For a firm that has passed the point where the law of

Question

1. For a firm that has passed the point where the law of diminishing returns has taken effect, adding another input to production means that

	variable costs are decreasing
	marginal product is decreasing
	market price is decreasing
	profit is decreasing

1 points

Question 2

1. Which of the following economic terms describes the total value of a nation's goods or services that have been adjusted for inflation?

	Altered gross domestic product
	Altered gross national product
	Real gross domestic product
	Gross domestic product

1 points

Question 3

1. Nancy Murray has $6,000 in demand deposits with the Teachers Credit Union. This means that she has $6,000 in

	savings accounts
	certificates of deposit
	IRA accounts
	checking accounts

1 points

Question 4

1. If the demand for peaches increases when the price of pears increases, holding other factors constant, then these goods must be

	elastic
	inferior
	substitutes
	complements

1 points

Question 5

1. When economists study the national economy or global economy, they are using a ____ approach.

	microeconomics
	monetary
	macroeconomics
	fiscal

1 points

Question 6

1. If a senior citizen living on a fixed income has to give up buying some food in order to be able to afford to purchase her medication, this is an example of

	opportunity cost
	diminishing returns
	economic profit
	comparative advantage

1 points

Question 7

1. The primary function of the Fed is to

	appoint its board members
	charter national banks
	regulate the supply of money in the United States so as to maintain a healthy economy
	regulate the supply of money in the world to support capitalism

1 points

Question 8

1. An economic system in which individuals and businesses make the decisions about what to produce and what to buy, and the forces of supply and demand determine how much is sold and at what prices, is called a ____ economy.

	producer's
	market
	command
	planned

1 points

Question 9

1. If all leading corporations in the soft-drink industry merged, this would

	create a monopoly
	lead to an oligopoly
	encourage monopolistic competition
	encourage pure competition

1 points

Question 10

1. In a perfectly competitive market environment, long-run economic profit equals zero because

	barriers to entry keep competing firms out of the market
	high, long-run fixed costs drive economic profit to zero
	a lack of barriers to entry leads to more firms entering the market, driving profit to zero
	long-run economic profits greater than zero are illegal