Weekly Economics Surgery Questions 1

Choose the one alternative that best completes the statement or answers the question.
1) Scarcity requires that people must 1) _______
A) cooperate. B) make choices.
C) trade. D) compete.

2) Which of the following is a macroeconomic topic? 2) _______

A) Why plumbers earn more than janitors.
B) Whether the army should buy more tanks or more rockets.
C) The reasons for the rise in average prices.
D) The reasons for a rise in the price of orange juice.

3) Studying the determination of prices in individual markets is primarily 3) _______

a concern of
A) microeconomics. B) positive economics.
C) macroeconomics. D) negative economics.

4) Because we face scarcity, every choice involves 4) _______

A) money.
B) giving up something for nothing.
C) the question "what."
D) an opportunity cost

5) The loss of the highest-valued alternative defines the concept of 5) _______

A) scarcity. B) opportunity cost.
C) entrepreneurship. D) marginal benefit.

6) Which of the following is NOT an example of an opportunity cost? 6) _______

A) Because Mary is now being paid a higher wage, she can afford to
buy a new car even though she is moving into a bigger apartment.
B) By choosing to attend college, Jean was not able to continue
working as an electrician; as a result, she gave up more than
£45,000 in earnings while she was in college.
C) By spending Thursday night studying for an economics exam, a
student was unable to complete a homework assignment for
calculus class.
D) Because David used all of his vacation time to paint his house, he
was unable to visit the Caribbean last year.

7) Marginal cost is the cost 7) _______

A) that arises from an increase in an activity.
B) that your activity imposes on someone else.
C) that arises from the secondary effects of an activity.
D) of an activity that exceeds its benefit.

8) Which of the following is an example of a positive statement? 8) _______

A) Business firms ought to contribute more to charities.
B) Government should not redistribute income.
C) Households are the primary source of saving.
 D) The foreign sector should be more tightly controlled.

9) Which of the following is a normative statement? 9) _______

A) The current butter surplus is the result of government policies.
B) Next year's inflation rate will be under 4 percent.
C) The government's cuts in welfare spending impose an unfair
hardship on the poor.
D) Consumers will buy more gasoline over the Christmas holiday
even if the price of gas is 10 cents higher than it was during the
Thanksgiving holiday.

10) Three steps that economists take to discover how the economic world 10) ______
works are
A) model building; speculation; and, revision.
B) observation and measurement; model building; and, testing
models.
C) data mining; data testing; and, drawing conclusions.
D) speculation; observation and measurement; and, drawing
conclusions.

11) The opportunity cost of good A in terms of good B is equal to the 11) ______
A) ratio of the price of good A to the price of good B.
B) ratio of the price of good B to the price of good A.
C) price of good B minus the price of good A.
D) price of good A minus the price of good B.

12) The quantity demanded is 12) ______

A) the amount of a good that consumers plan to purchase at a
particular price.
B) independent of consumers' buying plans.
C) always equal to the equilibrium quantity.
D) independent of the price of the good.

13) The law of demand states that, other things remaining the same, the 13) ______
higher the price of a good, the
A) larger is the quantity of the good demanded.
B) smaller is the quantity of the good demanded.
C) smaller is the demand for the good.
D) larger is the demand for the good.

14) People come to expect that the price of a gallon of gasoline will rise next 14) ______
week. As a result,
A) today's supply of gasoline increases.
B) the price of a gallon of gasoline falls today.
C) today's demand for gasoline increases.
D) next week's supply of gasoline decreases.

15) An unusually warm winter shifts the 15) ______

A) demand curve for gloves leftward.
B) supply curve of gloves rightward.
C) demand curve for gloves rightward.
D) supply curve of gloves leftward.
16) A change in which of the following alters buying plans for cars but does 16) ______
NOT shift the demand curve for cars?
A) A 20 percent increase in the price of a car.
B) A 5 percent increase in people's income.
C) An increased preference for walking rather than driving.
D) A 10 percent decrease in the price of car insurance.

17) In the figure above, which movement reflects an increase in demand? 17) ______
A) From point a to point e. B) From point a to point b.
C) From point a to point c. D) From point a to point d.

18) In the figure above, which movement reflects an increase in income if 18) ______
fruit snacks are an inferior good?
A) From point a to point e. B) From point a to point b.
C) From point a to point c. D) From point a to point d.

19) A fall in the price of a good leads producers to reduce the quantity of 19) ______
the good they are willing to produce. This fact illustrates
A) the law of demand.
B) the nature of an inferior good.
C) a change in supply.
D) the law of supply.

20) A supply curve shows the relation between the quantity of a good 20) ______
supplied and
A) income. Usually a supply curve has negative slope.
B) income. Usually a supply curve has positive slope.
C) the price of the good. Usually a supply curve has positive slope.
D) the price of the good. Usually a supply curve has negative slope.

21) If the price of a good changes but everything else influencing suppliers' 21) ______
planned sales remains constant, there is a
A) new supply curve that is to the left of the initial supply curve.
 B) rotation of the initial supply curve around the initial price.
C) new supply curve that is to the right of the initial supply curve.
D) movement along the supply curve.

22) Which of the following increases the quantity supplied of good X but 22) ______
does NOT increase the supply of good X?
A) A reduction in the price of the factors of production used to
produce X.
B) An increase in the price of X.
C) An increase in the price of good Y, a complement in the production
of X.
D) An improvement in the technology for producing X.

23) The above figure represents the market for oil. Because of the 23) ______
development of a new deep sea drilling technology the
A) demand curve shifts from D1 to D2 and the supply curve will not
shift.
B) demand curve will not shift, and the supply curve shifts from S1 to
S2.
C) demand curve will not shift, and the supply curve shifts from S2 to
S1.
D) demand curve shifts from D1 to D2 and the supply curve shifts
from S1 to S2.

24) When the price is below the equilibrium price, the quantity demanded 24) ______
A) exceeds the equilibrium quantity and the quantity supplied also
exceeds the equilibrium quantity.
B) is less than the equilibrium quantity and the quantity supplied also
is less than the equilibrium quantity.
C) is less than the equilibrium quantity but the quantity supplied
exceeds the equilibrium quantity.
D) exceeds the equilibrium quantity but the quantity supplied is less
than the equilibrium quantity.

25) If the quantity supplied exceeds the quantity demanded, then there is a 25) ______
A) shortage and the price is above the equilibrium price.
B) shortage and the price is below the equilibrium price.
C) surplus and the price is below the equilibrium price.
D) surplus and the price is above the equilibrium price.

26) In the above figure, a price of £15 per dozen for roses would result in 26) ______
A) a surplus.
B) a shortage.
C) downward pressure on prices.
D) equilibrium.

27) The equilibrium quantity of a good will increase and its equilibrium 27) ______
price might rise, fall, or stay the same when
A) its demand decreases and supply increases.
B) its demand increases and supply decreases.
C) its demand and supply both increase.
D) its demand and supply both decrease.