ECN 2110 Week 1 Quiz

ECN 2110 Week 1 Quiz | Baker College

Module 1A Quiz

Question 1

In countries like _____________ the command economy predominates.

·         China and Vietnam

·         Cuba and North Korea

·         South Africa and Kenya

·         Germany and France

Question 2

In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers.

·         division of labor

·         interconnected economy

·         task economy

·         modern economy

Question 3

Which of the following best describes a fiscal policy tool?

government spending

·         bank lending

·         financial capital markets

·         household spending

Question 4

·         Macroeconomic topics do not usually include:

·         the profit maximizing decisions of an individual manufacturer.

·         the rate of inflation.

·         the rate of unemployment.

·         economic growth.

Question 5

In the circular flow diagram model:

·         households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses.

·         businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households.

·         households receive revenue for selling goods and services to businesses, and use that revenue to buy inputs from businesses.

·         Both (a) and (b) are correct.

Question 6

Attending college is a case where the ________________ exceeds the monetary cost.

·         budget constraint

·         marginal analysis Correct!

·         opportunity cost

·         marginal utility

Question 7

Why is there scarcity?

·         Because the opportunity set determines this.

·         Because theory dictates it. Correct!

·         Because our unlimited wants exceed our limited resources

·         Because human wants are limited.

Question 8

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:

·         $0

·         $4

·         $40

·         $44

Question 9

Most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good.

·         utility

·         marginal analysis

·         the budget constraint

·         consumption

Question 10

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the _________________, sometimes also called the opportunity set, a diagram which shows what choices are possible.

·         consumption set

·         budget constraint

·         original budge

·         income cap

Question 11

The downward slope of the demand curve again illustrates the pattern that as _____________ rises, ______________ decreases.

·         quantity demanded, price

·         quantity supplied, quantity demanded

·         price, quantity demanded

·         price, quantity supplied

Question 12

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________________.

·         income gap

·         market equilibrium

·         law of demand

·         price model

Question 13

Refer to Figure 3-1. Using the graph above and beginning on D1, a shift to D2 would indicate a(n):

·         increase in quantity demanded.

·         decrease in quantity demanded.

·         increase in demand.

·         decrease in demand.

Question 14

If new manufacturers enter the computer industry, then (ceteris paribus):

·         the supply curve shifts to the left.

·         the supply curve shifts to the right.

·         the demand curve shifts to the left.

·         some established manufacturers must exit the industry.

Question 15

Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect:

·         Andy's demand for pizza to increase.

·         Andy's demand for pizza to decrease.

·         Andy's quantity of pizza demanded to decrease.

·         Andy's demand for beer to increase.