Part 1 of 1 - / 109.

5 Points

Question 1 of 51 - 2.5 Points

A price ceiling set below the equilibrium price will result in
 A. an increase in supply.
 B. the equilibrium price.
 C. a decrease in demand.
 D. decrease in supply.

Question 2 of 51 - 2.5 Points

During the winter of 2014-2015, the price of fuel oil increased enormously but the quantity
demanded decreased only a little. This response indicates that the demand for fuel oil was
 A. inelastic.
 B. unit elastic.
 C. perfectly elastic.
 D. elastic.
 E. perfectly inelastic.

Question 3 of 51 - 2.5 Points

If tolls on a toll road can be raised significantly before commuters will consider using a free
alternative, then an increase in tolls will result in
 A. an increase in toll road usage.
 B. a decrease in non-toll road usage.
 C. an increase in total revenue.
 D. none of the above.
 E. a decrease in total revenue.

Question 4 of 51 - 2.5 Points

The imposition of an excise tax usually causes the price paid by consumers to ________,
while the price received by sellers ________.
 A. rise; remains unchanged
 B. fall; remains unchanged
 C. fall; falls
 D. rise; falls
 E. rise; rises

Question 5 of 51 - 0.0 Points

(2.5. points) An excess supply of some product is the same thing as
 A. price floor.
 B. a shortage.
 C. a surplus.
 D. scarcity.
 E. an excess demand.

Question 6 of 51 - 2.5 Points

A price ceiling set below the equilibrium price will result in..
 A. an increase in supply.
 B. the equilibrium price.
 C. a decrease in demand.
 D. excess supply.
 E. excess demand.

Question 7 of 51 - 2.0 Points

Suppose drought destroys many millions of acres of valuable Canadian farmland. The effect
on the Canadian economy would be to move
 A. its production possibilities boundary outward.
 B. it beyond its production possibilities boundary.
 C. None of the above. There would be no change in Canada's production possibilities
 boundary.
 D. its production possibilities boundary inward.
 E. it along its production possibilities boundary.

Question 8 of 51 - 2.5 Points

Ted chooses to study for his economics exam instead of going to the concert. The concert he
will miss is Ted's ________ of studying for the exam.
 A. absolute cost
 B. comparative cost
 C. opportunity cost
 D. discretionary cost
 E. monetary cost

Question 9 of 51 - 2.5 Points

In economics, perfect competition refers to a market structure where
 A. all firms are earning profits.
 B. firms can set the price of their product.
 C. firms co-operate with each other.
 D. each firm has zero market power.
 E. firms behave strategically.

Question 10 of 51 - 2.5 Points

For a perfectly competitive corn grower in Jacobu in the Amansie Central District of Ghana,
the marginal revenue curve is
 A. downward sloping.
 B. vertical at the profit maximizing quantity of production.
 C. U-shaped.
 D. upward sloping.
 E. the same as its demand curve, perfectly flat.
Question 11 of 51 - 2.5 Points
Which of the following is correct for a single-price monopoly? ii.It would never profitably
produce output in the inelastic range of its demand. iii.Its marginal revenue is less than price.
 A. The firm can determine the quantity it produces and the price it charges.
 B. i, ii, and iii
 C. i and iii
 D. ii only
 E. ii and iii
 F. i only

Question 12 of 51 - 2.5 Points

Consider the market for cellular phones. Which of the following shifts the demand curve
leftward?
 A. studies showing using cellular phones can cause brain cancer
 B. an increase in the price of cellular phones
 C. a decrease in the price of cellular phones
 D. an increase in the services provided by cellular phones, such as text messaging
 E. a decrease in the quantity demanded of cellular phones

Question 13 of 51 - 2.5 Points

The number of buyers of sport utility vehicles, (SUVs), decreases sharply. So the
 A. demand curve for SUVs shifts rightward.
 B. demand curve for SUVs shifts leftward.
 C. demand curve for SUVs does not shift, but there is a movement downward along
it.
 D. supply curve for SUVs shifts rightward.
 E. demand curve for SUVs does not shift, nor is there a movement along then
demand curve.
Question 14 of 51 - 2.5 Points
A market is defined as
 A. physical place where people buy only goods.
 B. a physical place where people buy both goods and services.
 C. a store where people buy physical goods.
 D. any arrangement that brings buyers and sellers together.
 E. a place where one good is bartered for another.

Question 15 of 51 - 2.5 Points

Market equilibrium occurs when
 A. the quantity demanded equals the quantity supplied.
 B. the market is changing rapidly.
 C. other things remain the same.
 D. buyers get the lowest possible price.
 E. everyone who wants the good gets the quantity they want at the price they want

Question 16 of 51 - 2.5 Points

As a falling price eliminates a surplus in the jersey market,
 A. the demand curve for jerseys shifts leftward, and the supply curve of jerseys shifts
rightward.
 B. consumers increase the quantity of jerseys they demand.
 C. producers increase the quantity of jerseys they supply.
 D. producers decrease the quantity of jerseys they supply, and buyers decrease the
quantity of jerseys they demand.
 E. the demand curve for jerseys shifts rightward, and the supply curve of jerseys
shifts leftward.

Question 17 of 51 - 2.5 Points

The "law of demand" refers to the fact that, other things remaining the same, when the price
of a good rises,
 A. the demand curve shifts rightward.
 B. the demand curve shifts leftward.
 C. there is a movement down along the demand curve to larger quantity demanded.
 D. there is a movement up along the demand curve to a smaller quantity demanded.
 E. the demand curve shifts rightward and there is a movement up along the demand
curve to a smaller quantity demanded.

Question 18 of 51 - 2.5 Points

According to the law of ________, there is a positive relationship between price and
________.
 A. supply; the change in supply
 B. demand; change in demand
 C. supply; the quantity supplied
 D. demand; quantity demanded

Question 19 of 51 - 2.5 Points

The supply schedule
 A. shows the relationship between the quantity supplied and the price of a good when
all other influences on selling plans remain the same.
 B. is a curve showing the relationship between the amount the sellers want to sell and
the price of that good when all relevant factors change.
 C. shows one quantity at one price.
 D. is the schedule that suppliers have to keep or else they will be late.
 E. shows the relationship between the quantity supplied and the price of a good when
all other influences on selling plans change.

Question 20 of 51 - 2.5 Points

If the price of carrots is below the equilibrium price, the
 A. quantity demanded of carrots exceeds the quantity supplied and a surplus exists.
  B. quantity supplied of carrots exceeds the quantity demanded and a surplus exists.
 C. quantity demanded of carrots exceeds the quantity supplied and a shortage exists.
 D. quantity supplied of carrots exceeds the quantity demanded and a shortage exists.
 E. quantity supplied of carrots equals the quantity demanded.

Question 21 of 51 - 2.5 Points

Which of the following shifts the supply curve of rutabagas rightward? (A rutabaga is a
potato-like vegetable.
 A. an increase in the price of a rutabaga
 B. an exceptionally cold summer that killed much of the rutabaga crop
 C. a fall in the price of fertilizer used to grow rutabagas
 D. an increase in the price of a rutabaga and a fall in the price of fertilizer used to
grow rutabagas shift the supply curve of rutabagas rightward.
 E. an increase in the price of a rutabaga and an exceptionally cold summer that killed
much of the rutabaga crop shift the supply curve of rutabagas rightward.

Question 22 of 51 - 2.5 Points

A small landscaping firm purchases a tractor that, in one day, is capable of drilling 60 fence-
post holes or removing 12 tree stumps (or some intermediate combination). For this
landscaper, what is the opportunity cost of removing one extra tree stump?
 A. 1/12th of the cost of the tractor
 B. 1/5 of the cost of the tractor
 C. drilling 12 fence-post holes
 D. drilling 5 fence-post holes
 E. There is no opportunity cost.

Question 23 of 51 - 2.5 Points

When technology increases the supply of a good and lower prices increase the quantity
demanded,
 A. the economy is reallocating resources to achieve an efficient allocation.
 B. consumer surplus falls.
  C. the invisible hand is unnecessary.
 D. the marginal benefit of the good increases with the quantity produced.
 E. the economy is no longer efficient because the quantity changes.

Question 24 of 51 - 2.5 Points

Consider the market for rental accommodation. In the short run, the supply of this product
tends to be
 A. infinitely price elastic.
 B. unit price elastic.
 C. very or completely price inelastic.
 D. irrelevant to the housing market price.
 E. very price elastic.

Question 25 of 51 - 2.5 Points

A change in demand is said to take place when there is a
 A. shift of the demand curve.
 B. shift of the supply curve.
 C. price change.
 D. movement along the demand curve.
 E. quantity change.

Question 26 of 51 - 2.5 Points

The table below provides information on output per month and short-run costs for a firm
producing outdoor wooden lounge chairs. All costs are in dollars. Q TFC TVC TC 5 200 200
400 10 200 220 420 15 200 240 440 20 200 260 460 25 200 350 550 30 200 810 1010 Refer
to Table above. What is the average variable cost of producing 10 chairs?
 A. $200
 B. $220
 C. $420
 D. $42
  E. $22

Question 27 of 51 - 2.5 Points

Which of the following statements apply to a perfectly competitive market?

Question 28 of 51 - 0.0 Points

There is freedom of entry and exit of firms in the industry.

Question 29 of 51 - 0.0 Points

Consumers prefer certain brands over others.

Question 30 of 51 - 0.0 Points

All firms in the industry are price takers.
 A. 1 only
 B. 2 only
 C. 3 only
 D. 1 and 2 only
 E. 1 and 3 only

Question 31 of 51 - 2.5 Points

In the short run, a profit-maximizing firm will expand output
 A. as long as marginal cost is greater than marginal revenue.
 B. until marginal revenue equals average variable cost.
 C. as long as marginal revenue is greater than marginal cost.
 D. until marginal cost begins to rise.
 E. until total revenue equals total cost.

Question 32 of 51 - 2.5 Points

Assume the following total cost schedule for a perfectly competitive firm. Output TVC ($)
TFC ($) 0 0 100 1 40 100 2 70 100 3 120 100 4 180 100 5 250 100 6 330 100 Refer to Table
above. The total cost of producing 6 units of output is
 A. $330.
 B. $71.67.
 C. $230.
 D. $100.
 E. $430.

Question 33 of 51 - 2.5 Points

A "decrease in supply" refers to which of the following?
 A. a decrease in quantity supplied
 B. a downward movement along a supply curve
 C. a drop in the quantity actually exchanged
 D. a leftward shift in the supply curve
 E. the likely result from a decrease in the price of a factor of production

Question 34 of 51 - 2.5 Points

With a given upward-sloping supply curve for restaurant meals (a normal good), a rise in
household income will cause the
 A. equilibrium price to increase and equilibrium quantity to decrease.
 B. equilibrium price and equilibrium quantity to both increase.
 C. equilibrium price and equilibrium quantity to both decrease.
 D. equilibrium price to increase and equilibrium quantity to remain constant.
 E. equilibrium price to decrease and equilibrium quantity to increase.

Question 35 of 51 - 2.5 Points

For a legislated minimum wage to be binding in a competitive labour market, it must be set
 A. below the free-market wage.
  B. such that no worker can earn more than the established minimum wage.
 C. at or below the free-market wage.
 D. equal to the free-market wage.
 E. above the free-market wage.

Question 36 of 51 - 2.5 Points

Which of the following factors of production is most likely to be variable in the short run?
 A. labour
 B. land
 C. entrepreneurship
 D. capital equipment
 E. technology

Question 37 of 51 - 2.5 Points

Which of the following statements does not apply to a perfectly competitive market?

Question 38 of 51 - 0.0 Points

There is freedom of entry and exit of firms in the industry.

Question 39 of 51 - 0.0 Points

Consumers prefer certain brands over others.

Question 40 of 51 - 0.0 Points

All firms in the industry are price takers.
 A. 1 only
 B. 2 only
 C. 3 only
 D. 1 and 2 only
 E. 1 and 3 only
Question 41 of 51 - 2.5 Points
In the short run, a profit-maximizing firm will expand output
 A. as long as marginal cost is greater than marginal revenue.
 B. until marginal revenue equals average variable cost.
 C. as long as marginal revenue is greater than marginal cost.
 D. until marginal cost begins to rise.
 E. until total revenue equals total cost.

Question 42 of 51 - 2.5 Points

If a perfectly competitive market is in a short-run equilibrium and each firm has P > SRATC,
then
 A. the market supply curve will become less elastic.
 B. existing firms will continue to earn economic profits in the long run.
 C. individual firms in the industry will increase their output.
 D. price will fall in the short run as it is too high and firms are making economic
profits.
 E. new firms will enter the market because existing firms are earning economic
profits.

Question 43 of 51 - 2.5 Points

A monopolistically competitive firm and a monopoly are similar because
 A. both firms must behave strategically toward other firms in the industry.
 B. they each face a downward-sloping demand curve.
 C. both firms will earn zero profits in the long run.
 D. both firms always operate at their point of minimum average cost.
 E. each firm has a large number of competitors.

Question 44 of 51 - 2.5 Points

Suppose that the price of soybeans increases by 20 percent and, as a result, the quantity
supplied of soybeans increases by 30 percent. It must be the case that supply is
 A. elastic and the elasticity of supply equals 1.5.
 B. inelastic and the elasticity of supply equals 1.5.
 C. elastic and the elasticity of supply equals 0.66.
 D. inelastic and the elasticity of supply equals 0.66.
 E. either elastic or inelastic, but more information about the elasticity of demand is
needed to determine which.

Question 45 of 51 - 2.5 Points

How would you describe an inferior good? It is a good that has
 A. a positive income elasticity of demand.
 B. a negative income elasticity of demand.
 C. an income elasticity of demand greater than zero but less than 1.
 D. a positive income elasticity of demand and a price elasticity of demand greater
than 1.
 E. a negative price elasticity of demand.

Question 46 of 51 - 2.5 Points

Total utility is always
 A. greater than marginal utility.
 B. less than marginal utility.
 C. decreasing when marginal utility is decreasing.
 D. decreasing when marginal utility is increasing.
 E. increasing when marginal utility is positive.

Question 47 of 51 - 2.5 Points

Economic growth constitutes..
 A. An increase in production
  B. An increase in economic activities within a country over a period
 C. Fall in consumption
 D. no production

Question 48 of 51 - 2.5 Points

The lowest point of economic activities in an economy constitutes..
 A. Trough
 B. Peak
 C. Growth
 D. Deflation

Question 49 of 51 - 2.5 Points

Inflation is always considered a harmful thing to an economy
 A. True
 B. False
 C. none of the above

Question 50 of 51 - 2.5 Points

Fixed income earners benefit from inflation
 A. True
 B. False
 C. none of the above

Question 51 of 51 - 2.5 Points

The highest level of inflation recorded in the history of Ghana is ..
 A. 100%
 B. 200%
 C. 122.8%
 D. 123.4%