Question

Q1 multipule Quastions

please answer

1- Economists assume that rational behaviour is useful in explaining choices people make

Select one:

because irrational people do not make economic choices.

even though people may not behave rationally all the time.

because individuals act rationally all the time in all circumstances.

even though people rarely, if ever, behave in a rational manner.

2-If a decrease in income leads to an increase in the demand for macaroni, then macaroni is:

Select one:

a. a normal good.

b. an inferior good.

c. a neutral good.

d. a necessity.

3- A surplus in a market means:

Select one:

a. quantity demanded is greater than quantity supplied.

b. demand is greater than supply.

c. quantity supplied is greater than quantity demanded.

d. supply is greater than demand.

4- If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16, what is the slope of this line?

Select one:

a. 0.5

b. -2

c. 2

d. -0.5

5- In economics, an optimal decision involves carrying out an activity up to the point where:

Select one:

a. the marginal benefit of the activity is equal to the marginal cost of the activity.

b. the opportunity cost of the activity is negative.

c. the opportunity cost of the activity is zero.

d. the marginal benefit of the activity is greater than the marginal cost of the activity.

6-The principle of opportunity cost is that

Select one:

taking advantage of investment opportunities involves costs.

the economic cost of using a factor of production is the alternative use of that factor that is given up.

the cost of production varies depending on the opportunity for technological application.

in a market economy, taking advantage of profitable opportunities involves some money cost.

7-Assume that the prices of airline tickets (assuming airline tickets are normal goods) have fallen in recent months. Over this same period, assume that the price of jet fuel has risen and consumer incomes have fallen. Which of the following best explains the falling prices of airline tickets?

Select one:

a. The demand curve and the supply curve for airline tickets have both shifted to the right.

b. The supply curve for airline tickets has shifted to the left by more than the demand curve has shifted to the left.

c. The supply curve for airline tickets has shifted to the right while the demand curve for airline tickets has shifted to the left by a greater amount than the supply shift.

d. The demand curve for airline tickets has shifted to the left by more than the supply curve has shifted to the left.

8-The production possibility frontier model shows that

Select one:

if all resources are fully and efficiently utilised, more of one good can be produced only by producing less of another good.

economic growth can only be achieved by free market economies.

a market economy is more efficient in producing goods and services than is a centrally planned economy.

if consumers decide to buy more of a product, its price will increase.

9-The study of economics that examines issues such as employment and income is known as:

Select one:

a. positive economics.

b. microeconomics.

c. macroeconomics.

d. normative economics.

10-The law of demand states that holding everything else constant:

Select one:

a. there is an inverse or downward-sloping relationship between price and quantity.

b. there is a positive or upward-sloping relationship between price and quantity.

c. buyers reduce the amount of a good bought when there is more in the market.

d. buyers increase the quantities they buy when their incomes increase.

11-An increase in the quantity supplied is caused by:

Select one:

a. a higher market price.

b. an advance of technology.

c. a decrease in the incomes of buyers.

d. a decrease in the price of inputs.

12-What assumptions do economists make about people?

Select one:

a. People prefer to live in a society that values fairness above all else.

b. Economists make no assumptions are human behaviour.

c. People are greedy and selfish.

d. People are rational and respond to incentives.

12-A produce cooperative sells trays of mixed vegetables for $80 each. The cost per tray is $50. For a total price of $90 the cooperative will deliver within the town boundary, a service that adds an additional $15 to the total cost of the package. Should the cooperative continue to offer the delivery service?

Select one:

More information is needed to make this decision.

Yes, the cooperative still makes a profit by offering a delivery service with vegetable tray purchases.

Yes, but only if the cooperative raises the price of vegetable trays.

No, the cooperative's marginal benefit is less than marginal cost.

13-Consider the following statements:

a.    Car owners purchase more petrol from a petrol station that sells petrol at a lower price than other rival petrol stations in the area.

b.    Banks do not take steps to increase security since they believe it is less costly to allow some bank robberies than to install expensive security monitoring equipment.

c.    Firms produce more of a particular DVD when its selling price rises.                                                                               

14-Which of the above statements demonstrates that economic agents respond to incentives?

Select one:

b only

c only

a and b

a, b and c

15-The substitution effect of a price change refers to the:

Select one:

a. movement along a demand curve when the price of a substitute good changes.

b. shift in the demand curve due to a change in purchasing power brought about by the price change.

c. change in quantity demanded that results from a change in price, making a good more or less expensive relative to other goods that are substitutes.

d. movement along the demand curve due to a change in purchasing power brought about by the price change.

16-The expectation of higher future prices causes higher prices now because:

Select one:

a. supply will increase now as firms try to sell more before the price rises.

b. demand will increase now as people try to buy before price rises.

c. quantity supplied will decrease now.

d. quantity demanded will increase now.

17-Suppose that real wages in a country were $800 per week in 2011 and $825 per week in 2012. Which of the following correctly calculates the percentage change in real wages between 2011 and 2012 (to one decimal place)?

Select one:

a. [($800-$825)/$800] x 100 = - 3.1%.

b. [($825-$800)/$800] x 100 = 3.1%.

c. ($825 - $800)/100 = 0.25%.

d. [($800-$825)/$825] x 100 = 3.0%.

18-Olive oil producers want to sell more olive oil at a higher price. Which of the following events would have this effect?

Select one:

a decrease in the cost of transporting olive oil to markets

an increase in the price of land used to plant olives

an increase in the price of olive oil presses

research finds that consumption of olive oil reduces the risk of heart disease

19-If the demand for cars increases when the price of petrol decreases, then:

Select one:

a. the two goods are complementary.

b. the two goods are substitutes.

c. petrol is a normal good.

d. cars are an inferior good.

20-Which of the following would not result in a positive shift in the demand curve for coffee?

Select one:

a. A fall in the price of coffee.

b. A fall in the price of milk and sugar.

c. An increase in the price of tea.

d. Research findings that drinking coffee increases your life span.

Answer 1

1.B.) Even though people may not behave rationally at the time.

Because humans are emotional and easily distracted beings, they make decisions that are not in their self-interest.

2. B.) Inferior good

good for which the demand increases as income falls and decreases as income rises is inferior good.

3. C.) Quanity supplied is greater than qunatity demanded.

A Market Surplus occurs when there is excess supply i.e., quantity supplied is greater than quantity demanded.

4. D.) -0.5

Slope of a line =[ y(2)---y(1)]/[x(2)-x(1)]

(24,8) (8,16) are the points:

= (16 - 8)/(8 - 24)

= (8)/(-16)

= -1/2

= -0.5

Slope of a straight line = - 0.5

5. A.). the marginal benefit of the activity is equal to the marginal cost of the activity.

An optimal decision is a decision that leads to at least as good a known or expected outcome as all other available decision options.

6. b) the economic cost of using a factor of production is the alternative use of that factor that is given up.

The principle that the cost of something is equal to what is sacrificed to get it is known as the principle of opportunity cost.In order to calculate opportunity cost, you look at the idea of pursuing the BEST of the posible activities, and what you lose by not pursuing the ONE BEST alternative

9. C.) Macroeconomics

The branch of economics that examines the economic behavior of aggregates—income, employment, output, and so on a national scale is called Macro Economics.

11. A.) A higher markey price

The only factor that causes a change in quantity supplied is price.

12. D.) individuals are rational and respond predictably to incentives.

Economists assume that individuals are rational and respond predictably to incentives as People choose the best alternative because it cost he less and they will get the greatest benefit.

15. C.)

The Change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods that are substitutes is the Substitution effect.