Economics Quiz

Refer to the following graph. If S2 is the initial supply curve, a decrease in the number of producers is likely to

• result in a downward movement along S2

• shift the curve from S2 to S1

• shift the curve from S2 to S3

• result in an upward movement along S2

Which of the following could cause a change in quantity demanded?

• a change in price

• a change in consumer preferences

• a change in income

• all of the above

Refer to the following table. At a price of $3, there is a

• surplus of 600 pairs of socks

• 1. surplus of 100 pairs of socks

• 1.  shortage of 100 pairs of socks

• 1. shortage of 600 pairs of socks

Refer to the following graph. There will be a shortage of bread if the market price of bread is

• $10

• $6

• above $10

• between $8 and $10

__________ is an example of a price floor.

• farm price support

• scalping of Harry Potter movie tickets

• reselling tickets of a U2 concert at a high price

• rent control

• minimum wage laws

An appropriate description of the term economic model is that it is a

• method to distinguish between causation and association

• complicated framework to explain complex processes

• representation of a theory or part of a theory

• method to distinguish correlation from causation

_______ is an example of the government acting as a referee.

• provision of health insurance benefits

• enforcement of contract provisions between buyer and seller

• purchase of new arms for national security

• imposition of taxes on monopolies

Which of the following is true according to the concept of “an invisible hand”?

• governmental control over the production processes leads to efficiency in production and distribution

• productivity of labor can be increase through research and development

• pursuit of self-interest promotes economic well-being for the society as a whole

• at the optimum level of output, the marginal cost of production exceeds the marginal utility of consumption

Adam Smith’s discussion of the production in a pin factory illustrates the

• law of comparative advantage

• principle of externalities

• principle of the division of labor

• law of diminishing marginal returns

For an economy’s production possibilities frontier, all of the points inside the frontier are ______, and all of the points that are on the production possibilities frontier are ______.

• attainable; unattainable

• efficient; inefficient

• unattainable; efficient

• inefficient; efficient