Demand and supply & Market in action Multiple choice?

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Demand and supply & Market in action Multiple choice?

Section1 The market:Demand and supply

1. Economists believe that scarcity forces everyone to:
A. Satisfy all their wants.
B. Abandon consumer sovereignty.
C. Make choices.
D. Create unlimited resources.
E. Not to reveal their wants.
2. An economics textbook is an example of:
A. Capital.
B. Labor.
C. A natural resource.
D. Entrepreneurship
3. Which of the following is closest to the definition of capital?
A. Money in your bank account.
B. Factories and machinery.
C. Borrowed money.
D. The ability of an individual to create financial capital.
E. Lakes, animals, coal and oil.

4. The study of microeconomics and macroeconomics differs in that:
A. Microeconomics is concerned with the domestic economy and macroeconomics is concerned only with the international economy.
B. Microeconomics examines the individual markets of the economy while macroeconomics studies the whole economy.
C. Microeconomics studies the actions of households and macroeconomics studies the actions of business firms.
D. Microeconomics studies the economy in terms of private individuals and firms while macroeconomics includes the effect of government.
E. Microeconomics examines the whole economy while macroeconomics studies the individual units of the economy.

5. Which of the following is a microeconomics topic?
A. The unemployment rate.
B. The inflation rate.
C. The economy’s growth rate.
D. The price of apples.
E. Forecasts of a recession next year.

Section2 Market in action

1. Assuming that hamburgers and hot dogs are substitutes, an increase in the price of hamburgers, other things being equal, results in a:
A. Leftward shift in the demand curve for hamburgers.
B. Rightward shift in the demand curve for hamburgers.
C. Leftward shift in the demand curve for hot dogs.
D. Rightward shift in the demand curve for hot do
2. Farmers can choose to produce eggs and/or milk. If there is a successful advertising campaign for people to ‘drink milk’, then what will be the effect on the egg market?
A. None, since consumers do not see eggs and milk as related goods.
B. Egg demand will increase.
C. Egg demand will decrease.
D. Egg supply will increase.
E. Egg supply will decrease
3. Supply is a relationship between:
A. Price of a particular good and quantity of this good buyers are willing to buy.
B. Cost of a particular good and quantity of this good sellers are willing to buy.
C. Price of a particular good and quantity of this good sellers are willing to sell.
D. Cost of a particular good and price buyers are willing to pay.
4. Which of the following could cause the supply of carrots to decrease?
A. Consumers’ incomes decrease.
B. There is a technological advance in carrot production.
C. The price of carrots decreases.
D. The number of farmers growing carrots increases.
E. Fertiliser costs increase.
5. The introduction of the carbon tax which requires polluters to pay for carbon emissions will:
A. Shift the supply curve to the left.
B. Shift the supply curve to the right.
C. Increase the quantity supplied.
D. Decrease the quantity supplied.
E. Decrease the demand

Production and cost & Market structures:Competition & Monopoly-Multiple choice?

Section4 Market structures:Competition & Monopoly
1.Consider the market for grapes. An increase in the wage paid to grape pickers will cause the:
A. Demand curve for grapes to shift to the right, resulting in a higher equilibrium price for grapes and a reduction in the quantity consumed.
B. Demand curve for grapes to shift to the left, resulting in a lower equilibrium price for grapes and an increase in the quantity consumed.
C. Supply curve for grapes to shift to the left, resulting in a lower equilibrium price for grapes and a decrease in the quantity consumed.
D. Supply curve for grapes to shift to the left, resulting in a higher equilibrium price for grapes and a decrease in the quantity consumed.

2. Which of the following statements is NOT true of a market?
A. An increase in demand, with no change in supply, will increase the equilibrium price and quantity.
B. An increase in supply, with no change in demand, will decrease the equilibrium price and the equilibrium quantity.
C. A decrease in supply, with no change in demand, will increase the equilibrium price and decrease the equilibrium quantity.
D. A decrease in demand, with no change in supply, will decrease the equilibrium price and quantity.

3. Consider the market for apples. Assuming that apples and oranges are substitutes, an increase in the price of oranges will:
A. Decrease the demand for apples, creating a lower price and a smaller amount of apples purchased in the market.
B. Increase the supply of apples, creating a lower price and a greater amount of apples purchased in the market.
C. Decrease the supply of apples, creating a higher price and a smaller amount of apples purchased in the market.
D. Increase the demand for apples, creating a higher price and a greater amount of apples purchased in the market. 4. In Exhibit in last slide, which of the following might cause a shift from S1 to S2?
A. An increase in number of producers.
B. An improvement in technology.
C. A decrease in number of producers.
D. An increase in consumer income.

Section4 Market structures:Competition & Monopoly
1.A young chef is considering opening his own sushi bar. To do so, he would have to quit his current job, which pays $20 000 a year, and take over a store building that he owns and currently rents to his brother for $6000 a year. His expenses at the sushi bar would be $50 000 for food and $2000 for gas and electricity. What are his explicit costs?
A.$26 000.
B.$66 000.
C.$78 000.
D.$52 000.
E.$72 000.
2. During the course of a week, McDonalds has enough time to hire or lay-off workers, but it does not have enough time to expand its kitchen or add an additional seating area. In this situation, McDonald’s:
A.Has no fixed costs.
B.Is in the short run.
C.Suffers an economic loss.
D.Earns a large profit.
3. Marginal product measures the change in:
A.Total cost brought about by changing production by one unit.
B.Product price brought about by changing production by one unit.
C.A firm’s revenue brought about by changing production by one unit.
D.The firm’s output brought about by employing one additional unit of input.
E.The firm’s profit brought about by employing one more input.
4. The main reason why the slope of the production function decreases is because of:
A.Diminishing returns to the variable factor.
B.Constant returns to an increasing factor.
C.Increasing returns to the variable factor.
D.Diseconomies of scale.
E.The fact that all factors are variable.
5. The marginal cost:
A.Always rises in the short run.
B.Rises when the law of diminishing returns is being experienced.
C.Always falls in the long run.
D.Falls when the law of diminishing returns is being experienced.

Structures:Monopolistic & Oligopoly & The National Economy -Multiple choice and short answer?

Section5 Market Structures:Monopolistic & Oligopoly
1. Economies of scale are created by greater efficiency of capital and by:
A.Longer chains of command in management.
B.Better wages for labour.
C.Smaller plant sizes.
D.Increased specialisation of labour.
2. The primary source of scale diseconomies appears to be:
A.A firm’s inability to acquire quality resources.
B.Too little demand for the firm’s product.
C.Consumers who resist dealing with large firms.
D.Division of labour.
E.The organisational difficulties of managing an ever-larger enterprise

3. Discuss marginal cost and marginal revenue. How can a firm maximize its profits in the long run? How does the firm, in the short run, decide to stay in the business or not?
Illustrate by diagrams.

Section6 The National Economy &Section7 Business Cycles and Economics Growth
1. Which of the following is a characteristic of the monopolistic competition market structure?
A.Many firms and a homogeneous product.
B.Few firms and differentiated products.
C.Few firms and similar products.
D.Few firms and a homogeneous product.
E.Many firms and differentiated products.
2. Which of the following is true about advertising by a firm?
A.It is always successful in increasing demand for a firm’s product.
B.It attempts to increase demand and to make demand more elastic.
C.It can attract severe penalties if firms are engaged in false or misleading advertising. 

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