A direct relationship occurs when
A) the two variables being compared change in opposite directions, or when one goes up the other goes down.
B) a change in one of the variables causes a change in the other variable in any direction.
C) the two variables being compared change in the same direction, or when one goes up the other also goes up.
D) the two variables have no identifiable relationship with each other.
Ques. 2Any improvement in overall production technology that permits more output to be produced with the same level of inputs causes
A) a movement up the supply curve resulting in both a higher equilibrium price and quantity.
B) a rightward shift of the supply curve so that more is offered at each price.
C) no movement of the supply curve, but a fall in price and a decrease in quantity supplied.
D) a leftward shift of the supply curve so that less is offered for sale at each price.
Ques. 3Scalping at major sporting events is an example of
A) a surplus caused by the existence of price ceilings.
B) the operation of rationing by the market.
C) a black market caused by a price ceiling.
D) a black market caused by a price floor.
Ques. 4Suppose the Fed conducts an open market sale of bonds. This monetary policy action will tend to cause
A) the price of bonds to increase and the interest rate to increase.
B) the price of bonds to increase and the interest rate to decrease.
C) the price of bonds to decrease and the interest rate to increase.
D) the price of bonds to decrease and the interest rate to decrease.
Ques. 5To an economist, a free rider is a person who
A) uses private goods without paying for them.
B) benefits from consuming public goods without paying for them.
C) consumes demerit goods.
D) uses the public transportation system without paying for it.
Ques. 6When Crest claims that its toothpaste product whitens teeth more than the products of its competitors, Crest is practicing
A) product differentiation.
B) libel.
C) marginal revenue pricing.
D) marginal cost pricing.
Ques. 7The use of money as a medium of exchange I. lowers transaction costs. II. permits more specialization.
A) I only
B) II only
C) Neither I nor II
D) Both I and II
Quick Reply
