ECO 365T Wk 1 – Practice: The Fundamentals of Economics 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 opportunity cost of an action is always equal to:

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.

the time you give up to undertake the action.

the money you give up to undertake the action.

Economic reasoning is based on the premise that:

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

The steak Henry did not buy because he is a vegetarian.

The Smith Household produces an average of three bags of trash a week.

Sienna enjoys viewing flowers in the city garden 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

Ham for the sandwiches

An additional worker

A new idea that automates the making of sandwiches

A meat slicer to cut ham for sandwiches

In the circular flow model of the market system, households

Multiple Choice

buy products and resources.

sell products and resources.

buy products and sell resources.

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

$28 per gallon; 150 million gallons

$1.00 per gallon; 35 million gallons

$1.50 per gallon; 30 million gallons

$1.50 per gallon; 28 million gallons

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.

tangerines and bananas are complements.

tangerines and bananas are substitutes.

tangerines are an inferior good.

Use the following graph to answer the question 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

make decisions based on some desired outcome.

have all the information they need to make a decision.

always make the right decisions.

are quite selfish and are not concerned about others.

Use the following market data to answer the question below.

Price per Unit       Quantity Purchased by Consumer   Quantity Sold by Producer

$5   2,000     0

10   1,800     300

15   1,600     600

20   1,400     900

25   1,200     1,200

30   1,000     1,500

In the market shown in the table, the equilibrium quantity is

Multiple Choice

900.

1,400.

1,600.

1,200.

Use the following market data to answer the question below.

Price per Unit       Quantity Purchased by Consumer   Quantity Sold by Producer

$5   2,000     0

10   1,800     300

15   1,600     600

20   1,400     900

25   1,200     1,200

30   1,000     1,500

In the market shown in the table, the marginal cost of 600th unit is

Multiple Choice

$10.

$20.

$25.

$15.

Marginal cost can be defined as the change in

Multiple Choice

cost resulting from one less unit of production.

benefit resulting from one more unit of production.

cost resulting from one more unit of production.

benefit resulting from one less unit of production.

The problems of inflation and unemployment are

Multiple Choice

not relevant to the U.S. economy.

major topics of microeconomics.

major topics of macroeconomics.

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.

the entire economy.

Which of the following is a labor resource

Multiple Choice

a computer programmer

a piece of software used by a firm

silicon (sand) used to make computer chips

a computer

The circular flow model illustrates

Multiple Choice

how natural and other resources are created.

how money is created by the banking system.

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

limited resources to satisfy limited economic wants.

unlimited resources to satisfy limited economic wants.

unlimited resources to satisfy unlimited economic wants.

limited resources to satisfy unlimited economic wants.

Microeconomics is concerned with

Multiple Choice

how government debt affects aggregate economic 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.

scarcity is more important than choice.

people’s behavior reflects rational self-interest.

The basic truth that underlies the study of economics is the fact that we all face

Multiple Choice

taxes.

risk.

scarcity.

death.

Markets can:

provide unlimited goods and services.

make buyers and sellers better off.

force producers to make things they do not want to make.

force buyers to buy things they do not want to buy.

Use the table below to answer the following question.

Output   Total Cost

0     $10

1     20

2     28

3     38

4     53

5     73

6     98

The marginal cost of producing 3 units of output is

Multiple Choice

$28.

$0.

$10.

$38.

Which of the following is the best synonym for “marginal” in economics

Multiple Choice

additional

basic

minor

scarce

Which of the following is not a main function of the entrepreneur

Multiple Choice

to make routine pricing decisions

to make strategic business decisions

to assume the risk of economic losses

to innovate

The four factors of production (or types of resources) are

Multiple Choice

land, labor, capital, and entrepreneurial ability.

land, labor, capital, and money.

labor, capital, entrepreneurial ability, and money.

labor, capital, technology, and entrepreneurial ability.

Which of the following is a land resource

Multiple Choice

a machine for detecting earthquakes

natural gas

an oil drilling rig

a farmer

The main function of the entrepreneur is to

Multiple Choice

create market demand.

make routine pricing decisions.

purchase capital.

innovate.

Use the following graph to answer the question below.

The price where marginal benefit equals marginal cost is

Multiple Choice

$1.60.

$1.60.

$0.50.

$1.00.

In the resource market

Multiple Choice

households buy resources from businesses.

businesses borrow financial capital from households.

households sell resources to businesses.

businesses sell services to households.

The concept of a market is a

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)

$4   7,200

6     6,800

8     6,400

10   6,000

12   5,600

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:

diminishing marginal utility.

the substitution effect.

the income effect.

a change in income.

Which of the following scenarios is an example of a person interacting outside of a market

Mark places his comic book collection up for sale on eBay.

Young buys fresh radishes at the local farmers’ market.

Melissa votes for her favorite performer at a local 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

the whole demand curve or schedule.

how much of an item buyers want to buy at a given price.

one point on the demand curve.

one price-quantity combination on the demand 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.

actually buying now and in the recent past at various prices.

willing and wanting to buy at different prices.

willing and able to buy with their given income.

The most important purpose of a market is to

Multiple Choice

bring buyers and sellers together so they can trade.

bring buyers and sellers together so they can argue.

bring buyers and sellers together so they can barter.

increase the sellers’ wealth.

An increase in the demand for music downloads indicates that more music downloads are

Multiple Choice

demanded because sellers are selling more music downloads.

demanded even if prices of music downloads stay the same.

demanded because sellers are putting music downloads on sale.

demanded because music download prices have decreased.

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

Multiple Choice

leftward shift of the demand curve for tablets.

movement up and to the left along the demand curve for tablets.

rightward shift of the demand curve for tablets.

decrease in the demand 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.

the demand curve has shifted to the right.

the product has become particularly scarce for 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 income effect.

the rationing function of prices.

the substitution effect.

an inferior good.

Who determines the price and quantity traded in a market

Multiple Choice

prices and quantities traded are not generally determined in markets

buyers

sellers

buyers and sellers

Prices usually allocate resources efficiently because they allocate

Multiple Choice

consumption to the highest cost of good or service.

consumption to the lowest value good or service.

resources to the highest value good or service.

resources to the lowest value good or service.

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

Coke to the left.

Pepsi to the left.

Pepsi to the right.

Coke to the right.

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