Test Bank for Economics: A
Global Introduction
Selling through a farmers' market or roadside market is known as __________ . A. Equilibrium B. Call
option C. Direct marketing D. Demand - ANSWERSC. Direct marketing
The relationship between quantity purchased and price is known as __________ . A. Demand B.
Supply C. Call option D. equilibrium - ANSWERSA. Demand
The relationship between quantity supplied and price is known as _________ . A. Demand curve B.
Derived demand C. Supply curve D. Direct marketing - ANSWERSC. Supply curve
Price movement across months within the year is __________ variability. A. Seasonal B.Short
C.Derived demand D. Bull - ANSWERSA. Seasonal
The demand for a product at the farm level is a(n) __________ . A. Equilibrium B. Demand curve C.
Supply curve D. Derived demand - ANSWERSD. Derived demand
The price where demand and supply intersect is known as __________ . A. Derived demand B.
Equilibrium C. Supply curve D. Demand curve - ANSWERSB. Equilibrium
The primary purpose of the production function is to determine _________ . A. Whether or not to
operate in the long run B. How to allocate resources throughout a business C. How much to produce
D. All of the above - ANSWERSC. How much to produce
What does stage two in production function graph determine? A. The beginning point of increasing
returns B. The stage where you should not produce C. The lowest point of increasing marginal
returns D. The amount of variable input to use - ANSWERSD. The amount of variable input to use
The point on a production function graph where marginal cost equals marginal revenue is where
__________ . A. Loses will be the greatest B. Profits will be the greatest C. Costs are minimized D.
Production is maximized - ANSWERSB. Profits will be the greatest
,An agriculture producer learns what from the production function? A. Output responses to an input
B. Whether or not to operate in the long run C. How to allocate resources throughout an enterprise
D. ALL of the above - ANSWERSA. Output responses to an input
On the production function graph the MC=MR, what does this tell the producer? A. Where the losses
will be the least B. Where change in cost and change in revenue are the same D. Where the profits
are the greatest D. ALL of the above - ANSWERSD. ALL of the above (Where the losses will be the
least, where change in cost and change in revenue are the same, and where the profits are the
greatest)
What is Stage II of the Production Function? A. The lowest point B. The highest point C. The point of
diminishing returns D. The decision making stage - ANSWERSD. The decision making stage
Any time a consumer will take more only at lower prices is called __________ . A. Margin B. Supply
C. Discovery D. Demand - ANSWERSD. Demand
The dynamic process of searching for the equilibrium or market - clearing prices is called
__________ . A. Margin B. Supply C. Discovery D. Demand - ANSWERSD. Discovery
On a chart, a line that connects all the high points as the markets move higher forms a trend line.
When projected out, it forms points of __________ . A. Support B. Interest C. Resistance D.
Understanding - ANSWERSC. Resistance
When a market has huge swings on a daily basis, it is described as __________ . A. Stable B.
Comfortable C. Volatile D. Variable - ANSWERSC. Volatile
What does the Production Function indicate for an agricultural producer? A. How to allocate
resources throughout a business B. How output responds to inputs C. Whether to operate in the
long run D. All of the above - ANSWERSB. How output responds to inputs
The point where Marginal Costs = Marginal Revenue is __________ . A. Where production reaches
maximum point B. Where all of your resources are used C. Where profits are at a maximum D. All of
the above - ANSWERSC. Where profits are at a maximum
What does marginal cost measure? A. The change in cost from one enterprise to another B. The
output cost from production at the level of inputs C. The change in the cost by adding another unit
of input D. The change in cost by producing another unit of output - ANSWERSC. The change in the
cost by adding another unit of input
, Suppose that the supply curve shifts right. What is the most likely effect on price and quantity? A.
Price will increase and quantity may change B. Price will decrease and quantity may decrease C. Price
will decrease and quantity will increase D. Price will increase and quantity will increase - ANSWERSC.
Price will decrease and quantity will increase
What is the Law of Supply? A. The higher the quantity demanded, the higher the price B. The higher
the price , the higher the quantity supplied will be
c. The lower the demand, the higher the price will be
d. ALL of the above - ANSWERSB. The higher the price, the higher the quantity supplied will be
Why do you want to know how markets cycle?
a. What day of the week to sell your product
b. What season you should sell
c. Whether the market is going to go up or down
d. ALL of the above - ANSWERSD. All of the above (What day of the week to sell your product, what
season you should sell, and whether the market is going to go up or down)
It is impossible to be competitive in the complex commodity marketplace without __________ .
a. Physical accounts b. The ability to collect accurate data
c. The ability to estimate losses d. Reducing the number of daily decisions - ANSWERSB. The ability to
collect accurate data
Utility means satisfaction; products have what type of utility?
a. Form b. Place
c. Time d. ALL of the above - ANSWERSD. All of the above (Form, place, and time)
Which of the following terms describes this situation: Quantity taken will increase only if the price
comes down?
a. Margin b. Basis
c. Supply d. Demand - ANSWERSD. Demand
If the industry level supply curve shifts right, what result is most likely?
Global Introduction
Selling through a farmers' market or roadside market is known as __________ . A. Equilibrium B. Call
option C. Direct marketing D. Demand - ANSWERSC. Direct marketing
The relationship between quantity purchased and price is known as __________ . A. Demand B.
Supply C. Call option D. equilibrium - ANSWERSA. Demand
The relationship between quantity supplied and price is known as _________ . A. Demand curve B.
Derived demand C. Supply curve D. Direct marketing - ANSWERSC. Supply curve
Price movement across months within the year is __________ variability. A. Seasonal B.Short
C.Derived demand D. Bull - ANSWERSA. Seasonal
The demand for a product at the farm level is a(n) __________ . A. Equilibrium B. Demand curve C.
Supply curve D. Derived demand - ANSWERSD. Derived demand
The price where demand and supply intersect is known as __________ . A. Derived demand B.
Equilibrium C. Supply curve D. Demand curve - ANSWERSB. Equilibrium
The primary purpose of the production function is to determine _________ . A. Whether or not to
operate in the long run B. How to allocate resources throughout a business C. How much to produce
D. All of the above - ANSWERSC. How much to produce
What does stage two in production function graph determine? A. The beginning point of increasing
returns B. The stage where you should not produce C. The lowest point of increasing marginal
returns D. The amount of variable input to use - ANSWERSD. The amount of variable input to use
The point on a production function graph where marginal cost equals marginal revenue is where
__________ . A. Loses will be the greatest B. Profits will be the greatest C. Costs are minimized D.
Production is maximized - ANSWERSB. Profits will be the greatest
,An agriculture producer learns what from the production function? A. Output responses to an input
B. Whether or not to operate in the long run C. How to allocate resources throughout an enterprise
D. ALL of the above - ANSWERSA. Output responses to an input
On the production function graph the MC=MR, what does this tell the producer? A. Where the losses
will be the least B. Where change in cost and change in revenue are the same D. Where the profits
are the greatest D. ALL of the above - ANSWERSD. ALL of the above (Where the losses will be the
least, where change in cost and change in revenue are the same, and where the profits are the
greatest)
What is Stage II of the Production Function? A. The lowest point B. The highest point C. The point of
diminishing returns D. The decision making stage - ANSWERSD. The decision making stage
Any time a consumer will take more only at lower prices is called __________ . A. Margin B. Supply
C. Discovery D. Demand - ANSWERSD. Demand
The dynamic process of searching for the equilibrium or market - clearing prices is called
__________ . A. Margin B. Supply C. Discovery D. Demand - ANSWERSD. Discovery
On a chart, a line that connects all the high points as the markets move higher forms a trend line.
When projected out, it forms points of __________ . A. Support B. Interest C. Resistance D.
Understanding - ANSWERSC. Resistance
When a market has huge swings on a daily basis, it is described as __________ . A. Stable B.
Comfortable C. Volatile D. Variable - ANSWERSC. Volatile
What does the Production Function indicate for an agricultural producer? A. How to allocate
resources throughout a business B. How output responds to inputs C. Whether to operate in the
long run D. All of the above - ANSWERSB. How output responds to inputs
The point where Marginal Costs = Marginal Revenue is __________ . A. Where production reaches
maximum point B. Where all of your resources are used C. Where profits are at a maximum D. All of
the above - ANSWERSC. Where profits are at a maximum
What does marginal cost measure? A. The change in cost from one enterprise to another B. The
output cost from production at the level of inputs C. The change in the cost by adding another unit
of input D. The change in cost by producing another unit of output - ANSWERSC. The change in the
cost by adding another unit of input
, Suppose that the supply curve shifts right. What is the most likely effect on price and quantity? A.
Price will increase and quantity may change B. Price will decrease and quantity may decrease C. Price
will decrease and quantity will increase D. Price will increase and quantity will increase - ANSWERSC.
Price will decrease and quantity will increase
What is the Law of Supply? A. The higher the quantity demanded, the higher the price B. The higher
the price , the higher the quantity supplied will be
c. The lower the demand, the higher the price will be
d. ALL of the above - ANSWERSB. The higher the price, the higher the quantity supplied will be
Why do you want to know how markets cycle?
a. What day of the week to sell your product
b. What season you should sell
c. Whether the market is going to go up or down
d. ALL of the above - ANSWERSD. All of the above (What day of the week to sell your product, what
season you should sell, and whether the market is going to go up or down)
It is impossible to be competitive in the complex commodity marketplace without __________ .
a. Physical accounts b. The ability to collect accurate data
c. The ability to estimate losses d. Reducing the number of daily decisions - ANSWERSB. The ability to
collect accurate data
Utility means satisfaction; products have what type of utility?
a. Form b. Place
c. Time d. ALL of the above - ANSWERSD. All of the above (Form, place, and time)
Which of the following terms describes this situation: Quantity taken will increase only if the price
comes down?
a. Margin b. Basis
c. Supply d. Demand - ANSWERSD. Demand
If the industry level supply curve shifts right, what result is most likely?
