A decrease in supply is caused by:

suppliers' expectations of higher prices in the future

Which of the following is FALSE about the circular-flow diagram?

Money flows from households to firms

Economic models often:

vary greatly in assumptions and simplifications.

In the circular-flow diagram, a firm is:

an organization that produces goods or services for sale

The models that economists construct:

usually make simplifying assumptions

An economy is said to have a comparative advantage in the production of a good if it can:

at a lower opportunity cost than another economy

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Chapter 2&3 Macroeconomics midterm review

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Questions 12

Answers

1
A decrease in supply is caused by:
an increase in the number of sellers in the market
suppliers' expectations of higher prices in the future
an advancement in the technology for producing the good
a decrease in input prices
2
What is the equilibrium price in this wheat market?
$6
$4
$8
$2
3
Which of the following is FALSE about the circular-flow diagram?
Firms are the primary suppliers of goods and services
Money flows in the direction opposite to goods and services
Households are the primary demanders of goods and services
Money flows from households to firms
4
The law of demand is illustrated by a demand curve that is:
downward-sloping
horizontal
vertical
upward-sloping
5
The downward slope of the production possibility frontier implies that resources:
should not be wasted
must be used efficiently
be allocated so that approximately=amounts of goods&produced
are scarce.
6
Economic models often:
provide similar answers
are correct
fail to explain any of the real-life scenarios
vary greatly in assumptions and simplifications.
7
In the circular-flow diagram, a firm is:
an individual or a group of people who share their income.
an organization that purchases goods and services
an organization that sells factors of production
an organization that produces goods or services for sale
8
The models that economists construct:
usually make simplifying assumptions
often rely on physical constructs
rarely use mathematical equations or graphs
attempt to replicate the real world
9
Which of the following is NOT a determinant of supply?
the technology of production
expectations regarding future prices
consumer taste
cost of production
10
The price of chocolate covered peanuts is .60 the quantity demanded by George is () bag/month
10
15
30
25
11
An economy is said to have a comparative advantage in the production of a good if it can:
outside its production possibilities curve
with more resources than another economy
at a lower opportunity cost than another economy
with a higher opportunity cost than another economy
12
If a price of $10 temporarily exists in this market, a (__) of (__) bushels will result.
shortage; 10,000
surplus; 4,000
surplus; 8,000
shortage; 8,000

Chapter 2&3 Macroeconomics midterm review Flashcards | StudBud