Unit 1 Exam

Which of the following is the most fundamental issue that economics addresses?

• Choice of appropriate technology
• Reduction of unemployment
• Use of scarce resources
• Reduction of budget deficit

When making a decision, the next best alternative is called?

• The production possibilities
• The opportunity cost
• Scarcity
• The absolute advantage

A point outside the production possibilities curve would represent?

• Future output once producers become more efficient
• An efficient use of resources
• A combination that cannot be achieved due to scarcity
• Full employment of resources in the economy

An increase in which of the following will increase the quantity supplied of volleyballs?

• Taxes on volleyball producers
• The price of a substitute
• The number of volleyball consumers
• The price of volleyballs

If demand for mp3 players decreases when the price of mobile phones decreases, we can say that cell phones and mp3 players are

• Normal goods
• Inferior goods
• Substitute goods
• Complementary goods

The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.

• inverse, direct
• direct, inverse
• inverse, inverse
• strong, weak

Which of the following statements is correct?

• A decrease in the price of X will increase the demand for substitute product Y
• A decrease in income will decrease the demand for an inferior good
• An increase in the price of X will increase the demand for complementary product Y
• An increase in the price of X will decrease the demand for complementary product Y

Refer to Figure A. At price $20, which of the following would occur?

• Shortage of 100
• Surplus of 200
• Surplus of 50
• Surplus of $100

Name the 5 shifters of demand and provide one example for each.

Name the 5 shifters of Supply and provide one example for each.