Chapter_6 - YourResultsfor"SelfStudyQuiz SiteTitle...

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Your Results for: "Self-Study Quiz" Print this page Site Title: Principles of Economics, Eighth Edition Book Title: Principles of Economics, 8/e Book Author: Case/Fair Location on  Site: Chapter 6 > Self-Study Quiz Date/Time  Submitted: February 7, 2012 at 9:02 AM  (UTC/GMT) Summary of Results 33% Correct  of 48 Scored items: 16 Correct:  33% 32 Incorrect:  67% 5 questions not scored. 48 scored questions. More information about scoring 1. The analysis of the interaction  between firms and households  assumes that: Your Answer: Labor and capital are supplied by  Correct Answer: Labor and capital are supplied by    Incorrect. Labor and capital are supplied by households. The demand curves for labor and  capital reflect the firms’ demand these inputs for production. 2. Among the basic assumptions made  in this and some of the following  chapters is perfect competition. One  of the characteristics of perfectly  competitive industries is that there  are: Your Answer: A few firms, and possibly just a sin market output at times. Correct Answer: Many firms, each small relative to    Incorrect. A competitive industry is composed of many firms, each small relative to the size  of the industry.
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3. Among the basic assumptions made  in this and some of the following  chapters is perfect competition.  Among the characteristics of  perfectly competitive industries is: Your Answer: Homogeneous knowledge and im Correct Answer: Homogeneous products and perfe   Incorrect. A competitive industry is composed of many firms, each small relative to the size  of the industry. 4. Every household must make three  basic decisions. Which of these  decisions is more closely associated  with the capital market? Your Answer:   Correct. Households supply capital in the capital market. In the simple circular flow  diagram, household saving comprises the supply of capital, and business investment the  demand for capital. The price in this market equals the market rate of interest. 5. The budget constraint refers to the  limits imposed on household  choices by: Your Answer: Prices. Correct Answer: All of the above.   Incorrect. This choice is correct, however, other answers are also correct.
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6. The set of options that is defined  and limited by a budget constraint is  called: Your Answer: Relative price. Correct Answer: The choice set or opportunity set.   Incorrect. Relative price is the opportunity cost of a good, measured in terms of the value of  other goods and services that could have been purchased with the same amount of money.
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