ECO204 Quizzes Week 1 – Quiz

Question 1

1 / 1 pts

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

1 / 1 pts

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

1 / 1 pts

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

1 / 1 pts

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

1 / 1 pts

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

1 / 1 pts

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

1 / 1 pts

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

Correct!

  

producing

 

  

directing

 

  

informing

 

  

motivating

 

 

Question 8

1 / 1 pts

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

1 / 1 pts

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

1 / 1 pts

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