macroeconomics test 1 - Custom Scholars
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macroeconomics test 1

question
An office supply store sells a ream of printer paper at a fixed price of $4.50. Which of the following is a term used by economists to describe the money received from the sale of an additional ream of paper?
A) marginal revenue
B) gross earnings
C) pure profit
D) marginal costs
E) net benefit
answer
marginal revenue
question
2. Economics promotes which of the following as the way to make the best decision?
A) Continue an enjoyable activity as long as you do not have to pay for it.
B) Continue an enjoyable activity until it is no longer enjoyable.
C) Continue an enjoyable activity until you cannot afford to pursue it.
D) Continue an enjoyable activity up to the point where its marginal benefit equals its marginal cost.
answer
continue an enjoyable active up to the point where its marginal benefit equals its marginal cost
question
marginal cost is the _______ associated with a particular increase in activity
a. total cost
b. additional cost
c. opportunity cost
d. forgone cost
answer
additional cost
question
Suppose a t-shirt manufacturer currently sells 5,000 t-shirts per week and makes a profit of $10,000 per week. A manager at the plant observes, "Although the last 400 t-shirts we produced and sold increased our revenue by $4,000 and our costs by $4,800, we are still making an overall profit of $10,000 per week so I think we're on the right track. We are producing the optimal number of t-shirts."
4.Refer to Scenario 1-1. Using marginal analysis terminology, what is another economic term for the incremental revenue received from the sale of the last 400 t-shirts?
A) gross earnings
B) marginal revenue
C) sales revenue
D) gross profit
answer
marginal revenue
question
Consider the following statements:
a. Soda drinkers purchase more soda from a grocery store that sells soda at a lower price than other rival grocery stores in the area.
b. Homeowners do not take steps to increase security even though they believe it is more costly to allow burglaries than to install security monitoring equipment.
c. Manufacturers produce less of a particular cell phone when its selling price rises.
6. Which of the above statements demonstrates that economic agents respond to incentives?
A) a only.
B) b only.
C) c only.
D) a and b.
E) a, b, and c.
answer
A only
question
suppose the US government encouraged teachers to take jobs in underperforming schools by paying the new teachers a $20,000 bonus. These teachers would be exemplifying the economic idea that...
answer
people respond to economic incentives
question
trade-offs force society to make choices when answering what three fundamental questions?
answer
1. what goods and services to produce
2. how will these goods and services be produced
3. and who receives them?
question
which of the following is an example of an economic trade-off that a firm has to make?
a. whether it is cheaper to produce with more machines or with more workers
b. whether or not consumers will buy its products
c. deciding why consumers want its products
d. deciding what profit margin it desires for its products
answer
whether it is cheaper to produce with more machines or with more workers
question
_______ exists because unlimited wants exceed the limited resources available to fulfill those wants.
answer
scarcity
question
an _______ is represented by a rightward shift of the demand curve
answer
increase in demand
question
an _______ is represented by a movement along a given demand curve
answer
increase in quantity demand
question
if, in response to an increase in the price of pineapples, the quantity of pineapples demanded decreases, then economists would describe this as
answer
a decrease in quantity demand
question
holding everything else constant, a decrease in the price of GPS systems will result in
answer
an increase in the quantity of GPS systems demanded
question
a ______ demand curve for shampoo would be causes by a change in the price of shampoo
answer
movement along the
question
the income effect of a price change results in a
answer
movement along the demand curve due to a change in purchasing power brought about by the price change
question
if an increase in income leads to an increase in the demand for sushi, then sushi is
answer
a normal good
question
if a decrease in income leads to an increase in the demand for macaroni, then macaroni is
answer
an inferior good
question
which of the following would cause an increase in the equilibrium price and decrease in the equilibrium quantity of watermelon?
a. a decrease in demand and an increase in supply
b. a decrease in supply
c. an increase in demand and an increase in supply greater than the increase in demand
d. an increase in demand and an increase in supply
answer
a decrease in supply
question
what would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery?
answer
demand will decrease, but this will not shift the supply curve
1 of 19
question
An office supply store sells a ream of printer paper at a fixed price of $4.50. Which of the following is a term used by economists to describe the money received from the sale of an additional ream of paper?
A) marginal revenue
B) gross earnings
C) pure profit
D) marginal costs
E) net benefit
answer
marginal revenue
question
2. Economics promotes which of the following as the way to make the best decision?
A) Continue an enjoyable activity as long as you do not have to pay for it.
B) Continue an enjoyable activity until it is no longer enjoyable.
C) Continue an enjoyable activity until you cannot afford to pursue it.
D) Continue an enjoyable activity up to the point where its marginal benefit equals its marginal cost.
answer
continue an enjoyable active up to the point where its marginal benefit equals its marginal cost
question
marginal cost is the _______ associated with a particular increase in activity
a. total cost
b. additional cost
c. opportunity cost
d. forgone cost
answer
additional cost
question
Suppose a t-shirt manufacturer currently sells 5,000 t-shirts per week and makes a profit of $10,000 per week. A manager at the plant observes, "Although the last 400 t-shirts we produced and sold increased our revenue by $4,000 and our costs by $4,800, we are still making an overall profit of $10,000 per week so I think we're on the right track. We are producing the optimal number of t-shirts."
4.Refer to Scenario 1-1. Using marginal analysis terminology, what is another economic term for the incremental revenue received from the sale of the last 400 t-shirts?
A) gross earnings
B) marginal revenue
C) sales revenue
D) gross profit
answer
marginal revenue
question
Consider the following statements:
a. Soda drinkers purchase more soda from a grocery store that sells soda at a lower price than other rival grocery stores in the area.
b. Homeowners do not take steps to increase security even though they believe it is more costly to allow burglaries than to install security monitoring equipment.
c. Manufacturers produce less of a particular cell phone when its selling price rises.
6. Which of the above statements demonstrates that economic agents respond to incentives?
A) a only.
B) b only.
C) c only.
D) a and b.
E) a, b, and c.
answer
A only
question
suppose the US government encouraged teachers to take jobs in underperforming schools by paying the new teachers a $20,000 bonus. These teachers would be exemplifying the economic idea that...
answer
people respond to economic incentives
question
trade-offs force society to make choices when answering what three fundamental questions?
answer
1. what goods and services to produce
2. how will these goods and services be produced
3. and who receives them?
question
which of the following is an example of an economic trade-off that a firm has to make?
a. whether it is cheaper to produce with more machines or with more workers
b. whether or not consumers will buy its products
c. deciding why consumers want its products
d. deciding what profit margin it desires for its products
answer
whether it is cheaper to produce with more machines or with more workers
question
_______ exists because unlimited wants exceed the limited resources available to fulfill those wants.
answer
scarcity
question
an _______ is represented by a rightward shift of the demand curve
answer
increase in demand
question
an _______ is represented by a movement along a given demand curve
answer
increase in quantity demand
question
if, in response to an increase in the price of pineapples, the quantity of pineapples demanded decreases, then economists would describe this as
answer
a decrease in quantity demand
question
holding everything else constant, a decrease in the price of GPS systems will result in
answer
an increase in the quantity of GPS systems demanded
question
a ______ demand curve for shampoo would be causes by a change in the price of shampoo
answer
movement along the
question
the income effect of a price change results in a
answer
movement along the demand curve due to a change in purchasing power brought about by the price change
question
if an increase in income leads to an increase in the demand for sushi, then sushi is
answer
a normal good
question
if a decrease in income leads to an increase in the demand for macaroni, then macaroni is
answer
an inferior good
question
which of the following would cause an increase in the equilibrium price and decrease in the equilibrium quantity of watermelon?
a. a decrease in demand and an increase in supply
b. a decrease in supply
c. an increase in demand and an increase in supply greater than the increase in demand
d. an increase in demand and an increase in supply
answer
a decrease in supply
question
what would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery?
answer
demand will decrease, but this will not shift the supply curve

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