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BNAD 301 Test 1 questions with correct answers 2024/2025
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BNAD 301 Test 1 questions with correct answers 2024/2025
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BNAD 301 Test 1Astrology is not a science, according to current ideas, because: - ANSAstrologers make no
systematic attempt to test its predictions.
Which kind of economic behavior seems hardest to explain, using economists' fundamental
assumptions about behavior? - ANSContributing anonymously to a charity
Which statement is an example of positive ("scientific") economics? - ANSCutting the tax on
capital gains will increase stock prices.
Which statement is an example of normative economics? - ANSThe federal budget should be
balanced.
The opportunity cost of a resource is: - ANSThe current value of that resource in its next best
use.
The opportunity cost of a businessman's own labor is: - ANSThe wage he could get working for
someone else.
Which of the following can be true in a competitive market (mark all that apply)? - ANSBuyers
are unsure about sellers' prices.
The market has more sellers than buyers.
A significant barrier to entry makes it difficult for new sellers to enter the market.
The Law of Demand says that if the market price rises then the (mark all that apply): -
ANSQuantity demanded decreases.
Many economists believe that ______ sometimes provide an exception to the Law of Demand. -
ANSstatus goods
Many economists believe that ______ sometimes provide an exception to the Law of Supply. -
ANSlabor markets
[We have not done this kind of question in class, because it is fairly straightforward and so it
seems sufficient to include it in the study questions.] Suppose that the market supply curve can
be described by the equation QS=(p/4)-3 and market demand can be described by the equation
QD=42-p, where p is the market price. Then, in equilibrium, the quantity traded in this market is
closest to: - ANS5.
, A shift in the demand curve has no effect on the equilibrium price if the ______ curve is a
______ line. - ANSSupply; horizontal.
If the market price is $6, then the quantity supplied is closest to: - ANS20
If the market price is $6, then the quantity demanded is closest to: - ANS100
If the market price is $11, then the quantity traded is closest to: - ANS50
Which of the following market prices causes the largest quantity to be traded? - ANS$10.
At approximately what market price would there be an excess demand of 60? - ANS$7
For this question only, assume that the diagram represents the labor market, and P represents
the hourly wage. Suppose that the government forces the market wage to be $11 (for example,
through a minimum wage law). If the unemployment rate is defined to be the excess supply
divided by the quantity supplied, then the unemployment rate lies in what range? - ANS25-30%
Assume that demand falls by 50% (i.e., at any given price, buyers demand half as much as they
did before). Then the new equilibrium quantity is closest to: - ANS40
For the next two questions, assume that the government imposes a price ceiling of $9 in this
market, meaning that the government blocks the price from rising above $9. "The price ceiling
creates excess _____ of _____ units (check two boxes)." - ANSDemand
20
For the next two questions, assume that the government imposes a price ceiling of $9 in this
market, meaning that the government blocks the price from rising above $9. "After the
imposition of the price ceiling, the quantity traded is:" - ANS50
Suppose that the market price of oil is $60 per barrel, the quantity demanded is 50, and the
quantity supplied is 80. This tells you that the equilibrium price ____________ and the
equilibrium quantity ____________. (Mark two answers.) - ANSIs less than $60., Is less than
$60.
In a competitive market, which situation allows buyers to discriminate arbitrarily among sellers in
certain groups, at little or no cost to themselves? - ANSExcess supply.
If there is excess demand in a market, then which things do we normally expect to happen, to
bring the market into equilibrium? (Check all that apply.) - ANSMarket price will rise.
Suppose that the labor market is competitive and initially in equilibrium. Suddenly the demand
for labor shifts left, but the market price (i.e., the wage) sticks at the old level for awhile, before
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