TEST BANK For Microeconomics Global Edition 9th
Edition by Jeffrey M. Perloff
Which one of the following does NOT constitute an assumption made in the analysis
of peoples' economic behavior? - ANSWER: People do not make tradeoffs in what
they decide to purchase and consume
When a person chooses to buy X, it is based on the premise that the value derived
from X must be _____________ - ANSWER: more than or equal to the opportunity
cost
Which one of the following concepts relates directly to the value of a worker's
special knowledge and skills? - ANSWER: Human Capital
Which one of the following is NOT among the central or key dimensions (question) in
economic choice? - ANSWER: Where to produce the goods and services
A situation where there is either inefficient or inequitable distribution of goods /
services in a free market is termed _ - ANSWER: Marshall's tradeoff
The wider acceptance of a more competitive market-based economy by countries is
termed ___________. - ANSWER: Globalization
Which of the following is NOT one of the benefits of competition? - ANSWER: It
ensures that taxes collected by the government are put to good use
The argument that free actions of private individuals and firms would work together
for the greater good of society is best captured in which idea/concept developed by
Adam Smith? - ANSWER: Invisible hand
Which one of the following constitutes the most direct benefit of increasing division
of labor? - ANSWER: Increase in labor productivity
Which of the following themes would be the central concern in the subfield of "game
theory" in economics? - ANSWER: Analysis of decision making under conditions of
interdependency between firms.
Which of the following may cause a movement along the demand curve for product
X? - ANSWER: Change in the price of x
Which of the following can cause a shift of the supply curve for product X: (I) change
in price of product X; (II) change in input prices of producing X; (III) change in
technology? - ANSWER: II and III
, Good X and good Y are "complements". When the price of X is increased, there is a
_________. - ANSWER: Shift in demand curve for Y and movement along demand
curve for X
The market for product Y is in a state of disequilibrium. To bring the market back to
equilibrium, what is observed is that the price of Y is going up. Which of the
following will lead to this increase in the price - ANSWER: The demand for Y exceeds
the supply and there is a shortage of Y
Currently the market for product X is witnessing a "surplus". What is likely to happen
in this situation of market disequilibrium? - ANSWER: Price will go down; demand
will go up and supply will come down
Currently, the market for product X is witnessing a "shortage". What is likely to
happen in this situation of market disequilibrium? - ANSWER: Price will go up;
demand will come down and supply will go up
Which one the following is a true statement? - ANSWER: A price ceiling is usually
applied to essential products and has the effect of lowering the price of the products
What is a "price ceiling" and at what level should the price ceiling be to effective? -
ANSWER: A price ceiling is a control on the maximum price that can be charged for a
product; it has to be set at a level below the equilibrium price to be effective.
What is a "price floor" and at what level should the price floor be to be effective? -
ANSWER: A price floor is a control on the minimum price that can be charged for a
product; it has to be set at a level
above the equilibrium price to be effective.
The Massachusetts minimum wage policy currently requires firms to pay workers at
least or more than $13.50 per hr. This is an example of which type of price control? -
ANSWER: Price floor
What are the sources of demand and supply for labor and what is the price of labor?
- ANSWER: Demand = firms; Supply = individuals; price = wages
When the price of labor is deliberately increased through the implementation of a
minimum wage policy, what is the most likely result? - ANSWER: The supply of labor
will increase and the demand will decrease resulting in a labor surplus
When the minimum wage rate is set at $15 (up from equilibrium price of $10), this
leads to a number of workers being fired from their jobs. Based on the data given in
the diagram on the right, the number of fired workers is ______. - ANSWER: 100 - 50
= 50 workers
Edition by Jeffrey M. Perloff
Which one of the following does NOT constitute an assumption made in the analysis
of peoples' economic behavior? - ANSWER: People do not make tradeoffs in what
they decide to purchase and consume
When a person chooses to buy X, it is based on the premise that the value derived
from X must be _____________ - ANSWER: more than or equal to the opportunity
cost
Which one of the following concepts relates directly to the value of a worker's
special knowledge and skills? - ANSWER: Human Capital
Which one of the following is NOT among the central or key dimensions (question) in
economic choice? - ANSWER: Where to produce the goods and services
A situation where there is either inefficient or inequitable distribution of goods /
services in a free market is termed _ - ANSWER: Marshall's tradeoff
The wider acceptance of a more competitive market-based economy by countries is
termed ___________. - ANSWER: Globalization
Which of the following is NOT one of the benefits of competition? - ANSWER: It
ensures that taxes collected by the government are put to good use
The argument that free actions of private individuals and firms would work together
for the greater good of society is best captured in which idea/concept developed by
Adam Smith? - ANSWER: Invisible hand
Which one of the following constitutes the most direct benefit of increasing division
of labor? - ANSWER: Increase in labor productivity
Which of the following themes would be the central concern in the subfield of "game
theory" in economics? - ANSWER: Analysis of decision making under conditions of
interdependency between firms.
Which of the following may cause a movement along the demand curve for product
X? - ANSWER: Change in the price of x
Which of the following can cause a shift of the supply curve for product X: (I) change
in price of product X; (II) change in input prices of producing X; (III) change in
technology? - ANSWER: II and III
, Good X and good Y are "complements". When the price of X is increased, there is a
_________. - ANSWER: Shift in demand curve for Y and movement along demand
curve for X
The market for product Y is in a state of disequilibrium. To bring the market back to
equilibrium, what is observed is that the price of Y is going up. Which of the
following will lead to this increase in the price - ANSWER: The demand for Y exceeds
the supply and there is a shortage of Y
Currently the market for product X is witnessing a "surplus". What is likely to happen
in this situation of market disequilibrium? - ANSWER: Price will go down; demand
will go up and supply will come down
Currently, the market for product X is witnessing a "shortage". What is likely to
happen in this situation of market disequilibrium? - ANSWER: Price will go up;
demand will come down and supply will go up
Which one the following is a true statement? - ANSWER: A price ceiling is usually
applied to essential products and has the effect of lowering the price of the products
What is a "price ceiling" and at what level should the price ceiling be to effective? -
ANSWER: A price ceiling is a control on the maximum price that can be charged for a
product; it has to be set at a level below the equilibrium price to be effective.
What is a "price floor" and at what level should the price floor be to be effective? -
ANSWER: A price floor is a control on the minimum price that can be charged for a
product; it has to be set at a level
above the equilibrium price to be effective.
The Massachusetts minimum wage policy currently requires firms to pay workers at
least or more than $13.50 per hr. This is an example of which type of price control? -
ANSWER: Price floor
What are the sources of demand and supply for labor and what is the price of labor?
- ANSWER: Demand = firms; Supply = individuals; price = wages
When the price of labor is deliberately increased through the implementation of a
minimum wage policy, what is the most likely result? - ANSWER: The supply of labor
will increase and the demand will decrease resulting in a labor surplus
When the minimum wage rate is set at $15 (up from equilibrium price of $10), this
leads to a number of workers being fired from their jobs. Based on the data given in
the diagram on the right, the number of fired workers is ______. - ANSWER: 100 - 50
= 50 workers
