Exam 1.2 Macro Fall 2018 1.A buyer is said to have a demand for a good only when

Question

Exam 1.2 Macro Fall 2018 1.A buyer is said to have a demand for a good only when: A) B) C) D) The buyer wants to own the good. The buyer is both willing and able to purchase the good at alternative prices. The price of the good is low enough. An adequate supply of the good is available for purchase. 2.Ceteris paribus, if the price of a PlayStation decreases, then we can expect: A) B) C) D) An increase in the demand for PlayStation. An increase in the quantity demanded of PlayStation. A decrease in the demand for PlayStation. A decrease in the quantity demanded of PlayStation. 3.Ceteris paribus, which of the following is most likely to cause a decrease in the demand for Maker's Mark bourbon? A) An increase in the price of Maker's Mark. B) A decrease in tastes for Maker's Mark. C) An increase in income. D) An increase in the price of Jack Daniels Sour Mash, a substitute good. 4.Ceteris paribus, which of the following would generally cause a decrease in the demand for new automobiles? A) B) C) D) An increase in the price of automobiles. An increase in consumers' income. The new models are perceived as ugly compared with old models. Consumer expectations that the price of automobiles will be higher next year. 5.The basic factors of production include: A) Land, labor, money, and capital. B) Land, labor, money, and inputs. C) Labor and capital. D) Land, labor, capital, and entrepreneurship. 6.Capital, as economists use the term, refers to: A) B) C) D) The money needed to start a new business. The costs of operating a business. Shares of stock issued by businesses. Final goods that are used to produce other goods and services. 7.The fundamental problem of economics is: A) B) C) D) The law of increasing opportunity costs. The scarcity of resources relative to human wants. How to get government to operate efficiently How to create employment for everyone. 8. Production-possibilities curves demonstrate that: A) Producing more of a good reduces the potential production of another good. B) C) D) It is always possible to produce more of one good. It is always possible to produce more of both goods. It is never possible to produce zero output.

Explanation / Answer

Q1. Answer is B. a buyer is both willing and able to purchase the goods at alternative prices. Q2. Answer is B. an increase in quantity demanded of Playstation. Q3. Answer is B. a decrease in taste of Maker's mark. Q4. Answer is C. a new model perceived as ugly as compared to old models. Q5. Answer is D. Land, labour, capital and Enterpreneur. Q6. Answer is B. cost of operating the business. Q7. Answer is B. Scarcity of resources relative to human wants. Q8. Answer is A. producing more of a good redcued the potential production of another good.

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