Question : Multiple Choice Questions 1.An economy where private individuals who guided by : 1378990

Economics

Multiple Choice Questions

1.An economy where private individuals who are guided by the invisible hand make decisions is known as a:

A. market economy.

B. centrally planned economy.

C. socialist economy.

D. barter economy.

2.The term market refers to:

A. the physical location where buyers and sellers meet to exchange goods for money.

B. the buyers and sellers who trade a particular good or service, not to a physical location.

C. the location where buyers go to fulfill their wants and needs.

D. a physical or virtual place of exchange.

3.The buyers and sellers who trade a particular good or service make up what we call a:

A. market.

B. store.

C. mall.

D. barterers.

4.Buyers and sellers are included in the market under consideration by:

A. their physical proximity.

B. the context.

C. their preferences.

D. the income levels.

5.The four important characteristics that define a competitive market are:

A. standardized good, full information, no transactions costs, participants are price takers.

B. standardized information, finished good, no transactions costs, participants are price makers.

C. standardized good, same information for buyer and seller, low transactions costs, participants are price takers.

D. standardized good, full information, no transactions costs, participants are price makers.

6.A perfectly competitive market is one in which:

A. fully informed, price-taking buyers and sellers easily trade a standardized good or service.

B. fully informed, price-making buyers and seller easily trade a standardized good or service.

C. uninformed, price-taking buyers and sellers easily trade a standardized good or service.

D. uninformed, price-making buyers and seller easily trade a standardized good or service.

7.A standardized good or service is one:

A. for which any two units of it have the same features and are interchangeable.

B. for which any two units of it have similar features that could be considered close substitutes.

C. for which any two units of it have different, unique features.

D. that has very distinguishable characteristics, with each unit being economically unique.

8.The best example of a standardized good would be:

A. corn.

B. a handbag.

C. an autographed baseball.

D. None of these could be considered a standardized good.

9.Transaction costs can be defined as:

A. the costs incurred by buyer and seller in agreeing to and executing a sale of goods or services.

B. the costs the government must pay to allow for an exchange.

C. the costs the government must pay to ensure the execution of a sale of goods or services takes place.

D. the costs the government incur to create a structured market for the exchange of buyers and sellers.

10.Shopping at a warehouse, such as Sam’s Club or Costco, allows its members to pay very low prices on the goods and services they buy. Customers who shop at such a store incur:

A. transaction costs because they must be members to shop there.

B. no transaction costs because they pay prices that are lower than any other location.

C. transaction costs because they must buy a product in bulk.

D. no transaction costs because members can return any item purchased for any reason.

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July 1, 2023

61.When there is a shortage in a market, prices are likely to:

A. Fall because buyers do not wish to buy as much as sellers want to sell.

B. Rise because some buyers will offer to pay a higher price.

C. Fall because sellers are likely to reduce their production if prices rise.

D. Rise because the government will put a price ceiling in place.

62.If a market shortage exists:

A. The invisible hand will work to reduce the price.

B. The only solution is for the government to raise the price.

C. Producers will compete for customers by reducing prices.

D. Consumers will compete for the product by offering to pay more.

63.A market surplus occurs when:

A. People cannot buy the amount of goods and services that they are willing and able to buy.

B. The price is less than the equilibrium price.

C. The quantity supplied exceeds the quantity demanded at a given price.

D. There is a price ceiling.

64.When there is a surplus in a market, prices are likely to fall because:

A. Buyers do not wish to buy as much as sellers want to sell.

B. Some buyers will offer to pay a higher price, initiating a move up the supply curve.

C. Sellers are likely to increase their production.

D. Buyers will wait for the government to establish a price floor.

65.If a market surplus exists:

A. The only resolution is for the government to set the price.

B. Consumers will compete for the product buy offering to pay more.

C. Producers will compete for customers by reducing prices.

D. The equilibrium price is equal to the price ceiling.

66.If demand is constant, a decrease in the supply of gasoline will cause the equilibrium price:

A. To rise and quantity to fall.

B. And quantity both to rise.

C. To fall and quantity to rise.

D. And quantity both to fall.

67.If demand is constant, a leftward shift in the supply curve will result in:

A. A decrease in equilibrium quantity and a lower equilibrium price.

B. An increase in equilibrium quantity and a lower equilibrium price.

C. A decrease in equilibrium quantity and a higher equilibrium price.

D. An increase in equilibrium quantity and a higher equilibrium price.

68.The price of chocolate candy bars rises. This could be due to:

A. A decrease in the wage rate paid to workers in the candy bar factories.

B. A decrease in the cost of chocolate, which is used to produce candy bars.

C. A subsidy by the federal government for the producers of chocolate candy bars.

D. A decrease in the number of chocolate candy bar producers.

69.If demand is unchanged, a rightward shift in the supply curve for plasma TVs will cause:

A. A decrease in equilibrium quantity and a higher equilibrium price.

B. An increase in equilibrium quantity and a higher equilibrium price.

C. An increase in equilibrium quantity and a lower equilibrium price.

D. A decrease in equilibrium quantity and a lower equilibrium price.

70.Which of the following would cause a decrease in the price of automobiles?

A. A technological advance in automobile manufacturing.

B. An increase in the wages paid to automobile assembly line workers.

C. A decrease in the cost of gasoline.

D. An increase in the number of buyers.