EC1301 - Post-Lecture Quiz 1

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Post-Lecture Quiz 1

1 out of 2

JOSHUA CHOO YONG IAN

37m 8s
29-Aug-2015 01:10 PM
18 out of 20

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Section 1
1) Opportunity costs exist because
there is a price attached to virtually every good or service
technology is not fixed in the economy
people have dierent tastes and preferences
limited resources cannot satisfy all of the wants in society
the production possibilities frontier is bowed in with respect to the origin
Your Answer : there is a price attached to virtually every good or service
Your Marks : 0 out of 1
2) Which of the following would be a concern of normative economics?
measuring the actual distribution of income in the economy
recommending a change in government policy to make the distribution of income more
equitable
determining the impact of higher income taxes on the distribution of income

determining the impact of a lower federal budget deficit on the distribution of income
measuring the change in the nation's income distribution since 1960
Your Answer : recommending a change in government policy to make the
distribution of income more equitable
Your Marks : 1 out of 1
3) The statement that "at 10 percent, the interest rate is too high for families to buy a home they
could have aorded when the interest rate was below 7 percent ," is a(n)
positive statement
normative statement
morally ambiguous philosophical position
aront to the American dream
value judgment
Your Answer : positive statement
Your Marks : 1 out of 1
4) Two reasons why an economy might operate inside of its production possibilities frontier are
productive eciency and technological change
depressions and inflation
recessions and productive ineciency
opportunity costs and substitutability of resources used in production
productive ineciency and a decrease in the state of technology
Your Answer : recessions and productive ineciency
Your Marks : 1 out of 1
5) Which of the following is an example of productive ineciency?
Scientists discover a new substance that dramatically increases potential steel production.
A demographic boom leads to a rise in the number of workers in the labor force.
The rate of unemployment falls to zero.
Computer technicians are forced to answer telephones rather than perform their normal
duties.
Due to economic growth, the economy reaches a new point along its production possibilities
frontier.
Your Answer : Computer technicians are forced to answer telephones rather than
perform their normal duties.
Your Marks : 1 out of 1

6)

Which of the following could explain the shift in the production possibilities frontier from AB to
AC in Figure 2-7?
a productive improvement in petroleum production that has no eect on clothing production
a productive improvement in clothing production that has no eect on petroleum production
an increase in the size of the labor force that can produce either petroleum products or
clothing
oil drilling in Alaska is ended in order to protect the environment
major oil reserves are discovered o the coast of Africa
Your Answer : oil drilling in Alaska is ended in order to protect the environment
Your Marks : 1 out of 1
7)
Point

Figure 2-5
#Rockets

#Cruise Ships

A
B
C
D
E

20
18
14
8
0

0
6
10
12
13

Figure 2-5 shows five dierent combinations of rockets and cruise ships that a country could
manufacture. Suppose it decided to produce 18 rockets and 12 cruise ships. Which of the
following would be true?
This combination could not be produced.
The country will be at point B.
The country will be at point C.
The country will not be fully utilizing its resources.

The country will be at the midpoint of points B and D.

Your Answer : This combination could not be produced.
Your Marks : 1 out of 1
8) Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours. Eileen can cook dinner in
1.5 hours and mow the lawn in 2 hours. Which of the following statements is correct?
Bill has both an absolute advantage and a comparative advantage in cooking dinner.
Bill has both an absolute advantage and a comparative advantage in mowing the lawn.
Eileen has both an absolute advantage and a comparative advantage in cooking dinner.
Eileen has both an absolute advantage and a comparative advantage in mowing the lawn.
Bill has the comparative advantage in both cooking dinner and mowing the lawn.
Your Answer : Bill has both an absolute advantage and a comparative advantage in
cooking dinner.
Your Marks : 1 out of 1
9) Which of the following would increase the amount of an inferior good that buyers would like
to purchase?
an increase in buyers' incomes
an increase in the price of a complement
a decrease in the price of a substitute
a decrease in buyers' incomes
a decrease in its expected future price
Your Answer : a decrease in buyers' incomes
Your Marks : 1 out of 1
10) If steel manufacturers expected that the price of steel was going to rise in the next six
months, this would
have no change in the competitive market for steel
lead to a decreased demand for steel
lead to a decreased supply of steel
increase the future demand for automobiles
lead to a decrease in the quantity of steel supplied to the market
Your Answer : lead to a decreased supply of steel
Your Marks : 1 out of 1
11) Which of the following would cause a leftward shift of the supply curve for computers?
an increase in the price of printed circuit boards used to build computers

a decrease in the price of electricity

an increase in incomes of consumers
a decrease in the price of computers
a decrease in the size of the population
Your Answer : an increase in the price of printed circuit boards used to build
computers
Your Marks : 1 out of 1

12)

Consider the market for ground beef represented by Figure 3-12, which is initially in equilibrium
at point J. Which of the following is correct if equilibrium shifts to point K?
There is an excess supply of 50,000 pounds at the price of $1.00.
The demand decreased due to a lower price substitute.
There is an excess demand of 25,000 pounds at the price of $1.00.
The shift in supply will cause a temporary shortage, which will disappear when the price rises
to $1.50.
Both demand and the quantity demanded have dropped.
Your Answer : The shift in supply will cause a temporary shortage, which will
disappear when the price rises to $1.50.
Your Marks : 1 out of 1
13) A price floor on corn would have the eect of
creating a surplus regardless of the level at which the price floor is set
creating a surplus supply when the floor is above the equilibrium price
creating a shortage when the price floor is set below the equilibrium price

creating a shortage regardless of where the price floor is set

ensuring a more equitable distribution of the good among consumers
Your Answer : creating a surplus supply when the floor is above the equilibrium price
Your Marks : 1 out of 1
14) Price ceilings are primarily targeted to help __________, while price floors generally benefit
__________.
producers; no one
increase tax revenue for governments; producers
increase tax revenue for governments; consumers
producers; consumers
consumers; producers
Your Answer : consumers; producers
Your Marks : 1 out of 1

15)

Figure 4-4 depicts a market in which the government has imposed a price floor of $5.00 per
unit. To maintain the price floor, the government should
buy 200 units of the good
sell 200 units of the good
buy 700 units of the good
sell 700 units of the good
buy 500 units of the good
Your Answer : buy 200 units of the good
Your Marks : 1 out of 1

16) An excise tax on cigarettes

will cause both the market price and quantity to increase
will cause both the market price and quantity to fall
will cause the market price to rise and the market quantity to fall
will cause the market price to fall and the market quantity to rise
None of the above.
Your Answer : will cause the market price to rise and the market quantity to fall
Your Marks : 1 out of 1
17) If the price of a certain brand of sneakers falls from $27.50 to $22.50, and the quantity
demanded by consumers increases from 15 to 25 pairs per week, then the price elasticity of
demand is
0.25
1.00
2.75
1.50
2.50
Your Answer : 2.50
Your Marks : 1 out of 1
18) The more narrowly we define a good, the easier it is to find substitutes, and
the greater is the number of producers of that good
the greater is the supply-side response
fewer consumers therefore wish to purchase the good
less elastic is the demand for that good
more elastic is the demand for that good
Your Answer : the greater is the supply-side response
Your Marks : 0 out of 1
19)
Figure 5-1
Good
Haircuts per Week
Manicures per Week

Price

Quantity
Demanded

$20
$16
$12
$ 8

40
60
80
120

Figure 5-1 shows the prices of two services oered by Earl's Barber Shop and the resulting
quantities demanded by customers. In this example, the price elasticity of demand for
manicures (using the midpoint formula) is
1
2
3
0.5
0.4
Your Answer : 1
Your Marks : 1 out of 1
20) When there is a positive cross-price elasticity of demand between two goods,
they are independent goods
they are complementary goods
they are substitute goods
they are normal goods
the income elasticity of demand is positive
Your Answer : they are substitute goods
Your Marks : 1 out of 1

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