1. Two goods
are substitutes when a decrease in the price of one good

a. decreases
the demand for the other good.

b. increases
the quantity demanded of the other good.

c. increases
the demand for the other good.

d. decreases
the quantity demanded of the other good.

2 points

QUESTION 13

1. If goods
A and B are complements, then an increase in the price of good A will result in

a. more of
good B being sold.

b. no
difference in the quantity sold of either good.

c. more of
good A being sold.

d. less of
good B being sold.

2 points

QUESTION 14

1. Suppose
scientists provide evidence that chocolate pudding increases the bad
cholesterol levels of those who eat it.
We would expect to see

a. a
decrease in the demand for chocolate pudding.

b. an
increase in the demand for chocolate pudding.

c. a
decrease in the supply of chocolate pudding.

d. no change
in the demand for chocolate pudding.

2 points

QUESTION 15

1. You love
peanut butter. You hear on the news that
50 percent of the peanut crop in the South has been wiped out by drought and
that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut butter

a. will
increase but not until the end of the year.

b. shifts
left today.

c. increases
today.

d. decreases
as you look for a substitute good.

2 points

QUESTION 16

1. If the
number of buyers in a market decreases, then

a. demand
will increase.

b. demand
will decrease.

c. supply
will decrease.

d. supply
will increase.

2 points

QUESTION 17

1. The
quantity supplied of a good is the amount that

a. sellers
are able to produce.

b. buyers
are willing and able to purchase.

c. buyers
and sellers agree will be brought to market.

d. sellers
are willing and able to sell.

2 points

QUESTION 18

1. A
decrease in the price of a good will

a. decrease
quantity supplied.

b. decrease
supply.

c. increase
supply.

d. increase
quantity supplied.

2 points

QUESTION 19

1. Which of
the following changes would not shift the supply curve for a good or service?

a. a change
in input prices

b. a change
in the price of the good or service

c. a change
in expectations about the future price of the good or service

d. a change
in production technology

2 points

QUESTION 20

1. The
unique point at which the supply and demand curves intersect is called

a. market
harmony.

b. equivalence.

c. equilibrium.

d. coincidence.

2 points

QUESTION 21

1. A surplus
exists in a market if

a. there is
an excess demand for the good.

b. quantity
demanded exceeds quantity supplied.

c. the
current price is above its equilibrium price.

d. All of
the above are correct.

2 points

QUESTION 22

1. If a
shortage exists in a market, then we know that the actual price is

a. below the
equilibrium price, and quantity supplied is greater than quantity demanded.

b. below the
equilibrium price, and quantity demanded is greater than quantity supplied.

c. above
the equilibrium price, and quantity demanded is greater than quantity supplied.

d. above the
equilibrium price, and quantity supplied is greater than quantity demanded.

2 points

QUESTION 23

1. For an
economy as a whole,

a. consumption
must equal saving.

b. the
number of buyers must equal the number of sellers.

c. income
must equal expenditure.

d. wages
must equal profit.

2 points

QUESTION 24

1. GDP is
defined as the

a. value of
all final goods and services produced by the citizens of a country, regardless
of where they are living, in a given period of time.

b. value of
all goods and services produced within a country in a given period of time.

c. value of
all goods and services produced by the citizens of a country, regardless of
where they are living, in a given period of time.

d. value of
all final goods and services produced within a country in a given period of
time.

2 points

QUESTION 25

1. Most
goods and services produced at home

a. and most
goods and services produced illegally are included in GDP.

b. are
included in GDP while most goods and services produced illegally are excluded
from GDP.

c. and most
goods and services produced illegally are excluded from GDP.

d. are
excluded from GDP while most goods and services produced illegally are included
in GDP

2 points

QUESTION 26

1. Spots,
Inc. produces ink and sells it to Write on Target, which makes pens. The ink produced by Spots, Inc. is called

a. a final
good.

b. an
intermediate good.

c. an
inventory good.

d. a
transitory good.

2 points

QUESTION 27

1. Grapes
are considered intermediate goods

a. whether
the purchaser uses them to make wine to sell or eats them.

b. if the
purchaser uses them to make wine to sell others but not if the purchaser eats
them.

c. if the
purchaser eats them, but not if the purchaser uses to them to make wine to
sell.

d. None of
the above is correct.

2 points

QUESTION 28

1. The
income that households and noncorporate businesses receive is called

a. net
national product.

b. disposable
personal income.

c. personal
income.

d. national
income.

2 points

QUESTION 29

1. Disposable
income is

a. the
income that households and businesses have remaining after satisfying their
obligations to the government.

b. the total
income earned by a nation’s residents in the production of good and services.

c. the
income that households and non-corporate businesses receive.

d. the total
income earned by a nation’s permanent residents.

2 points

QUESTION 30

1. The
consumer price index is used to

a. monitor
changes in the level of wholesale prices in the economy.

b. monitor
changes in the level of real GDP over time.

c. monitor
changes in the stock market.

d. monitor
changes in the cost of living over time.