1999_Economics - 1999 Economics 1. Supply is a list of...

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1999 Economics Page 1 1. Supply is a list of quantities that someone is willing and able to make available for sale at all possible prices at a particular point in time. a. True b. False 2. The Law of Demand summarizes the relationship between price and quantity demanded as an inverse relationship, meaning that as the price increases buyers will consume less of the product if it is a normal good. a. True b. False 3. The elasticity of demand measures how responsive consumers are to a change in price for a product. a. True b. False 4. Supply could be increased by both a reduction in the cost of producing the product, and an improvement in the technology used to make the product. a. True b. False 5. In order to calculate the break-even point of production a firm has to know the selling price per a unit, the fixed costs per a unit, and the variable costs per a unit. a. True b. False 6. If supply is elastic, a slight change in price will cause the producer to make a comparatively larger percentage change in the quantity supplied. a. True b. False 7. Equilibrium price is the price at which quantity supplied equals the quantity demanded. a. True b. False 8. Both shortages and surpluses create inefficiencies in the market because the current price is not at equilibrium. a. True b. False 9. Economic profit is typically higher than accounting profit. a. True b. False 10. One characteristic of a perfectly competitive market is that the products of the firms are so similar that producers use brand names to enable customers to distinguish the products. a. True b. False 11. In many cases the government is best suited to deal with negative externalities because it has the power to make and enforce laws that control the undesired behavior. a. True b. False 12. During most of the last thirty years the Federal Government has had a deficit budget in that expenditures exceeded revenues. a. True b. False 13. The National Debt is the sum of all previous borrowings of the Federal Government that remain unpaid. a. True b. False 14. Part of the problem with protective tariffs is that they really do not protect domestic employment or industries in the long run. a. True b. False 15. A country like the United States with its large amount of land, labor, and capital is unlikely to gain anything significant from trade with other less fortunate countries. a. True b. False
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1999 Economics Page 2 16. NAFTA eliminated all trade barriers between the United States and all countries in North and South America. a. True b. False 17. The European Economic Community has agreed to create and use a new currency, the Euro, among most of its members beginning January 1st, 1999. a. True b. False 18. If the Federal Reserve Bank increases the reserve requirement, it will result in a decrease in the money supply. a. True
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This note was uploaded on 05/18/2011 for the course ECON 101 taught by Professor Mcdounough during the Spring '11 term at DeVry Westminster.

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1999_Economics - 1999 Economics 1. Supply is a list of...

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