l1 - Lesson 1 Quiz (Required for course grade) David Hanson...

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Unformatted text preview: Lesson 1 Quiz (Required for course grade) David Hanson Started: February 23, 2009 7:15 PM Questions: 10 Finish 1. (Points: 10) Save All Help Even though local newspapers are very inexpensive, people rarely buy more than one of them each day. This fact: a. is an example of irrational behavior. b. implies that reading should be taught through phonics rather than the whole language method. c. contradicts the economic perspective. d. implies that, for most people, the marginal benefit of reading a second newspaper is less than the marginal cost. Save Answer 2. (Points: 10) The marginal benefit curve is: a. b. c. d. upsloping because of increasing marginal opportunity costs. upsloping because successive units of a specific product yield less and less extra utility. downsloping because of increasing marginal opportunity costs. downsloping because successive units of a specific product yield less and less extra utility. Save Answer 3. (Points: 10) When product prices change, consumers are inclined to purchase larger amounts of the now cheaper products and less of the now more expensive products. This describes: a. b. c. d. the the the the cost effect. price effect. income effect. substitution effect. Save Answer 4. (Points: 10) An economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. This prediction is based on the assumption that: a. b. c. d. there are many goods that are substitutes for bicycles. there are many goods that are complementary to bicycles. there are few goods that are substitutes for bicycles. bicycles are normal goods. Save Answer 5. (Points: 10) A normal good is one: a. b. c. d. whose amount demanded will increase as its price decreases. whose amount demanded will increase as its price increases. whose demand curve will shift leftward as incomes rise. the consumption of which varies directly with incomes. Save Answer 6. (Points: 10) Assume that the demand schedule for product C is downsloping. If the price of C falls from $2.00 to $1.75: a. b. c. d. a larger quantity of C will be demanded. the demand for C will decrease. the demand for C will increase. a smaller quantity of C will be demanded. Save Answer 7. (Points: 10) Refer to the above diagram. The equilibrium price and quantity in this market will be: a. b. c. d. $1.00 and 200. $.50 and 130. $1.60 and 130. $1.60 and 290. Save Answer 8. (Points: 10) In the following question(s) you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X, (2) the equilibrium price (P) of X and (3) the equilibrium quantity (Q ) of X. Refer to the above. An increase in income, if X is a normal good, will: a. b. c. d. decrease D, increase P, and increase Q . increase D, increase P, and decrease Q . increase D, increase P, and increase Q . increase S, increase P, and increase Q . Save Answer 9. (Points: 10) One can say with certainty that equilibrium price will decline when supply: a. b. c. d. and demand both decrease. decreases and demand increases. increases and demand decreases. and demand both increase. Save Answer 10. (Points: 10) The market system's answer to the fundamental question "How will the goods and services be produced?" is essentially: a. b. c. d. "By exploiting labor." "Using the latest technology." "At least-cost production." "With as much machinery as possible." Save Answer Finish Save All Help ...
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