Quiz Review for Midterm (Until Dwemand topic)

Which of the following is NOT a characteristic of a Command Economy?

• The power to determine and implement the direction of the economy is concentrated in the central government with minimal room for participation and feedback.

• It is organized in a top-down administrative model in which macroeconomic and even microeconomic decisions take place at the top with little to zero inputs from lower levels.

• The government specifically controls production goals and levels, distribution quotas, prices and wages, resource utilization and allocation, trends or patterns in consumption, and the capabilities of the labor force.

• The public, which is represented by the government, owns the means of production such as natural resources and raw materials, the capital, tools and machinery, as well as major industries and sectors or the firms under these major industries and sectors.

• Participants are free to enter or exit markets without government permission.

Which of the following activities is most likely to produce an externality?

• A student sits at home and watches TV

• A village homeowner having a videoke birthday party in their private backyard

• A student reads a novel for pleasure

• A student eats a hamburger in the student council office

If a nation has an absolute advantage in the production of a good,

• it can produce that good at a lower opportunity cost that its trading partner

• it can produce that good using fewer resources than its trading partner

• it can benefit by restricting imports of that good

• it will specialize in the production of that good and export it

A group of buyers and sellers of a particular good or service

• Market

• Monopoly

• Oligopoly

• Competitive market

• Monopolistically competitive

A good for which, ceteris paribus, an increase in income leads to an increase in quantity demanded

• Complements

• Basic goods

• Normal Goods

• Substitutes

• Inferior goods

Two goods for which an increase in the price of one leads to an increase in the demand for the other

• Complements

• Basic goods

• Normal Goods

• Substitutes

• Inferior goods

If an increase in consumer income leads to a decrease in the demand for camping equipment, then camping equipment is

• a complementary good

• a substitute good

• a normal good

• an inferior good

• None of the above

Ceteris paribus means

• before this, therefore because of this

• whatever will be will be

• the invisible hand

• other things being equal

• none of the above

A graph that shows the relationship between the price of a good and the quantity supplied

• Quantity Supplied

• Demand Schedule

• Law of demand

• Supply Curve

• Supply Schedule

Which of the following leads to an increase in supply?

• SanYang Furniture store will raise prices on all wood furniture.

• Price of a complementary good goes down.

• Five new companies begin producing smart phones.

• Increased cyclical unemployment due to the pandemic.

• All of the above increases supply