ECO204 Quizzes Week 1 – Quiz

Question 1

Like many economists, Richard predicts that recruiters will have more success hiring college graduates if they offer good salaries and benefits. Richard is applying the __________.

hierarchy of needs pyramid

rational expectations hypothesis

market economy theory

Correct!

self-interest assumption

Question 2

The primary reason that economists disagree over which economic policies to pursue is that they __________.

Correct!

have different values, methods, and priorities

use irrelevant models

use expired data

make false assumptions

Question 3

Which of the following would most likely be regarded as a macroeconomic issue?

the price of spaghetti sauce

Correct!

the growth rate of total product output

the number of retirees in the steel industry

the number of SUVs manufactured

Question 4

Assume that Indiana levies a tax on gasoline and uses the proceeds to repair roads in low-income areas. Which government function(s) is (are) being carried out?

both allocation and stabilization

national defense

stabilization

Correct!

both allocation and redistribution

Question 5

Which of the following is NOT a benefit of specialization and trade?

Resources are used in a better manner.

The real income of individuals can be increased.

People can take full advantage of their talents and skills.

Correct!

People become less dependent on each other.

Question 6

Monetary savings represents a leakage in the circular flow of an economy because it __________.

is used to purchase imports

increases the size of the flow

Correct!

is income not consumed

is of no use to the economy

Question 7

Which of the following is NOT a function of price in the market system?

Correct!

producing

directing

informing

motivating

Question 8

In economic theory, demand

refers to the various amounts of goods or services that consumers are willing to buy over a specified time period __________.

as their income changes

Correct!

at various prices

when prices increase

as their tastes change

Question 9

If an economist sees that an inferior good’s price has increased from $1.00 to $1.50 per unit, and that the income available to purchase that inferior good has increased from $10,000 to $15,000, the economist will likely conclude that __________.

10,000 units would be purchased in both cases

the quantity demanded of the good has increased

Correct!

the equilibrium quantity will decrease, because both forces have a negative effect

the equilibrium quantity will increase, because both forces have a positive effect

Question 10

In economic terms, what are coffee and tea vis-à-vis each other?

Correct!

substitutes

unrelated goods

complements

nonmarket goods

Quiz Score: 10 out of 10