You are on page 1of 69

# ECO/365

PRINCIPLES OF MICROECONOMICS

## The Latest Version A+ Study Guide

**********************************************
ECO 365 Entire Course Link
https://uopcourse.com/category/eco-365/
**********************************************

## ECO 365 Week 1 Practice: The Fundamentals of

Economic Quiz
Complete the Week 1 The Fundamentals of
Economics Quiz in McGraw-Hill Connect®. These
are randomized questions.

## Note: You have unlimited attempts available to

complete practice assignments. The highest scored
attempt will be recorded. These assignments have
earlier due dates, so plan accordingly. Grades must
be transferred manually to eCampus by your
instructor. Don't worry, this might happen after the
due date.

## the next-best alternative for the resources used to

undertake the action.

## the things you could have done instead of the action

you chose to undertake.

## all decisions or actions are costless.

all decisions or actions have a cost associated with
them.

## only non-economic decisions or actions have a cost

associated with them.

## only economic decisions or actions have a cost

associated with them.

## The fish in the ocean are what type of market

resource

Land

Capital

Entrepreneurial ability

Labor
Which of the following scenarios most accurately
reflects the concept of scarcity

vegetarian.

## The Smith Household produces an average of three

bags of trash a week.

during her walk.

## Brett is a farmer with an open field on which he can

plant either soybeans or corn.

## Bob, the owner of a local deli in town, needs to

purchase something that economists would label as
"capital" to help him produce sandwiches. Which of
the following is an example of capital

sandwiches

households

Multiple Choice

## sell products and buy resources.

Use the following graph of the market for milk to
answer the question below.

## In this market, the equilibrium price is _______ and

equilibrium quantity is _______.

Multiple Choice

## Use the following graph to answer the question

below.
At a quantity of 130, marginal benefit equals
______ and marginal cost equals _____.

Multiple Choice

\$1.60, \$0.50

\$1.00, \$1.00

\$0.50, \$1.60

\$1.60, \$1.60

## Pam sees that the price of bananas has risen in the

grocery store. All else equal, she decides to buy
more tangerines than she normally purchases.
From the information given, you might conclude
that:
bananas are a luxury good.

below.

## At a quantity of 290, marginal benefit equals

______ and marginal cost equals _____.

Multiple Choice

\$0.50, \$1.60
\$1.60, \$0.50

\$1.00, \$1.00

\$1.60, \$1.60

## When studying human behavior, economists

assume rational self-interest. This means that
people

Multiple Choice

decision.

## always make the right decisions.

are quite selfish and are not concerned about
others.

question below.

## Price per Unit Quantity Purchased by Consumer

Quantity Sold by Producer
\$52,000 0
101,800 300
151,600 600
201,400 900
251,200 1,200
301,000 1,500

quantity is

Multiple Choice
900.

1,400.

1,600.

1,200.

question below.

## Price per Unit Quantity Purchased by Consumer

Quantity Sold by Producer
\$52,000 0
101,800 300
151,600 600
201,400 900
251,200 1,200
301,000 1,500
In the market shown in the table, the marginal cost
of 600th unit is

Multiple Choice

\$10.

\$20.

\$25.

\$15.

Multiple Choice

## cost resulting from one less unit of production.

benefit resulting from one more unit of production.

Multiple Choice

## only relevant to European economies.

Macroeconomics approaches the study of
economics from the viewpoint of

Multiple Choice

governmental units.

## the operation of specific product and resource

markets.

individual firms.

## Which of the following is a labor resource

Multiple Choice

a computer programmer
a piece of software used by a firm

a computer

Multiple Choice

## the importance of having a central plan for the

economy.
the interdependence of businesses and consumers.

## The economizing problem is essentially one of

deciding how to make the best use of

Multiple Choice

wants.

wants.

wants.

Multiple Choice

activity.

## a detailed examination of specific economic units

that make up the economic system.

## the establishing of an overall view of the operation

of the aggregate economic system.

## the aggregate or total levels of income,

employment, and output.

## In analyzing human decision and action,

economists assume that

Multiple Choice

## there are no scarce resources in the economy.

costs are more important than benefits.

## The basic truth that underlies the study of

economics is the fact that we all face

Multiple Choice

taxes.

risk.

scarcity.

death.
Markets can:

make.

question.

0 \$10
1 20
2 28
3 38
4 53
5 73
6 98

Multiple Choice

\$28.

\$0.

\$10.

\$38.

## Which of the following is the best synonym for

"marginal" in economics
Multiple Choice

basic

minor

scarce

entrepreneur

Multiple Choice

to innovate

resources) are

Multiple Choice

ability.

## Which of the following is a land resource

Multiple Choice
a machine for detecting earthquakes

natural gas

a farmer

Multiple Choice

## make routine pricing decisions.

purchase capital.

innovate.
Use the following graph to answer the question
below.

cost is

Multiple Choice

\$1.60.

\$1.60.

\$0.50.

\$1.00.

Multiple Choice

households.

Multiple Choice

store.

## location where buyers and sellers meet to negotiate

prices and determine quantities traded.

## place where sellers increase their wealth.

group of buyers and sellers of a good or service.

## The table below represents the demand for bottles

of sunscreen at Daytona Beach on a sunny June
day.

## Demand for Sunscreen

Price (dollars) Quantity of Sunscreen Demanded
(bottles)
\$47,200
6 6,800
8 6,400
106,000
125,600

## If the price of a bottle of sunscreen is \$8, what will

be the quantity demanded
6,000 bottles

1,600 bottles

8,000 bottles

6,400 bottles

## Marcus budgets \$120 a week for groceries. When

the price of all food goes up by 10% he buys less
salmon. This can best be explained by:

## the income effect.

a change in income.
Which of the following scenarios is an example of a
person interacting outside of a market

eBay.

market.

talent show.

## Isabella agrees to fix Miguel’s sink if Miguel paints

Isabella’s porch.

## Tastes and preferences generally do not change for

goods or services in markets.

False
True
When economists speak of "demand" in a particular
market, they refer to

Multiple Choice

price.

schedule.

## In understanding and analyzing "demand," we focus

on how much of a product the buyers are

Multiple Choice
willing and able to buy at different prices.

various prices.

Multiple Choice

## bring buyers and sellers together so they can barter.

increase the sellers’ wealth.

Multiple Choice

the same.

## demanded because music download prices have

decreased.
All else held constant, an increase in the price of
tablets will result in a

Multiple Choice

## movement up and to the left along the demand

curve for tablets.

## When economists say that the demand for a

product has decreased, they mean that

Multiple Choice
the product has become more expensive and thus
consumers are buying less of it.

## consumers are now willing and able to buy less of

this product at each possible price.

some reason.

## When the price of a product increases, consumers

shift their purchases to other products whose prices
are now relatively lower. This statement describes

Multiple Choice

## the rationing function of prices.

the substitution effect.

an inferior good.

market

Multiple Choice

## prices and quantities traded are not generally

determined in markets

sellers

## buyers and sellers

Prices usually allocate resources efficiently because
they allocate

Multiple Choice

## If the price of Pepsi decreases, all else held

constant, then we’d expect to see a consequent
shift of the demand curve for
Multiple Choice

## In a market, buyers want to pay the _____ possible

price and sellers want to charge the _____ possible
price.

Multiple Choice

lowest, lowest

lowest, highest

highest, highest
highest, lowest

## The horizontal axis of a graph that shows a market

demand curve indicates the

Multiple Choice

purchased.

will be cleared.

## quantities that consumers are willing and able to

buy at various prices.

## number of consumers who are in the market for a

product.
For most products, purchases tend to fall with
decreases in consumers' incomes. Such products
are known as

Multiple Choice

average goods.

direct goods.

normal goods.

inferior goods.

## All else held constant, the law of demand suggests

that as

Multiple Choice
the price of tablets decreases, the quantity of
tablets demanded will decrease.

will increase.

## the price of tablets decreases, the quantity of

tablets demanded will increase.

## the demand for tablets increases, the price of

tablets will increase.

constant,

Multiple Choice

## consumers will buy more of a product at high prices

than at low prices.
the larger the number of buyers in a market, the
lower the product price will be.

## If product Y is an inferior good, a decrease in

consumer incomes will

Multiple Choice

## not affect the sales of product Y.

In order to derive a market demand curve from
individuals’ demand curves, we add up the

Multiple Choice

price.

period.

pay.

## incomes of all buyers, assuming that their tastes

remain constant.
The demand schedule for a product shows the
relationship between how much of the product
buyers are willing and able to buy and the

Multiple Choice

product’s price.

## In moving along a demand curve, which of the

following is not held constant

Multiple Choice
price expectations

is relevant

consumer incomes

## All else being equal, if the law of supply states that

as the price of a good, service, or resource rises

Multiple Choice

## the quantity demanded will decrease, which

explains the shape of the supply curve.
the quantity demanded will increase, which explains
the shape of the supply curve.

## the quantity supplied will increase, which explains

the shape of the supply curve.

## the quantity supplied will decrease, which explains

the shape of the supply curve.

Multiple Choice

demand curve.

## a schedule of various combinations of market prices

and quantities demanded.
an upsloping line on a graph that relates consumer
purchases and product price.

## the total amount spent on a particular commodity

over a fixed time period.

## Imagine that the market supply of peaches comes

from Georgia (GA) and South Carolina (SC). The
supply schedule below shows the quantity of
peaches supplied in each state at each price.

## Individual and Market Supply of Peaches

Quantity of Peaches Supplied (pounds)
Price (dollars per pound) GA SC Market
\$10 20,000 18,000 38,000
8 16,000 15,000 31,000
6 12,000 12,000 24,000
4 8,000 9,000 17,000
2 4,000 6,000 10,000
Instructions: Enter your answers as a whole
number.

“Market.”

## b. How many pounds of peaches will be supplied to

the market when the price is \$6 per pound

24,000 pounds

## Which of the following scenarios would likely shift

the supply of cars to the left (decrease in supply)

## The price of steel and aluminum increase.

The price of automotive paint decreases.

question.

## An increase in price, all else held constant, would

cause a change from

Multiple Choice

point 4 to point 5.

point 5 to point 1.

point 3 to point 4.

point 1 to point 3.
In order to derive the market supply curve from
individual supply curves, we add up the

Multiple Choice

## various quantities that individual sellers are willing

and able to supply at different prices.

product.

## various prices that individual sellers are charging for

the quantities of the product available.
Which of the following statements is true about
supply

Multiple Choice

## As price decreases, producers are willing and able

to put more of the good on the market for sale.

## As price increases, producers are willing and able

to put more of the good on the market for sale.

## There is an inverse relationship between price and

quantity supplied.

## Supply refers to the amount of inventory that sellers

have in their warehouses.

## Which of the following scenarios would likely shift

the supply curve for potatoes to the right (increase
in supply)
Potato growers expect the price of potatoes to be
lower this year than last year.

## A new harvester enables farmers to bring in ripe

potatoes twice as fast as they did before.

college.

question.

## The diagram shows three supply curves for apples.

Which of the following would cause the supply of
apples to shift from S1 to S3

Multiple Choice
a decrease in the price of resources used to
produce apples

question.

## The diagram shows three supply curves for cars

today. Which of the following would cause the
supply of cars to shift from S1 to S2

Multiple Choice

## expectations of lower car prices in the future

a decrease in the number of car producers

question.

## The figure shows three supply curves for wheat.

Which of the following would cause the supply of
wheat to shift from S1 to S2

Multiple Choice

## a new tax on wheat production

a decrease in the price of water

## When economists say that the supply for a product

has decreased, they mean that the

Multiple Choice

## product has become more expensive and thus

consumers are buying less of it.

## product has become particularly abundant for some

reason.
An increase in the supply of music downloads
indicates that more music downloads will be

Multiple Choice

decreased.

the same.

## Use the figure below to answer the following

question.
The figure above shows three supply curves for
wheat. Which of the following would cause the
quantity of wheat supplied to increase from point a
to point b

Multiple Choice

## Use the figure below to answer the following

question.
The figure above shows three supply curves for
wheat. Which of the following would cause the
supply of wheat to shift from S1 to S2

Multiple Choice

## The vertical axis of a graph that shows a market

supply curve indicates the

Multiple Choice
number of sellers who are in the market for this
product.

be cleared.

## prices at which firms would be willing and able to

sell their different products.

question.

## The figure above shows three supply curves for

wheat. Which of the following would cause the
supply of wheat to shift from S1 to S2

Multiple Choice
a subsidy for wheat production

## Which one of the following is not assumed to be

constant when the supply curve for a product is
drawn

Multiple Choice

## price of the product

number of producers

## price of inputs used to make the product

state of technology

question.

## The figure above shows three supply curves for

wheat. Which of the following would cause the
supply of wheat to shift from S1 to S2

Multiple Choice

is a normal good

## the development of a more effective insecticide

against cutworms
an increase in the price of fertilizer

question.

## The figure shows three supply curves for apples. If

you observe the supply of apples shift from S1 to
S3, which of the following could be responsible for
this shift

Multiple Choice

## The producers of apples now receive a subsidy.

Apple producers are willing to sell more at every
price.

## Samantha needs to purchase something that

economists would label as "labor" to help her
produce court documents for her law firm. Which of
the following is an example of labor

proceedings

proceedings

documents

## The ability to see that organizing courtroom

documents is an unfilled market need
Use the figure below to answer the following
question.

## The figure above shows three supply curves for

wheat. Which of the following would cause the
supply of wheat to shift from S1 to S3

Multiple Choice

## Use the figure below to answer the following

question.
The figure above shows three supply curves for
wheat. Which of the following would cause the
quantity of wheat supplied to decrease from point b
to point a

Multiple Choice

## In understanding and analyzing "market supply," we

focus on how much all firms

Multiple Choice
have sold in the recent past at various prices.

## All else being equal, if the price of a product

decreases, we would expect

Multiple Choice

## quantity supplied to decrease.

supply to decrease.

demand to increase.

## quantity supplied to increase.

When economists say that the supply for a product
has increased, they mean that the

Multiple Choice

reason.

## product has become more expensive and thus

consumers are buying less of it.

## supply curve has shifted to the right.

Use the figure below to answer the following
question.

## The diagram shows three supply curves for apples

today. Which of the following would cause the
current supply of apples to shift from S1 to S3

Multiple Choice

## A recurring theme in economics is that people

Multiple Choice
can increase resources by limiting their economic
wants.

wants.

resources.

## Which of the following can best be characterized as

a subject of macroeconomics

## An examination of how much of a particular good

gets produced
An examination of inflation

## Which of the following can best be characterized as

a subject of microeconomics

## An examination of how much of a particular good

gets produced

An examination of inflation

production