Set 2 - Chapters 3 & 7 Flashcards
Which would be a likely cause of an increase in the demand for pizza?
A) A decrease in the prices of cheese, pepperoni, and mushrooms
B) A decrease in the price of hamburger sandwiches
C) A health report showing eating pizza reduces stress
D) A reduced desire for take-out and fast-food dining
A health report showing eating pizza reduces stress
Which of the following will not cause the supply curve to shift?
A) A change in the price of the good
B) A technological change in the production of the good
C) A change in the costs of resources needed to produce the good
D) A change in the prices of other goods that producers could be producing
A change in the price of the good
The market system automatically corrects a surplus condition in a competitive market by:
A) Reducing the price of the commodity in question while decreasing the quantity demanded
B) Reducing the price of the commodity in question while increasing the quantity demanded
C) Raising the price of the commodity in question while increasing the quantity demanded
D) Raising the price of the commodity in question while decreasing the quantity demanded
Reducing the price of the commodity in question while increasing the quantity demanded
A market for a product reaches equilibrium when:
A) Price falls further after there is a shortage
B) Buyers intend to buy a quantity equal to the quantity that sellers intend to sell
C) The actual quantity bought by buyers equals actual quantity sold by sellers
D) The price rises further after there is a surplus
Buyers intend to buy a quantity equal to the quantity that sellers intend to sell
Picture a competitive market with the usual upsloping supply curve and downsloping demand curve. If the current price is creating a shortage, then market forces will cause the price to adjust and:
A) Quantity demanded will increase
B) Demand will decrease
C) Quantity supplied will decrease
D) Quantity supplied will increase
Quantity supplied will increase
If the price of gasoline increases significantly, then we’d expect the demand curve for large trucks and SUVs
to:
A) Shift to the left
B) Shift to the right
C) Not shift, but there will be a movement along that demand curve
D) Become upward-sloping
Shift to the left
If the price of Pepsi decreases, other factors constant, then we’d expect to see a consequent shift of the
demand curve for:
A) Coke to the right
B) Pepsi to the left
C) Pepsi to the right
D) Coke to the left
Coke to the left
A fall in the price of milk, used in the production of ice cream, will:
A) Increase the supply of ice cream
B) Decrease the supply of ice cream
C) Cause a movement along the supply curve of ice cream
D) Have no effect on the supply of ice cream
Increase the supply of ice cream
If real GDP in a year was $3,668 billion and the price index was 112, then nominal GDP in that year was
approximately:
A) $3,925 billion
B) $4,379 billion
C) $4,108 billion
D) $3,846 billion
$4,108 billion
The total volume of business sales in our economy is several times larger than GDP because:
A) Total sales are in money terms and GDP is always stated in real terms
B) The GDP grossly understates the value of our annual output
C) The GDP excludes intermediate transactions
D) The GDP does not take taxes into account
The GDP excludes intermediate transactions
To avoid multiple counting in national income accounts:
A) Intermediate goods and services should be counted
B) Only final goods and services should be counted
C) Primary, intermediate, and final goods and services should be counted
D) Both final and intermediate goods and services should be counted
Only final goods and services should be counted
A business buys $5,000 worth of inputs from other firms in order to produce a product. The business makes 100 units of the product and each of them sells for $65. The value added by the business to these products is:
A) $1,500
B) $5,000
C) $6,500
D) $1,000
$1,500
Gordon is a person who sells narcotics “on the street.” This type of illegal activity:
A) Causes GDP to be overstated
B) Is excluded from GDP figures
C) Would be considered double counting in calculating GDP
D) Is estimated and included in GDP figures
Is excluded from GDP figures
