Goods and services are exchanged in Answer Selected Answer: product markets Correct Answer: product markets Question

2 4 out of 4 points Theory in economics Answer Selected Answer: involves some simplification of reality Correct Answer: involves some simplification of reality Question 3 4 out of 4 points In economics, the term "marginal" usually refers to Answer Selected Answer: a small change in an economic variable Correct Answer:

a small change in an economic variable Question 4 4 out of 4 points The opportunity cost of a particular activity Answer Selected Answer: varies from person to person Correct Answer: varies from person to person Question 5 4 out of 4 points Because of specialization and comparative advantage, most people Answer Selected Answer: consume the products of many other specialists Correct Answer: consume the products of many other specialists Question 6 4 out of 4 points Just as resources are scarce for the individual, Answer Selected Answer:

they are also scarce for the economy as a whole Correct Answer: they are also scarce for the economy as a whole Question 7 4 out of 4 points A common assumption that economists make about the behavior of elected officials is that they try to Answer Selected Answer: maximize the number of votes they receive in the next election Correct Answer: maximize the number of votes they receive in the next election Question 8 4 out of 4 points Which category includes the largest number of firms? Answer Selected Answer: sole proprietorship Correct Answer: sole proprietorship Question 9 4 out of 4 points

Which resource generates the largest share of the income in the United States? Answer Selected Answer: labor Correct Answer: labor Question 10 4 out of 4 points Suppose a market is in equilibrium and then a price floor is established below the equilibrium price. Which of the following will happen? Answer Selected Answer: the market will remain in equilibrium Correct Answer: the market will remain in equilibrium Question 11 4 out of 4 points If demand for personal computers increases as a result of an increase in income, Answer Selected Answer: personal computers must be a normal good Correct Answer: personal computers must be a normal good

Question 12 4 out of 4 points Which of the following is the best example of substitutes? Answer Selected Answer: hiking boots and athletic shoes Correct Answer: hiking boots and athletic shoes Question 13 4 out of 4 points Given the availability of California oranges, demand for Florida oranges will Answer Selected Answer: be more elastic than if there were no California oranges Correct Answer: be more elastic than if there were no California oranges Question 14 4 out of 4 points A perfectly elastic demand curve is Answer Selected Answer: a horizontal straight line

Correct Answer: a horizontal straight line Question 15 4 out of 4 points For which of the following products is the consumer's demand curve most likely to be vertical? Answer Selected Answer: insulin, for a diabetic Correct Answer: insulin, for a diabetic Question 16 4 out of 4 points Your willingness to pay additional money for time-saving goods depends primarily on Answer Selected Answer: the opportunity cost of your time Correct Answer: the opportunity cost of your time Question 17 4 out of 4 points If you buy a good, its expected marginal value to you Answer

Selected Answer: may be greater than or equal to but not less than its price Correct Answer: may be greater than or equal to but not less than its price Question 18 4 out of 4 points Marginal utility is the Answer Selected Answer: additional satisfaction obtained from consuming one more unit of a good Correct Answer: additional satisfaction obtained from consuming one more unit of a good Question 19 4 out of 4 points A firm's opportunity costs of using resources provided by the firm's owners are called Answer Selected Answer: implicit costs Correct Answer: implicit costs Question 20 0 out of 4 points

An implicit cost is Answer Selected Answer: any cost a firm cannot avoid in the short run Correct Answer: an opportunity cost Question 21 0 out of 4 points Which of the following would be shown on IBM's accounting statement? Answer Selected Answer: revenue, implicit costs, and accounting profit Correct Answer: revenue, explicit costs, and accounting profit Question 22 4 out of 4 points Cash payments for steel to be used in production would be an example of Answer Selected Answer: explicit costs Correct Answer: explicit costs Question 23

4 out of 4 points Total cost is calculated as Answer Selected Answer: fixed cost plus variable cost Correct Answer: fixed cost plus variable cost Question 24 4 out of 4 points The short-run average variable cost curve Answer Selected Answer:

slopes downward at low rates of output, then slopes upward at higher rates of output

Correct Answer: slopes downward at low rates of output, then slopes upward at higher rates of output Question 25 4 out of 4 points Commodity products are Answer Selected Answer: perceived by consumers to be identical

Correct Answer: perceived by consumers to be identical Question 26 4 out of 4 points A perfectly competitive firm in the short run determines its quantity supplied at various prices by using Answer Selected Answer: the portion of its marginal cost curve rising above its average variable cost Correct Answer: the portion of its marginal cost curve rising above its average variable cost Question 27 4 out of 4 points Productive efficiency occurs in markets when Answer Selected Answer: goods are produced at the lowest possible average total cost Correct Answer: goods are produced at the lowest possible average total cost Question 28 4 out of 4 points Average revenue minus average total cost equals Answer

Selected Answer: economic profit per unit of output Correct Answer: economic profit per unit of output Question 29 4 out of 4 points Commodity products are Answer Selected Answer: uniform or standardized Correct Answer: uniform or standardized Question 30 4 out of 4 points The short-run supply curve of a perfectly competitive firm is the Answer Selected Answer: marginal cost curve, which lies above the average variable cost curve Correct Answer: marginal cost curve, which lies above the average variable cost curve Sunday, November 11, 2012 1:25:50 PM EST