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

answer

marginal revenue

question

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

answer

marginal revenue

question

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

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

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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macroeconomics test 1

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