Economics Online
Test 1 - Supply & Demand & Introduction to Economics

Put your answers on a separate piece of paper to be handed in.
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OSIS:
Class Period:
Part I Directions Select or fill-in the answer that best completes the sentence.
1. Fill-in is measured by the number of consumers will and able to purchase a product at a given price.
2. Fill-in is measured by the number of products sellers are willing and able to produce at a given price.
3. See Graph 1: The blue line depicts: A) elasticity of supply, B) elasticity of demand, C) inelasticity of  demand, D) inelasticity of  supply.
4.

See Graph: The red line depicts: A) elasticity of supply, B) elasticity of demand, C) inelasticity of  demand, D) inelasticity of  supply.
5,

The Food and Drug Administration has determined that chemicals in broccoli have natural cancer-fighting attributes. How will this affect the demand for broccoli  A) demand will increase, B) demand will stay the same, C) demand will decrease, D) not enough information to tell.
6.

The price of gasoline has increased significantly.  Toyota has introduced a new automobile.  Given the cost change in gasoline, how will demand for the new car be affected?  A) demand will increase, B) demand will stay the same, C) demand will decrease, D) not enough information to tell.
7. Fill-in The states that consumer satisfaction decreases with each additional purchase or consumption of a particular item.
8.

Price elasticity of supply happens when: A) there’s a significant increase in production as a result of an increase in price,  B) production is reduced as a result of an increase in price, C) demand is increased as a result of a change in price, D) there’s no or very little change in production as a result of a change in price.
9.

See Graph 2: Which is the equilibrium price (market clearing price) for the vans? A) $22,000, B) $32,000, C) $30,000, D) $10,000
10. See Graph: How much would consumers be willing to buy at a price of $25,000? A) 200 B) 350 C) 450 D) 500
11. In a public economy the fundamental economic questions of WHAT, HOW, WHO are answered by: A) consumers, B) companies, C) the government, D) religious leaders.
12. "Buyers and sellers make their wishes known in a market place." This quite most describes a ______. Economic system. A) Market, B) Command/Pubilc, C) Traditional, D) both A and B.
13. When an economic system experiences a severe downturn resulting in high unemployment, dramatic drop in business activity and idle resources it's called: A) inflation, B) a recession, C) a boom, D) a depression.
14. is the belief that all persons should have equal economic opportunity.
15. Economic _____ was the goal of the Employment Act of 1946.
16. True=A, False=B, Opinion=C: According to the theory of economics (problem of scarcity) people can get everything they want.
17. True=A, False=B, Opinion=C: Everyone should get all the goods and services they desire.
18. The Gap is criticized for using underpaid workers (sweatshop labor) to make their clothes.  This issue deals with A) What is made. B) How things are made. C) Who gets what's made.
19. We have rich and poor in this country.  The rich are guaranteed health care while the poor are not. This issue deals with A) What is made. B) How things are made. C) Who gets what's made.
20. President Bush says we need more spending on the military. This issue deals with A) What is made. B) How things are made. C) Who gets what's made.
21. According to conservatives, regarding who is rich and who is poor: A) life is not fair, B) government needs to make life fairer, C) life is fair, D) A & B.
22. According to liberals, regarding who is rich and who is poor: A) life is not fair, B) government needs to make life fairer, C) life is fair, D) A & B.
23. Social Darwinists believe that the poor are so: A) at their own choosing, B) because God wanted them to be poor, C) they were designed inferior by nature, D) none of these.
24. Puritans believe that the poor are so: A) at their own choosing, B) because God wanted them to be poor, C) they were designed inferior by nature, D) none of these.
25. The theories of the Social Darwinists or Puritans provide comfort to the rich because: A) they are more motivated to help the poor, B) they have an excuse not to feel guilty that they are rich while others are poor, C) they take pleasure in being seen as better than others, D) all of these.
26. Laissez-Faire Economic theory supports a conservative economic agenda in that it: A) provides support for the poor, B) says government must intervene in society, C) says government should stay out and let the free market work its magic, D) all of these.
27. Fill-in supported by George Bush and Neoconservatives states that as the rich get richer the rest of will too. Therefore, the government needs to help the rich get richer.
28. The corporation is a "legal person". That means they: A) can sue in court, B) can be sued, C) cannot have their property and other rights taken away without due process of law, D) all of these.
29. The corporations achieved this status of legal persons through: A) money, B) smart lawyers, C) the 13th Amendment, D) the 14th Amendment.
30. The legal person of the corporation was diagnosed in the film, The Corporation, as being: A) a psychopath, B) a hypochondriac, C) a schizophrenic, D) none of these.
31.  Fill-in The film describes the corporation as a . This means the corporation does great good and does great harm.
32. Economist, Milton Friedman, says corporations are not moral persons and that: A) they should not be held responsible for their actions, B) the people who run them are and need to be held accountable, C) they care only about the shareholders, D) neither is anyone else.
33. Intellectual and linguist, Noam Chomsky, said we are all moral persons. This means: A) we have the ability to do great good, B) we have the ability to do great evil, C) we can be nice persons yet, at the same time, participate in horrible institutions (war, slavery), D) all of these.
34. Fill-in is the legal concept that shields the owners of corporations from exposure.
35. A=True, False=B, Opinion=C: A person who believes in laissez faire capitalism would agree with the current government bailout plan of Wall Street.