A relationship between two variables in which one variable increases at the same time that the other ...

A relationship between two variables in which one variable increases at the same time that the other increases is called
 
  A) nonlinear.
  B) constant.
  C) inverse.
  D) direct.

---

Ques. 2

How do public goods differ from private goods?
 
  What will be an ideal response?

---

Ques. 3

Which of the following is a determinant of supply?
 
  A) tastes and preferences of consumers
  B) technology
  C) consumer income
  D) number of consumers

---

Ques. 4

When promoting average cost pricing, regulators
 
  A) include what they consider to be a normal rate of return on investment.
  B) encourage firms to produce at the output level where price equals marginal cost.
  C) fail to consider a return to investors, so regulated firms often have a hard time raising investment funds.
  D) inflate costs so much that price ends up as large as would prevail under unregulated monopoly.

---

Ques. 5

Because there are low barriers to entry in a monopolistically competitive market
 
  A) there are many firms in the industry.
  B) they produce a homogeneous product.
  C) the firms are price takers.
  D) there is no non-price competition.

---

Ques. 6

The opportunity cost of more consumption of goods today is
 
  A) lower consumption of goods in the future.
  B) fewer capital goods in the future.
  C) more capital goods today.
  D) more unemployment both today and in the future.

---

Ques. 7

If more foreign auto plants relocate to the United States, we would expect
 
  A) the U.S. supply curve for automobiles to shift to the right.
  B) the U.S. supply curve for automobiles would shift to the left.
  C) that the U.S. auto market would not respond.
  D) that U.S. auto demand might change, but U.S. auto supply would remain static.

---

Ques. 8

Explain why economists consider it to be one of the economic functions of government to provide a legal system.
 
  What will be an ideal response?

---

Ques. 9

A black market may occur when
 
  A) the government imposes a price floor below the market clearing price.
  B) the government imposes a price ceiling below the market clearing price.
  C) the government imposes a price ceiling above the market clearing price.
  D) the government does not impose either a price ceiling or a price floor.