ECON 100 Exam – Questions With Accurate Solutions
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Terms in this set (182)
What is economics? A study of how people make choices to achieve goals
with resource constraints.
What is meant by "the invisible hand?" The "invisible hand" means that the division of labor and
exchange occur naturally among people without being
directed by anyone.
What is the root of exchange behavior? Human natural tendency toward division of labor to gain
efficiency.
Division of labor and exchange are Yes
human tendencies to enhance one's self-
interest. Can contributing to charities to
assure everyone in one's community has
access to food, housing and health care
be consistent with the principles of self-
interest?
What is scientific about Social Science? Social scientists use the scientific method to test
hypotheses about human behavior.
,What is the contribution of The Wealth Adam Smith described how people made production
of Nations published by Adam Smith in and consumption decisions in the 18th Century.
1776?
What is a market as discussed in an The coming together of suppliers and demanders of
economics class? goods and services.
What do consumers want to achieve? - Maximize personal satisfaction.
- Take care of their children and families.
- Assure that poor people are fed, housed, and clothed.
*All the above*
As the price of gasoline continues to The quantity consumed will decline as consumers
rise, respond to higher prices.
Why would producers offer more of a - Because some inefficient, high-cost producers can
product as price rises? enter the market at high prices.
- Because producers can justify using more expensive
inputs when product prices are high.
- Because producers are willing to work overtime when
prices are good.
*All the above*
What is the principal communication Price.
device between producers and
consumers in a free market?
From an economic perspective, a choice A decision that must be made because resources are
is: scarce.
You know you have incurred a cost You must give up something you wanted when making a
when: choice.
Why do we tend to see specialization Specialization increases productivity, so trade must
and trade develop at the same time? increase because no one remains self-sufficient.
In a free market, competition involves: Buyer competing against buyer, and seller competing
against seller.
, Automobile sales have plummeted Income Elastic
during the recession. This suggests that
consumer demand for automobiles
tends to be:
Why are states rushing to increase Because cigarettes have a demand which is price
cigarette taxes? inelastic, resulting in big increases in state revenue.
In the German Beer Market, What Effect -Wine and Beer Go Together (Complements) So More
Do Wine Sales Have on Beer Demand? Wine Causes an Increase in Demand for Beer.
-Wine and Beer are Substitutes So More Wine Causes a
Decrease in Demand for Beer.
-Wine and Beer have no Effect on One Another, So the
Demand for Beer is Unaffected by the Consumption of
Wine.
How does a "black market" get When producers are willing to offer, and consumers are
established? willing to buy a product or service which is banned by a
governmental authority.
Which of the following products is likely - Vacation trips to Las Vegas.
to have the lowest income elasticity of - Diamond rings.
demand? - Refrigerators.
Milk
Automobile sales have plummeted Income elastic.
during the recession. This suggests that
consumer demand for automobiles
tends to be:
How would you characterize the price Price inelastic because if one wants education, they get
elasticity of demand for college it at almost any price as an investment in their future
education? income.
Why are prices at a fruit and vegetable Producers (sellers) adjust price during the day to get
farmers' market volatile within the same customers to buyout exactly the supply they brought
day? with them to the market.
Add to calendar
Play your way to mastery with fun games
Match Blocks Charms NEW
Terms in this set (182)
What is economics? A study of how people make choices to achieve goals
with resource constraints.
What is meant by "the invisible hand?" The "invisible hand" means that the division of labor and
exchange occur naturally among people without being
directed by anyone.
What is the root of exchange behavior? Human natural tendency toward division of labor to gain
efficiency.
Division of labor and exchange are Yes
human tendencies to enhance one's self-
interest. Can contributing to charities to
assure everyone in one's community has
access to food, housing and health care
be consistent with the principles of self-
interest?
What is scientific about Social Science? Social scientists use the scientific method to test
hypotheses about human behavior.
,What is the contribution of The Wealth Adam Smith described how people made production
of Nations published by Adam Smith in and consumption decisions in the 18th Century.
1776?
What is a market as discussed in an The coming together of suppliers and demanders of
economics class? goods and services.
What do consumers want to achieve? - Maximize personal satisfaction.
- Take care of their children and families.
- Assure that poor people are fed, housed, and clothed.
*All the above*
As the price of gasoline continues to The quantity consumed will decline as consumers
rise, respond to higher prices.
Why would producers offer more of a - Because some inefficient, high-cost producers can
product as price rises? enter the market at high prices.
- Because producers can justify using more expensive
inputs when product prices are high.
- Because producers are willing to work overtime when
prices are good.
*All the above*
What is the principal communication Price.
device between producers and
consumers in a free market?
From an economic perspective, a choice A decision that must be made because resources are
is: scarce.
You know you have incurred a cost You must give up something you wanted when making a
when: choice.
Why do we tend to see specialization Specialization increases productivity, so trade must
and trade develop at the same time? increase because no one remains self-sufficient.
In a free market, competition involves: Buyer competing against buyer, and seller competing
against seller.
, Automobile sales have plummeted Income Elastic
during the recession. This suggests that
consumer demand for automobiles
tends to be:
Why are states rushing to increase Because cigarettes have a demand which is price
cigarette taxes? inelastic, resulting in big increases in state revenue.
In the German Beer Market, What Effect -Wine and Beer Go Together (Complements) So More
Do Wine Sales Have on Beer Demand? Wine Causes an Increase in Demand for Beer.
-Wine and Beer are Substitutes So More Wine Causes a
Decrease in Demand for Beer.
-Wine and Beer have no Effect on One Another, So the
Demand for Beer is Unaffected by the Consumption of
Wine.
How does a "black market" get When producers are willing to offer, and consumers are
established? willing to buy a product or service which is banned by a
governmental authority.
Which of the following products is likely - Vacation trips to Las Vegas.
to have the lowest income elasticity of - Diamond rings.
demand? - Refrigerators.
Milk
Automobile sales have plummeted Income elastic.
during the recession. This suggests that
consumer demand for automobiles
tends to be:
How would you characterize the price Price inelastic because if one wants education, they get
elasticity of demand for college it at almost any price as an investment in their future
education? income.
Why are prices at a fruit and vegetable Producers (sellers) adjust price during the day to get
farmers' market volatile within the same customers to buyout exactly the supply they brought
day? with them to the market.
