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ECON 1580-01 – AY2024-T2

Review Quiz #1

Review Quiz #1

Started on Tuesday, 9 January 2024, 10:17 PM

State Finished

Completed on Tuesday, 9 January 2024, 10:50 PM

Time taken 33 mins 44 secs

Marks 23.00/25.00

Grade 92.00 out of 100.00

Question 1

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Question text

If consumer income, preferences, and the prices of all other goods remain constant while the price of X
varies, the amount purchased of X is defined by the:

Question 1Select one:

a.

demand curve.#

b.

price-consumption curve.
c.

income-consumption curve.

d.

price line.

Question 2

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Question text

Diminishing marginal returns for the first four units of a variable input is exhibited by the marginal
product sequence:

Question 2Select one:

a.

50, 50, 50, 50.

b.

50, 40, 30, 20.#

c.

50, 110, 180, 260.

d.

50, 100, 150, 200.

Question 3

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Question text

When an increase in the firm’s output reduces its long-run average cost, it experiences:

Question 3Select one:

a.

economies of scale.#

b.

diseconomies of scale.

c.

constant returns to scale.

d.

variable returns to scale.

Question 4

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The law of demand implies that:

Question 4Select one:

a.

consumers are not responsive to price changes.

b.

consumers will, all other things unchanged, buy more at lower prices.#
c.

sellers will, all other things unchanged, offer more on the market at higher prices.

d.

sellers will, all other things unchanged, offer less on the market at lower prices.

Question 5

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After graduation from college you will receive a substantial increase in your income from a new job. If
you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger
would be considered a/an:

Question 5Select one:

a.

normal good.

b.

substitute good.

c.

complementary good.

d.

inferior good.#

Question 6

Incorrect

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Question text

Water is considered a scarce good rather than a free good because:

Question 6Select one:

a.

it has alternative uses.

b.

it does not have alternative uses.

c.

scarce goods are less expensive than free goods.#

d.

free goods are more expensive than scarce goods.

Question 7

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Question text

A criticism of oligopolistic firms is that they:

Question 7Select one:

a.

have high concentration ratios.#

b.

are associated with unstable prices.

experience economies of scale.

d.

retard research and development.

Question 8

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Question text

The BEST example of making a choice at the margin is:

Question 8Select one:

a.

buying a new car.

b.

quitting your job.

c.

a coffee drinker drinking another cup of coffee.#

d.

attending college.

Question 9

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Question text

If the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity demanded
does not change, this indicates that, if other things are unchanged, the price elasticity of demand is:

Question 9Select one:

a.

0.

b.

-0.5.

c.

-1.

d.

-2.#

Question 10

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Question text

An increase in demand in a perfectly competitive industry characterized by constant costs will cause
a/an:

Question 10Select one:

a.

permanent increase in price.

b.
economic loss for firms.

c.

increase in the quantity supplied in the short run and an increase in market supply in the long run.#

d.

decrease in firm’s marginal revenue.

Question 11

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Question text

In market capitalism:

Question 11Select one:

a.

factors of production are privately owned and decisions are made privately.#

b.

factors of production are owned by the government but decisions are made privately.

c.

there is no role for government.

d.

the consumer has few choices to make.

Question 12

Correct

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Question text

The cross price elasticity of demand for Coke with respect to the price of Pepsi has been estimated to be
0.61. If the price of Pepsi falls by 10 percent in a period, how will that affect the demand for Coke in that
period, all other things unchanged?

Question 12Select one:

a.

The demand for Coke will increase but by less than 6.1 percent.

b.

The demand for Coke will increase by 6.1 percent.

c.

The demand for Coke will not change because many people prefer Coke over Pepsi.

d.

The demand for Coke will fall.#

Question 13

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Question text

A demand curve that is perfectly inelastic:

Question 13Select one:

a.

will be vertical.#
b.

will be horizontal.

c.

will be upward sloping.

d.

has an elasticity equal to 1 everywhere on the curve.

Question 14

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Question text

A curve that represents combinations of two goods that yield equal levels of satisfaction is a/an:

Question 14Select one:

a.

indifference curve.#

b.

budget curve.

c.

marginal utility curve.

d.

price-consumption curve.

Question 15

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A feature of monopoly that leads to unfavorable consequences is that it:

Question 15Select one:

a.

reduces income inequality.

b.

sets marginal cost equal to marginal revenue rather than price.#

c.

produces more output than if perfectly competitive firms characterized the same industry.

d.

charges a lower price than if perfectly competitive firms characterized the same industry.

Question 16

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Perfect competition is important to study because it:

Question 16Select one:

a.

is a theoretical extreme used for analysis.#

b.
is a realistic model of a few key markets.

c.

is a realistic model of many different markets.

d.

avoids all real-world problems and complexities.

Question 17

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Question text

If the production possibilities curve were a straight line sloping down from left to right, this would
suggest that:

Question 17Select one:

a.

more of both goods could be produced moving along the curve.

b.

the two products must have the same price.

c.

no factor of production has any particular comparative advantage over other resources.#

d.

the utility of the two goods must be equal to consumers.

Question 18

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An indifference curve shows combinations of two goods that yield:

Question 18Select one:

a.

equal prices.

b.

equal money income.

c.

equal satisfaction.#

d.

increasing prices.

Question 19

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Question text

In contrast to a monopoly firm, a perfectly competitive firm:

Question 19Select one:

a.

is a price taker.#

b.
faces a downward-sloping demand curve.

c.

has only a moderate degree of monopoly power.

d.

produces more than the efficient level of output.

Question 20

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Question text

Efficient production implies that it is:

Question 20Select one:

a.

possible to produce more of all goods and services.

b.

it is possible to produce more of one good without producing less of another.

c.

not possible to produce more of one good without producing less of another good.#

d.

producing at a combination of goods which lies between the production possibilities curve and the
origin.

Question 21

Correct
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Question text

If total revenue goes down when price falls, the price elasticity of demand is said to be:

Question 21Select one:

a.

price inelastic.#

b.

unit price elastic.

c.

price elastic.

d.

positive.

Question 22

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If the slope of the total product curve is decreasing, the slope of the total variable cost curve is:

Question 22Select one:

a.

increasing.#

b.
decreasing.

c.

unchanged.

d.

at its minimum value.

Question 23

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Question text

Which of the following is an example of structural unemployment?

Question 23Select one:

a.

An autoworker who is temporarily laid off from an automobile company due to a decline in sales.

b.

A geologist who is permanently laid off from an oil company due to a new technological advance.#

c.

A worker at a fast-food restaurant who quits work and attends college.

d.

A real estate agent who leaves a job in Texas and searches for a similar, higher paying job in California.

Question 24

Correct

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Question text

A strategy that is the same regardless of the action of the other player in a game is said to be a:

Question 24Select one:

a.

competitive strategy.

b.

trigger strategy.

c.

dominant strategy.#

d.

tit-for-tat strategy.

Question 25

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Question text

To determine whether an economy’s output is growing or shrinking, one must keep track of:

Question 25Select one:

a.

changes in nominal GDP.

b.

changes in the growth rate of nominal GDP.

changes in the general price level.

d.

changes in real GDP.#

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