ECON104 Quiz Questions WITH Complete Solutions
Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
For the rancher, the opportunity cost of one pound of meat is
Select one:
a. 5 pounds of meat
b. 1 pound of meat
c. 0.2 pound of potatoes
d. 5 pounds of potatoes - -d. 5 pounds of potatoes
-Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
The farmer and rancher both could benefit by the farmer's specialising in ............ and the
rancher's specialising in ..............
Select one:
a. meat, potatoes
b. potatoes, meat
c. neither good, meat
d. They cannot benefit by specialisation and trade. - -a. meat, potatoes
-Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
The farmer has a comparative advantage in ............. and the rancher has an absolute
advantage in .................
Select one:
a. both goods, neither good
b. meat, both goods
c. meat, neither good
d. potatoes, neither good - -b. meat, both goods
-Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
,The farmer has an absolute advantage in .......... and the rancher has a comparative
advantage in ...............
Select one:
a. meat, meat
b. potatoes, potatoes
c. neither good, potatoes
d. neither good, meat - -c. neither good, potatoes
-Economics is defined as
Select one:
a. the study of business
b. the study of how society controls prices and output
c. the study of how society manages its scarce resources
d. the study of government regulation - -c. the study of how society manages its scarce
resources
-In the second half of the nineteenth century, grasshoppers caused great destruction to
crops in the American Midwest. To rid the area of the insects, states paid large bounties for
each bushel of dead grasshoppers. In some cases, farmers began growing and harvesting
grasshoppers rather than wheat. This is an example of
Select one:
a. profit maximisation
b. irrational behaviour
c. rational response to economic incentives
d. the need for a subsidy - -c. rational response to economic incentives
-Paul decides to spend an hour playing football rather than studying or working at $6 per
hour. His trade off is
Select one:
a. nothing, because he enjoys playing football more than working or studying
b. the benefit to his marks from studying for an hour or the $6 he could have earned
c. the increase in skill he obtains from playing football for that hour
d. nothing, because he spent $6 for admission into the sports complex to play football - -b.
the benefit to his marks from studying for an hour or the $6 he could have earned
-The opportunity cost of going to university is
Select one:
a. the sum of all the money a student spends on food, clothing, books, transportation,
tuition, lodging and other expenses
b. the value of the best opportunity a student gives up to attend university
c. zero for students who are fortunate enough to have all of their university expenses paid
by someone else
d. zero, since a university education will allow a student to earn a larger income after
graduation - -b. the value of the best opportunity a student gives up to attend university
, -Demand is said to be elastic
Select one:
a. if the price of the good responds only slightly to changes in the quantity demanded
b. if the demand shifts only slightly when the price of the good changes
c. if buyers respond substantially to changes in the price of the good
d. if the quantity demanded changes only slightly when the price of the good changes - -c. if
buyers respond substantially to changes in the price of the good
-Which of these statements best represents the law of demand?
Select one:
a. When buyers' tastes for a good increase, they purchase more of the good.
b. When income levels increase, buyers respond by purchasing more of most goods.
c. When the price of a good falls, buyers respond by purchasing more of the good.
d. When buyers' demands for a good increase, the price of the good will increase. - -c.
When the price of a good falls, buyers respond by purchasing more of the good.
-If peas and beans are substitute goods, an increase in the cost of production of peas will
most likely result in
Select one:
a. an increase in demand for beans and a decrease in supply of peas.
b. an increase in demand for beans and a decrease in the quantity demanded of peas.
c. an increase in the quantity supplied of beans, and a decrease in the supply of peas.
d. all of the above. - -d. all of the above.
-Price elasticity of demand measures
Select one:
a. how much the price of a good changes when there is a change in the quantity demanded
b. how much the quantity demanded responds to a change in the price
c. how much the price of a good changes when there is a change in the number of buyers
d. how much the demand shifts for a given change in the price of the good - -b. how much
the quantity demanded responds to a change in the price
-Suppose that the number of buyers in a market increases and there is technological
advancement. What would we expect to happen in the market?
Select one:
a. The equilibrium price would increase, but the impact on the amount sold in the market
would be ambiguous
b. The equilibrium price would decrease, but the impact on the amount sold in the market
would be ambiguous
Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
For the rancher, the opportunity cost of one pound of meat is
Select one:
a. 5 pounds of meat
b. 1 pound of meat
c. 0.2 pound of potatoes
d. 5 pounds of potatoes - -d. 5 pounds of potatoes
-Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
The farmer and rancher both could benefit by the farmer's specialising in ............ and the
rancher's specialising in ..............
Select one:
a. meat, potatoes
b. potatoes, meat
c. neither good, meat
d. They cannot benefit by specialisation and trade. - -a. meat, potatoes
-Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
The farmer has a comparative advantage in ............. and the rancher has an absolute
advantage in .................
Select one:
a. both goods, neither good
b. meat, both goods
c. meat, neither good
d. potatoes, neither good - -b. meat, both goods
-Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
,The farmer has an absolute advantage in .......... and the rancher has a comparative
advantage in ...............
Select one:
a. meat, meat
b. potatoes, potatoes
c. neither good, potatoes
d. neither good, meat - -c. neither good, potatoes
-Economics is defined as
Select one:
a. the study of business
b. the study of how society controls prices and output
c. the study of how society manages its scarce resources
d. the study of government regulation - -c. the study of how society manages its scarce
resources
-In the second half of the nineteenth century, grasshoppers caused great destruction to
crops in the American Midwest. To rid the area of the insects, states paid large bounties for
each bushel of dead grasshoppers. In some cases, farmers began growing and harvesting
grasshoppers rather than wheat. This is an example of
Select one:
a. profit maximisation
b. irrational behaviour
c. rational response to economic incentives
d. the need for a subsidy - -c. rational response to economic incentives
-Paul decides to spend an hour playing football rather than studying or working at $6 per
hour. His trade off is
Select one:
a. nothing, because he enjoys playing football more than working or studying
b. the benefit to his marks from studying for an hour or the $6 he could have earned
c. the increase in skill he obtains from playing football for that hour
d. nothing, because he spent $6 for admission into the sports complex to play football - -b.
the benefit to his marks from studying for an hour or the $6 he could have earned
-The opportunity cost of going to university is
Select one:
a. the sum of all the money a student spends on food, clothing, books, transportation,
tuition, lodging and other expenses
b. the value of the best opportunity a student gives up to attend university
c. zero for students who are fortunate enough to have all of their university expenses paid
by someone else
d. zero, since a university education will allow a student to earn a larger income after
graduation - -b. the value of the best opportunity a student gives up to attend university
, -Demand is said to be elastic
Select one:
a. if the price of the good responds only slightly to changes in the quantity demanded
b. if the demand shifts only slightly when the price of the good changes
c. if buyers respond substantially to changes in the price of the good
d. if the quantity demanded changes only slightly when the price of the good changes - -c. if
buyers respond substantially to changes in the price of the good
-Which of these statements best represents the law of demand?
Select one:
a. When buyers' tastes for a good increase, they purchase more of the good.
b. When income levels increase, buyers respond by purchasing more of most goods.
c. When the price of a good falls, buyers respond by purchasing more of the good.
d. When buyers' demands for a good increase, the price of the good will increase. - -c.
When the price of a good falls, buyers respond by purchasing more of the good.
-If peas and beans are substitute goods, an increase in the cost of production of peas will
most likely result in
Select one:
a. an increase in demand for beans and a decrease in supply of peas.
b. an increase in demand for beans and a decrease in the quantity demanded of peas.
c. an increase in the quantity supplied of beans, and a decrease in the supply of peas.
d. all of the above. - -d. all of the above.
-Price elasticity of demand measures
Select one:
a. how much the price of a good changes when there is a change in the quantity demanded
b. how much the quantity demanded responds to a change in the price
c. how much the price of a good changes when there is a change in the number of buyers
d. how much the demand shifts for a given change in the price of the good - -b. how much
the quantity demanded responds to a change in the price
-Suppose that the number of buyers in a market increases and there is technological
advancement. What would we expect to happen in the market?
Select one:
a. The equilibrium price would increase, but the impact on the amount sold in the market
would be ambiguous
b. The equilibrium price would decrease, but the impact on the amount sold in the market
would be ambiguous
