When we move along a given supply curve,

all nonprice determinants of supply are held constant.

If a good is a Giffen good, then

the demand curve is upward sloping.

In the simple circular-flow diagram, with households and firms, GDP can be computed as the

income received by households, in the form of wages, rent and profit.

A monopolistically competitive industry is characterized by

many firms, differentiated products, and free entry

All of the following are properties of typical indifference curves except

lower indifference curves are preferred to higher ones.

When looking at a graph of aggregate demand, which of the following is correct?

The variable on the vertical axis is nominal; while horizontal axis is real

The market supply curve is

how quantity supplied of a good varies as the price of that good varies.

In monopolistically competitive markets, economic losses

suggest that some existing firms will exit the market.

Aisyah, a Malaysian citizen, works only in the United Kingdom. The value of the output she produces is

included in U.K. GDP, but it is not included in U.K. GNP.

Demand is said to be inelastic if

quantity demanded changes only slightly when the price of the good changes.

In most societies, resources are allocated by

the combined actions of millions of households and firms.

The GDP deflator is the ratio of

nominal GDP to real GDP multiplied by 100.

The minimum points of the average variable cost and average total cost curves occur where the

MC curve intersects those curves

Economics is the study of how society manages its

unlimited wants and limited resources.

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QUIZ 1

20 termsStudBud Administration162 plays

Micro and Macro exercise

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Questions 20

Answers

1
When we move along a given supply curve,
technology and price are held constant.
all nonprice determinants of supply are held constant.
only price is held constant.
all determinants of quantity supplied are held constant.
2
If a good is a Giffen good, then
the demand curve is horizontal.
the supply curve is downward sloping.
there is no optimal level of consumption for the consumer.
the demand curve is upward sloping.
3
Which of the following is likely to have the most price elastic demand?
PROTON IRIZ
NISSAN ALMERA
HONDA CIVID
PERODUA MYVI
4
In the simple circular-flow diagram, with households and firms, GDP can be computed as the
income received by households in the form of wages.
income received by households, in the form of wages, rent and profit.
payments made by firms for labor.
profits received by households.
5
Which of the following is a type of household expenditure that is categorized as investment rather than consumption?
The purchase of a new house
The purchase of durable goods such as stoves and washing machines
Spending on education
The purchase of stocks and bonds
6
A monopolistically competitive industry is characterized by
a few firms, identical products, and free entry.
a few firms, differentiated products, and barriers to entry
many firms, differentiated products, and barriers to entry.
many firms, differentiated products, and free entry
7
All of the following are properties of typical indifference curves except
indifference curves are downward sloping.
lower indifference curves are preferred to higher ones.
indifference curves are bowed inward.
indifference curves do not cross.
8
When looking at a graph of aggregate demand, which of the following is correct?
The variable on the vertical axis is nominal; while horizontal axis is real
The variable on the vertical axis is real; while horizontal axis is nominal
There are real variables on both the vertical and horizontal axes.
There are nominal variables on both the vertical and the horizontal axes.
9
The market supply curve is
prices that sellers are willing to accept for a given quantity of the good
how supply changes when consumer income changes.
how quantity supplied of a good varies as the price of that good varies.
the average quantity supplied by sellers at each possible price.
10
In both perfect competition and monopolistic competition, each firm
sells identical products.
faces a downward-sloping demand curve its product.
has many competitors.
has some monopoly power.
11
Changes in the GDP deflator reflect
both changes in prices and changes in the amounts being produced.
only changes in the amounts being produced.
only changes in prices.
neither changes in prices nor changes in the amounts being produced.
12
In monopolistically competitive markets, economic losses
are minimized through government-imposed barriers to entry.
suggest that some existing firms will exit the market.
suggest that new firms will enter the market.
are never possible.
13
Aisyah, a Malaysian citizen, works only in the United Kingdom. The value of the output she produces is
included in U.K. GNP, but it is not included in U.K. GDP.
included in U.K. GDP, but it is not included in U.K. GNP.
included in neither U.K. GDP nor U.K. GNP.
included in both U.K. GDP and U.K. GNP.
14
Demand is said to be inelastic if
the price of the good responds only slightly to changes in demand.
demand shifts only slightly when the price of the good changes.
quantity demanded changes only slightly when the price of the good changes.
buyers respond substantially to changes in the price of the good.
15
In most societies, resources are allocated by
a single central planner.
those firms that use resources to provide goods and services.
a small number of central planners.
the combined actions of millions of households and firms.
16
In the short run, a firm in a monopolistically competitive market operates much like a
firm in a perfectly competitive market.
monopolist.
firm in an oligopoly.
nonprofit firm.
17
The GDP deflator is the ratio of
nominal GDP to the inflation rate multiplied by 100.
real GDP to nominal GDP multiplied by 100.
real GDP to the inflation rate multiplied by 100.
nominal GDP to real GDP multiplied by 100.
18
A firm produces 100 units of output at a total cost of RM1,200. If fixed costs are RM100,
average fixed cost is RM12
average total cost is RM13
average variable cost is RM11
average total cost is RM14
19
The minimum points of the average variable cost and average total cost curves occur where the
MC curve intersects those curves
MC curve lies below the AVC and ATC curves.
slope of TC is the smallest.
AVC and ATC curves intersect.
20
Economics is the study of how society manages its
limited wants and unlimited resources.
limited wants and limited resources.
unlimited wants and limited resources.
unlimited wants and unlimited resources.

QUIZ 1 Flashcards | StudBud