Question

no. Question Statement

1 Which of the following is an example of a trade-off?
2 What is the opportunity cost of going to the movies?
3 Which of the following is an example of thinking at the margin?
4 What happens to the amount of ice cream people buy when the
5 Which of the following is an example of how trade can make eve
6 Which of the following is an example of how markets can organi
7 Which of the following is an example of how governments ca
8 Which of the following countries is likely to have a higher standa
9 What happens to the price of goods and services when the gov
10 Which of the following is an example of how economics is a soci
11 Which of the following is a flow variable in the circular flow mod
12 Which of the following is a stock variable in the circular flow mo
13 Which of the following sectors is included in the circular flow m
14 Which of the following is an injection into the circular flow mode
15 What is the difference between a flow variable and a stock varia
16 What is the purpose of the circular flow model?
17 What are the two main phases of the circular flow model?
18 What is the role of households in the circular flow model?
19 What is the role of firms in the circular flow model?
20 What does a shift outward of the PPF represent?
21 What does a movement along the PPF represent?
22 Which of the following is not a possible point on the PPF?
23 What is the opportunity cost of producing more cars?
24 Why is the PPF bowed outward?
25 What happens to the PPF if there is a decrease in the demand fo
26 What happens to the PPF if there is an improvement in the tech
27 Which of the following is a correct statement about the law of
28 What is the difference between a normal good and an inferior g
29 What is the effect of a decrease in the price of a good on the
30 What is the effect of an increase in the income of consumers o
31 What is the effect of an increase in the income of consumers on
32 What is the effect of a change in consumer tastes on the deman
33 What is the effect of an increase in the number of consumers i
34 If the price of a good decreases, what will happen to the consu
35 A firm is experiencing constant returns to scale if its ________ i
36 The total cost of production is the sum of ________.
37 A firm is experiencing economies of scale if its ________ is decre
38 A firm is experiencing diseconomies of scale if its ________ is in
39 The minimum efficient scale is the ________ at which a firm can
40 A perfectly competitive firm will always produce at ________.
41 A firm's fixed costs are the ________ that the firm must pay rega
42 A firm's variable costs are the ________ that the firm must pay t
43 The marginal cost of production is the ________ cost of produci
44 The average cost of production is the ________ cost of producing
45 The long-run average cost curve is ______
46 The interest rate is the ________.
47 The interest rate is determined by the ________ of demand and
48 The demand for money is ________ with the level of income.
49 The supply of money is determined by the ________.
50 An increase in the money supply will lead to ________ in the int
51 A decrease in the money supply will lead to ________ in the inte
52 The real interest rate is the ________ interest rate minus the infl
53 The real interest rate is important because it determines the _
54 A higher real interest rate will lead to ________ investment.
55 A lower real interest rate will lead to ________ investment.
56 In a market, the equilibrium price is ________.
57 When the price of a good is below equilibrium, there is _______
58 When there is a surplus of a good, ________.
59 If the demand for a good decreases, the equilibrium price will _
60 If the supply of a good decreases, the equilibrium price will ___
61 If both the demand and supply of a good decrease, the equilibri
62 If both the demand and supply of a good increase, the equilibrium price will ________.
63 If the demand for a good is perfectly elastic, a change in price w
64 The long-run average cost curve of a perfectly competitive firm
65 The average product curve will eventually ________ as the quanti
66 The law of variable proportions states that as a firm increases t
67 The point at which the marginal product of a variable factor is
68 The law of returns to scale states that as a firm increases all fa
69 The law of returns to scale applies to _______
70 The stage of production in which the law of returns to scale app
71 The stage of production in which the marginal product of all fact
72 The stage of production in which the marginal product of all fac
73 The law of returns to scale does not apply to _______
74 The law of variable proportions applies to ________
75 The law of returns to scale applies to ________
76 The stage of increasing returns to scale is also known as the __
77 The stage of decreasing returns to scale is also known as the _
78 The law of returns to scale is based on the assumption that ___
79 The law of variable proportions and the law of returns to scale
80 The Cobb-Douglas production function is typically written as:
81 The Cobb-Douglas production function can be used to estimate:
82 The Cobb-Douglas production function is a widely used model in
83 Which of the following is NOT a type of cost?
84 Which of the following is a direct cost?
85 Which of the following is an indirect cost?
86 Which of the following is a variable cost?
87 Which of the following is a fixed cost?
88 Which of the following is a controllable cost?
 89 Which of the following is an uncontrollable cost?
90 What are the three types of returns to scale?
91 What is constant returns to scale?
92 What is increasing returns to scale?
93 What is decreasing returns to scale?
94 Which of the following is an example of a business that experien
95 What is the difference between economies of scale and disecono
96 Which of the following industries is most likely to experience inc
97 What is the long-run average cost curve (LRAC)?
98 What is the liquidity preference theory of interest?
99 What is the loanable funds theory of interest?
100 What is the time preference theory of interest?
Option 1 Option 2
All of the above A company that decides to produce more widget
All of the above The price of the movie ticket plus the cost of an
All of the above A company deciding whether to hire one more
People buy more ice cream. People buy less ice cream.
All of the above A company that outsources its manufacturing
All of the above A farmer sells her crops to a grocery store.
All of the above The government enforces contracts and property
All of the above A country with a lot of skilled workers.
Prices rise. Prices fall.
Economists use data to test their theories. All of the above
Income Capital
Production Capital
All of the above Firms
Investment Government spending
A flow variable measures a quantity over a period of timA flow variable measures a quantity at a point i
All of the above. To help us understand how goods and services
The production phase and the consumption phase. The factor market and the product market.
Households provide goods and services to firms in the Households provide factors of production to fir
Firms produce goods and services in the production ph Firms produce goods and services in the consum
An increase in the amount of resources available. Both an increase in the amount of resources av
A change in the production of one good, given the prodA change in technology.
25 cars, 125 computers 50 cars, 100 computers
The number of cars that could have been produced wit The number of computers that must be forgone
Both of the above. Because the resources used to produce the two g
The PPF will remain the same. The PPF will shift outward.
The PPF will shift outward. The PPF will remain the same.
The law of demand states that the quantity demanded of Thea law of demand states that the quantity deman
A normal good is a good whose demand increases as incA normal good is a good whose demand decreases
The demand for the complement will increase. The demand for the complement will decrease.
The demand for the normal good will increase. The demand for the normal good will decrease.
The demand for the inferior good will decrease. The demand for the inferior good will increase.
The demand for the good will remain the same. The demand for the good will decrease.
The demand for the good will increase. The demand for the good will decrease.
Consumer surplus will increase. Consumer surplus will decrease.
Total cost; constant. Average cost; increasing.
Fixed cost and variable cost. Average cost and marginal cost.
Average Cost Marginal cost
Average Cost Marginal cost
Quantity of output Price
The point where marginal cost equals price. Its minimum efficient scale.
Costs that do not vary with the level of output. Costs that vary with the level of output.
Costs that vary with the level of output. Costs that do not vary with the level of output.
Variable Total Cost
 Total cost variable cost
U-Shaped Horizontal
Price of money. Price of goods and services.
Equlibirium Surplus
Directly related Inversely related
Central Bank Commercial banks
A Decrease An Increase
An Increase A Decrease
Nominal Maturity
Quantity of output Quality
Less More
More Less
The price at which quantity supplied equals quantity The price at which buyers are willing to pay more
A surplus of the good. A shortage of the good.
The price will fall. The price will rise.
Fall Rise
Rise Fall
Fall Rise
he equilibrium price will ________. Rise
Have no effect on the quantity demanded. Increase the quantity demanded.
Horizontal U-Shaped
Decreased Increased
Decreased Increased
Point of Diminishing returns Break even point
Increased Proportionately Increased at an Increasing rate
All Firms Only perfectly competitive firms.
Constant Return to Scale Increasing Returns
Increasing Returns Decreasing Returns
Decreasing Returns Increasing Returns
Firms that use fixed proportions of inputs. Firms that produce homogeneous goods.
All firms in the short run. All firms in the long run.
All firms in the long run All firms in the short run.
None of the above Stage of diminishing marginal product.
Stage of diminishing marginal product. Stage of constant marginal product.
The technology of production is fixed. The prices of inputs are fixed.
The firm is a competitive firm. The firm is a price-taker.
Q = ALαKβ Q = AL + K
Both the productivity of labor and capital The productivity of labor
Both microeconomics and macroeconomics Microeconomics
Sunk Cost Direct cost
Wages of factory workers Rent on office space
Rent on office space Depreciation of factory equipment
Cost of raw materials Depreciation of factory equipment
Depreciation of factory equipment Rent on office space
Wages of factory workers Depreciation of factory equipment
Depreciation of factory equipment Rent on office space
Constant returns to scale, increasing returns to scale, a Increasing returns to scale, decreasing returns t
When the output increases by the same percentage as tWhen the output increases by a greater percent
When the output increases by a greater percentage thaWhen the output increases by a smaller percent
When the output increases by a smaller percentage thaWhen the output increases by a greater percent
A construction company that doubles its number of tru A law firm that doubles its number of lawyers and
Economies of scale are the benefits that a business can Er conomies of scale are the benefits that a busine
Automobile manufacturing Software development
The curve that shows the average cost of production forThe curve that shows the average cost of product
The theory that the interest rate is determined by th The theory that the interest rate is determined
The theory that the interest rate is determined by the The theory that the interest rate is determine
The theory that the interest rate is determined by the t The theory that the interest rate is determine
Option 3 Option 4 Option 5
A government that decides to spe A student who decides to study for an exam instead of going t
The total cash expenditure neededThe price of the movie ticket.
A government deciding whether t A farmer deciding whether to plant one more acre of corn.
The amount of ice cream people bIt depends on the individual's preferences.
A worker who specializes in one A country that exports wheat and imports cars.
A worker sells her labor to a compA company that produces widgets sells them to consumers.
The government redistributes incoThe government provides public goods, such as roads and nati
A country with a lot of capital. A country with a lot of natural resources.
Prices stay the same. It depends on the individual's preferences.
Economists use their knowledge t Economists make predictions about the future.
Wealth Production
Wealth Income
Government Households
Exports Taxes
There is no difference between a fBoth flow variables and stock variables measure quantities over
To help us understand how factorTo help us understand how money flows between households,
The goods market and the serviceBoth the production phase and the consumption phase.
Households provide factors of proBoth households and firms provide factors of production to ea
Firms provide factors of producti Both firms and households produce goods and services to each
None of the above. An improvement in technology.
A change in the amount of resourcNone of the above.
100 cars, 50 computers 75 cars, 75 computers
The cost of the resources used to None of the above.
Because the opportunity cost of pNone of the above.
The PPF will shift inward. The direction of the shift cannot be determined without more
The PPF will shift inward. The direction of the shift cannot be determined without more
The law of demand states that theThe law of demand states that the quantity demanded of a good
A normal good is a good whose dem A normal good is a good whose demand is equal to its price, whi
The demand for the complement w It is impossible to say without more information.
The demand for the normal good w It is impossible to say without more information.
The demand for the inferior good It is impossible to say without more information.
The demand for the good will incrIt is impossible to say without more information.
The demand for the good will remIt is impossible to say without more information.
Consumer surplus will remain the It is impossible to say without more information.
Marginal cost; decreasing. Average cost; decreasing
Opportunity cost and explicit cost.Sunk cost and variable cost.
Total Cost Revenue cost
Total Cost Revenue cost
Cost Revenue
The point where average cost equa The point where marginal revenue equals price.
Costs that are incurred in the shorCosts that are incurred in the long run.
Costs that are incurred in the shorCosts that are incurred in the long run.
Fixed cost average cost
Fixed cost average cost
Vertical Negatively sloped
Price of labor. Price of capital.
Shortage Excess Demand
Not related Cannot be determined
Individual households The government
No change Cannot be determined
No change Cannot be determined
Effective Discount
Type Level
The same Cannot be determined
The same Cannot be determined
The price at which buyers are williThe price at which buyers are willing to pay less than sellers are
An increase in demand. A decrease in demand.
The quantity supplied will rise. The quantity demanded will rise.
Stay the same Cannot be determined
Stay the same Cannot be determined
Stay the same Cannot be determined
Fall Stay the same
Decrease the quantity demanded.Cannot be determined
Vertical Negatively sloped
Remain Constant Become negative
Remain Constant Cannot be determined
Point of maximum returns Point of negative returns
Increased at an Decreasing rate Decrease
Only monopolistic firms. Only perfectly competitive firms and monopolistic firms.
Decreasing returns None of the above.
Constant returns None of the above.
Constant returns None of the above.
Firms that produce heterogeneousFirms that use variable proportions of inputs.
Only firms that produce homogenOnly firms that produce heterogeneous goods.
Only firms that produce homogenOnly firms that produce heterogeneous goods.
Stage of constant marginal producStage of negative marginal product.
Stage of negative marginal producNone of the above.
The prices of outputs are fixed. All of the above
The firm is a price-setter. The firm is a monopolist.
Q = AL + Kβ Q = AL
The productivity of capital None of the above
Macroeconomics None of the above
Indirect cost Variable cost
Depreciation of factory equipmenWages of sales staff
Wages of factory workers Wages of sales staff
Rent on office space Wages of factory workers
Wages of factory workers Cost of raw materials
Rent on office space Wages of sales staff
Wages of factory workers Wages of sales staff
Constant returns to scale, positiveNone of the above
When the output increases by a sm None of the above
When the output does not changeNone of the above
When the output does not changeNone of the above
A software company that doubles Alli of the above
Economies of scale are the costs thNone of the above
Agricultural All of the above
The curve that shows the marginalThe curve that shows the marginal cost of production for a busi
The theory that the interest rate The theory that the interest rate is determined by the productiv
The theory that the interest rate The theory that the interest rate is determined by the productiv
The theory that the interest rate The theory that the interest rate is determined by the productiv
Correct Answer-1
All of the above
All of the above
All of the above
People buy more ice cream.
All of the above
All of the above
All of the above
All of the above
Prices rise.
All of the above
Income
Production
All of the above
Investment
A flow variable measures a quantity over a period of time, while a stock variable measures a quantity at a point in time.
All of the above.
The production phase and the consumption phase.
Households provide goods and services to firms in the production phase, and they receive income from firms in the consumpti
Firms produce goods and services in the production phase, and they sell these goods and services to households in the consu
Both an increase in the amount of resources available and an improvement in technology.
A change in the production of one good, given the production of the other good.
25 cars, 125 computers
The number of cars that could have been produced with the same resources.
Both of the above.
The PPF will remain the same.
The PPF will shift outward.
The law of demand states that the quantity demanded of a good is inversely related to its price.
A normal good is a good whose demand increases as income increases, while an inferior good is a good whose demand decrea
The demand for the complement will increase.
The demand for the normal good will increase.
The demand for the inferior good will decrease.
The demand for the good will remain the same.
The demand for the good will increase.
Consumer surplus will increase.
Total cost; constant.
Fixed cost and variable cost.
Average Cost
Average Cost
Quantity of output
The point where marginal cost equals price.
Costs that do not vary with the level of output.
Costs that do not vary with the level of output.
Variable
Total cost
U-Shaped
Price of money.
Equlibirium
Directly related
Central Bank
A Decrease
An Increase
Nominal
Quantity of output
Less
More
The price at which quantity supplied equals quantity demanded.
A surplus of the good.
The price will fall.
Fall
Rise
Fall
Rise
Have no effect on the quantity demanded.
Horizontal
Decreased
Decreased
Point of Diminishing returns
Increased Proportionately
All Firms
Constant Return to Scale
Increasing Returns
Decreasing Returns
Firms that use fixed proportions of inputs.
All firms in the short run.
All firms in the long run
None of the above
Stage of diminishing marginal product.
The technology of production is fixed.
The firm is a competitive firm.
Q = ALαKβ
Both the productivity of labor and capital
Both microeconomics and macroeconomics
Sunk Cost
Wages of factory workers
Rent on office space
Cost of raw materials
Depreciation of factory equipment
Wages of factory workers
Depreciation of factory equipment
Constant returns to scale, increasing returns to scale, and decreasing returns to scale
When the output increases by the same percentage as the inputs
When the output increases by a greater percentage than the inputs
When the output increases by a smaller percentage than the inputs
A construction company that doubles its number of trucks and workers and quadruples its output
Economies of scale are the benefits that a business can realize from increasing its scale of production, while diseconomies of s
Automobile manufacturing
The curve that shows the average cost of production for a business at different scales of production
The theory that the interest rate is determined by the demand for money and the supply of money
The theory that the interest rate is determined by the demand for loans and the supply of loans
The theory that the interest rate is determined by the time preference of individuals
uantity at a point in time.

ome from firms in the consumption phase.

vices to households in the consumption phase.

is a good whose demand decreases as income increases.

duction, while diseconomies of scale are the costs that a business can realize from increasing its scale of production.