Question

21)

When applied to an economic system, the term laissez-faire means that

Select one:

a. the government makes the majority of economic decisions.

b. the government decides how resources should be allocated.

c. the government minimizes its activity in the economy.

d. the government maximizes its activity in the economy.

In both capitalist and mixed economies, the answer to "for whom" to produce goods and service

Select one:

a. involves only positive statements.

b. does not depend on the ownership of resources.

c. is made by government decision-makers.

d. is based on the distribution of incomes and wealth among households.

The circular flow diagram shows that

Select one:

a. firms are more important than consumers in determining what goods and services get produced.

b. the interaction of consumers and producers determines what goods and services get produced.

c. consumers are more important than firms in determining what goods and services get produced.

d. the best form of economic organization is laissez-faire.

In economics, the term "demand" refers to

Select one:

a. the quantity of a good or service that people will buy at a particular price.

b. the intensity of desire for a good or service.

c. the quantity of a good or service that people want to consume.

d. the quantities of a good or service people would be willing and able to buy at various prices.

The law of demand states that, other things being equal,

Select one:

a. the quantity of a good or service demanded is inversely related to its price.

b. the quantity of a good or service demanded is directly related to its price.

c. changes in price and changes in quantity demanded move in the same direction.

d. people always demand less at lower prices and more at higher prices.

Which of the following will cause a decrease in the quantity of shoes demanded, ceteris paribus?

Select one:

a. an increase in income

b. a decrease in the price of socks

c. an increase in the price of shoes

d. an expected increase in shoe prices

Which of the following is a determinant of demand?

Select one:

a. cost of production

b. income

c. technology

d. number of suppliers

Suppose that goods X and Y are substitutes and the price of good Y falls. We would then expect

Select one:

a. a decrease in the demand for good X and an increase in the quantity of good Y demanded.

b. an increase in the demand for good Y and a decrease in the demand for good X.

c. the quantity demanded of good Y to increase and the demand for good X to increase also.

d. an increase in demand for both good X and good Y.

An expected increase in the price of automobiles will lead to

Select one:

a. no predictable impact on today's demand for automobiles.

b. a movement down the demand schedule for automobiles.

c. an outward shift in demand for automobiles today.

d. a reduction in the demand for gasoline today.

An expected increase in the price of a good next month is likely to

Select one:

a. increase demand now.

b. decrease demand now.

c. decrease the quantity demanded now.

d. increase the quantity demanded now.

Other things constant, quantity supplied of a product is determined by

Select one:

a. input prices.

b. the product's price.

c. taxes and subsidies.

d. price expectations.

For typical goods and services, supply curves are

Select one:

a. vertical.

b. horizontal.

c. downward sloping.

d. upward sloping.

Which of the following will shift today's supply curve to the right?

Select one:

a. Input prices rise

b. Prices are expected to be lower in the future

c. Sales taxes increase

d. Prices are expected to be higher in the future

Other things constant, the only way to move along a given supply curve for a product is for

Select one:

a. the product's relative price to increase or decrease.

b. technological changes to occur.

c. the future relative price of related goods to change.

d. the number of sellers to increase or decrease.

In any given market, prices are determined by

Select one:

a. comparative advantage.

b. transactions costs.

c. the interaction of supply and demand.

d. specialization of labour.

Answer 1

When applied to an economic system, the term laissez-faire means that c) the government minimizes its activity in the economy.

In both capitalist and mixed economies, the answer to "for whom" to produce goods and service d) is based on the distribution of incomes and wealth among households.

The circular flow diagram shows that b) the interaction of consumers and producers determines what goods and services get produced.

In economics, the term "demand" refers to d) the quantities of a good or service people would be willing and able to buy at various prices.

The law of demand states that, other things being equal, a) the quantity of a good or service demanded is inversely related to its price.

Which of the following will cause a decrease in the quantity of shoes demanded, ceteris paribus?

c) an increase in the price of shoes

Which of the following is a determinant of demand?

b) income

Suppose that goods X and Y are substitutes and the price of good Y falls. We would then expect b) an increase in the demand for good Y and a decrease in the demand for good X.

An expected increase in the price of automobiles will lead to c) an outward shift in demand for automobiles today.

An expected increase in the price of a good next month is likely to d) increase the quantity demanded now.

Other things constant, quantity supplied of a product is determined by b) the product's price.

For typical goods and services, supply curves are d) upward sloping.

Which of the following will shift today's supply curve to the right?

b) Prices are expected to be lower in the future

Other things constant, the only way to move along a given supply curve for a product is for a) the product's relative price to increase or decrease.

In any given market, prices are determined by c) the interaction of supply and demand.