Question

ID: 19. Which of the following will cause a movement upward along a supply curve a. Increases in raw material costs. b. Increases in the market price of a good, other things being equal c. Increases in the cost of machinery. d. Increases in labor costs. 20. Demand for a good will always rise when: a. the price of a substitute good falls. b. the price of a complementary good falls e. incomes decrease. d. tastes change. e. the price of the good falls. 21. Which of the following is true of the production possibilities curve a. It assumes resources are fixed b. It assumes a fixed level of technology. c. It assumes resources are fully employed. d. All of the above are correct. 22. Complementary goods are goods: a. that are consumed one in place of the other b. for which demand decreases when the price of its complementary goods decreases c. that are inversely related. d. that are consumed jointly. e for which demand increases when the price of its complementary goods increases. 23. A factor of production is the same as: a. a resource. b. a profit of a firm. c. an opportunity cost. d. the price of a good. e. the amount of a good produced. 24. Economics, according to its definition, studies how people: a. supply goods in response to demand. b. make choices in the face of scarcity. c. invest in the stock and bond markets. d. earn and spend money. 25. What shape is the production possibilities curve usually expected to exhibit? a. Upward-sloping. b. Bowed in. c. U-shaped d. Straight line. e. Bowed out. 26. Which of the following is a macroeconomic subject? a. Shipping rates b. Unemployment rate in the nation. c. Market price of Japanese cars. d. Price of corporate stock.

Answer 1

(19) Increase in the market price of a good, other things being equal will cause a movement upward along a supply curve.

Answer: Option (B).

(20) Demand for a good will always rise when the price of a complementary goods falls.

Answer: Option (B)

(21) Production possibilities curve assumes resources are fixed, assumes a fixed level of technology, assumes resources are fully employed.

Answer: Option (C).

(22) Complementary goods are goods that are consumed jointly. For example, Car and petrol.

Answer: Option (D)

(23) A factor of production is the same as resources.

Answer: Option (A)

(24) Economics, according to its definition, studies how people make choices in the face of scarcity.

Answer: Option (B).

(25) The production possibilities curve usually expected to exhibit bowed out (i.e., concave in shape)

Answer: Option (E)

(26) Unemployment rate in the nation is a macroeconomic subject.

Answer: Option (B).