If a country is producing on its PPF, we can say that it is allocatevely efficient.
    • A. 

      True

    • B. 

      False

  • 10. 
    Scarcity leads to a concave PPF.
    • A. 

      True

    • B. 

      False

  • 11. 
    A "change in quantity demanded" occurs whenever the price of a substitute good increases or decreases.
    • A. 

      True

    • B. 

      False

  • 12. 
    A price floor must be placed below the equilibrium price in order to be "effective".
    • A. 

      True

    • B. 

      False

  • 13. 
    Even if a country is less efficient at producing every good than another country, it can still benefit from trade.
    • A. 

      True

    • B. 

      False

  • 14. 
    When generating theories from observed data, you engage in the process of deduction.
    • A. 

      True

    • B. 

      False

  • 15. 
    It is possible for one person to have an absolute advantage in the production of all products.
    • A. 

      True

    • B. 

      False

  • 16. 
    "A decrease in homework should improve faculty evaluatoion scores." This is a positive statement.
    • A. 

      True

    • B. 

      False

  • 17. 
    An effective price ceiling is normally accompanied by a surplus.
    • A. 

      True

    • B. 

      False

  • 18. 
    A stable equilibrium is one that cannot be disturbed.
    • A. 

      True

    • B. 

      False

  • 19. 
    The opportunity cost of any decision is the value of the next best alternative that is not chosen.
    • A. 

      True

    • B. 

      False

  • 20. 
    Removing a tariff on imported sugar will likely push the demand curve for candy bars out to the right.
    • A. 

      True

    • B. 

      False

  • 21. 
    In one week, the Wicked Witch can knit 15 sweaters or bake 480 cookies. The opportunity cost per cookie for the Wicked Witch is:
    • A. 

      $15

    • B. 

      15 sweaters

    • C. 

      32 sweaters

    • D. 

      480 sweaters

    • E. 

      1/32 of a sweater

  • 22. 
    If there is a shortage of convenient parking spaces on campus, economists would argue that it is because:
    • A. 

      There are not enough of these spaces

    • B. 

      The price of these spaces is below equilibrium

    • C. 

      The price of these spaces is above equilibrium

    • D. 

      Economists are simply argumentative

  • 23. 
    Ruling out the possibility of growth, productive efficiency implies:
    • A. 

      The possibility of gains in one good without losses in thet other

    • B. 

      That more output has been produced

    • C. 

      The impossibility of gains in one good without losses in another

    • D. 

      That prices are stable

    • E. 

      C and d

  • 24. 
    Ann and Bob are business partners. Ann can type a one page letter every 5 minutes or audit one page of accounting every 15 minutes. Bob can either type a one page letter or audit one page of accounting every 10 minutes. Both work until all the office's business is taken care of. Both would also like to get home as soon as possible. Which statement is true?
    • A. 

      Both Bob and Ann should split the typing and auditing equally.

    • B. 

      Bob has a comparative advantage in both activities.

    • C. 

      Bob has an absolute advantage in both activities.

    • D. 

      Ann should do the auditing and Bob should type.

    • E. 

      None of the above is true.

  • 25. 
    The "invisible hand" described by Adam Smith refers to the:
    • A. 

      Allocative role of markets and market forces.

    • B. 

      Importance of government intervention and central planning.

    • C. 

      Role of custom in organizing economic behavior.

    • D. 

      Value of religious belief in creating an ideal economy.

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