ReviewExercisesQonlyMod

8/7/2019 ReviewExercisesQonlyMod

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Yorlanda A. Golden

REVIEW OF THE BASICS:

1) Solve: x + 79 = 194

X=155

2) Solve: x - 56 = 604

X=548

3) Solve: 6x = 36

X=6

4) Solve: x / 5 = 10

X=50

5) Solve the Problem: 6/1 ÷ 2/3

=1

6) Problem: 3/4 * 6/7 = 1

7) Graph: y = 2x + 1=

Y=2(0)+1=1

Y=2(1)+1=3

Y=2(2)+1=5

Y=2(2)+1= -1

(use values of X= 0,1,2,-1)

8) Simplify: (-5)^3

-125



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9) Simplify: -3 3 - (-3) 2 + (-2) 2 = -40

10) Opportunity cost is best defined as:

A) The amount given up when choosing one activity over the next best alternative.

B) The opportunity to earn a profit that is greater than the one currently being made.

C) The amount that is given up when choosing an activity that is not as good as the next bestalternative.

D) The amount given up when choosing one activity over all other alternatives.

11) In a market economy, which of the following is the most important factor affecting scarcity?

A) The needs and wants of consumers

B) The price of the product

C) The degree to which the government is involved in the allocation of resources.

D) All of the above are equally important.

12) Which of the following is not considered by economists to be a basic resource or factor of production?

A) Money

B) Machinery and equipment

C) Technology

D) Unskilled labor

13) Select the group that best represents the basic factors of production.

A) Land, labor, capital, entrepreneurship



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B) Land, labor, money, management skills

C) Land, natural resources, labor, capital D ) Land, labor, capital, technology

14) The best definition of the subject of economics is

A) How choices are made under conditions of scarcity

B) How money is used

C) How goods and services are produced

D) How businesses maximize profits

15) Complete the statement with "supply" or "demand": A maximum price below the equilibrium price causes excess ________, while a minimum price above the equilibrium price causesexcess._________.

A) Supply, Demand

B ) Demand, Supply

C) Demand, Demand

D) Supply, Supply

16) Complete the statement with ³right´ or ³left´: An increase in the price of cassette tapes willshift the demand curve for CDs to the a. _________________; an increase in the price of CD

players will shift the demand curve for CDs to the b. _____________________.

A) Left, right

B) Right, right

C) Right, left

D) Left, left

E ) None of the above



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17) Which of the following items go together?

A. Change in quantity supplied D. Shifting the supply curve

B. Change in production cost E . Change in price

C. Change in supply F. Movement along the supply curve

A) A,C,F; B,E ,D.

B) A,C,D; BE F

C ) A,E,F; B ,C ,D

D) A,D,C; BE

FE ) D,E ,F; A,C,D

18) Complete the statement with "supply" or "demand": If the price and quantity change in thesame direction, ____________ is changing; if the price and quantity change in oppositedirections, __________ is changing.

A) Supply, Demand

B ) Demand, Supply

C) Supply, Supply

D) Demand, Demand

E ) None of the above

19) Consider the market for personal computers. Suppose that the demand is stable: the demandcurve doesn¶t change. Predict the effects of the following changes on the equilibrium price of computers. The cost of memory chips (one component of a computer ) decreases.

A) Supply increases, so price falls and quantity rises

B) Quantity falls.



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C ) Supply decreases, so price rises and quantity falls.

D) Nothing would happen because demand is stable and so supply would be stable

E ) Not enough information to predict what would happen

20. Which of these provide the best definition of economics is:a. the study of how limited resources are allocated among competing needs.

b. the study of scarcity and how people deal with the problem of scarcity.c. the study of how choices are made.d. the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of that society.

21. The three central coordination problems any economic system must solve are:a. what to produce, why to produce, how to produce.

b. what to produce, why to produce, for whom to produce.

c. what to produce, how to produce, for whom to produce.d. what to produce, where to produce, how to produce.

22. Rational decision making means that:a. marginal benefits and marginal costs of a decision are always easy to measure.b. if the marginal benefit of the last unit of an activity exceeds its marginal cost, then moreof that activity should be undertaken.c. one should keep doing an activity until the total benefits are maximized.d. one should keep doing an activity until the marginal costs are minimized.

23

. An opportunity cost is:a. easily measured in dollar terms.b. the highest valued alternative that must be foregone whenever something is undertaken

or acquired .c. only incurred when important and costly decisions are to be made.d. not implicit in every decision we make.

24. E conomic models, insights, or theories:a. are always correct in their predictions.

b. once established as ³true,´ are always ³true.´c. are generalizations about the workings of an abstract theory.d. always include as much detail as possible.

25. Which of the following is a macroeconomic concern?a. The wage rates of electricians in Kansas City.

b. The effects of agricultural price supports on the income of farmers.c. How profits are maximized by a firm.d. The causes of unemployment in the United States.



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26. Which of the following is a microeconomic concern?a. Whether Microsoft is a monopoly or not.b. Whether a new governmental policy is inflationary or not.c. The effect that a new ³police action´ such as in Kosovo will have on national income.d. Whether government can implement a policy that will eliminate unemployment.

27. E conomic institutions:a. always operate in ways that economic theory would predict.

b. are pretty much the same no matter what country you visit.c. have social, political, and even religious dimensions.d. seldom change.

28. Positive economics:a. deals with subjective value judgments about ³what ought to be.´

b. will make the economy positively better off.c. is the exact opposite of negative economics.

d. deals with how the economy does in fact work.29. In a capitalist system

a. goods are distributeed based on people¶s needs. b. the factors of production are owned by the state.c. political, social, and historical forces play no role in the coordinatiion of economic activity.d. businesspeople decide how to produce efficiently, guided by their desire to make a profit.

3 0. Which of the following statements correctly distinguishes a market system (Capitalism ) from a non-market system?a. In capitalism, ³what to produce´ is determined by consumer demand; in socialism, by

free market forces. b. In capitalism, ³how to produce´ is determined by businesspeople¶s desire to minimize cost

and maximize profits; in socialism, it is determined to a much greater degree bygovernment.

c. There is more freedom of enterprise in socialism than in capitalism.d. Capitalism still exists while socialism does not exist in any form anymore.

3 1. A production possibilities curvea. that shows opportunity cost is a straight line.

b. has time on one axis and space on the other.c. cannot be used to explain one of two alternatives for a nation.d. shows we are faced with scarcity.

3 2. An economy is producing efficiently only if it is operatinga. outside the production possibility curve.

b. inside the production possibility curve.c. on the production possibility curve.d. at the x- or y-axis intercepts of the production possibility curve.



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33 . The opportunity cost of changing your decision on what to major in college is highest a. before you have earned any of the credits needed to obtain the major you initially chose.

b. after you have officially declared a major.c. after you have earned ½ of the credits to obtain the major you initially chose.

d. after you have completed your major and received your diploma.3 4. When individuals trade, using their comparative advantages, the production possibility curve

a. bows out. b. rotates along a single axis.c. shifts in.d. does not change.

3 5. An increase in demand:a. causes the demand curve to shift to the left.

b. means consumers are willing and able to buy more at any price.c. creates a surplus at the original price.d. could be caused by an increase in the price of a complementary good.

3 6. Which of the following would cause an increase in the demand for a good?a. A decrease in price.

b. An increase in consumer tastes for the good.c. A decrease in the price of a substitute good.d. Consumers expect the price of the good to fall in the near future.

3 7. The law of supply:a. states that as the price rises, buyers will purchase less.

b. states that as the price rises, sellers will supply a greater quantity.c. is applicable in only a few markets.d. is reflected as a downward sloping curve.

3 8. An increase in supply:a. will cause the supply curve to shift to the left.b. could be caused by a decrease in the price of a necessary factor of production.c. means sellers will produce less at any price.d. will cause the quantity demanded to fall.

3 9. The law of demand states that:a. there is an inverse relationship between the price and quantity demanded.b. there is a direct relationship between the price and quantity demanded.c. as income rises, quantity demanded also rises.d. a decrease in price will increase demand.

40. If at some price the quantity supplied exceeds the quantity demanded, then:a. a surplus exists and the price will fall over time as sellers competitively bid down the price.



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b. a shortage exists and the price will rise over time as buyers competitively bid up the price.c. the price is below equilibrium.d. equilibrium will be reestablished as the demand curve shifts to the left.

41. Which of the following would most likely increase the demand for hot dog buns?

a. An increase in the price of wheat used in the production of the buns.b. A decrease in the number of consumers of hot dog buns.c. A decrease in the price of hot dogs.d. A decrease in the price of hot dog buns.

42. Compared to last year, more television sets are being bought while the selling price hasrisen. This could have caused by:a. an exception to the law of demand.

b. an increase in supply.c. an increase in demand.d. a decrease in supply.

43 . If we observe the price of a good or service rising, then this could have been caused by:a. an increase in demand.

b. an increase in supply.c. a temporary surplus.d. a small increase in demand accompanied with a huge increase in supply.

44) The demand curve is given by:

QD = 5000 - 10 PFind the equation for Total revenue

45) The demand curve is given by:

QD = 5000 - 10 P

Find the equations for Marginal revenue

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