A situation where people have to make choices based on unlimited wants and limited resources is known as
Factors of production
Macroeconomics
Scarcity
Law of Demand
Which of the following is an example of a price floor?
Agricultural price supports
Rent controls
Minimum wages
Both a and c
What is the portion of the unemployed that is accounted for by people who are out of work for long periods of time because their skills do not match those required for available jobs known as?
Structural unemployment
Functional unemployment
Frictional unemployment
Cyclical unemployment
Farmers can choose to produce eggs or milk. If there is an increase in the price of milk then what will be the effect on the egg market?
Egg supply will increase.
Egg supply will decrease.
Egg demand will decrease.
The quantity of eggs demanded will increase.
Positive economics focuses on
How to fairly allocate goods and services in the economy.
Determining which government policies are good for the economy.
Observed facts and the relationship between them.
All of the above.
The Law of Demand states that as the price of a good ____________________, the quantity demanded tends to ________________.
Increases....increase
Decreases....remain unchanged
Decreases....decrease
Increases....decrease
If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that
Y and Z are complements.
the demand for Y is elastic, but the demand for Z is inelastic.
Y and Z are substitutes.
Y and Z are unrelated.
A price floor that sets the price of a good above market equilibrium will cause
a surplus of the good.
a decrease in quantity demanded of the good.
an increase in quantity supplied of the good.
What is the term for the process of adjusting payments like social security benefits for changes in the price level?
Realization
Nominal adjustment
Indexation
Cyclical alignment
Which of the following is most likely to shift the demand curve for electricity to the left?
An increase in income
An increase in the price of natural gas, a substitute source of energy
A decrease in the price of electricity
Consumers being more energy conscious
A graph the shows the possible combination of goods that can be produced by an economy given available knowledge and factors of production is called
Production Possibilities Curve
Supply schedule
Demand schedule
Consumer price index
The highest valued alternative that must be given up in order to choose an option is called
opportunity cost.
disutility.
utility.
scarcity.
Two products that are usually consumed jointly would be referred to as
unrelated goods.
complements.
substitutes.
inferior goods.
Farmers can produce wheat and/or corn. What will happen in the wheat market if there is an increase in price of corn?
Wheat supply will decrease.
Wheat demand will decrease.
Wheat supply will increase.
Wheat demand will increase.
Suppose a seller finds a new technology that increases the speed with which he can produce the good. This leads to
A decrease in the quantity supplied for this good.
An increase in the price of this good.
The supply curve for this good shifts to the right.
An increase in the opportunity cost of producing the good.
The type of unemployment which occurs when workers are briefly between jobs is called
structural unemployment.
frictional unemployment.
functional unemployment.
cyclical unemployment.
Economics is primarily the study of
the choices we must make among alternatives because of scarcity.
how to make money in the stock market.
the proper form of industrial structure for the United States.
how to find lower cost methods of production.
Comparative advantage is when
two parties can complete a task equally well.
One person can produce more than another person.
One person can produce a good at a lower opportunity cost than another person.
If the price of Coke decreases, the demand curve for Pepsi will
remain unchanged.
shift to the right.
shift to the left.
do none of the above.
Which of the following goods are likely to be complements?
potato chips and pretzels.
Pepsi and Coke.
hot dogs and hot dog buns.
DVD players and VCRs.
The Law of Supply states that as the price ________________, the quantity supplied tends to ________________.
decreases....increase
increases....decrease
decreases....remain unchanged
increases....increase
Which of the following is a measurement of improvements in technology and organization that allow more output per unit of labor and capital inputs?
Real input productivity
Total factor productivity
Nominal capital productivity
Real labor productivity
If the demand for a good increased, what would be the effect on the equilibrium price and quantity?
Price would decrease, and quantity would increase.
Price would increase, and quantity would increase.
Price would decrease, and quantity would decrease.
Price would increase, and quantity would decrease.
Which of the following is an example of a normative economic statement?
The economy grew at an annual rate of 5% during the first quarter this year.
The minimum wage should be increased so that low income workers can afford to keep up with the cost of living.
If two automobile companies merge, it is likely that the price of automobiles will rise.
The inflation rate in the United States decreased from 4% last year to 3% this year as a result of lower energy prices.
Three key economic ideas/assumptions:
People are rational.
Every society faces trade-offs.
Optimal decisions are made at the margin.
A market is a group of buyers and sellers of a good or service.
Markets reward hard work.
Use economic data to test hypotheses.
People respond to economic incentives.
Economic issues must be simplified to be analyzed and understandable.
Type of unemployment where overall demand for goods and services in an economy cannot support full employment.
A price set below equilibrium will lead to a
shortage.
surplus.
price ceiling.
contraction.
A price floor that sets price above market equilibrium will cause
an increase in quantity demanded.
a decrease in quantity demanded.
an increase in quantity supplied.
a decrease in quantity supplied.
a surplus.
a shortage.
_______________ make(s) trade-offs necessary,
Alternatives
Comparative advantage
Normative analysis
Analysis of "what ought to be"
Positive analysis
If price is set above market equilibrium, there will be a
deadweight loss.
comparative advantage.
