Question 1: Demand for a good will always rise when
the price of a complementary good falls.
the price of a substitute good falls.
tastes change.
incomes decrease.
the price of the good falls.
Question 2: Which of the following would be described as capital by an economist?
Government bonds
Corporate bonds
Petroleum reserves owned by a corporation
Common stocks traded on a national exchange
The power lift in a service station
Question 3: Along with the other social sciences, economics is concerned with
the behavior of human beings as individuals.
the behavior of human beings in groups.
the activities of international agencies.
the laws of mathematics as they apply to decision making.
the behavior of human beings both as individuals and in groups.
Question 4: The measure of the cost of a particular good in terms of what is given up to produce that good is called
a fixed cost.
a dollar cost.
a necessary cost.
an opportunity cost.
an explicit cost.
Question 5: In what type of economic system are the basic economic questions answered in the same way as in the past?
A planned economy
A traditional economy
A command economy
A market economy
Question 6: If the demand for coffee decreases as income decreases, coffee is a(n):
normal good.
inferior good.
substitute good.
complementary good.
Question 7: In Collegia, a small college town, the market for parking spaces is in equilibrium at a going price of $5 a day. There are 1,500 spaces and they are all sold every day with no unsatisfied buyers. Now the college takes in 200 more students, each of whom also wants a parking space at $5 a day. If there is a normal, upward-sloping supply curve, what will happen when the market has time to adjust?
There will be 1,700 parking spaces at $5 a day.
There will be 1,500 parking spaces at some price greater than $5 a day.
There will be more than 1,500 but less than 1,700 parking spaces at $5 a day.
There will be more than 1,500 but less than 1,700 parking spaces and the price will be more than $5 a day.
Question 8: The Wall Street Journal carried a story on a type of grocery store that operates with few services and limited use of attractive displays, but with lower prices than its competitors. This decision of the owners is a way of answering a question that every society must face. Which of the following is that question?
What goods and services will be produced?
How can we avoid inflation?
How can we avoid a recession?
Who will get the goods and services produced?
How will the goods and services be produced?
Question 9: What will cause a change along the supply curve?
The supplier's expectations
The supplier's costs
The price of the good
The price of all other goods
Question 10: Ceteris paribus, as applied in demand theory, means
accounting for all possible simultaneous changes.
holding constant all factors that affect demand except one.
observing the real world.
holding technology and resource prices constant.
holding one input constant while changing the other input.