Economics Quiz

In the diagram, what should appear in place of the question mark?

• what to produce

• how to produce

• for whom to produce

• how many to produce

When producers offer fewer products for sale at each and every price, the supply curve has shifted to the left.

• True

• False

Advertising, fashion trends, and new product introductions serve to create consumer demand.

• True

• False

Name and describe the factor of production that is missing from this illustration.

• capital

• consumers

• government

• robots

The concept of voluntary exchange means people freely and willingly engage in market transactions.

• True

• False

If a competitive market is at equilibrium, and if there is a sudden increase in demand, then a temporary shortage will occur and the price will increase.

• True

• False

Which of the following choices could cause the movement shown in this graph?

• a decrease in income.

• an increase in income.

• no change in income.

APPLYING SKILLS Using Graphs: Study the graph and answer the questions below. What was the GDP in 2001?

The situation in which some necessities have little value while some non-necessities have a much higher value is known as the paradox of value.

• True

• False

The level of profit-maximizing output is reached when marginal cost is equal to marginal revenue.

• True

• False