Eco401 Online Quiz # 1
Wednesday, May 12, 2010 Posted In Eco Edit This
ECO-401 QUIZ#1
QUESTION# 1OF 15:
A new technology which reduces costs for firms:
Select correct option:
Shifts the supply curve to the right.
Shifts the supply curve to the left.
Reduces the equilibrium quantity.
Raises the equilibrium price.
Question # 2 of 15 ( Start time: 04:52:34 PM ) Total Marks: 1
The opportunity cost of an action:
Select correct option:
Will be the same for everyone.
Is the value of the next best alternative.
Measures the undesirable aspects of that action.
Is the average amount of unhappiness experienced by everyone involved.
Question # 3 of 15 ( Start time: 04:53:28 PM ) Total Marks: 1
If the cost of computer components falls, then
Select correct option:
The demand curve for computers shifts to the right.
The demand curve for computers shifts to the left.
The supply curve for computers shifts to the right.
The supply curve for computers shifts to the left.
Question # 4 of 15 ( Start time: 04:55:01 PM ) Total Marks: 1
Our economy is characterized by:
Select correct option:
Unlimited wants and needs.
Unlimited material resources.
No energy resources.
Abundant productive labor.
Question # 5 of 15 ( Start time: 04:55:47 PM ) Total Marks: 1
If consumer incomes increase, the demand for product Y:
Select correct option:
Will necessarily remain unchanged.
Will shift to the right if Y is a complementary good.
Will shift to the right if Y is a normal good.
Will shift to the right if Y is an inferior good.
Question # 6 of 15 ( Start time: 04:56:47 PM ) Total Marks: 1
The correlation between an asset's real rate of return and its risk (as measured by its standard deviation) is usually:
Select correct option:
Positive.
Strictly linear.
Flat.
Negative.
Question # 7 of 15 ( Start time: 04:57:50 PM ) Total Marks: 1
A partial explanation for the inverse relationship between price and quantity demanded is that a:
Select correct option:
Lower price shifts the supply curve to the left.
Higher price shifts the demand curve to the left.
Lower price shifts the demand curve to the right.
Higher price reduces the real incomes of buyers.
Question # 8 of 15 ( Start time: 04:58:46 PM ) Total Marks: 1
If the supply of a product decreases and supply curve shifts leftward, and the demand for that product simultaneously increases and demand curve shifts rightward, then equilibrium:
Select correct option:
Price must rise.
Price must fall.
Quantity must rise.
Quantity must fall.
Question # 9 of 15 ( Start time: 04:59:45 PM ) Total Marks: 1
The production possibilities curve:
Select correct option:
Shows all combinations of goods that society most desires.
Indicates that any combination of goods lying outside the curve is attainable.
Shows the maximum level of output that an economy can produce with all the available resources.
Shows only those combinations of two goods that reflect "full production".
Question # 10 of 15 ( Start time: 05:00:32 PM ) Total Marks: 1
If a decrease in price increases total revenue:
Select correct option:
Demand is elastic.
Demand is inelastic.
Supply is elastic.
Supply is inelastic.
Question # 11 of 15 ( Start time: 05:01:24 PM ) Total Marks: 1
Goods X and Y are complements while goods X and Z are substitutes. If the supply of good X increases:
Select correct option:
The demand for both Y and Z will increase
The demand for Y will increase while the demand for Z will decrease
The demand for Y will decrease while the demand for Z will increase
The demand for both Y and Z will decrease
Question # 12 of 15 ( Start time: 05:02:20 PM ) Total Marks: 1
The law of increasing opportunity costs states that:
Select correct option:
The more one is willing to pay for resources, the larger will be the possible level of production.
Increasing the production of a particular good will cause the price of the good to rise.
In order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods.
Only by keeping production constant can rising prices be avoided.
Question # 12 of 15 ( Start time: 05:02:20 PM ) Total Marks: 1
The law of increasing opportunity costs states that:
Select correct option:
The more one is willing to pay for resources, the larger will be the possible level of production.
Increasing the production of a particular good will cause the price of the good to rise.
In order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods.
Only by keeping production constant can rising prices be avoided.
Question # 14 of 15 ( Start time: 05:04:19 PM ) Total Marks: 1
You observe that the price of houses and the number of houses purchased both rise over the course of the year. You conclude that:
Select correct option:
The demand for houses has increased.
The demand curve for houses must be upward-sloping.
The supply of houses has increased.
Housing construction costs must be decreasing.
Question # 15 of 15 ( Start time: 05:05:03 PM ) Total Marks: 1
The effect of a change in income on the quantity of the good consumed is called the:
Select correct option:
Income effect.
Budget effect.
Substitution effect.
Real income effect.
QUESTION# 1OF 15:
A new technology which reduces costs for firms:
Select correct option:
Shifts the supply curve to the right.
Shifts the supply curve to the left.
Reduces the equilibrium quantity.
Raises the equilibrium price.
Question # 2 of 15 ( Start time: 04:52:34 PM ) Total Marks: 1
The opportunity cost of an action:
Select correct option:
Will be the same for everyone.
Is the value of the next best alternative.
Measures the undesirable aspects of that action.
Is the average amount of unhappiness experienced by everyone involved.
Question # 3 of 15 ( Start time: 04:53:28 PM ) Total Marks: 1
If the cost of computer components falls, then
Select correct option:
The demand curve for computers shifts to the right.
The demand curve for computers shifts to the left.
The supply curve for computers shifts to the right.
The supply curve for computers shifts to the left.
Question # 4 of 15 ( Start time: 04:55:01 PM ) Total Marks: 1
Our economy is characterized by:
Select correct option:
Unlimited wants and needs.
Unlimited material resources.
No energy resources.
Abundant productive labor.
Question # 5 of 15 ( Start time: 04:55:47 PM ) Total Marks: 1
If consumer incomes increase, the demand for product Y:
Select correct option:
Will necessarily remain unchanged.
Will shift to the right if Y is a complementary good.
Will shift to the right if Y is a normal good.
Will shift to the right if Y is an inferior good.
Question # 6 of 15 ( Start time: 04:56:47 PM ) Total Marks: 1
The correlation between an asset's real rate of return and its risk (as measured by its standard deviation) is usually:
Select correct option:
Positive.
Strictly linear.
Flat.
Negative.
Question # 7 of 15 ( Start time: 04:57:50 PM ) Total Marks: 1
A partial explanation for the inverse relationship between price and quantity demanded is that a:
Select correct option:
Lower price shifts the supply curve to the left.
Higher price shifts the demand curve to the left.
Lower price shifts the demand curve to the right.
Higher price reduces the real incomes of buyers.
Question # 8 of 15 ( Start time: 04:58:46 PM ) Total Marks: 1
If the supply of a product decreases and supply curve shifts leftward, and the demand for that product simultaneously increases and demand curve shifts rightward, then equilibrium:
Select correct option:
Price must rise.
Price must fall.
Quantity must rise.
Quantity must fall.
Question # 9 of 15 ( Start time: 04:59:45 PM ) Total Marks: 1
The production possibilities curve:
Select correct option:
Shows all combinations of goods that society most desires.
Indicates that any combination of goods lying outside the curve is attainable.
Shows the maximum level of output that an economy can produce with all the available resources.
Shows only those combinations of two goods that reflect "full production".
Question # 10 of 15 ( Start time: 05:00:32 PM ) Total Marks: 1
If a decrease in price increases total revenue:
Select correct option:
Demand is elastic.
Demand is inelastic.
Supply is elastic.
Supply is inelastic.
Question # 11 of 15 ( Start time: 05:01:24 PM ) Total Marks: 1
Goods X and Y are complements while goods X and Z are substitutes. If the supply of good X increases:
Select correct option:
The demand for both Y and Z will increase
The demand for Y will increase while the demand for Z will decrease
The demand for Y will decrease while the demand for Z will increase
The demand for both Y and Z will decrease
Question # 12 of 15 ( Start time: 05:02:20 PM ) Total Marks: 1
The law of increasing opportunity costs states that:
Select correct option:
The more one is willing to pay for resources, the larger will be the possible level of production.
Increasing the production of a particular good will cause the price of the good to rise.
In order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods.
Only by keeping production constant can rising prices be avoided.
Question # 12 of 15 ( Start time: 05:02:20 PM ) Total Marks: 1
The law of increasing opportunity costs states that:
Select correct option:
The more one is willing to pay for resources, the larger will be the possible level of production.
Increasing the production of a particular good will cause the price of the good to rise.
In order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods.
Only by keeping production constant can rising prices be avoided.
Question # 14 of 15 ( Start time: 05:04:19 PM ) Total Marks: 1
You observe that the price of houses and the number of houses purchased both rise over the course of the year. You conclude that:
Select correct option:
The demand for houses has increased.
The demand curve for houses must be upward-sloping.
The supply of houses has increased.
Housing construction costs must be decreasing.
Question # 15 of 15 ( Start time: 05:05:03 PM ) Total Marks: 1
The effect of a change in income on the quantity of the good consumed is called the:
Select correct option:
Income effect.
Budget effect.
Substitution effect.
Real income effect.
...........
Question # 1 of 15 ( Start time: 03:42:56 PM ) Total Marks: 1
The shape of production possibilities curve is:
Select correct option:
Concave.
Convex.
Linear.
Positive.
Question # 2 of 15 ( Start time: 03:43:23 PM ) Total Marks: 1
The percentage change in quantity demanded given a percentage change in consumer's income is known as:
Select correct option:
Price elasticity of demand.
Income elasticity of demand.
Supply price elasticity.
Cross price elasticity.
Question # 3 of 15 ( Start time: 03:43:55 PM ) Total Marks: 1
Demand is said to be ---------------- when the elasticity of demand is less than 1.
Select correct option:
Increasing
Decreasing
Elastic
Inelastic
Question # 4 of 15 ( Start time: 03:44:16 PM ) Total Marks: 1
We know that the demand for a product is elastic if:
Select correct option:
When price rises, revenue rises.
When price rises, revenue falls.
When price rises, quantity demanded rises.
When price falls, quantity demanded rises.
Question # 5 of 15 ( Start time: 03:44:50 PM ) Total Marks: 1
If the income elasticity of demand is 1/2, the good is:
Select correct option:
A luxury.
A normal good (but not a luxury).
An inferior good.
A Giffen good.
Question # 6 of 15 ( Start time: 03:45:05 PM ) Total Marks: 1
If the equilibrium price of bread is Rs. 3 and the government imposes Rs. 2 price ceiling on the price of bread then:
Select correct option:
More bread will be produced to meet the increased demand.
There will be a shortage of bread.
The demand for bread will decrease because suppliers will reduce their supply.
A surplus of bread will emerge.
Question # 7 of 15 ( Start time: 03:45:25 PM ) Total Marks: 1
If utility remains the same for original and new combination of goods consumed, the effect of a change in the price of a good on the quantities consumed will be called as:
Select correct option:
Substitution effect.
Real income effect.
Income effect.
Budget effect.
Question # 8 of 15 ( Start time: 03:46:10 PM ) Total Marks: 1
Which of the following is true about the point on a nation's production-possibilities curve?
Select correct option:
It shows an undesirable combination of goods and services.
It shows the combinations of production that are unattainable, given current technology and resources.
It shows the level of production that will cause both unemployment and inflation.
It shows that resources are fully employed in producing a particular combination of goods and services.
Question # 9 of 15 ( Start time: 03:46:44 PM ) Total Marks: 1
In a free-market economy, the allocation of resources is determined by:
Select correct option:
Votes taken by consumers.
A central planning authority.
Consumer preferences.
The level of profits of firms.
Question # 10 of 15 ( Start time: 03:46:58 PM ) Total Marks: 1
At the equilibrium price:
Select correct option:
There will be a shortage.
There will be neither a shortage nor a surplus.
There will be a surplus.
There are forces that cause the price to change.
Question # 11 of 15 ( Start time: 03:47:38 PM ) Total Marks: 1
A schedule which shows the various amounts of a product consumers are willing and able to purchase at each price in a series of possible prices during a specified period of time is called:
Select correct option:
Supply Scedule.
Demand Scedule.
Quantity supplied Scedule.
Quantity demanded Scedule.
Question # 12 of 15 ( Start time: 03:48:28 PM ) Total Marks: 1
Suppose price rises from Rs. 15 to Rs. 17 and quantity demanded decreases by 20%. We can conclude:
Select correct option:
Demand is inelastic.
The elasticity of demand is 2.
Total revenue will decrease.
Demand is unit elastic.
Question # 13 of 15 ( Start time: 03:49:19 PM ) Total Marks: 1
While drawing a given market demand curve,---------------- is not considered constant.
Select correct option:
Income.
The price of the good in question.
The prices of related goods.
Preferences.
Question # 14 of 15 ( Start time: 03:49:48 PM ) Total Marks: 1
The effect of a change in income on the quantity of the good consumed is called the:
Select correct option:
Income effect.
Budget effect.
Substitution effect.
Real income effect.
Question # 15 of 15 ( Start time: 03:50:07 PM ) Total Marks: 1
What is the reason of leftward shift in the demand curve for product A?
Select correct option:
A decrease in income if A is an inferior good.
An increase in income if A is a normal good.
An increase in the price of a product that is a close substitute for A.
An increase in the price of a product that is complementary to A.
