ACC498 Module 3 ECO Quiz 2017

Question

Question 1

Which one of the following is not a characteristic of public goods?

Question 1 options:

They are indivisible.

Public goods can be used by increasing numbers of people at no additional cost.

It is difficult to charge people on the basis of how much they use.

Public goods are subject to the principle of rival consumption.

Question 2

The part of the Federal Reserve System that determines monetary policy actions is the:

Question 2 options:

Federal Open Market Committee.

District Bank Board.

Federal Deposit Insurance Corporation (FDIC).

Comptroller's Office.

Question 3

In a free market, the market price and quantity in the below figure will adjust to equilibrium values of:

Question 3 options:

$2 per gallon and 60 million gallons.

$4 per gallon and 10 million gallons.

$2 per gallon and 30 million gallons.

$1 per gallon and 50 million gallons.

Question 4

All of the following explain the downward slope of the aggregate demand curve except:

Question 4 options:

changes in the stock of real wealth held by individuals.

the presence of unused production capacity and unemployment.

the availability of foreign substitute goods.

the effect of changing interest rates on the quantity demanded of interest-rate-sensitive goods.

Question 5

If one's demand for peanut butter decreases as income rises, the income elasticity of demand for the product is:

Question 5 options:

negative.

elastic.

unit elastic.

inelastic.

Question 6

If we add successive laborers to work a given amount of land on a wheat farm, eventually:

Question 6 options:

the increases in wheat harvested will get larger and larger.

average total cost will fall to zero.

the increases in wheat harvested will rise at a constant rate.

the increases in wheat harvested will get smaller and smaller.

Question 7

Other things being equal, a higher price induces

Question 7 options:

buyers to increase the amount they want to buy and sellers to increase the amount they are willing to sell.

buyers to increase the amount they want to buy and sellers to reduce the amount they are willing to sell.

buyers to reduce the amount they want to buy and sellers to increase the amount they are willing to sell.

buyers to reduce the amount they want to buy and sellers to reduce the amount they are willing to sell.

Question 8

A monopolistically competitive firm differs from a perfectly competitive firm in the long run in that:

Question 8 options:

profits are positive for a monopolistically competitive firm and zero for a perfectly competitive firm.

marginal cost equals the market price for a monopolistically competitive firm but not for a perfectly competitive firm.

profits are zero for a monopolistically competitive firm and positive for a perfectly competitive firm.

the demand curve faced by a monopolistically competitive firm is downward sloping, while the demand curve faced by a perfectly competitive firm is horizontal.

Question 9

In the below table, the balance on the current account for Country X is __________ billion dollars.

Question 9 options:

-150

+75

-85

-200

Question 10

The production possibilities curve bows outward because:

Question 10 options:

resources are of uniform quality.

opportunity costs are decreasing as the production of a good increases.

opportunity costs are fixed as the production of a good increases.

opportunity costs are increasing as the production of a good increases.

Question 11

Stephanie has decided to eat lunch between classes. She has ranked her choices, from highest to lowest as, 1) turkey sandwich, 2) tuna sandwich, 3) slice of cheese pizza, 4) cheeseburger. The opportunity cost of the eating turkey sandwich is:

Question 11 options:

the value of the cheeseburger.

zero, since she has satisfied a want.

the value of tuna sandwich, the next best choice.

the combined value of the tuna sandwich, slice of cheese pizza, and cheeseburger.

Question 12

A basic distinction between the long run and the short run is that:

Question 12 options:

if a firm produces no output in the long run, it still incurs a cost.

in the long run, some inputs are fixed, while in the short run, all inputs are variable.

in the short run, complete adjustment of all inputs is impossible, while in the long run all inputs can be adjusted.

the opportunity costs of production are lower in the short run than in the long run.

Question 13

When one uses the expenditure approach to calculate Gross Domestic Product (GDP), which of the following would be included?

Question 13 options:

Household purchases of services

All of the above

Private business investment

Government spending at the local, state, and federal levels

Question 14

Economic growth causes the:

Question 14 options:

production possibilities curve to shift leftward and the long-run aggregate supply curve to shift leftward.

production possibilities curve to shift rightward and the long-run aggregate supply curve to shift

leftward.

production possibilities curve to shift rightward and the long-run aggregate supply curve to shift

rightward.

production possibilities curve to shift leftward and the long-run aggregate supply curve to shift

rightward.

Question 15

The profit-maximizing price and quantity established by the unregulated monopolist in the above figure are:

Question 15 options:

Q4 units of output and a price of P4.

Q1 units of output and a price of P1.

Q3 units of output and a price of P3.

Q1 units of output and a price of P5.

Question 16

Microeconomics is the study of:

Question 16 options:

the effect that money has in the economic system.

how rising prices affect the level of employment in the economy.

the behavior of the economy as a whole.

how individuals and firms make decisions.

Question 17

Strategic behavior and game theory are features of which market structure?

Question 17 options:

Oligopoly

Monopoly

Monopolistic competition

Perfect competition

Question 18

In a market system, __________ provide signals about whether resources are relatively scarce or abundant.

Question 18 options:

government officials

scientists and engineers

prices

economists

Question 19

Which one of the following statements is false?

Question 19 options:

ATC = AFC + AVC

MC = TC divided by Q

AFC = TFC divided by Q

TC = TFC + TVC

Question 20

On a hot summer day, a construction worker enters a McDonald's fast-food restaurant. He orders the first Big Mac. He consumes it within 3 minutes. He then orders a second Big Mac and consumes it in 10 minutes. He eats only half of the third one in 18 minutes and throws away the rest. The store manager offers him the fourth for free. The construction worker says: "No thanks." Why?

Question 20 options:

Marginal utility increased at an increasing rate.

The law of diminishing marginal utility does not apply to consumption of Big Macs.

For the construction worker, total utility increased at an increasing rate.

Marginal utility declined as he consumed additional Big Macs.