AnswersTX-Economics CRUnit Test

Introduction to Macroeconomics Answers

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1
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Which is an example of a negative incentive for producers?

A
a chance to make more money
B
a special sale at a department store
C
a coupon clipped from a newspaper
D
a sharp increase in production costs
2
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best

l
loss of income
l
loss of supply
d
distribution problems
m
market problems
3

The graph shows excess supply.Which explains why the price indicated by p2 on the graph is higher than the equilibrium price?

Question illustration
A
As prices rise, quantity demanded goes up.
B
As prices rise, quantity demanded goes down.
C
As prices rise, quantity demanded stays the same.
D
As prices rise, quantity demanded disappears.
4

The law of demand applies most directly to which group?

A
buyers ✓ Correct
B
sellers
C
producers
D
lawmakers
5

What is the difference between profit and revenue?

R
Revenue is the total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production costs.
R
Revenue is the total amount producers earn after subtracting the production costs. Profit is the total amount producers receive after selling a good.
R
Revenue is the total amount producers pay to manufacture a good. Profit is the total amount producers earn after subtracting the production costs.
R
Revenue is the total amount producers pay to manufacture a good. Profit is the total amount producers receive after selling a good.
6

MonopolisticPure competitionAn oligopoly

A
Monopolistic
B
Pure competition
C
An oligopoly
7

Supply and demand coordinate to determine prices by working

A
together.
B
competitively.
C
with other factors.
D
separately.
8

In economics, if a good is inelastic,

A
consumers have lost an interest in purchasing it.
B
producers have lost an interest in manufacturing it.
C
its supply or demand is too sensitive to price changes.
D
its supply or demand is not sensitive to price changes.
9

[BLANK]

A
debts
B
profits
C
expenses
D
costs
10

best

I
Incentives are mostly positive.
I
Incentives are mostly negative.
I
Incentives can be positive or negative.
I
Incentives are neither positive nor negative.
11

According to the law of demand, as prices decrease, the quantity demanded

A
decreases.
B
increases.
C
stays the same.
D
disappears.
12

How can producers maximize their profit? Check all that apply.They can work to increase their marginal cost.They can work to decrease their marginal cost.They can raise prices to increase marginal revenue.They can lower prices to decrease marginal revenue.They can keep marginal costs below marginal revenues.They can keep marginal revenues below marginal costs.

A
They can work to increase their marginal cost.
B
They can work to decrease their marginal cost.
C
They can raise prices to increase marginal revenue.
D
They can lower prices to decrease marginal revenue.
E
They can keep marginal costs below marginal revenues.
F
They can keep marginal revenues below marginal costs.
13

Products whose demand rises when another product’s price increases are called

s
substitute goods.
c
complementary goods.
e
elastic goods.
c
clearance goods.
14

The graph shows a supply curve.Which change is illustrated by the shift taking place on this graph?

Question illustration
A
an increase in demand
B
a decrease in demand
C
an increase in supply
D
a decrease in supply
15

Which helps enable an oligopoly to form within a market?

A
Costs of starting a competing business are too high.
B
The government restricts market entry.
C
The number of options in a market confuses consumers.
D
No competition exists between producers.
16

A demand curve shows how changes in

A
consumer demand affects income.
B
prices affect the consumer demand. ✓ Correct
C
prices affect complementary goods.
D
consumer demand affects substitute goods.
17

Which is an example of a product that is considered a need?

A
breakfast food
B
music player
C
sports equipment
D
video game
18

Brenda’s Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total profit the company earns after selling 100 boards?

$
$300
$
$350
$
$3,000
$
$3,500
19

[BLANK]

A
total revenue
B
marginal revenue
C
marginal cost
D
total units produced
20

The law of supply demonstrates the behaviors of producers when they

A
change their company’s name.
B
decide to hire fewer workers.
C
supply goods to consumers.
D
launch a new marketing campaign.

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