20 ECO Multiple Choice Questions

1. Economics studies _____. (Points : 5)How society manages its scarce resourcesSocial WelfareEthical use of resourcesProtection of workers’ rights2. All other things being equal, a decrease in supply results in a(n)_____. (Points : 5)increase in equilibrium price and a decrease in equilibrium quantityincrease in equilibrium quantity and a decrease in equilibrium pricedecrease in equilibrium quantity and a decrease in equilibrium pricedecrease in demand3. In one hour, a person can fix 4 flat tires or type 200 words. The opportunity cost of fixing ONE flat tire is _____. (Points : 5)200 words4 flat tires1 word50 words4. The amount of a good or service that buyers would be willing and able to purchase at a specific price is known as _____. (Points : 5)quantity demandeddemandsupplyquantity supplied5. Public goods are _____. (Points : 5)excludable but not rival in consumptionrival in consumption but not excludableexcludable and rival in consumptionneither excludable nor rival in consumption6. In a free market economy, government is needed when _____. (Points : 5)property right are not assigned to individualsthe market fails to allocate resources efficientlya single supplier has a substantial influence on the market price.all of the above apply7. All other things being equal, an increase in demand results in a(n) ______. (Points : 5)increase in equilibrium price and a decrease in equilibrium quantityincrease in equilibrium quantity and a decrease in equilibrium pricedecrease in equilibrium quantity and a decrease in equilibrium priceincrease in equilibrium price and an increase in equilibrium quantity8. In a free market, a shortage of a product always leads to: (Points : 5)Increases in priceDecreases in priceNo change in priceAny of the above9. Price discrimination is most likely practiced by a(n) _____. (Points : 5)monopolyoligopolymonopolistic firmperfectly competitive firm10. Rival pricing strategies and collisions are typically found in a(n) _____. (Points : 5)monopolyoligopolymonopolistic competitionperfectly competition11. Most products purchased in our daily lives are found in this market: (Points : 5)monopolyoligopolymonopolistic competitionperfect competition12. When the government is involved in regulating the prices sellers are allowed to charge, this often leads to_____. (Points : 5)unemployment, inflation, and recessiondeceptive advertisingprice gougingthe quantity of goods available being less than the equilibrium quantity13. A price imposed by the government below an equilibrium price is called a ____ . (Points : 5)price ceilingprice floorprice carpetprice surplus14. A tax on imports is called a: (Points : 5)sales taxcorporate taxtrade taxtariff15. Profit-maximizing firms produce extra units of output up to the point where: (Points : 5)marginal revenue equals marginal costmarginal revenue exceeds marginal costmarginal revenue is less than marginal costany of the above16. In the United States, anti-trust laws might not allow: (Points : 5)black marketsunderground economymergers of big and dominant companies like Coca-Cola and PepsiCotoo much competition in a specific market.17. Higher oil prices tend to: (Points : 5)increase the prices of many different productsincrease the prices of farm products onlyincrease prices in the airline industry onlyincrease the prices of public transportation only18. When doing research, Economists: (Points : 5)follow the scientific method: observation, theory, and more observationcannot use experiments, as they are often done in areas like Physics and Chemistry.have to use whatever data the world happens to give themall of the above.19. Economic models_____. (Points : 5)must completely describe every aspect of the economy in order to be usefulare simplified abstract representations of realityavoid the use of assumptions wherever possibleare ideals that economics agents aspire to achieve20. A few industry-dominating firms acting as a collective monopoly is known as a: (Points : 5)a trading bloca marketa cartelan industry