Quiz 1,2 (2022-2023-2)

Economics is best defined as the study of

• how society manages its scarce resources

• how to run a business most profitably

• how to predict inflation, unemployment, and stockprices

• how the government can stop the harm fromunchecked self-interest

Your opportunity cost of going to a movie is.............

• the price of the ticket

• the price of the ticket plus the cost of any sodaand popcorn you buy at the theater

• the total cash expenditure needed to go to themovie plus the value of your time

• zero, as long as you enjoy the movie and considerit a worthwhile use of time and money

A marginal change is one that

• is not important for public policy

• incrementally alters an existing plan

• makes an outcome inefficient

• does not influence incentives

Adam Smith’s “invisible hand” refers to

• the subtle and often hidden methods that businesses use to profit at consumers’ expense

• the ability of free markets to reach desirableoutcomes, despite the self-interest of marketparticipants

• the ability of government regulation to benefit consumers, even if the consumers are unaware of theregulations

• the way in which producers or consumers inunregulated markets impose costs on innocentbystanders

Governments may intervene in a market economy inorder to

• protect property rights

• correct a market failure due to externalities

• achieve a more equal distribution of income

• All of the above

If a nation has high and persistent inflation, the mostlikely explanation is

• unions bargaining for excessively high wages

• the government imposing excessive levels of taxation

• the central bank creating excessive amounts ofmoney

• firms using their monopoly power to enforce excessive price hikes

A change in which of the following will NOT shift the demand curve for hamburgers?

• the price of hot dogs

• the price of hamburgers

• the price of hamburger buns

• the income of hamburger consumers

An increase in ________ will cause a movement along a given demand curve, which is called a change in________.

• supply, demand

• supply, quantity demanded

• demand, supply

• demand, quantity supplied

Movie tickets and film streaming services are substitutes. If the price of film streaming increases, what happens in the market for movie tickets?

• The supply curve shifts to the left

• The supply curve shifts to the right

• The demand curve shifts to the left

• The demand curve shifts to the right

The discovery of a large new reserve of crude oil willshift the ________ curve for gasoline, leading to a________ equilibrium price.

• supply, lower

• supply, higher

• demand, higher

• demand, lower