ECO 204 Week 1 Quiz 1. Demand for a good will always rise when (Points : 1) the price of a complementary good falls. the price of a substitute good falls. tastes change. incomes decrease. the price of the good falls. 2. Opportunity costs are (Points : 1) only dollar expenditures. costs that never include dollar expenditures. dollar expenditures plus time costs and other forgone activities. not important. only relevant for individuals and not for government. 3. Which of the following is a macroeconomic issue? (Points : 1) The price of butter The number of new cars produced The growth rate of total output The price of products sold in the steel industry The price of cell phone service 4. In Collegia, a small college town, the market for parking spaces is in equilibrium at a going price of $5 a day. There are 1,500 spaces and they are all sold every day with no unsatisfied buyers. Now the college takes in 200 more students, each of whom also wants a parking space at $5 a day. If there is a normal, upward-sloping supply curve, what will happen when the market has time to adjust? (Points : 1) There will be 1,700 parking spaces at $5 a day. There will be 1,500 parking spaces at some price greater than $5 a day. There will be more than 1,500 but less than 1,700 parking spaces at $5 a day. There will be more than 1,500 but less than 1,700 parking spaces and the price will be more than $5 a day. 5. If the demand for coffee decreases as income decreases, coffee is a(n): (Points : 1) normal good. inferior good. substitute good. complementary good. 6. All but which one of the following could shift the demand curve? (Points : 1) A shift of the supply curve A rise in income A change in the price of substitutes An increase in the size of the age group buying that good A successful advertising campaign which convinces people that they want more of this good 7. When price changes, one should expect a change in (Points : 1) supply. demand. the weather. technology and income. quantity supplied. 8. Ceteris paribus, as applied in demand theory, means (Points : 1) accounting for all possible simultaneous changes. holding constant all factors that affect demand except one. observing the real world. holding technology and resource prices constant. holding one input constant while changing the other input. 9. Along with the other social sciences, economics is concerned with (Points : 1) the behavior of human beings as individuals. the behavior of human beings in groups. the activities of international agencies. the laws of mathematics as they apply to decision making. the behavior of human beings both as individuals and in groups. 10. If left alone, a market-directed economy will (Points : 1) invariably provide the correct economic choices. provide the correct economic choice in many but not all cases. protect consumers from monopoly. avoid the production problems encountered in command economies. disintegrate.