Survey of Economics
Textbook Exam Questions
Course Introduction
Survey of Economics provides students with a broad overview of fundamental economic concepts and principles. The course explores both microeconomic and macroeconomic topics, such as supply and demand, market structures, consumer behavior, national income, unemployment, inflation, and the roles of government and policy in the economy. Students will gain an understanding of how individual choices, business strategies, and government actions influence economic outcomes, and will apply economic reasoning to contemporary issues and real-world examples. This course is designed for non-majors seeking a general introduction to economics as well as for those considering further study in the field.
Recommended Textbook
ECON MICRO 5th Edition by William A. McEachern
Available Study Resources on Quizplus
21 Chapters
3187 Verified Questions
3187 Flashcards
Source URL: https://quizplus.com/study-set/3724 Page 2
Chapter 1: The Art and Science of Economic Analysis
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74251
Sample Questions
Q1) Economics is best defined as the study of how individuals decide to use limited resources in an attempt to satisfy unlimited wants.
A)True
B)False
Answer: True
Q2) Rational choice by an individual implies:
A)the use of a mathematical model when solving a problem.
B)making decisions aimed at achieving some predetermined goal.
C)that only monetary costs and benefits are weighed.
D)that the individual will never regret any action taken.
E)that scarcity can be eliminated for that individual.
Answer: B
Q3) Which of the following is not a part of the scientific method in economics?
A)Normative statements
B)Comparing predictions to evidence
C)Formulating a hypothesis
D)A hypothesis
E)Behavioral assumptions
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Economic Tools and Economic Systems
Available Study Resources on Quizplus for this Chatper
159 Verified Questions
159 Flashcards
Source URL: https://quizplus.com/quiz/74252
Sample Questions
Q1) If all resources are used efficiently to produce goods and services, a nation will find itself producing:
A)inside its production possibilities frontier.
B)somewhere on its production possibilities frontier.
C)outside of its production possibilities frontier.
D)at one extreme end of its production possibilities frontier.
E)more of one product with no decrease in the production of any other product.
Answer: B
Q2) Opportunity cost is objective; therefore, its value does not change as circumstances change.
A)True
B)False
Answer: False
Q3) Which of the following would not shift the production possibilities frontier?
A)An increase in capital stock
B)A war that destroyed many buildings
C)A technological improvement that improved fuel efficiency in cars
D)A decrease in the size of the labor force
E)A change to a more inefficient production process
Answer: E
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Economic Decision Makers
Available Study Resources on Quizplus for this Chatper
174 Verified Questions
174 Flashcards
Source URL: https://quizplus.com/quiz/74253
Sample Questions
Q1) A public good is one that is supplied to:
A)only people who pay for it.
B)only people who do not pay for it.
C)all people, regardless of whether they pay for it or not.
D)the government by private firms.
E)foreign governments by our federal government.
Answer: C
Q2) A tariff is:
A)a tax on imports.
B)a legal limit on quantities of goods that can be imported.
C)a voluntary limit on quantities of goods that can be imported.
D)a quality restriction on imports.
E)a subsidy for exports.
Answer: A
Q3) Under a regressive income tax system, individuals with higher incomes pay higher marginal tax rates.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Demand, Supply, and Markets
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/74254
Sample Questions
Q1) The income effect of an increase in the price of backpacks, a normal good, is a(n):
A)decrease in the demand for backpacks.
B)decrease in the quantity of backpacks demanded.
C)decrease in the supply of backpacks.
D)increase in the quantity of backpacks demanded.
E)increase in the quantity supplied of backpacks.
Q2) The income effect refers to the impact of a change in:
A)money income of consumers on the price of a good.
B)the relative price of a good on the demand for other goods.
C)the price of a good on a consumer's real income.
D)the price of a substitute good on a consumer's budget.
E)money income of consumers on the demand for a good.
Q3) Which of the following is likely to increase the supply of wheat?
A)An increase in the cost of fertilizer
B)A decrease in the price of bread
C)A decrease in the price of corn
D)An increase in land prices
E)An expectation that the price of wheat will be higher in near future
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Elasticity of Demand and Supply
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/74255
Sample Questions
Q1) Inferior goods have an income elasticity of demand that is:
A)positive.
B)negative.
C)zero.
D)greater than 1 in absolute value.
E)equal to 1 in absolute value.
Q2) If the price elasticity of demand is 0.5, then a:
A)1 percent decrease in quantity demanded leads to a 0.5 percent decrease in price.
B)1 percent decrease in price leads to a 0.5 percent increase in quantity demanded.
C)50 percent decrease in price leads to a 1 percent increase in quantity demanded.
D)50 percent decrease in price leads to a 100 percent increase in quantity demanded.
E)50 percent decrease in quantity demanded leads to a 1 percent decrease in price.
Q3) The availability of substitutes makes the demand for a good less elastic.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Consumer Choice and Demand
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74256
Sample Questions
Q1) If a consumer buys a good, the expected:
A)marginal utility of the good is zero
B)opportunity cost of buying the good is more than its price
C)marginal utility of per dollar spent on the good equals its price
D)total utility derived from the consumption of the good is less than its price
E)marginal value of the good is greater than or equal to its price
Q2) The fact that paper towels are available free of cost in a washroom suggests that the marginal utility of paper towels diminishes to zero for each individual.
A)True
B)False
Q3) Tyrell has $50 to spend on good A and good B per week. The price of good A is $5 and that of good B is $4. He buys six units of good A and five units of good B. The marginal utility of the sixth unit of A is 25 units, and the marginal utility of the fifth unit of B is 20 units. Which of the following is true?
A)He is maximizing his utility.
B)His last dollar spent on good A exceeds the last dollar spent on good B.
C)He is not maximizing his utility and should buy more of A.
D)He is not maximizing his utility and should buy more of B.
E)He is not maximizing his utility because he is not spending all of his income.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Production and Cost in the Firm
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/74257
Sample Questions
Q1) Implicit costs involve direct cash payments for the use of a resource.
A)True
B)False
Q2) Which of the following is also known as the firm's planning curve?
A)The average total cost curve
B)The total cost curve
C)The long-run average cost curve
D)The long-run marginal cost curve
E)The fixed cost curve
Q3) If General Electric finds that doubling both its plant size and the amount of associated inputs does not double its output level, then:
A)the law of diminishing returns is in effect.
B)long-run average costs must be decreasing.
C)the firm is experiencing diseconomies of scale.
D)the firm should increase production.
E)the firm is experiencing constant returns to scale.
Q4) In the short run, all costs are fixed.
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
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74258
Sample Questions
Q1) Long-run equilibrium for a perfectly competitive firm occurs when:
A)Price (P) = Marginal cost (MC) = Short-run average total cost (SRATC) = Long-run average cost (LRAC).
B)Marginal cost (MC) = Marginal revenue (MR) = Average fixed cost (AFC) = Short-run average total cost SRATC.
C)Marginal cost (MC) = Marginal revenue (MR) = Price (P) > Long-run average cost (LRAC).
D)Price (P) = Marginal revenue (MR) = Long-run average variable cost (LRAVC) = Long-run average cost (LRATC).
E)Marginal cost (MC) = Marginal revenue (MR) = Average fixed cost (AFC) = Long-run average cost (LRAC).
Q2) If price is less than minimum average variable cost, a perfectly competitive firm that continues to produce in the short run _____.
A)earns a positive economic profit
B)incurs a loss greater than its fixed cost
C)can cover all of its fixed cost and some of its variable cost
D)can cover all of its variable cost and some of its fixed cost
E)can cover both its fixed cost and its variable cost
To view all questions and flashcards with answers, click on the resource link above.
10
Chapter 9: Monopoly
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74259
Sample Questions
Q1) Anything that prevents new firms from competing on an equal basis with existing firms in an industry is called a barrier to entry.
A)True
B)False
Q2) Which of the following can be concluded about a monopolist whose marginal revenue is zero for a particular output level?
A)The economic profit earned by the monopolist by producing that output level is zero.
B)Total revenue earned by the monopolist is maximum at that output level.
C)Total revenue earned by the monopolist increases at an increasing rate as output increases beyond that output level.
D)Total revenue earned by the monopolist increases at a decreasing rate as output increases beyond that output level.
E)Average revenue earned by the firm for that output level is less than marginal revenue for that output level.
Q3) A natural monopoly emerges from legal restrictions imposed by a government.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Monopolistic Competition and Oligopoly
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74260
Sample Questions
Q1) In the long run, both perfectly competitive and monopolistically competitive firms produce at minimum average cost.
A)True
B)False
Q2) Which of the following factors makes a monopolistically competitive firm a price maker?
A)Product differentiation
B)Barriers to entry
C)Product similarity
D)Its homogeneous product
E)High tariffs
Q3) An oligopoly firm that _____ will earn long-run economic profit.
A)enjoys huge brand loyalty
B)spends less on advertisement
C)charges a higher price for its product
D)incurs high cost to achieve the minimum efficient scale
E)charges a low price for its product
Q4) Cartels are inherently unstable.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Resource Markets
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74261
Sample Questions
Q1) Marginal revenue product is defined as:
A)the total revenue generated by resources.
B)the additional output produced by one additional unit of a resource, other things constant.
C)the marginal revenue from each unit of output.
D)the total revenue divided by the number of resources employed.
E)the additional revenue generated by one additional unit of a resource, other things constant.
Q2) The marginal revenue product curve represents a firm's demand curve for a resource.
A)True
B)False
Q3) Which of the following resources earns the highest economic rent as a proportion of total earnings?
A)A resource specialized in one task
B)A nonspecialized resource
C)A resource with inelastic demand
D)A resource with low demand
E)A resource with elastic demand
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Labor Markets and Labor Unions
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74262
Sample Questions
Q1) The substitution effect in the labor supply decision refers to:
A)substituting leisure for work as the wage rate rises.
B)substituting market work for nonmarket work as the wage rate falls.
C)working more hours as the wage rate falls.
D)working fewer hours as the wage rate rises.
E)substituting market work for leisure or nonmarket work as the wage rate rises.
Q2) As the wage rate increases, the substitution effect causes workers to supply more time to market work and the income effect causes them to supply less time to market work.
A)True
B)False
Q3) Which of the following groups is a craft union?
A)Auto workers
B)Steel workers
C)Writers
D)Government employees
E)Construction workers
Q4) Most labor negotiations in the United States end without a strike.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Capital, Interest, Entrepreneurship, and Corporate Finance
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74263
Sample Questions
Q1) The more valuable a collateral backing up a loan, other things constant, the higher the interest rate charged on the loan.
A)True
B)False
Q2) Which of the following would be true if the market interest rate increases?
A)The cost of borrowing would increase, and this would decrease saving.
B)The opportunity cost of consuming a good in the future would increase, and this would increase saving.
C)The opportunity cost of consuming a good in the future would increase, and saving would decrease.
D)The reward for saving would decrease, and present consumption would increase.
E)The reward for saving would increase, and this would increase saving.
Q3) For a typical consumer, present consumption is _____.
A)preferred to future consumption
B)less rewarding than future consumption
C)preferred to future saving
D)not preferred to future saving
E)financed out of present saving
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Transaction Costs, Asymmetric Information, and Behavioral Economics
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/74264
Sample Questions
Q1) In order to focus on its area of core competency, a firm relies on:
A)government intervention and the bounded rationality of its managers.
B)the market price and the minimum efficient scale of production.
C)economies of scope.
D)the division of labor and the law of comparative advantage.
E)the vertical integration of its production process.
Q2) Don's Pasture Apple Cider Company buys four inputs when producing apple cider: apples, glass bottles, apple presses, and computers for record keeping. If the company decides to become vertically integrated backward, it is most likely to:
A)start growing apples next.
B)start making glass bottles next.
C)start making apple presses next.
D)start making computers next.
E)internalize the production of all these inputs at the same time.
Q3) Reliable information is:
A)costly for consumers, but not for producers.
B)costly for both producers and consumers.
C)freely available.
D)costly for producers, but not for consumers.
E)not relevant to economic decision making.
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Economic Regulation and Antitrust Policy
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74265
Sample Questions
Q1) In its case against Microsoft, the government contended that Microsoft engaged in a pattern of predatory behavior to extend its monopoly power. This is an example of a ruling according to the principle of "per se illegality."
A)True
B)False
Q2) If the Herfindahl index is the same in two industries, we can conclude that:
A)the number of firms in each industry is the same.
B)the number of firms in the two industries is not the same.
C)the sum of the squared market shares of all firms is the same in the two industries.
D)there must be an identical distribution of market shares among the firms in the two industries.
E)there are only two firms in each industry.
Q3) A regulated natural monopoly that must set price equal to average cost will:
A)incur an economic loss.
B)earn a net economic profit.
C)earn a normal profit.
D)shut down in the short run.
E)experience diseconomies of scale.
To view all questions and flashcards with answers, click on the resource link above.
17
Chapter 16: Public Goods and Public Choice
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74266
Sample Questions
Q1) A large U.S. steel firm wants to restrict imports of Japanese steel, but Ford Motor Company wants fewer restrictions on steel imports so that its cost of production remains constant. This can best be described as a(n):
A)zero-sum game.
B)example of a competing interest.
C)example of a special interest.
D)situation with widespread costs and concentrated benefits.
E)free-rider problem.
Q2) Which of the following is a crude but efficient mechanism that promotes efficiency in the provision of public goods by bureaus?
A)Vote with their feet
B)Arbitrage
C)Pork-barrel spending
D)Competing-interest legislation
E)Special-interest legislation
Q3) Special-interest legislation generally leads to an increase in social welfare.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
18
Chapter 17: Externalities and the Environment
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74267
Sample Questions
Q1) In Japan, recycling is prevalent and landfill use is relatively smaller than the United States because:
A)the Japanese have less developed technology for landfills.
B)the externality problem is not present in Japan.
C)land is relatively more scarce in Japan.
D)the Japanese have better recycling technology.
E)littering is illegal there.
Q2) The marginal social benefit curve is downward sloping under variable technology. A)True
B)False
Q3) If the benefits to society of students attending college exceed the benefits to the students, then:
A)higher education should be strictly regulated.
B)higher education should be taxed.
C)higher education provides a positive externality.
D)higher education is overproduced at the privately determined equilibrium.
E)higher education provides a negative externality.
Q4) The United States recycles a greater portion of its garbage than Japan does. A)True B)False
Page 19
To view all questions and flashcards with answers, click on the resource link above.
Chapter 18: Poverty and Redistribution
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74268
Sample Questions
Q1) Poor welfare recipients often face very high marginal tax rates.
A)True
B)False
Q2) The wage gap between African-American and white workers in the United States has narrowed since 1993.
A)True
B)False
Q3) If 15 percent of households receive 15 percent of the total income in an economy, _____.
A)the Lorenz curve will lie above the line of equality
B)the Lorenz curve will lie below the line of equality
C)the slope of the Lorenz curve will be equal to zero
D)the slope of the Lorenz curve will be equal to one
E)the slope of the Lorenz curve will be equal to infinity
Q4) Which of the following is true of income assistance programs?
A)These require that the recipient work and contribute to the program.
B)These are designed to replace lost income.
C)These include unemployment compensation and Medicare.
D)These are funded exclusively by the federal government.
E)These include both cash and in-kind transfer programs.
Page 20
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: International Trade
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74269
Sample Questions
Q1) The establishment of GATT resulted in:
A)lower tariff rates.
B)an increase in the net welfare loss of economies.
C)a decrease in the total world trade.
D)increased protectionism.
E)a rise in the price of imports.
Q2) When a country imposes a per-unit tariff on an imported good or service, _____.
A)the price that domestic consumers pay for the import falls
B)the quantity of the good or service imported into the country declines
C)the quantity of the good or service imported into the country increases
D)the price at which any supplier can sell output in the world market decreases
E)the quantity of the good or service demanded by the consumers increases
Q3) Which of the following reasons best explains U.S. imports of crude oil from Saudi Arabia and diamonds from South Africa?
A)Differences in resource endowments
B)Economies of scale
C)Differences in tastes
D)Import tariffs
E)Import quota
To view all questions and flashcards with answers, click on the resource link above.
Page 21
Chapter 20: International Finance
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74270
Sample Questions
Q1) A country's balance of payments summarizes all economic transactions during a given period between the residents of that country and the residents of other countries.
A)True
B)False
Q2) If the U.S. demand for British pounds increases, then:
A)the dollar price of British pounds will increase.
B)the dollar price of British pounds will decrease.
C)the exchange rate between dollars and pounds will be less than the equilibrium exchange rate.
D)the pound will fall in value vis-à-vis the dollar.
E)there will be no change in either the value of the dollar or the pound.
Q3) A fixed exchange rate is enforced by:
A)national governments, who establish appropriate trade barriers for each country they trade with.
B)national governments, who manipulate gold reserves appropriately.
C)central banks, who buy and sell appropriate currencies.
D)the International Monetary Fund, which offers loans to its member countries.
E)local governments, who manipulate capital reserves appropriately.
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Economic Development
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74271
Sample Questions
Q1) The World Bank estimates GNI per capita and then adjusts figures across countries based on _____.
A)the population rate in each country
B)the unemployment rate in each country
C)the purchasing power of the income in each country
D)the inflation rate in each country
E)the consumer price index in each country
Q2) Developing countries:
A)do not benefit from foreign aid.
B)do not benefit from private investment.
C)generate less than half of their annual flow of foreign exchange from exports.
D)must acquire foreign exchange in order to pay for imports.
E)need to decrease labor productivity.
Q3) In some developing countries, different exchange rates apply to different categories of transaction, and therefore, _____.
A)the local currency is not easily convertible to foreign currency.
B)the local currency is not easily convertible to foreign currency
C)the prices of foreign goods fluctuate widely in the domestic markets.
D)the prices of domestic goods fluctuate widely in the foreign markets
E)domestic investors are more inclined to invest in foreign assets
To view all questions and flashcards with answers, click on the resource link above. Page 23