Econ 101 Exam 1
The fact that people with higher incomes get to consume more goods and services addresses the ________ part of one of the two big economic questions. -"how" -"for whom" -"when" -"where"
"for whom"
An art museum decides to offer tours by having visitors listen to cassette tapes rather than have tour guides. The museum is answering the ________ part of one of the two big economic questions. -"what" -"how" -"scarcity" -"why"
"how"
If Taco Bell decides to produce more tacos and fewer burritos, Taco Bell is answering the ________ part of one of the two big economic questions. "why" "when" "scarcity" "what"
"what"
When a firm decides to produce more electric cars and conventional gas powered cars, it is most directly answering the ________ part of one of the two big economic questions. -"how" -"scarcity" -"for whom" -"what"
"what"
When firms in an economy start producing more computers and fewer televisions, they are answering the ________ part of one of the two big economic questions. -"where" -"when" -"what" -"for whom"
"what"
During the summer you have made the decision to attend summer school, which prevents you from working at your usual summer job in which you normally earn $6,000 for the summer. Your tuition cost is $3,000 and books and supplies cost $1,300. In terms of dollars, the opportunity cost of attending summer school is $4,300. $3,300. $6,000. $10,300.
$10,300.
You decide to take a vacation and the trip costs you $2,000. While you are on vacation, you do not go to work where you could have earned $750. In terms of dollars, the opportunity cost of the vacation is -$750. -$1,250 -$2,750. -$2,000.
$2,750
The most anyone is willing to pay for another purse is $30. Currently the price of a purse is $40, and the cost of producing another purse is $50. The marginal benefit of a purse is -$50. -$40. -$30. -an amount not given in the answers given .
$30
In the above figure, what is the minimum supply price for the fourth gallon of ice cream? -$4.00 -$2.00 -$3.00 -$5.00
$5.00
Bill Bonecrusher graduates from college with a choice of playing professional football at $2 million a year or coaching for $50,000 a year. He decides to play football, but eight years later, though he could continue to play football at $2 million a year, he quits football to make movies for $3 million a year. His opportunity cost of playing football at graduation was ________ and eight years later the opportunity cost of making movies was ________. -$50,000; $50,000 -$50,000; $2 million -$2 million; $2 million -$2 million; $3 million
$50,000; $2 million
The equilibrium price in the above figure is -$4. -$8. -$6. -$2.
$6
A fall in the price of X from $12 to $8 causes an increase in the quantity of Y demanded from 900 to 1,100 units. What is the cross elasticity of demand between X and Y? - -0.5 - 2 - -2 - 0.5
-0.5
Florida State University has just lowered the price of its season football tickets from $350.00 to $300.00. As a result, there was an increase in the number of season tickets purchased from 43,000 to 47,000. The price elasticity of demand for season tickets equals -0.58. -1.71. -0.71. -1.58.
0.58.
Fred's income has just risen from $940 per week to $1,060 per week. As a result, he decides to purchase 9 percent more steak per week. The income elasticity of Fred's demand for steak is -0.75. -1.00. -1.33. -0.90.
0.75
A rise in the price of cabbage from $14 to $18 per bushel increases the quantity supplied from 4,000 to 6,000 bushels. The elasticity of supply is -0.8. -1.6. -1.0. -0.6.
1.6
The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bottle of soda? -33¢ -$3 -1/3 bag of corn chips per bottle of soda -3 bags of corn chips per bottle of soda
1/3 bag of corn chips per bottle of soda
The income elasticity of demand for vacations is 5. If incomes increase by 3 percent next year, the quantity of vacations demanded at today's price will increase by ________ percent. -3 -5/3 -5 -15
15
An ice cream cone costs $1.50. A can of soda costs $0.75. The relative price of an ice cream cone is -1/2 can of soda per ice cream cone, the opportunity cost of an ice cream cone. -$0.75, the opportunity cost of a can of soda. -2 cans of soda per soda, the opportunity cost of an ice cream cone. -$1.50, the opportunity cost of a can of soda.
2 cans of soda per soda, the opportunity cost of an ice cream cone.
The increase in the demand for widgets, shown in the figure above, is the result of an increase in the price of McBoover devices from $9 to $11. Therefore, the cross-price elasticity for these two products is - -2.0. - 0.5. - -0.5. - 2.0.
2.0
In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of Y is -1/2 unit of X per unit of Y. -2/3 unit of X per unit of Y. -3 units of X per unit of Y. -2 units of X per unit of Y.
2/3 unit of X per unit of Y.
When the price of perfume changes from $24 to $26, the quantity supplied increases from 100 jars to 150 jars. What is the elasticity of supply of perfume? -0.04 -25.0 -5.0 -0.2
5.0
The money price of a pizza is $12 per pizza and the money price of a taco is $2 per taco. The relative price of a pizza is -1/6 pizza per taco. -$12 per pizza. -$24 per pizza. -6 tacos per pizza.
6 tacos per pizza.
The table above represents the marginal cost and marginal benefit associated with pizza (in terms of movies). What quantity of pizza should be produced if resources are to be used efficiently? 6 pizzas 8 pizzas 5 pizzas 7 pizzas
7 pizzas
Which of the following is a positive statement? -What to do with Social Security is the most important economic issue today. -Because they decrease productivity, labor unions should be eliminated. -The United States should fight inflation even if it raises unemployment. -A 5 percent increase in income leads to a 3 percent increase in the consumption of orange juice.
A 5 percent increase in income leads to a 3 percent increase in the consumption of orange juice.
In the figure above, an economy would grow fastest if it produces at point A. B. C. D.
A.
If property rights are not clearly defined and enforced, then -incentives for specialization based on comparative advantage are weakened. -some potential gains from specialization and trade are lost. -resources are devoted to protecting possessions rather than to production. -All of these answers are correct.
All of these answers are correct.
Suppose inter-city bus travel is a substitute for transportation by train. Which of the following could then be TRUE? -The cross elasticity between bus and train travel could equal 0.65. -The cross elasticity between bus and train travel could equal 1.0. -The cross elasticity between bus and train travel could equal 1.25. -All of these could be true.
All of these could be true.
Which of the following is consistent with the law of demand? -An increase in the price of a soda causes a decrease in the quantity of soda demanded. -A decrease in the price of a gallon of milk causes a decrease in the quantity of milk demanded. -An increase in the price of a DVD causes an increase in the quantity of DVDs demanded. -A decrease in the price of juice causes no change in the quantity of juice demanded.
An increase in the price of a soda causes a decrease in the quantity of soda demanded.
Which of the following is a positive statement? -The government should spend more on education. -An increase in the price of pizza will lead fewer students to buy pizza. -My favorite dinner is pizza and soda. -The government must provide health insurance so that the poor can obtain decent medical treatment.
An increase in the price of pizza will lead fewer students to buy pizza.
Which of the following is NOT an example of an opportunity cost? -By choosing to attend college, Jean was not able to continue working as an electrician; as a result, she gave up more than $85,000 in earnings while she was in college. -Because Mary is now being paid a higher wage, she can afford to buy a new car even though she is moving into a bigger apartment. -Because David used all of his vacation time to paint his house, he was unable to visit the Caribbean last year. -By spending Thursday night studying for an economics exam, a student was unable to complete a homework assignment for calculus class.
Because Mary is now being paid a higher wage, she can afford to buy a new car even though she is moving into a bigger apartment.
Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is TRUE? -Joe should produce pizza because he has a higher opportunity cost of producing pizza than does Beth. -Joe should produce pizza because he has a lower opportunity cost of producing pizza than does Beth. -Beth should produce pizza because she has a lower opportunity cost of producing pizza than does Joe. -Beth should produce pizza because she has a higher opportunity cost of producing pizza than does Joe.
Beth should produce pizza because she has a lower opportunity cost of producing pizza than does Joe.
The income elasticity of demand for restaurant meals is 1.61. So -if income increases by 16.1 percent, the quantity demanded of restaurant meals will increase by 10 percent. -if income increases by 10 percent, the quantity demanded of restaurant meals will increase by 16.1 percent. -restaurant meals are an income elastic normal good. -Both answers if income increases by 10 percent, the quantity demanded of restaurant meals will increase by 16.1 percent and restaurant meals are an income elastic normal good are correct.
Both answers if income increases by 10 percent, the quantity demanded of restaurant meals will increase by 16.1 percent and restaurant meals are an income elastic normal good are correct.
A marginal cost curve -is upward sloping. -shows that as more of a good is produced, opportunity costs of producing another unit increase. -is bowed inward so that its slope can become negative. -Both answers is upward sloping and shows that as more of a good is produced, opportunity costs of producing another unit increase are correct.
Both answers is upward sloping and shows that as more of a good is produced, opportunity costs of producing another unit increase are correct.
The figure above shows the production possibilities frontiers for four nations that have identical production possibilities frontiers in the present. The one that will grow most rapidly in the future is most likely to be producing at point A. B. C. D.
C.
In the above figure, once on PPF2, a country would grow slowest by producing at point A. B. C. D.
D.
In the figure above, a point showing an inefficient production point is point A. B. C. D.
D.
The above figures show the market for hamburger meat. Which figure(s) shows the effect of a new report by the U.S. Surgeon General that beef consumption is healthier than previously believed? Figure A Figure B Figure D Figure A and B
Figure A
Based on the above, which figure shows the impact of a decrease in the population available to work? Figure A Figure B Figure C Figure D
Figure D
Which of the following is an example of a positive statement? -The foreign sector should be more tightly controlled. -Households are the primary source of saving. -Government should not redistribute income. -Business firms ought to contribute more to charities.
Households are the primary source of saving.
Which of the following is TRUE regarding markets? I) Economists define a market as a geographic location where trade occurs. II) A market enables buyers and sellers to get information about each other and to buy and sell from each other. III) Markets coordinate decisions through prices. -I only -I and III -II and III -I, II and III
II and III
What will happen to the equilibrium price and equilibrium quantity of ice cream cones when consumers' incomes decrease? -If ice cream cones are an inferior good, then the equilibrium price for an ice cream cone will increase and the equilibrium quantity of ice cream cones will decrease. -If ice cream cones are an inferior good, then the equilibrium price and quantity of ice cream cones will decrease. -If ice cream cones are a normal good, then the equilibrium price and quantity of ice cream cones will decrease. -If ice cream cones are a normal good, then the equilibrium price and equilibrium quantity of ice cream cones will increase.
If ice cream cones are a normal good, then the equilibrium price and quantity of ice cream cones will decrease.
Which of the following is a normative statement? -Low rents will restrict the supply of housing. -Owners of apartment buildings are free to charge whatever rent they want. -Housing costs are rising. -Low rents are good because they make apartments more affordable.
Low rents are good because they make apartments more affordable.
Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. If these two states were to engage in trade, which of the following is TRUE? -Missouri would specialize in pear production and trade pears to Washington pecans. -Half of both Washington's and Missouri's resources would be devoted to pears and the other half to pecans because that is the comparative advantage. -Missouri would specialize in pecan production and trade pecans to Washington for pears. -Washington would produce both pears and pecans and Missouri would produce neither.
Missouri would specialize in pecan production and trade pecans to Washington for pears.
Households are the primary source of saving. -More goods are produced than services. -More services are produced than goods. -The economy is too complex to determine the proportion of production that is devoted to producing services. -Production is divided evenly between goods and services.
More services are produced than goods.
In economics we learn that -tradeoffs allow us to have more of everything we value. -tradeoffs allow us to avoid the problem of opportunity cost. -opportunity costs are all of the possible alternatives given up when we make a choice. -None of these answers is correct.
None of these answers is correct.
The elasticity of the momentary supply curve for any good always equals -zero. -one. -positive infinity. -None of these answers is correct.
None of these answers is correct.
The above table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following statements is TRUE? -Producing 40 chocolate bars and 0 cans of cola is unattainable and inefficient. -Producing 20 chocolate bars and 80 cans of cola is attainable, but inefficient. -Producing 30 chocolate bars and 38 cans of cola is only attainable with an increase in technology. -Producing 0 chocolate bars and 100 cans of cola is both attainable and efficient.
Producing 0 chocolate bars and 100 cans of cola is both attainable and efficient.
For Product X, the income elasticity of demand is 1.16. Which of the following is therefore definitely TRUE? -Product X is something that mostly poor people will buy. -Product X is income elastic. -Product X is a necessity. -Product X is a substitute for some other good.
Product X is income elastic.
In the figure above, how can the economy represented by the production possibilities frontier move from point C to point F? -First move to point B and then move to point F. -Redistribute the existing resources to produce more apples and fewer oranges. -Increase the level of technology. -Increase the available amount of resources.
Redistribute the existing resources to produce more apples and fewer oranges.
Which of the following is a normative statement? -The current butter surplus is the result of federal policies. -The government's cuts in welfare spending impose an unfair hardship on the poor. -Next year's inflation rate will be under 4 percent. -Consumers will buy more gasoline over the Christmas holiday even if the price of gas is 10 cents higher than it was during the Thanksgiving holiday.
The government's cuts in welfare spending impose an unfair hardship on the poor.
The price elasticity of demand for purses is measured in what units? -dollars -purses -dollars per purse -The price elasticity of demand is a unitless measure.
The price elasticity of demand is a unitless measure.
Twenty years ago a stove cost $300 and a refrigerator cost $1,500. Today a stove costs $600, while a refrigerator costs $1,800. Which of the following statements is TRUE? -The relative price of stoves and refrigerators has not changed. -The money price of a refrigerator has fallen. -The relative price of a stove has increased. -The relative price of a refrigerator has increased.
The relative price of a stove has increased.
As we increase the production of computers, we find that we must give up larger and larger amounts of DVD players per computer. -DVD players will be more highly regarded by consumers than computers. -This situation illustrates increasing opportunity cost. -As a result, we should specialize in the production of DVD players. -The production possibilities frontier for computers and DVD players is a straight line.
This situation illustrates increasing opportunity cost.
Suppose a scientific breakthrough made free solar power available in unlimited quantities in the United States. The effect of this invention would be to move the -U.S. production possibilities frontier outward. -United States beyond its production possibilities frontier. -U.S. production possibilities frontier inward. -United States inside its production possibilities frontier.
U.S. production possibilities frontier outward.
Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements is TRUE? -Washington has an absolute advantage in the production of both pecans and pears. -Washington has a comparative advantage in the production of both pecans and pears. -Washington has a comparative advantage in producing pecans and Missouri has a comparative advantage in producing pears. -Both answers Washington has an absolute advantage in the production of both pecans and pears and Washington has a comparative advantage in producing pecans and Missouri has a comparative advantage in producing pears are correct.
Washington has an absolute advantage in the production of both pecans and pears.
Which of the following is a normative statement? -Candy bars are more expensive than newspapers. -The price of candy bars is $1.25 each. -Popcorn and candy are sold in movie theaters. -You should eat less candy.
You should eat less candy.
Supply is elastic if -the slope of the supply curve is positive. -the good in question is a normal good. -a 1 percent change in price leads to a smaller percentage change in quantity supplied. -a 1 percent change in price leads to a larger percentage change in quantity supplied.
a 1 percent change in price leads to a larger percentage change in quantity supplied.
In 2014, the price of peanuts was rising, which lead peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. Consequently, in the current market for peanut butter there was ________ which resulted in a ________ in the price of peanut butter and ________ in the quantity of peanut butter. -a decrease in supply of peanut butter and an increase in demand for peanut butter; fall; an increase, decrease or possibly no change -a decrease in supply of peanut butter and a decrease in demand for peanut butter; rise, fall, or possibly no change; a decrease -a decrease in supply of peanut butter and an increase in demand for peanut butter; rise; an increase, decrease or possibly no change -an increase in supply of peanut butter and a decrease in demand for peanut butter; fall; an increase, decrease or possibly no change
a decrease in supply of peanut butter and an increase in demand for peanut butter; rise; an increase, decrease or possibly no change
A changes in which of the following shifts the demand curve for hamburgers? -a fall in the price of french fries, a complement for hamburgers -an increase in the price of a hamburger -an increase in the price of the meat used to produce hamburgers -an increase in the number of hamburger restaurants
a fall in the price of french fries, a complement for hamburgers
Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call -an indexed price. -a relative price. -an opportunity price. -a money price.
a money price.
In the summer 2012 the lobster catch in Maine was especially large, but instead of celebrating the fisherman were suffering from a lower total revenue. (Source: New York Times, July 28, 2012) As the lobster catch increases, there is -a movement along the demand curve, resulting in a higher price and an increased quantity. -a movement along the demand curve, resulting in a lower price and an increased quantity. -no change in either the price or the quantity. -a movement along the demand curve, resulting in a higher price and a decreased quantity.
a movement along the demand curve, resulting in a lower price and an increased quantity.
Which of the following raises the price of a used car and increases the equilibrium quantity sold? -a new 8 percent federal excise tax placed on all new car purchases -an increase in wages for used car salespeople -a special rebate program on all new cars -None of these answers is correct
a new 8 percent federal excise tax placed on all new car purchases
If the quantity demanded exceeds the quantity supplied, then there is -a shortage and the price is above the equilibrium price. -a surplus and the price is above the equilibrium price. -a shortage and the price is below the equilibrium price. -a surplus and the price is below the equilibrium price.
a shortage and the price is below the equilibrium price.
Ticket scalpers at the NCAA basketball tournament last year charged prices high above the printed ticket price. This observation is evidence of -a surplus at printed ticket prices. -the tournament getting too much television exposure. -the tournament not being televised. -a shortage at printed ticket prices.
a shortage at printed ticket prices.
In the above figure, a price of $15 per dozen for roses would result in -a surplus. -downward pressure on prices. -a shortage. -equilibrium.
a shortage.
The marginal benefit is the -loss of the highest-valued alternative. -additional gain from one more unit of an activity. -additional cost from one more unit of an activity. -additional gain from one more unit of an activity minus the additional cost from one more unit of the activity.
additional gain from one more unit of an activity.
In markets, people's decisions are coordinated by -learning-by-doing. -changes in property rights. -specialization according to absolute advantage. -adjustments in prices.
adjustments in prices.
Which of the following shifts the supply curve for good X leftward? -a situation in which quantity demanded exceeds quantity supplied -an increase in the cost of the machinery used to produce X -a decrease in the wages of workers employed to produce X -a technological advance in the production of X
an increase in the cost of the machinery used to produce X
The relative price of a good is -equal to the money price of a good. -what you get paid for babysitting your cousin. -equal to the price of that good divided by the quantity demanded of the good. -an opportunity cost.
an opportunity cost.
Markets are best defined as -specific geographic locations where people get together to buy and sell. -places where people can inspect goods and services carefully. -hypothetical constructs used to analyze how people form their tastes and preferences. -arrangements where buyers and sellers get together to buy and sell.
arrangements where buyers and sellers get together to buy and sell.
Consider the demand curves for soft drinks shown in the figure above. Initially the economy is at point a. If people come to expect that the price of a soft drink will increase in the future, there will be a movement to a point such as -none of the points illustrated. -b. -c. -d.
b.
If the money price of hats rises and no other prices change, the I. Relative price of a hat rises II. Opportunity cost of a hat rises -only I -both I and II -only II -neither I nor II
both I and II
In the above figure, at which point on the demand curve is the price elasticity of demand equal to 1? -a -b -c -It is impossible to say at which point the elasticity equals one.
c
Positive economic statements -prescribe what should be. -are related only to microeconomics. -cannot be tested against the facts. -can be tested against the facts.
can be tested against the facts.
A person has a comparative advantage in producing a particular good if that person -has less desire to consume that good than anyone else has. -can produce it at lower opportunity cost than anyone else can. -has more human capital related to that good than anyone else has. -has higher productivity in producing it than anyone else has.
can produce it at lower opportunity cost than anyone else can.
An efficient allocation of resources occurs when we -produce the goods and services that people want. -cannot produce more of a good or service without giving up some other good or service that we need. -produce the goods and services that people need. -cannot produce more of a good or service without giving up some other good or service that we value more highly.
cannot produce more of a good or service without giving up some other good or service that we value more highly.
Which of the following pairs of goods are most likely substitutes? -DVDs and DVD players -lettuce and salad dressing -cola and lemon lime soda -peanut butter and gasoline
cola and lemon lime soda
The tradeoff between current consumption and the production of capital goods also reflects a tradeoff between -satisfying today the needs of the poor and the wants of the wealthy. -economic growth and technological change. -current consumption and future consumption. -the future production of capital goods and future consumption of goods.
current consumption and future consumption.
Ham and eggs are complements. If the price of ham rises, the demand for eggs will -increase or decrease but the demand curve for ham will not change. -not change but there will be a movement along the demand curve for eggs. -decrease and the demand curve for eggs will shift leftward. -decrease and the demand curve for ham will shift rightward.
decrease and the demand curve for eggs will shift leftward.
President Obama has proposed a goal that everyone complete at least one year of formal education or training beyond high school. This policy would ________ the production of current consumption goods and services and ________ the future production of consumption goods and services. -not change; increase -decrease; increase -increase; increase -increase; decrease
decrease; increase
A decrease in the expected future price of cars -increases the current quantity demanded of cars, that is, there is a movement downward along the demand curve for cars. -decreases the current demand for cars, that is, there is a leftward shift of the demand curve for cars. -increases the current demand for cars, that is, there is a rightward shift of the demand curve for cars. -decreases the current quantity demanded of cars, that is, there is a movement upward along the demand curve for cars.
decreases the current demand for cars, that is, there is a leftward shift of the demand curve for cars.
The above figure shows a linear (straight-line) demand curve. Starting at point A and then moving to point B and then point C, the price elasticity of demand -increases. -decreases. -increases and then decreases. -decreases and then increases.
decreases.
In the figure above, moving from production at point d to production at point a requires -technological change. -a decrease in unemployment. -decreasing the output of consumer goods in order to boost the output of capital goods. -both capital accumulation and a decrease in unemployment.
decreasing the output of consumer goods in order to boost the output of capital goods.
The above figure shows the market for oil. Because of the development of a new deep sea drilling technology the -demand curve shifts from D1 to D2 and the supply curve does not shift. -demand curve does not shift, and the supply curve shifts from S1 to S2. -demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2. -demand curve does not shift, and the supply curve shifts from S2 to S1.
demand curve does not shift, and the supply curve shifts from S1 to S2.
The above figure shows the market for bicycles. When there is a physical fitness craze so that everyone wants to exercise the -demand curve for bicycles shifts from D2 to D1. -supply curve of bicycles shifts from S1 to S2. -demand curve for bicycles shifts from D1 to D2. -demand curve and the supply curve of bicycles do not shift.
demand curve for bicycles shifts from D1 to D2.
A shift of the supply curve of oil raises the price from $60 a barrel to $75 a barrel and reduces the quantity demanded from 40 million to 20 million barrels a day. You can conclude that the -demand for oil is inelastic. -supply of oil is elastic. -supply of oil is inelastic. -demand for oil is elastic.
demand for oil is elastic.
Normative economic statements -deal with economic hypotheses that are not well-established laws. -describe what ought to be. -describe what is rather than what ought to be. -describe the process of economic policy-making.
describe what ought to be.
Marginal benefit curves slope -downward, but not because of increasing opportunity cost. -upward because of increasing opportunity cost. -downward because of increasing opportunity cost. -upward, but not because of increasing opportunity cost.
downward, but not because of increasing opportunity cost.
Macroeconomics is concerned with -individual consumers. -economy-wide variables. -government decision making concerning farm price supports. -the effects on Ford Motor of a strike by the United Auto Workers.
economy-wide variables.
Goods and services that can be produced by using commonly available resources that could be allocated to a wide variety of alternative tasks have a supply that is -unit elastic. -inelastic. -elastic. -perfectly inelastic.
elastic.
If a 5 percent change in the price of a good leads to a 10 percent change in the quantity supplied, then the supply of the good is ________ and the elasticity of supply is ________. -inelastic; 2.0 -elastic; 2.0 -inelastic; 0.5 -elastic; 0.5
elastic; 2.0
Which factor of production earns profit? -land -money -entrepreneurship -human capital
entrepreneurship
Human resources that perform the functions of organizing, managing, and assembling the other resources are called -venture capital. -productive capital. -entrepreneurship. -physical capital.
entrepreneurship.
When there is a shortage in the market, the quantity sold is -equal to the quantity supplied. -greater than the quantity supplied. -less than the quantity bought. -less than the quantity supplied.
equal to the quantity supplied.
If the price of a movie download falls, the rental rate of DVDs ________ and the equilibrium quantity of DVDs rented ________. -rises; decreases -falls; decreases -falls; increases -rises; increases
falls; decreases
In the above figure, if 4000 bicycles are produced per month, -marginal benefit is greater than marginal cost. -fewer bicycles should be produced to reach the allocatively efficient level of output. -the marginal cost of production is 2 bottles of soda per bicycle. -Both answers marginal benefit is greater than marginal cost and fewer bicycles should be produced to reach the allocatively efficient level of output are correct.
fewer bicycles should be produced to reach the allocatively efficient level of output.
In goods markets ________ and in factor markets ________. -households sell to firms; households sell to firms -firms sell to households; households sell to firms -households sell to firms; firms sell to households -firms sell to households; firms sell to households
firms sell to households; households sell to firms
The price elasticity of supply of laptop computers equals 1.5 if -for every 1 percent that laptop prices increase, computer makers produce another 1.5 percent laptops. -a rightward shift of the demand curve for laptops causes the quantity supplied to increase by 1.5 percent. -for every $1.00 that laptops increase in price, computer makers produce another 150 laptops. -a rightward shift of the demand curve for laptops causes a 1.5 percent increase in their price.
for every 1 percent that laptop prices increase, computer makers produce another 1.5 percent laptops.
The figure above shows the demand for fruit snacks. Which movement reflects a decrease in population? -from point a to point e -from point a to point b -from point a to point c -from point a to point d
from point a to point c
The figure above shows the demand for fruit snacks. Which movement reflects how consumers would react to an increase in the price of a fruit snack that is expected to occur in the future? -from point a to point e -from point a to point b -from point a to point c -from point a to point d
from point a to point d
In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either plow 14 acres or plant 14 acres. Brandon and Christopher can -exchange, but only Brandon will gain from the exchange. -gain from exchange if Brandon specializes in plowing and Christopher specializes in planting. -exchange, but only Christopher will gain from the exchange. -gain from exchange if Brandon specializes in planting and Christopher specializes in plowing.
gain from exchange if Brandon specializes in planting and Christopher specializes in plowing.
The figure above illustrates Mary's production possibilities frontier. If Mary wants to move from point b to point c, she must -give up some of good X in order to obtain more of good Y. -give up some of good Y in order to obtain more of good X. -improve technology. -increase the accumulation of capital.
give up some of good Y in order to obtain more of good X.
From 8 to 11 p.m., Sam can either attend a basketball game, a hockey match or the symphony. Suppose that Sam decides to attend the hockey match and thinks to herself that if she did not go to the match she would go to the symphony. Then the opportunity cost of attending the hockey match is -going to the basketball game. -three hours of time. -going to the symphony and the basketball game. -going to the symphony.
going to the symphony.
According to Adam Smith -in a market transaction buyers can either get what they want for less than they would be willing to pay or sellers can earn a profit, but both buyers and sellers can't gain simultaneously. -politicians are well-equipped to regulate corporations and intervene in markets to improve market outcomes. -government intervention in markets is not desirable because an invisible hand leads decisions made in pursuit of self-interest to unintentionally promote the social interest. -when big corporations pursue their self-interest of maximum profit, they will inevitably conflict with social interest.
government intervention in markets is not desirable because an invisible hand leads decisions made in pursuit of self-interest to unintentionally promote the social interest.
Pizza Hut pizza has more close substitutes than does food in general. The price elasticity of demand for Pizza Hut pizza is ________ the price elasticity of demand for food in general. -not comparable to -less than -the same as -greater than
greater than
Country A can produce 1 cello by giving up the production of 5 guitars. Country B can produce 1 guitar by giving up the production of 4 cellos. In which good does country A have a comparative advantage? -guitars -cellos -both goods -neither good
guitars
All economic questions are about -how to make money. -how to satisfy all our wants. -what to produce. -how to cope with scarcity.
how to cope with scarcity.
Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour. There can be gains from exchange -only if Agnes becomes faster at producing X. -only if Brenda becomes faster at producing X or Y. -if Agnes specializes in the production of Y and Brenda specializes in the production of X. -if Agnes specializes in the production of X and Brenda specializes in the production of Y.
if Agnes specializes in the production of X and Brenda specializes in the production of Y.
George and Michael can gain from exchange -unless they have different opportunity costs. -if each specializes in the production of the good for which he has the higher opportunity cost. -if each specializes in the production of the good for which he has the lower opportunity cost. -unless one has an absolute advantage in all goods.
if each specializes in the production of the good for which he has the lower opportunity cost.
A president of the United States promises to produce more defense goods without any decreases in the production of other goods. This promise can be valid -if the United States is producing at a point inside its production possibilities frontier. -if the United States is producing at a point on its production possibilities frontier. -if the United States is producing at a point beyond its production possibilities frontier. -only if the production possibilities frontier shifts rightward.
if the United States is producing at a point inside its production possibilities frontier
When an economist talks of scarcity, the economist is referring to the -ability of society to employ all of its resources. -inability of society to satisfy all human wants because of limited resources. -ability of society to consume all that it produces. -ability of society to continually make technological breakthroughs and increase production.
inability of society to satisfy all human wants because of limited resources.
Last year, Jack's income was $15,000 and he bought 50 bags of potato chips. This year his income is $18,000 and he buys 55 bags of potato chips. Therefore, Jack's -income elasticity of demand for potato chips is 1.66. -price elasticity of demand for potato chips is 1.66. -income elasticity of demand for potato chips is 0.52. -price elasticity of demand for potato chips is 0.52.
income elasticity of demand for potato chips is 0.52.
An increase in the demand for computers and a decrease in the number of sellers of computers will definitely ________. -increase the number of computers bought -not change the price of a computer and increase the number of computers bought -increase the price of a computer -increase the price of a computer and the number of computers bought
increase the price of a computer
If the elasticity of supply of TV sets is equal to 3, then a 10 percent increase in the price of a TV will -increase the quantity supplied by 30.0 percent. -increase the quantity supplied by 3.33 percent. -decrease the quantity supplied by 30.0 percent. -increase the quantity supplied by 0.33 percent.
increase the quantity supplied by 30.0 percent.
In the above figure, at point b on the demand curve, a price cut of one dollar will -leave total revenue unchanged. -increase total revenue. -decrease total revenue. -have an indeterminate effect on total revenue.
increase total revenue.
Suppose Target decided to lower the price on all shirts as part of its Back to School promotion. The cross elasticity of demand between pants and shirts is negative. Lowering the price on shirts will ________ the demand for pants because shirts and pants are ________. -increase; complements -increase; substitutes -decrease; substitutes -decrease; complements
increase; complements
The above figure shows the demand curve for movie rentals from Redbox. If Redbox lowered its price from $4.00 to $3.50, then total revenue would ________ because demand is ________. -increase; inelastic -increase; elastic -decrease; inelastic -decrease; elastic
increase; elastic
As a country that has a bowed-out production possibilities frontier produces more of one good, the opportunity cost of a unit of that good ________. -decreases -increases -remains the same -might increase or decrease
increases
The principal of decreasing marginal benefit means that as the quantity of a good consumed -decreases, its marginal benefit decreases. -increases, its marginal benefit decreases. -increases, its total benefit decreases. -None of these answers is correct.
increases, its marginal benefit decreases.
The demand for food in poor countries is -elastic and more elastic than in rich countries. -inelastic but more elastic than in rich countries. -elastic but less elastic than in rich countries. -inelastic and more inelastic than in rich countries.
inelastic but more elastic than in rich countries.
If the price elasticity is between 0 and 1, demand is -inelastic. -elastic. -perfectly elastic. -unit elastic.
inelastic.
If University of Nebraska increased its season football ticket sales from 43,000 to 47,000 when it lowered price from $350.00 to $300.00, then its demand for season tickets must be ________ because total revenue __________ when the price was lowered. -elastic; increased -inelastic; decreased -inelastic; increased -elastic; decreased
inelastic; decreased
Which of the following best defines capital as a factor of production? -the gifts of nature that businesses use to produce goods and services -financial assets used by businesses -the knowledge and skills that people obtain from education and use in production of goods and services -instruments, machines, and buildings used in production
instruments, machines, and buildings used in production
When the government chooses to spend the tax dollars that it collects on homeland security, its choice -primarily affects who gets the goods and services produced. -illustrates that scarcity does not always exist. -involves a tradeoff of other goods and services such as education for more homeland security. -involves no tradeoff because the defense is necessary.
involves a tradeoff of other goods and services such as education for more homeland security.
Suppose Company A's profits increase by $10 million and nobody is made worse off. The CEO of Company A keeps all $10 million for herself. This situation -is definitely not in the social interest. -is definitely not in the self-interest of Company A. -is definitely efficient. -is definitely fair.
is definitely efficient.
A student athlete is deciding whether to work out for an extra hour. Her marginal benefit from another hour of exercise -is the benefit she gets from all the hours she's worked out all week. -is the benefit she receives from exercising the additional hour. -is less than the marginal cost of the additional hour. -depends on the cost of the workout.
is the benefit she receives from exercising the additional hour
A straight-line demand curve along which the price elasticity of demand equals 0 is one that -forms a 60 degree angle with the horizontal axis. -is vertical. -forms a 45 degree angle with the vertical axis. -is horizontal.
is vertical.
The "gifts of nature" are included as part of which factor of production? -capital -land -entrepreneurship -labor
land
In every economic system, choices must be made because resources are ________ and our wants are ________. -unlimited; limited -limited; limited -limited; unlimited -unlimited; unlimited
limited; unlimited
A local transit authority charges $1 for a bus ride. An economics study suggests that in the price range from $0.50 to $1.50, the elasticity of demand for bus trips is 1.1. To increase its revenue, the transit authority should -leave the fare as it is. -lower the fare. -raise the fare.
lower the fare.
Scarcity requires that people must -compete. -cooperate. -trade. -make choices.
make choices
In the figure above, if 4 million computers are produced per year then the ________ should be produced to achieve the allocatively efficient use of resources. -marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers -marginal cost of a computer exceeds the marginal benefit of a computer, so more computers -marginal benefit of a computer exceeds the marginal cost of a computer, so more computers -marginal benefit of a computer exceeds the marginal cost of a computer, so fewer computers
marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers
In the above figure, the curve labeled a is the ________ curve and the curve labeled b is the ________ curve. -production possibilities frontier; trade line -marginal cost; marginal benefit -marginal cost; trade line -marginal benefit; trade line
marginal cost; marginal benefit
Studying the effects choices have on the individual markets within the economy is part of -scarcity. -microeconomics. -incentives. -macroeconomics.
microeconomics
In broad terms the difference between microeconomics and macroeconomics is that -microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy. -they use different sets of tools and ideas. -microeconomics studies the effects of government taxes on the national unemployment rate. -macroeconomics studies the effects of government regulation and taxes on the price of individual goods and services whereas microeconomics does not.
microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy.
Studying the determination of prices in individual markets is primarily a concern of -microeconomics. -negative economics. -macroeconomics. -positive economics.
microeconomics.
When the price of a good falls, the income effect for a normal good implies that people buy -less of that good because the relative price of the good has fallen. -more of that good because the relative price of the good has risen. -less of that good because they cannot afford to buy all the things they previously bought. -more of that good because they can afford to buy more of all the things they previously bought.
more of that good because they can afford to buy more of all the things they previously bought.
Because Product X has a very small, positive income elasticity of demand, it is likely that product X is a -product with many good complements. -product with many good substitutes. -necessity. -luxury.
necessity.
People must make choices because -most people enjoy shopping. -of scarcity. -there are many goods available. -None of these answers is correct.
of scarcity.
The loss of the highest-valued alternative defines the concept of -opportunity cost. -marginal benefit. -entrepreneurship. -scarcity.
opportunity cost
Marginal cost is the ________ one more unit of a good and ________ of the good increases. -opportunity cost of producing; increases as production -price that must be paid to consume; increases as consumption -price that must be paid to consume; decreases as consumption -opportunity cost of producing; decreases as production
opportunity cost of producing; increases as production
If the money price of wheat increases and no other prices change, the -demand for wheat increases. -relative price of wheat falls. -opportunity cost of wheat rises. -relative price of wheat is unaffected.
opportunity cost of wheat rises.
When the government hires people to serve in the army, these people are no longer available to do other work. This choice illustrates the concept of -opportunity cost. -marginal benefit. -an incentive. -a social interest/private interest conflict.
opportunity cost.
When the production possibilities frontier bows outward from the origin -some of society's resources are unemployed. -opportunity costs are decreasing. -opportunity costs are constant. -opportunity costs are increasing.
opportunity costs are increasing.
Scarcity exists because -our wants exceed the resources available to satisfy them. -society and people are greedy and wasteful. -poor people need more food and other goods. -of the inefficient choices we make.
our wants exceed the resources available to satisfy them.
Fundamental economic problems basically arise from -turmoil in the stock market. -the unequal distribution of income. -our wants exceeding our scarce resources. -the fact that society has more than it needs.
our wants exceeding our scarce resources.
The term human capital refers to -people's knowledge and skill. -entrepreneurship and risk-taking. -labor resources used to make capital equipment. -buildings and machinery.
people's knowledge and skill.
If the supply curve is vertical, then supply is -relatively inelastic. -relatively elastic. -perfectly elastic. -perfectly inelastic.
perfectly inelastic.
The above table shows production points on Sweet-Tooth Land's production possibilities frontier. A movement from ________ represents the greatest opportunity cost of increasing cola production. -point B to point A -point E to point D -point D to point C -point C to point B
point B to point A
In the figure above, which movement could be the result of an increase in the wages paid to oil workers? -point a to point e -point a to point b -point a to point c -point a to point d
point a to point d
In the above figure, a change in quantity demanded with unchanged demand is represented by a movement from -point a to point c. -point a to point b. -point a to point e. -None of the above represent a change in the quantity demanded with an unchanged demand.
point a to point e.
In the above figure, a change in quantity supplied with unchanged supply is represented by a movement from -point a to point e. -point b to point a. -point e to point c. -point b to point e.
point b to point a.
The figure above shows supply curves for soft drinks. Suppose the economy is at point a. An increase in the price of a soft drink is shown as a movement from point a to -none of the points that are illustrated. -point b. -point c. -point d.
point d.
When economic growth occurs, the -production possibilities frontier shifts outward. -production possibilities frontier becomes steeper. -production possibilities frontier shifts outward but no longer limits the amount that can be produced. -economy moves along its production possibilities frontier.
production possibilities frontier shifts outward
The social arrangement that gives John Grisham, the writer of best-selling novels, the ownership of his novels is -a market. -dynamic comparative advantage. -absolute advantage. -property rights.
property rights.
The cross elasticity of demand is calculated as the percentage change in the -price of one good divided by the percentage change in the quantity demanded of another good. -quantity demanded of one good divided by the percentage change in the quantity demanded of another good. -price of one good divided by the percentage change in the price of another good. -quantity demanded of one good divided by the percentage change in the price of another good
quantity demanded of one good divided by the percentage change in the price of another good
The quantity of CDs that firms plan to sell this month depends on all the following EXCEPT the -wage rate of workers who produce CDs. -number of producers of CDs. -quantity of CDs that people plan to buy. -price of a CD.
quantity of CDs that people plan to buy.
The opportunity cost of good A in terms of good B is equal to the -ratio of the money price of good B to the money price of good A. -money price of good B minus the money price of good A. -ratio of the money price of good A to the money price of good B. -money price of good A minus the money price of good B.
ratio of the money price of good A to the money price of good B.
The demand for corn increases. As a result, the price of corn will ________, and the less elastic the supply of corn, the ________ will be the effect on the price. -fall; greater -fall; smaller -rise; greater -rise; smaller
rise; greater
Moving along a bowed-out PPF between milk and cotton, as more milk is produced the marginal cost of an additional gallon of milk -does not change. -rises. -probably changes, but in an ambiguous direction. -falls.
rises
The price of a DVD rental is $2.50 and the price of a downloaded movie is $1.00. If the price of a DVD rental falls by $0.50, the relative price a downloaded movie -rises. -falls. -does not change. -might change but more information is needed.
rises
You observe that an increase in the price of salsa decreases the demand for tortilla chips and increases the demand for potato chips. You can conclude that -salsa and tortilla chips are complements. -tortilla chips and potato chips are complements. -salsa and tortilla chips are substitutes. -salsa and potato chips are complements.
salsa and tortilla chips are complements.
The wage rate paid by Walkman producers falls and at the same time the price of raw materials used in the production of Walkmans rises. You predict that the supply curve of Walkmans will -shift either leftward or rightward. -surely shift leftward. -surely become steeper. -surely shift rightward.
shift either leftward or rightward.
The quantity of shoes produced is measured along the horizontal axis of a PPF and the quantity of shirts is measured along the vertical axis. As you move down toward the right along the PPF, the marginal cost of -shirts increases. -shoes increases. -shoes decreases. -shoes and shirts is equal at the midpoint between the vertical and horizontal axis.
shoes increases
The above table shows the demand schedule and supply schedule for chocolate chip cookies. If the price is $4.00 per pound, there is a -shortage of 2 pounds of chocolate chip cookies. -shortage of 5 pounds of chocolate chip cookies. -surplus of 3 pounds of chocolate chip cookies. -shortage of 3 pounds of chocolate chip cookies.
shortage of 3 pounds of chocolate chip cookies.
In the above figure, a price of $15 per dozen roses would result in a ________ so that the price of roses will ________. -shortage; fall -surplus; fall -surplus; rise -shortage; rise
shortage; rise
If a 1 percent decrease in the price of a pound of oranges results in a smaller percentage decrease in the quantity supplied -supply is inelastic. -supply is elastic. -demand is inelastic. -demand is elastic.
supply is inelastic.
On December 10 the price of a Christmas tree is $50 and 100 trees are purchased. On December 20 the demand for Christmas trees decreases so that the price falls to $30 and 20 trees are purchased. From this set of facts, the -supply of Christmas trees is inelastic. -demand for Christmas trees is price inelastic. -demand for Christmas trees is price elastic. -supply of Christmas trees is elastic.
supply of Christmas trees is elastic.
On most days the price of a rose is $1 and 80 roses are purchased. On Valentine's Day the demand increases so that the price of a rose rises to $2 and 320 roses are purchased. Therefore, the price elasticity of -supply of roses is about 0.55. -demand for roses is about 1.8. -supply of roses is about 1.8. -demand for roses is about 0.55.
supply of roses is about 1.8.
In the above figure, if the price is $8 then there is a -shortage of 200. -surplus of 200. -shortage of 100. -surplus of 100.
surplus of 200.
If goods A and B are complements, then -the cross elasticity of demand between A and B is negative. -their income elasticities of demand are both less than 1. -their income elasticities of demand are both greater than 1. -the cross elasticity of demand between A and B is positive.
the cross elasticity of demand between A and B is negative.
At a local ice cream parlor, when the price of half-gallons of chocolate ice cream was lowered by fifty cents per half-gallon, total revenue from the sale of chocolate ice cream decreased. This result indicates that -there are more people who like vanilla ice cream than there are people who like chocolate ice cream. -the demand for chocolate ice cream is inelastic. -the demand for chocolate ice cream is elastic. -None of these answers is correct.
the demand for chocolate ice cream is inelastic.
Which of the following is a macroeconomic issue? -the hiring decisions that a business makes -the purchasing decisions that an individual consumer makes -the effect of increasing the money supply on inflation -the effect of an increase in the tax on cigarettes on cigarette sales
the effect of increasing the money supply on inflation
For consumers, goods A and B are complementary goods. The cost of a resource used in the production of A decreases. As a result -the equilibrium prices of both A and B will rise. -the equilibrium price of B will rise and the equilibrium price of A will fall. -the equilibrium prices of both A and B will fall. -the equilibrium price of B will fall and the equilibrium price of A will rise.
the equilibrium price of B will rise and the equilibrium price of A will fall.
In the above figure, if the demand curve is D2, then -there will be a shortage equal to Q2 - Q1. -an increase in price will shift the demand curve to D3. -the equilibrium price will be P1 and the equilibrium quantity will be Q2. -the equilibrium price will be P1 and the equilibrium quantity will be Q1.
the equilibrium price will be P1 and the equilibrium quantity will be Q2.
Using the above figure, suppose that roses are a normal good. If there is an increase in income -the equilibrium price will rise above $25 per dozen roses. -we cannot predict what will happen to the equilibrium price. -we cannot predict what will happen to the equilibrium quantity. -the equilibrium quantity will decrease below 10 dozen roses.
the equilibrium price will rise above $25 per dozen roses.
Laura is a manager for HP. When Laura must decide whether to produce a few additional printers, she is choosing at the margin when she compares -HP's printers to printers from competing companies, such as Lexmark. -the extra revenue from selling a few additional printers to the extra costs of producing the printers. -the total revenue from sales of printers to the total cost of producing all the printers. -the extra revenue from selling a few additional printers to the average cost of producing the additional printers.
the extra revenue from selling a few additional printers to the extra costs of producing the printers.
If a 5 percent increase in the price of good A leads to a 4 percent decrease in the demand for good B, then ________. -the goods are complements -both goods are normal goods -the goods are substitutes -only one good is a normal good
the goods are complements
Jane produces only corn, measured in tons, and cloth, measured in bolts. For her, the opportunity cost of one more ton of corn is -the ratio of all the tons of corn she produces to all the bolts of cloth she produces. -the ratio of all the bolts of cloth she produces to all the tons of corn she produces. -the same as the opportunity cost of one more bolt of cloth. -the inverse of the opportunity cost of one more bolt of cloth.
the inverse of the opportunity cost of one more bolt of cloth.
Each point on a supply curve represents -the lowest price for which a supplier can profitably sell another unit. -the highest price buyers will pay for a good. -the highest price sellers can get for each unit over time. -the lowest price buyers will accept per unit of the good.
the lowest price for which a supplier can profitably sell another unit.
If the price of milk increased by 5 percent because of an increase in the demand for milk, and the quantity of milk supplied increased by 7 percent -milk is more of a necessity than a luxury. -the supply curve of milk has shifted rightward. -milk is more of a luxury than a necessity. -the price elasticity of supply of milk is greater than one.
the price elasticity of supply of milk is greater than one.
A supply curve shows the relation between the quantity supplied and -income. Usually a supply curve has negative slope. -the price of the good. Usually a supply curve has negative slope. -income. Usually a supply curve has positive slope. -the price of the good. Usually a supply curve has positive slope.
the price of the good. Usually a supply curve has positive slope.
Which of the following is a microeconomic topic? -the reasons why Kathy buys less orange juice -the reasons for a decline in average prices -the effect of the government budget deficit on inflation -the reasons why total employment decreases
the reasons why Kathy buys less orange juice
The PPF shifts if -people decide they want more of one good and less of another. -the resources available to the nation change. -the prices of the goods and services produced rise. -the unemployment rate falls.
the resources available to the nation change
Human capital is -all capital owned by individuals, but not by corporations or governments. -all capital owned by individuals or corporations, but not by governments. -the skill and knowledge of workers. -machinery that meets or exceeds federal safety standards for use by humans.
the skill and knowledge of workers
Last year in the United States, the price of snowboards rose by 5 percent and the price rise resulted in a 15 percent increase in the quantity supplied. This outcome is an indication that -the supply curve of snowboards shifted rightward. -the supply of snowboards is price elastic. -some firms entered into the snowboard industry. -All of these answers are correct.
the supply of snowboards is price elastic.
In terms of dollars, the marginal benefit of working five days a week instead of four days a week is -the wages received for the fifth day of work. -the wages received for 5 days of work. -the wages received for 4 days of work. -None of these answers is correct.
the wages received for the fifth day of work.
Suppose the equilibrium price for soft drinks is $1.00. If the current price in the soft drink market is $1.25 each -the demand curve for soft drinks will shift leftward. -there will be a surplus of soft drinks. -the supply curve of soft drinks will shift leftward. -there will be a shortage of soft drinks.
there will be a surplus of soft drinks.
Anna and Maria produce shirts and ties. The figure above shows Anna's PPF and Maria's PPF. Anna and Maria can achieve the gains from trade if Anna produces ________ and Maria produces ________. -shirts and ties; only ties -ties; shirts -shirts; ties -only ties; shirts and ties
ties; shirts
If Pepsi decided to raise its price, you would expect the price of Coca Cola -to fall. -to raise. -Their prices should have no relationship because Pepsi and Coca Cola are not related. -None of these answers are correct.
to raise.
To obtain the gains available from comparative advantage, individuals or countries must do more than specialize; they must also -engage in research and development. -save. -invest. -trade.
trade
All economic questions arise because we -have an abundance of resources. -have limited wants that need to be satisfied. -want more than we need. -want more than we can get.
want more than we can get
The increase in the demand for widgets, shown in the figure above, is the result of an increase in the price of McBoover devices. Therefore -widgets and McBoover devices are substitutes. -McBoover devices are a normal good. -widgets and McBoover devices are complements. -widgets are a normal good.
widgets and McBoover devices are substitutes.
If the United States can increase its production of automobiles without decreasing its production of any other good, the United States must have been producing at a point -within its PPF. -on its PPF. -beyond its PPF. -None of these is correct because increasing the production of one good without decreasing the production of another good is impossible.
within its PPF.
On Saturday morning, you rank your choices for activities in the following order: go to the library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the library. Your opportunity cost is -working out at the gym, having breakfast with friends, and sleeping late. -not clear because not enough information is given. -working out at the gym. -zero because you do not have to pay money to use the library.
working out at the gym.
