Worksheets1-1 Quiz
Total questions: 25
Worksheet time: 16mins
Economics is best defined as the study of
how the government can stop the harm from unchecked self-interest.
how to predict inflation, unemployment, and stock prices.
how society manages its scarce resources.
how to run a business most profitably.
Your opportunity cost of going to a movie is
the price of the ticket.
the price of the ticket plus the cost of any soda and popcorn you buy at the theater.
the total cash expenditure needed to go to the movie plus the value of your time.
zero, as long as you enjoy the movie and consider it a worthwhile use of time and money.
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 desirable outcomes, despite the self-interest of market participants.
the ability of government regulation to benefit consumers, even if the consumers are unaware of the regulations.
the way in which producers or consumers in unregulated markets impose costs on innocent bystanders.
Governments may intervene in a market economy in order 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 most likely explanation is
the central bank creating excessive amounts of money.
unions bargaining for excessively high wages.
the government imposing excessive levels of taxation.
firms using their monopoly power to enforce excessive price hikes.
Write answer!
(a) – the study of how society manages its scare resources.
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 right
The demand curve shifts to the left
The supply curve shifts to the left
The demand curve shifts to the right
The discovery of a large new reserve of crude oil will shift the ________ curve for gasoline, leading to a ________ equilibrium price.
supply, higher
supply, lower
demand, higher
demand, lower
If the economy goes into a recession and incomes fall, what happens in the markets for inferior goods?
Prices and quantities both rise.
Prices and quantities both fall
Prices rise and quantities fall
Prices fall and quantities rise
When the government imposes a binding price floor, it causes
the supply curve to shift to the left
the demand curve to shift to the right
a shortage of the good to develop
a surplus of the good to develop
In a market with a binding price ceiling, an increase in the ceiling will ________ the quantity supplied, ________ the quantity demanded, and reduce the ________.
increase, decrease, surplus
decrease, increase, surplus
increase, decrease, shortage
decrease, increase, shortage
A $1 per unit tax levied on consumers of a good is equivalent to
a $1 per unit tax levied on producers of the good
a $1 per unit subsidy paid to producers of the good
a price floor that raises the good’s price by $1 per unit
a price ceiling that raises the good’s price by $1 per unit
When a good is taxed, the burden of the tax falls mainly on consumers if
the tax is levied on consumers
the tax is levied on producers
supply is inelastic, and demand is elastic
supply is elastic, and demand is inelastic
Write answer!
(a) a legal maximum on the price at which a good can be sold
Write answer!
(a) a legal minimum on the price at which a good can be sold
Jen values her time at $60 an hour. She spends 2 hours giving Colleen a uzbek language class. Colleen was willing to pay as much at $300 for the uzbek language class, but they negotiate a price of $200. In this transaction,
consumer surplus is $40 larger than producer surplus
consumer surplus is $20 larger than producer surplus
producer surplus is $20 larger than consumer surplus
producer surplus is $40 larger than consumer surplus
The demand curve for cookies is downward-sloping. When the price of cookies is $2, the quantity demanded is 100. If the price rises to $3, what happens to consumer surplus?
It falls by less than $100
It falls by more than $100
It rises by less than $100
It rises by more than $100
John has been working as a tutor for $300 a semester. When the university raises the price it pays tutors to $400, Jasmine enters the market and begins tutoring as well. How much does producer surplus rise as a result of this price increase?
by less than $100
between $200 and $300
between $100 and $200
by more than $300
An efficient allocation of resources maximizes
consumer surplus
producer surplus
consumer surplus minus producer surplus
consumer surplus plus producer surplus
When a market is in equilibrium, the buyers are those with the ________ willingness to pay and the sellers are those with the ________ costs.
highest, highest
highest, lowest
lowest, highest
lowest, lowest
(a) =Value to buyers - Amount paid by buyers
(a) = Amount received by sellers - Cost to sellers
(a) = Consumer surplus + Producer surplus
