1.Economics is primarily the study of
a.economists' roles in the market for stocks and bonds.
`b.the problem of unlimited wants and limited resources.
c.methods to eliminate scarcity.
d.government programs that make the economy grow.
2.Societies in which consumers, producers, and resource suppliers determine economic outcomes are known as a.traditional economies.
d.mixed capitalistic economies.
3.The "what," "how," and "for whom" questions are determined by government in a.capitalistic economies.
4.A production possibilities curve does not show
`a.all the possible combinations of resources that may be used to produce a good. b.the productive capacities of a nation when resources and technology are limited. c.the opportunity costs of one good in terms of another.
d.that in order to increase the production of one good some amount of another good must be foregone.
5.A production possibilities curve will shift in toward the origin if a.resources become unemployed.
b.resources are shifted from consumption goods to capital goods. c.national defense spending increases while spending on entertainment decreases. `d.the population and labor force decrease.
6. The economics problem is essentially one of deciding how to make the best use of a.limited resources to satisfy limited wants.
b.unlimited resources to satisfy limited wants.
`c.limited resources to satisfy virtually unlimited wants.
d.virtually unlimited resources to satisfy virtually unlimited wants.
7.Which of the following is not a basic question that an economic system is supposed to determine? a.what and how many goods and services are produced
b.what quantities of each resource are used to produce each good `c.how to create a markets of buyers and sellers
d.who receives the output after it is produced
8.Which of the following is not a resource?
9.Which of the following is the best definition of the demand for good "X"? Demand shows a.how much of X would be bought at the equilibrium price.
b.how people's purchases of X rise and fall as their incomes rise and fall. `c.the amounts of X that would be bought at each and any price, assuming other factors (income, tastes, etc.) remain constant. d.how the amount of money people spend to purchase X changes as the price they must pay for it changes.
10.Which of the following is the best description of the law of demand? a.When supply increases, demand increases.
`b.Price and quantity demanded are inversely related.
c.When income increases, the demand for normal goods increases. d.When the price of A increases, the demand for B increases.
11.If the price of A falls, then
` a.the demand for complementary product B shifts to the right. b.the demand for inferior good B shifts to the right.
c.the demand for substitute good B shifts to the right.
d.the demand for A shifts to the right.
12.An increase in the demand for A is caused by
a.a decrease in the price of A.
b.a decrease in the price of a substitute for A.
c.an increase in the price of a complement for A.
` d.a decrease in income if A is an inferior good.
13.If hamburgers and French fries are complementary goods, a decrease in the price of French fries would `a.cause the demand curve for hamburgers to shift to the right. b.cause consumers to decrease the quantity of French fries demanded. c.cause the demand curve for hamburgers to shift to the left. d.cause consumers to decrease the quantity of hamburgers demanded.
14.Which of the following does not indicate an increase in the demand for good X? a.Consumers were purchasing 10 units of X at $3 per unit and now they...