Chapter 5: Markets in Action
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/73536
Sample Questions
Q1) If the demand curve increases while the supply curve remains unchanged, the equilibrium price would increase.
A)True
B)False
Q2) In Exhibit 4.2, a decrease in quantity demanded would cause a move from which equilibrium point to another, other things being equal?
A) E<sub>1</sub> to E<sub>2</sub>.
B) E<sub>1</sub> to E<sub>3</sub>.
C) E<sub>4</sub> to E<sub>1</sub>.
D) E<sub>3</sub> to E<sub>4</sub>.
Q3) Exhibit 4.1 shows that at a price of $30:
A) the market is in equilibrium.
B) there will be excess quantity demanded.
C) there will be excess quantity supplied.
D) there is a price ceiling in effect.
Q4) A public good such as free clean air is available for all users even those who do not pay for the public good.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Elasticity of Demand and Supply
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/73537
Sample Questions
Q1) Tax incidence depends on:
A) the nature of the tax.
B) income elasticity of demand.
C) the price elasticities of demand and supply.
D) cross-price elasticity of supply.
Q2) The cross elasticity between two goods, X and Y, is positive. From this, we can conclude that goods X and Y are:
A) substitute goods.
B) complementary goods.
C) unrelated goods.
D) inferior goods.
Q3) Price elasticity of demand can be:
A) greater than 100 per cent.
B) equal to 100 per cent.
C) less than 1.
D) less than 100 per cent.
Q4) Price elasticity of supply measures the responsiveness of the quality of a supplied good to a change in price.
A)True
B)False
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Production Costs
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/73538
Sample Questions
Q1) Marginal cost initially decreases because:
A) marginal product is decreasing.
B) additional workers add to the complexity of production.
C) the extra cost of producing one more unit of output increases.
D) of the specialisation of workers.
Q2) The law of diminishing returns applies to which of the following segments of the marginal product of labour curve?
A) The entire curve.
B) The downward-sloping segment only.
C) The upward-sloping segment only.
D) The point where labour input is zero.
Q3) ATC can be calculated as follows:
A) AFC*AVC or TC*Q
B) AFC-AVC or TC/Q
C) AFC+AVC or TC*Q
D) AFC+AVC or TC/Q
Q4) The long-run average cost curve traces the lowest points of the AVC and ATC for all firms.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Perfect Competition
Available Study Resources on Quizplus for this Chatper
124 Verified Questions
124 Flashcards
Source URL: https://quizplus.com/quiz/73539
Sample Questions
Q1) A firm in a perfectly competitive market faces:
A) its own upward-sloping demand curve.
B) its own downward-sloping demand curve.
C) a market demand curve.
D) a perfectly elastic demand curve.
Q2) Marginal analysis is used to determine:
A) the maximum profit by comparing maximum revenue and marginal cost.
B) the profit maximising output.
C) the market price resulting from a one unit change in output.
D) the change in the total cost as the price changes.
Q3) In Exhibit 7.1, if output is between 100 and 200 units per week, economic profit for the firm is:
A) zero.
B) negative or zero.
C) at its maximum.
D) positive or zero.
Q4) The long-run supply curve in a perfectly competitive increasing-cost industry is upward-sloping.
A)True
B)False
10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Monopoly
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/73540
Sample Questions
Q1) A monopoly earns the most profit by charging a price where demand is inelastic.
A)True
B)False
Q2) Suppose a monopolist's demand curve lies below its average variable cost curve. The firm will:
A) stay in operation in the short run.
B) increase the price.
C) earn an economic profit in the long run.
D) shut down.
Q3) A single priced monopoly:
A) can increase price and increase output at the same time.
B) can charge any price it wants and still sell all of its output.
C) can sell any output it produces provided it accepts the market price.
D) must lower price in order to increase output.
Q4) When marginal revenue is zero for a monopolist facing a downward-sloping, straight-line demand curve, the price elasticity of demand is:
A) greater than 1.
B) equal to 1.
C) less than 2.
D) equal to zero.
Page 11
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Monopolistic Competition and Oligopoly
Available Study Resources on Quizplus for this Chatper
124 Verified Questions
124 Flashcards
Source URL: https://quizplus.com/quiz/73541
Sample Questions
Q1) The fact that a monopolistically competitive firm is not as efficient as a perfectly competitive firm may be outweighed by which of the following?
A) The price charged is still equal to marginal revenue.
B) Goods in a monopolistically competitive market are usually cheaper.
C) There are still many perfect substitutes.
D) Consumers are given more choice.
Q2) The strategic analysis firms undertake is often seen in perfect competition. A)True
B)False
Q3) The purpose of a cartel is to:
A) promote product innovation.
B) increase market competition.
C) act like a monopoly.
D) diversify operations.
Q4) Extremely difficult entry to the market with unique product is a feature of:
A) monopolies.
B) monopolistic competition.
C) perfect competition.
D) oligopolies.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Policy Issues: Housing Affordability and Climate Change
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/73542
Sample Questions
Q1) If the pollution control costs are low but the carbon tax is high, firms are encouraged to:
A) pay the carbon tax.
B) install pollution control equipment.
C) sell their inventories at lower prices.
D) increase production.
Q2) In Exhibit 10.2, which of the following is likely to be true?
A) Equilibrium between the market demand 'Demand' curve and market supply 'Supply' curve indicate the over allocation of resources to carbon intensive activities.
B) Supply curve 'Supply 2' includes the positive externality that is not included in the supply curve 'Supply 1'.
C) If the carbon tax of $30 is imposed, the supply curve 'Supply 1' will shift to the right to supply curve 'Supply 2'.
D) Carbon tax will result in 60 units of carbon intensive outputs at $30 per unit.
Q3) Regulation is the best solution to climate change issues.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Measuring the Size of the Economy
Available Study Resources on Quizplus for this Chatper
124 Verified Questions
124 Flashcards
Source URL: https://quizplus.com/quiz/73543
Sample Questions
Q1) In a closed economy, any differences between desired saving and investment will be equal to:
A) the change in inventories.
B) government spending.
C) consumption.
D) public saving.
Q2) Suppose a miller sells flour to a baker for $100. The baker then produces bread from the flour and sells it to Coles for $600. Coles in turn then sells it to the public for $850. The increase in GDP as a result of these transactions will be:
A) $1550.
B) $850.
C) $600.
D) $100.
Q3) Which of the following countries has the highest level of GDP?
A) Bangladesh.
B) The USA.
C) Switzerland.
D) Kenya.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Business Cycles and Economic Growth
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/73544
Sample Questions
Q1) Macroeconomic policies involve:
A) fiscal and monetary policy.
B) antitrust laws.
C) the introduction of competition.
D) changes in wages in the automotive industry.
Q2) In the Solow growth model, investment is only possible if:
A) consumption equals output.
B) consumption is greater than output.
C) output is greater than consumption.
D) firms borrow from overseas.
Q3) The 'golden rule' level of capital per worker in the Solow model implies:
A) governments should consistently follow the same monetary policy rule regardless of the economy's stage in the business cycle.
B) consumption will be maximised when capital per worker is at its maximum.
C) there is an optimal rate of saving that will maximise investment.
D) there is an optimal rate of saving that will maximise consumption.
Q4) It is desirable to reduce the rise in unemployment during recession.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Inflation and Unemployment
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/73545
Sample Questions
Q1) Cost-push inflation is due to:
A) 'too much money chasing too few goods'.
B) the economy operating at full employment.
C) significant increases in production costs.
D) a decrease in production costs.
Q2) In an economic expansion, people used their credit cards to purchase many goods. But now the economy is in recession, people must use much of their reduced incomes to pay back debts. If employees manufacturing the goods people used to buy are laid off, they will suffer from:
A) cyclical unemployment.
B) structural unemployment.
C) permanent unemployment.
D) frictional unemployment.
Q3) Workers who may be between jobs are considered:
A) frictionally unemployed.
B) structurally unemployed.
C) cyclically unemployed.
D) unemployable.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: A Simple Model of the Macro Economy
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/73546
Sample Questions
Q1) Stagflation occurs when the economy experiences:
A) low unemployment and low inflation.
B) high unemployment and rapid inflation.
C) low unemployment and rapid inflation.
D) high unemployment and low inflation.
Q2) ________ noted that the aggregate demand is not necessarily always equal to total production.
A) Churchill
B) Smith
C) Say
D) Keynes
Q3) The classical theory that states that 'supply creates its own demand' was developed by:
A) Adam Smith.
B) John Keynes.
C) Jean-Baptiste Say.
D) Richard Say.
Q4) The theory that supply creates its own demand is called Say's Law.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: The Monetary and Financial System
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/73547
Sample Questions
Q1) Unused lines of credit on credit cards are part of M3.
A)True
B)False
Q2) A bank's exchange settlement account must have a negative balance at the end of each trading day.
A)True
B)False
Q3) Which bank controls the Monetary Base in Australia?
A) The Commonwealth Bank.
B) The ANZ Bank.
C) The State Bank.
D) The Reserve Bank.
Q4) The quantity of money demanded to satisfy transaction needs:
A) is intended for unexpected expenditures.
B) increases with the level of real GDP.
C) decreases with the level of real GDP.
D) is unrelated to either national income or the interest rate.
Q5) Fiat money has no redeemability or intrinsic value.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Macroeconomic Policy I: Monetary Policy
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/73548
Sample Questions
Q1) Under a fixed exchange rate system, an excess supply for the Australian dollar in the FOREX market often resulted in:
A) an increase in liquidity in the financial system and a fall in interest rates.
B) a decrease in liquidity in the financial system and an increase in interest rates.
C) a decrease in liquidity in the financial system and a decrease in interest rates.
D) an increase in liquidity in the financial system and an increase in interest rates.
Q2) If the supply of money is stable while the demand for money is volatile, the likely result will be that:
A) interest rates will remain constant.
B) inflation rates will remain constant.
C) interest rates will become more volatile.
D) the velocity of money will fall.
Q3) If the velocity of money is constant then the money supply will also be constant.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
19
Chapter 18: Macroeconomic Policy II: Fiscal Policy
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/73549
Sample Questions
Q1) Unemployment benefits are an example of a/an:
A) discretionary stabiliser.
B) countercyclical stabiliser.
C) automatic stabiliser.
D) seasonal stabiliser.
Q2) Suppose the economy in Exhibit 17.2 is in equilibrium at point E<sub>1</sub> and the marginal propensity to consume (MPC) is 0.75. Following Keynesian economics, the federal government can move the economy to point E<sub>2</sub> and reduce inflation by:
A) increasing government tax revenue by $6 billion.
B) decreasing government tax revenue by $6.1 billion.
C) decreasing government tax revenue by $200 billion.
D) increasing government tax revenue by approximately $66 billion.
Q3) If the majority of national debt is held domestically, economists would consider this not to be a burden because:
A) we owe the debt to ourselves.
B) it is only future generations that will have to repay the debt, not us.
C) we can easily pay for this debt out of export income.
D) the government knows how to spend the money better than us.
To view all questions and flashcards with answers, click on the resource link above.
Page 20
Chapter 19: International Trade and Finance
Available Study Resources on Quizplus for this Chatper
132 Verified Questions
132 Flashcards
Source URL: https://quizplus.com/quiz/73550
Sample Questions
Q1) Free trade allows countries to specialise in producing goods and services they have an absolute advantage in, without restrictions or taxes and subsidies applied to their flow.
A)True
B)False
Q2) Which of the following could cause the dollar-pound exchange rate to change as shown in Exhibit 18.5?
A) American goods become more popular in Great Britain.
B) British incomes rise while US incomes remain unchanged.
C) The US price level rises while the British price level remains unchanged.
D) The US real interest rate rises while the British real interest rate remains unchanged.
Q3) If the yen price of dollars falls, then the dollar price of yen rises.
A)True
B)False
Q4) International trade allows a country to consume a combination of goods that lies only inside its production possibility frontier.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
21