Questions:
1) the president of the united states promises to simultaneously produce more defense goods without any decreases in the production of other goods. under which of the following conditions could such a promise be valid?
a) if the united states were producing inside its production possibilities curve
b)if the united states were producing to the right of its production possibilities curve
c) if the united states were producing at a point on its production possibilities curve
d) none of the above; the production possibilities curve must shift to the right
2)which one of the following variables will change in response to a change in price?
a) supply
b) the opportunity cost of producing a given quantity of output
c)quantity supplied
d)production cost for a given quantity of output
3) which one of the following is true?
a) firms supply more of a product when its price rises
b)an increase in demand leads to a decrease in supply
c)scarcity is eliminated as firms supply more of a good
d)an increase in supply leads to a decrease in demand
4.)which one of the following is true?
a) firms supply more of a product when its price rises
b)an increase in demands leads to a decrease in supply
c)scarcity is eliminated as firms supply more of a good
d)an increase in supply leads to decrease in demand
5.)what will lead a firm to produce a good?
a) the expectation of making a profit by doing so
b)the expectation of generating growth for the economy by doing so
c) the expectation of creating jobs by doing so
d) the expectation of generating tax revenue by doing so
6)what you consume is determined only by your preferences, not by your income?
True or false
7) in choosing whether to produce something, a firm wants to know
a) how the cost of producing the good compares to its selling price
b) how many other firms are producing the same good
c) how long the typical consumer will shop before making this purchase
d) how frequently consumers who purchase the good will actually use it
8) assuming that the marginal utility of the first four pieces of candy was 30, 28, 24, and 18 respectively, how much total utility was derived from eating three pieces of candy?
a)58
b) 54
c)82
d)100
9)goods that bring you utility are goods that
a) enhance your well-being
b) have an investment value
c)allow you to save money
d) are reasonable priced
10)what does economic theory assume about human behavior?
a)the people are unaware of the opportunity costs associated with consumption
b)that people consume goods in order to derive utility
c) hat people do not take price into account in deciding what to buy
d) that rational consumers will spend all of their money