Econ 102 Q1

In economics, the term ___________ means "additional" or "extra" A) Marginal B) Allocative C) Optimal D) Equity

A) Marginal

All of the following are part of an economic model except: A) opinions B) assumptions C) hypotheses D) data

A) opinions

Economists assume that rational people do all of the following except: A) undertake activities that benefit others and hurt themselves B) respond to economic incentives C) weigh the benefits and costs of all possible alternative actions D) use all available information as they act to achieve their goals

A) undertake activities that benefit others and hurt themselves

A decrease in the price of GPS systems will result in: A) an increase in the supply of GPS systems B) a smaller quantity of GPS systems supplied C) a larger quantity of GPS systems supplied D) a decrease in the demand for GPS systems

B) a smaller quantity of GPS systems supplied

An outward shift of a nation's production possibilities frontier represents: A) a situation in which a country produces more of one good and less of another B) economic growth C)an impossible situation D) rising prices of the two goods on the PPF model

B) economic growth

The highest valued alternative that must be given up to engage in an activity is the definition of: A) marginal benefit B) opportunity cost C) marginal cost D) economic equity

B) opportunity cost

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shifts to the left, but the supply curve shifts more than the demand curve. As a result: A) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease B) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease C) both the equilibrium price and quantity of MP3 players will decrease D) the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase

B) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease

Economists assume that individuals: A) behave in unpredictable ways B) will never take actions to help others C) are rational and respond to incentives D) prefer to live in a society that values fairness above all else

C) are rational and respond to incentives

The 3 fundamental questions that any economy must address are: A) how much will be saved; what will be produced; and how can these goods and services be fairly distributed? B) what will be the prices of goods and services; how will these goods and services be produced' and who will receive them? C) what goods and services to produce; how will these goods and services be produced; and who receives them? D) who gets jobs; what wages do workers ear; and who owns what property?

C) what goods and services to produce; how will these goods and services be produced; and who receives them

Olive oil producers want to sell more olive oil at a higher price. Which of the following events would have this effect? A) an increase in the price of olive oil presses B) an increase in the price of land used to plant olives C) a decrease in the cost of transporting olive oil to markets D) research finds that consumption of olive oil reduces the risk of heart disease

D) research finds that consumption of olive oil reduces the risk of heart disease