31. Complete the following analogy: A criminal is to a police artist\'s sketch a

Question

31.Complete the following analogy: A criminal is to a police artist's sketch as the economy is to: A) an economic model.
B) a resource.
C) ceteris paribus.
D) money.
E) scarcity.


32. A product would be more demand price inelastic: A) if the supply is more price elastic.
B) the more the number of good substitutes.
C) the shorter the time the consumer has to adjust to price changes.
D) the higher the price of the good.
E) the less the essential nature of the good.

33. If the supply of a good decreased, what would be the effect on the equilibrium price and quantity?
A) Price would increase, and quantity would decrease.
B) Price would increase, and quantity would increase.
C) Price would decrease, and quantity would decrease.
D) Price would decrease, and quantity would increase.

34. In differentiating between the short- and long-run elasticities, when economists talk about short-run elasticities,
A) there is no need to mention short versus long run.
B) the only issues are price and quantity.
C) short-run elasticities are usually lower.
D) b and c.
E) short-run elasticities are usually higher.

36. Which of the following most accurately indicates the implications of an economy's production possibilities curve?
A) Over time, it is generally impossible for a country to expand its production of goods.
B) If all the resources of an economy are being used efficiently, it is generally possible to produce more of one good without having to sacrifice the production of other goods.
C) If all the resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced.
D) An economy will automatically move toward a point that lies outside of the production possibilities constraint unless proper government policy constrains production.

38. Which of the following would eliminate scarcity as an economic problem?
A) None of these.
B) Resumption of steady productivity growth.
C) Moderation of people's competitive instincts.
D) Discovery of sufficiently large new energy reserves.

40. An increase in demand:
A) results in a leftward shift of the demand curve.
B) could be caused by an increase in the price of a substitute good.
C) could be caused by a decrease in the price of the good.
D) is shown as movement down along a demand curve.

41. The finite nature of the economy's resource base:
A) will always be with us.
B) will be solved if only we would learn to conserve.
C) is only a problem in developing countries.
D) will be solved as technology advances.

42. Consider the market for chicken. Assuming that chicken and beef are substitutes, an increase in the price of beef will:
A) decrease the demand for chicken creating a lower price and a smaller amount of chicken purchased in the market.
B) increase the demand for chicken creating a higher price and a greater amount of chicken purchased in the market.
C) decrease the supply of chicken creating a higher price and a smaller amount of chicken purchased in the market.
D) increase the supply of chicken creating a lower price and a greater amount of chicken purchased in the market.

43. An increase in demand and a decrease in supply cause which of the following?
A) Equilibrium price change is indeterminate.
B) Equilibrium price falls.
C) Equilibrium quantity increases.
D) Equilibrium quantity decreases.
E) Equilibrium price rises.

44. If the short-run price elasticity of demand for hospital care is .27, then the long-run price elasticity is expected to be:
A) equal to .27.
B) less than .27.
C) greater than 1.
D) less than 0.
E) greater than .27.

46. A demand curve that has constant price elasticity of demand coefficient equals to one at all points is a(n):
A) upward-sloping straight line.
B) downward-sloping straight line.
C) none of these.
D) rectangular hyperbola.

51. The price elasticity of demand coefficient for a good will be lower:
A) if there are few substitutes for the good.
B) if expenditure on it is a small part of one's budget.
C) both a and b are true.
D) neither a nor b are true.

54. A positive economic statement:
A) is an unbiased report of the facts of the economy.
B) is proper provided the advocator is clear the position rests on personal assessment.
C) should never be used by an economist.
D) contains personal and social value judgments.
E) is always a mathematical expression.

55. Which of the following is the best example of a microeconomic topic?
A) The impact that the money supply has on inflation.
B) The effect that federal budget deficits have on the interest rate.
C) The reasons for increases in the price of soft drinks.
D) The tradeoff between inflation and unemployment.

56. If the value of the price elasticity of demand is 0.2, this means that:
A) a 5 percent decrease in price causes a 1 percent increase in quantity demanded.
B) a 0.2 percent decrease in price causes a 0.2 percent increase in quantity demanded.
C) a 0.2 percent decrease in price causes a 1 percent increase in quantity demanded.
D) a 100 percent decrease in price causes a 200 percent increase in quantity demanded.
E) a 20 percent decrease in price causes a 1 percent increase in quantity demanded.

57. If the price of a good falls, the marginal utility per dollar spent on that good:
A) stays the same.
B) will rise or fall, depending on the consumer.
C) also falls.
D) remains unchanged, provided the consumer buys no more of the good.
E) rises.

58. The horizontal summation of individual demand curves gives:
A) a Phillips curve.
B) the quantity supplied.
C) a market demand curve.
D) a supply curve.
E) a production function.

59. An increase in the supply of the product implies:
A) producers will now charge a lower price for a given quantity of output.
B) some producers are dropping out of this market.
C) producers will now charge a higher price for a given quantity of output.
D) the price of this product has increased.
E) the supply curve will shift to the left.

60. Diminishing marginal utility means that as you consume more of a good, other things constant, the:
A) total amount produced falls.
B) total satisfaction you obtain from each extra good becomes constant.
C) marginal product falls.
D) additional satisfaction you obtain from each additional unit of the good falls.
E) total satisfaction you obtain from consuming this good falls.

61. Other things being equal, the effect of a decrease in the price of Coca-Cola would cause which of the following?
A) An upward movement along the demand curve for Coca-Cola.
B) A rightward shift in the demand curve for Coca-Cola.
C) A leftward shift in the demand curve for Coca-Cola.
D) A downward movement along the demand curve for Coca-Cola.

62. Which of the following is a public good?
A) Gun.
B) Pencil.
C) Apple.
D) Light house.
31.Complete the following analogy: A criminal is to a police artist's sketch as the economy is to: A) an economic model.
B) a resource.
C) ceteris paribus.
D) money.
E) scarcity.
31.Complete the following analogy: A criminal is to a police artist's sketch as the economy is to: A) an economic model.
B) a resource.
C) ceteris paribus.
D) money.
E) scarcity.
31.Complete the following analogy: A criminal is to a police artist's sketch as the economy is to: A) an economic model.
B) a resource.
C) ceteris paribus.
D) money.
E) scarcity.
32. A product would be more demand price inelastic:

Explanation / Answer

31) A

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