ECO 405 Week 3 Quiz – Strayer

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Quiz 2 Chapter 2 and 3

Chapter 02

Economic Systems, Resource Allocation, And Social Well-Being: Lessons From China's Transition

Multiple Choice Questions
 

1. Which Of The Following Descriptions Fits The American Economy Best?
A. A Pure Market Economy
B. A Mixed Economy
C. Purely Competitive Economy
D. A Command Economy
E. A Monopoly Economy

2. In A Market Economy,
A. Resources Are Allocated By The Private Parties Who Own The Resources
B. Resources Are Allocated By The Various Local, State, And Federal Planning Committees And Zoning Commissions
C. Shortages Never Exist
D. Surpluses Never Exist
E. Both C) And D)

3. In 1978, The Chinese Economy
A. Opened Ties To The Noncommunist World
B. Became A Strictly Centralized Economy Under Joseph Stalin
C. Became Communist Under Mao Zedong
D. Moved To The Island Of Taiwan
E. Became A Purely Market-Oriented Economy

4. In Both The U.S. And Canada, Most, But Not All, Of Economic Resources Are Owned And Controlled By Private Parties Who Make Decisions As To How To Use Those Resources With Somewhat Limited Interference From Government. As Such, These Economies Are Examples Of
A. The Pure Command Economy
B. Mixed Economies, Though Closer To The Market End Of The Spectrum
C. Mixed Economies, Though Closer To The Command End Of The Spectrum
D. The Pure Market Economy
E. The Communist Economy

5. In The Market Economy, Markets Serve The Function Of
A. Coordinating Resource Use Decisions Made By Individual Owners Of Resources
B. Bringing About Resource Allocation Changes Desired By Resource Owners
C. Determining Prices
D. All Of The Above
E. Both (A) And (B)

6. Which Of The Following Is Least Consistent With The Pure Market Economy?
A. An Established Legal System That Arbitrates Contract Disputes
B. An Individual Accepting A Job For $1 Per Hour
C. The Institution Of Private Property Rights
D. The Existence Of A Minimum Wage
E. Private Property Rights

7. Which Of The Following Is Not A Characteristic Of A Purely Competitive Market?
A. Enough Sellers And Buyers So That No One Of Them Acting Alone Can Influence The Price Of This Product
B. The Ability Of A Single Seller To Block Potential Competitors Out Of The Market
C. Freedom Of The Price To Move Up Or Down, That Is, No Price Fixing
D. Mobility Of Buyers And Sellers
E. A Standardized Product

8. A Market With Only One Seller Of A Product That Has No Good Substitutes Is Called
A. A Pure Monopoly
B. A Pure Command Economy
C. Purely Competitive
D. Imperfectly Competitive
E. An Oligopoly

9. Which Of The Following Is  Of Monopoly Firms? They
A. Can Manipulate The Price Of Their Product
B. Beat Their Competitors' Prices
C. Must Constantly Deal With The Entry Of New Firms
D. Never Receive Government Help Blocking Entry Into The Market
E. Do All Of The Above

10. Markets That Fall Between Pure Competition And Monopoly Are Called:
A. Anti-Competitive
B. Imperfectly Competitive
C. Command Markets
D. Tweener Markets
E. Monopsonistic

11. If A Consumer Always Eats Cheese With Macaroni, Then For That Consumer Macaroni And Cheese Are Examples Of:
A. Substitutes
B. Complements
C. Normal Goods
D. Inferior Goods
E. Standardized Products

12. If An Increase In The Price Of Cookies Leads To A Decrease In The Demand For Ice Cream, Then Ice Cream And Cookies Must Be
A. Substitutes
B. Complements
C. Normal Goods
D. Inferior Goods
E. Standardized Products

13. If An Increase In The Price Of Bicycles Leads To An Increase In The Demand For Bus Transportation, The Bicycles And Bus Rides Must Be
A. Substitutes
B. Complements
C. Normal Goods
D. Inferior Goods
E. Standardized Products

14. A Student Graduates From College And Gets A High-Paying Job. As A Result Of The Increase In Income, The Student Buys More Frozen Pizzas. For The Student, Frozen Pizzas Must Be A(N)
A. Substitute
B. Complement
C. Normal Good
D. Inferior Good
E. Standardized Product

15. You Receive A Big Raise At Work. As A Result Of Your Now Higher Income, You Stop Bringing Your Lunch From Home And Start Eating Lunch At A Nearby Restaurant. Your Homemade Lunches Must Be
A. A Substitute
B. A Complement
C. Normal Goods
D. Inferior Goods
E. Standardized Products

16. The Law Of Demand States That Price And
A. Demand Are Positively Related
B. Quantity Demanded Are Positively Related
C. Demand Are Negatively Related
D. Quantity Demanded Are Negatively Related
E. None Of The Above

17. The Law Of Supply States That Price And
A. Supply Are Positively Related
B. Quantity Supplied Are Positively Related
C. Supply Are Negatively Related
D. Quantity Supplied Are Negatively Related
E. Quantity Demanded Are Negatively Related

18. An Increase In The Price Of A Good Will Cause Which Of The Following?
A. Quantity Demanded To Demand To Rise
B. Demand To Fall
C. Quantity Supplied To Fall
D. Supply To Rise
E. None Of The Above

19. Which Of The Following Will Cause Demand To Rise?
A. A Decrease In Price
B. A Decrease In The Price Of A Substitute Good
C. A Decrease In The Price Of A Complementary Good
D. An Increase In Supply
E. An Increase In The Cost Of Production

20. Given A Downward-Sloping Demand Curve And An Upward-Sloping Supply Curve, An Increase In Supply Together With An Increase In Demand Will Cause The
A. Equilibrium Quantity Purchased To Increase, But The Effect On Price Will Be Indeterminate
B. Equilibrium Quantity Purchased To Decrease, But The Effect On Price Will Be Indeterminate
C. Price To Rise, But The Effect On The Equilibrium Quantity Purchased Will Be Indeterminate
D. Price To Fall, But The Effect On The Quantity Bought And Sold Will Be Indeterminate
E. Equilibrium Price To Rise And The Equilibrium Quantity Purchased Will Rise

21. A Situation In Which The Demand For A Product Is Decreasing While The Price Is Simultaneously Increasing Can Be Explained By
A. A Decrease In Supply
B. An Increase In Supply
C. Unchanged Supply
D. All Of The Above
E. None Of The Above

 Questions 22 - 24 Refer To The Graph Below.
  

22. At Price P₁ There Is A