ECO _ Ten Multiple Choice Questions

1. The economist considered to be the “Father” of economics, and proponent of free markets is: (Points : 1)Adam SmithKarl MarxJohn Maynard KeynesBen BernankeJoseph Schumpeter2. The tendency for consumers to seek out relatively cheaper goods when the price of one specific good changes is the primary reason underlying the law of demand. This is the: (Points : 1)consumption effect.income effect.demand effect.substitution effect.incentive effect.4. If a price CEILING is implemented BELOW the market equilibrium price, then the resultwill be: (Points : 1)a surplus.a shortage.an increase in quantity supplied.a change in demand.a change in supply.5. In an economy with 200 million people, 120 million hold jobs and 30 million are not working but are looking for jobs. What is the official unemployment rate? (Points : 1)60%30%20%15%6. If nominal output is $4.4 trillion and the GDP deflator is 110, then real output is: (Points : 1)$4.84 trillion$4.4 trillion$4 trillion$3.84 trillion7. When the price of cigarettes decreases by 6 percent, the quantity demanded increases by 2 percent. The absolute value of price elasticity of demand for cigarettes is: (Points : 1)0.10.20.3332.58. If an INCREASE in demand occurs with no change in market supply, in a competitive market: (Points : 1)equilibrium price and quantity will rise.equilibrium price and quantity will fall.equilibrium price will rise, equilibrium quantity will fall.equilibrium price will fall, equilibrium quantity will rise.neither price nor quantity will change.10. Which of the following is NOT a correct statement concerning Fixed Cost (FC)? (Points : 1)Fixed Cost must be constant in the Short RunAverage Fixed Costs (AFC will continually decline in the Short Run)Fixed costs occur because of fixed inputsAFC = ATC – AVCall the above are correct