Ashford University - ECO 204

Instructions Week 1 Quiz

1)A production possibilities curve that bows outward from the origin implies that

                      .

 

the more of a good you get, the less it will cost to get even more

 

 

no matter how much more of a good you get, the cost per unit will remain unchanged

 

 

the cost of more of a good is independent of the shape of a production possibilities curve

the more of a good you get, the more it will cost to get even more

 

The answer can be found in Chapter 1, Section 1.3, Society’s Choices: The Production Possibilities Curve.

 

 

Question 2

 

 

Janet is taking a microeconomics course. An appropriate subject for one of Janet’s

papers would be                          .

 

 

 

the gross national product (GNP)

 

 

inflation within the United States

 

 

the U.S. economy compared to the Cuban economy

 

 

 

Question 3

 

 

What is the focus of macroeconomics?

 

the cost and price of anything that is abundant

 

 

 

the behavior of variables that describe the whole economy

 

 

the interaction between producers and consumers of a particular service

 

 

the small details of large entities

 

 

 

Question 4

 

 

If left alone, a market-directed economy will                           .

 

avoid the production problems encountered in other economies

 

 

 

invariably provide the correct economic choices

 

 

generally protect consumers from monopoly

 

 

 

Question 5

 

 

A country’s economic system is said to be                              .

 

 

a market system if it relies on self-interested behavior and incentives

 

 

a market system if it relies on substantial central planning

 

 

a traditional system if it relies on simple market trading

 

 

a command system if it relies on long-standing practices

 

 

 

Question 6

 

 

The Wall Street Journal

carried a story on a grocery store that operates with few services and limited use of attractive displays, but with lower prices on its goods than its competitors. This decision primarily answers which economic question?

 

“Who will buy the goods and services we produce?”

 

 

 

 

 “How will we produce our goods and services?”

 

 

“How can we avoid a recession by lowering prices?”

 

 

 

Question 7

 

 

The Racine family raises artichokes to sell. One year the demand for artichokes increases, but due to bad weather, supply decreases. What will happen to the Racines’ artichoke price and quantity sold?

 

Quantity sold will fall; effect on price is indeterminate.

 

 

Price will rise; quantity sold will fall.

 

 

 

Price will fall; quantity sold will fall.

 

Price will rise; effect on quantity sold is indeterminate.

 

The answer can be found in Chapter 3, Section 3.4, A Theory of Price Formation.

 

 

Question 8

 

 

Which of the following would cause an increase in the quantity demanded of “Strong Woman” sweatshirts?

 

 

 

 

a decrease in the price of “Strong Woman” sweatshirts

 

 

a decrease in the supply of “Strong Woman” sweatshirts

 

 

an increase in the price of “Strong Momma” sweatshirts

 

 

 

Question 9

 

 

Following economic theory, demand for a good will always rise when                                .

 

the price of a substitute good falls

 

 

 

the price of a complementary good falls

 

 

the price of all goods falls

 

 

the price of the good falls

 

 

 

Question 10

 

 

Following the law of demand, if the U.S. Postal Service raises the price of first-class mail, ceteris paribus, what will happen to the demand for postage stamps?