Which of these best describes the influence of high prices on the behavior of producers?

High prices are an incentive for producers to produce more.

What is the income effect?

a change in quantity demanded caused by a change in consumer income

When is a firm’s rate of hiring likely to be highest?

during a phase of increasing marginal returns

Equilibrium is reached when what occurs?

quantity supplied equals quantity demanded

Which of the following explains why products made under a command economy are more likely to be low quality?

The workers who make them have little incentive to make them well.

Why is the Law of Demand called a “law”?

because it has been demonstrated repeatedly

Which of these is an accurate statement about mixed economies today?

There are more mixed economies in the world than any other kind.

According to the Law of Supply, which of these would happen to an item as its price rose?

Producers would make more of it.

Why does an increase in gas prices lead to less consumer spending on other items?

The demand for gas is largely inelastic.

What have some states done to protect workers from adverse economic events such as layoffs and illnesses?

They set up unemployment compensation programs.

A change in quantity demanded is represented by ______

Movement along the demand curve.

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Econ Exam Quiz! #1

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Questions 25

Answers

1
Which of these best describes the influence of high prices on the behavior of producers?
High prices are an incentive for producers to produce more.
High prices are an incentive for producers to produce less.
High prices have no significant influence on the behavior of producers.
High prices influence producers to use fewer raw materials and less labor.
2
Which would an economist consider a likely substitute for coffee?
water
chicken
donuts
tea
3
Which type of economy is most prevalent in the world today?
mixed
traditional
market
command
4
What is the income effect?
a proportional change in quantity demanded based on income
a change in quantity demanded caused by a change in consumer income
an increase in purchase of complements based on an increase in income
a change in demand caused by substitution
5
Which of the following would result in a change in the production possibilities frontier in the mythical country Alpha?
a long drought
all of the above
an influx of immigrants from other countries
the discovery of an abundant natural resource
6
When deciding how to use resources, you need to evaluate the costs and benefits of each choice. This is called
resource frontiers
trade-offs
priorities
opportunities
7
When is a firm’s rate of hiring likely to be highest?
during a phase of uncertain marginal returns
during a phase of decreasing marginal returns
during a phase of negative marginal returns
during a phase of increasing marginal returns
8
Equilibrium is reached when what occurs?
quantity supplied equals quantity demanded
prices are inelastic
price increases
there is no change in the quantity supplied
9
The study of economics involves
explaining how incomes are earned and how jobs are created.
all of the above.
explaining how people deal with scarcity.
studying how things are made, bought, sold, and used.
10
Which of these would an item’s producer be most likely to do if total revenue on that item began to drop?
raise the price of that item
produce more of that item
lower the price of that item
produce less of that item
11
A demand schedule is best described as _______
a time line
a graph
an incentive
data
12
Which of the following explains why products made under a command economy are more likely to be low quality?
The workers who make them are not given quality-control guidelines.
The workers who make them are forced to use old-fashioned methods.
The workers who make them have little incentive to make them well.
The workers who make them are left to manage production on their own.
13
What do prices help buyers and sellers make?
products
models
targets
decisions
14
Why is the Law of Demand called a “law”?
because there are no exceptions to it
because it is legally required
because it is an economic term
because it has been demonstrated repeatedly
15
Which of these is an accurate statement about mixed economies today?
Very few economies today can be accurately described as “mixed.”
Mixed economies exist mostly in nations with communist governments.
There are more mixed economies in the world than any other kind.
Most nations that had a mixed economy have evolved into command economies.
16
According to the Law of Supply, which of these would happen to an item as its price rose?
Producers would make less of it.
Producers would increase the price even more.
Producers would lower the price on similar items.
Producers would make more of it.
17
What do low prices signal buyers to do?
buy less
nothing
buy more
substitute
18
Why does an increase in gas prices lead to less consumer spending on other items?
The demand for gas is largely elastic.
The demand for gas is largely inelastic.
The price of gas is largely elastic
The price of gas is largely inelastic.
19
In American free enterprise capitalism, the profit motive can be best thought of as what?
a regulation
a market
an efficiency
an incentive
20
What have some states done to protect workers from adverse economic events such as layoffs and illnesses?
They gave workers more time off.
They provided every worker with insurance
They set up support groups.
They set up unemployment compensation programs.
21
The phrase "the customer is always right" is most often associated with what term?
consumer sovereignty
entreprenuership
mixed economy
regulatory government
22
Which of these is the most likely to create a surplus of an item?
a fixed price
a pric ceiling
a market price
a price floor
23
Which of the following is currently considered one of the seven major economic and social goals in the United States?
clean environment
price stability
preserving endangered species
conservation
24
A change in quantity demanded is represented by ______
A shift of the demand curve.
Movement along the demand curve.
Complements.
Substitution.
25
Which nation today is the most striking example of successful privatization?
Cuba
China
Soviet Union
North Korea

Econ Exam Quiz! #1 Flashcards | StudBud