ConstableIceFinch5
1 of 25 A simplified representation of the real world that is…
1 of 25
A simplified representation of the real world that is used to explain economic occurrences is a(n)
map.
assumption.
model.
implication.
Question
2 of 25
Inflation is best defined as
a sustained increase in the price of ALL goods and services in an economy.
a relative price increase.
a sustained increase in the average of all prices of goods and services in an economy.
a sustained increase in the price of a single good or service.
Question
3 of 25
The opportunity cost of attending college is likely to include all except which of the following?
Spending time with family and friends
The income you forgo in order to attend classes
Hands on experience
The cost of groceries during the school term
Question
4 of 25
Sofia is willing to pay up to $5 for an ice cream bar, but she actually pays $2 for it. The consumer surplus of the ice cream bar for Sofia
is $2.
is $3.
is $7.
cannot be determined without information about the market structure.
Question
5 of 25
Economics deals with
how individuals allocate scarce resources to satisfy unlimited human wants.
how to satisfy limited human wants.
how society allocates needs.
how to profit from the stock market.
Question
6 of 25
The ___________ is the price where quantity supplied is equal to quantity demanded.
horizontal axis intercept
vertical axis intercept
market price
equilibrium price
Question
7 of 25
The production possibilities curve shows all possible combinations of
two goods that can be efficiently produced with a given set of resources.
two goods that are desired by society.
two goods that can be purchased given the prices of the goods.
two goods that two countries can trade with each other.
Question
8 of 25
Which of the following is NOT a determinate of demand?
Consumers’ incomes
Expected changes in prices in the future
Production technology
Consumers’ tastes and preferences
Question
9 of 25
The United States (and most of the world) experienced a deep recession in 2020 due to the COVID-19 pandemic. Which type of unemployment would most likely increase during that period of recession?
Cyclical unemployment
Frictional unemployment
Seasonal unemployment
Structural unemployment
Question
10 of 25
The company where Lucia used to work replaced his manufacturing role with high-tech machinery. Which type of unemployment would this be considered?
Cyclical unemployment
Frictional unemployment
Seasonal unemployment
Structural unemployment
Question
11 of 25
Central planning is a key characteristic of which economic system?
Free market system
Command and control system
Price system
Mixed economic system
Question
12 of 25
The population of Jamestown is 100,000. Of the population 16 years and older, 50,000 are employed, 10,000 have never worked and are not looking for work, 5,000 are not working and are looking for work, and 15,000 are retired and not looking for work. The labor force equals
50,000.
65,000.
55,000.
80,000.
Question
13 of 25
Alma decided she wants to leave the hot weather of Arizona and move to the cooler climate of Colorado. To do this, she quit her job at the bank and will look for another job in Denver. Which type of unemployment would this be considered?
Cyclical unemployment
Frictional unemployment
Seasonal unemployment
Structural unemployment
Question
14 of 25
Economic models are used to
simplify reality to predict outcomes.
exactly replicate reality.
predict all possible outcomes of a study.
determine the thoughts of individuals.
Question
15 of 25
The price of orange juice increased, so Jay no longer buys orange juice, but instead buys cranberry juice. However, the market basket of goods used in the Consumer Price Index (CPI) to measure inflation includes orange juice. This situation would lead to a
price bias.
bait and switch.
substitution bias.
consumption bias.
Question
16 of 25
The downward slope of the demand curve indicates
the price must rise to induce firms to increase the quantity supplied.
a reduction in the price of a good causes individuals to increase their purchase of that good.
an increase in the price will cause a leftward shift in the demand curve.
all of the above.
Question
17 of 25
A fundamental principle in demand analysis is that a change in price leads to
a rightward shift of the demand curve.
a movement along the demand curve.
a leftward shift of the demand curve.
a complementary movement on the supply curve.
Question
18 of 25
People that are no longer looking for work because they are convinced that they will not find a job are considered
structurally unemployed.
discouraged workers.
part of the labor force.
underemployed.
Question
19 of 25
Inflation can lead to the following:
Unintended redistribution of purchasing power
A decrease in the purchasing power of money
An equal increase in wages for those with a COLA agreement
All of the above
Question
20 of 25
Producer surplus is
the difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item.
the difference between the total amount that producers actually receive for an item and the total amount that they would have been willing to accept.
the difference between the total amount that consumers are willing to pay for an item and the total amount that producers would like to receive.
the difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item.
Question
21 of 25
Which of the following best describes the circular flow of income?
Businesses buy resources from the government, and households buy goods and services from businesses.
The government purchases resources from businesses and households and then sells goods and services to businesses and households.
Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.
Households buy factors of production from businesses, and businesses buy goods and services from households.
Question
22 of 25
Cyclical unemployment occurs when
individuals enter the labor market and make the rounds of potential employers.
individuals with skills no longer valued in the domestic labor market cannot find employment.
individuals give up the search for employment.
a downturn in economic activity decreases employment.
Question
23 of 25
The categories of the Consumer Price Index (CPI) include ALL of the following except:
Food
Housing
Technology
Apparel
Question
24 of 25
Microeconomics is the part of economic analysis that
studies the behavior of the economy as a whole.
includes the problems of inflation and unemployment.
concerns aggregate production and consumption.
studies individual decision-making by households and firms.
Question
25 of 25
Which of the following people would be considered unemployed?
Jaden, who lost his job at a manufacturing company and is not looking for work.
Madison, who is working part time at Costco.
Ray, who is retired.
McKenna, who lost her job as a teacher and is currently searching for a new job.
