Econ 202 Exam #1 Quiz Questions

The marginal utility per dollar of the third pretzel is

4

Choices have to be made about how resources are used

A consequence of the economic problem of scarcity is that

Increase the the demand for the advertised good

A successful advertising campaign will Cause the quantity supplied of the advertised good to increase. Increase the demand for the advertised good. Increase the absolute value of the price elasticity of demand for the advertised good. Reduce the perceived utility of the good.

To fall and equilibrium quantity to rise

An increase in the supply of gasoline, ceteris paribus, will cause equilibrium price And equilibrium quantity to rise. To rise and equilibrium quantity to fall. To fall and equilibrium quantity to rise. And equilibrium quantity to fall.

Decrease and the equilibrium quantity of jelly to decrease

Assume peanut butter and jelly are complements. Ceteris Paribus, an increase in the price of peanut butter will cause the equilibrium price of jelly to Increase and the equilibrium quantity of jelly to increase. Decrease and the equilibrium quantity of jelly to decrease. Increase and the equilibrium quantity of jelly to decrease. Decrease and the equilibrium quantity of jelly to increase.

There is insufficient use of of available resources

At point A, All available resources are being used efficiently. The available technology keeps production inside PP1. An increase in the production of mops would definitely require a decrease in the production of brooms. There is inefficient use of available resources.

D

Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left, ceteris paribus. Figure 3.1 Shifts of Supply and Demand Designer clothes: consumer confidence in the economy improves.

X and Y are substitutes, and the price of Y will increase

If the price of X increases and you buy more Y then... "X" and "Y" are substitutes, and the price of "Y" will decrease. "X" and "Y" are complements, and the price of "Y" will increase. "X" and "Y" are substitutes, and the price of "Y" will increase. "X" and "Y" are complements, and the price of "Y" will decrease.

Prices and profit

In a market economy, which of the following determines the answer to the WHAT to produce question? Direct negotiations between consumers and government. Government directives. Prices and profit. A democratic vote by all consumers.

False

Land, labor, and capital are bought and sold in the product market TRUE OR FALSE

The change in total utility obtained by consuming one additional unit of a good or service

Marginal Utility is

is a way for sellers to elicit the maximum willingness to pay from buyers

Price discrimination

Charging different prices based on willingness to pay can increase revenues without increasing costs

Sellers can gain profits from price discrimination because Different prices charged to different customers can lower total revenue. Total expenses are less with price discrimination. Charging different prices based on willingness to pay can increase revenues without increasing costs. Total revenues are maximized when all buyers pay the same price.

1 B-1 bomber

Table 1.1 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus. Table 1.1 Production Possibilities for Bombers Combination, #of B-1's, # Stealth bomber S 0 10 T 1 9 U 2 7 V 3 4 NA On the basis of Table 1.1, what is the opportunity cost of producing at point S rather than point T?

Price

The four determinants of demand that are held constant when we consider a movement along a demand curve include all of the following except Income Price Tastes Availability and price of substitute goods

The scarcity of resources relative to human wants

The fundamental problem of economics is

Total Profits

The goal of the nussiness firms in a market economy is to maxamize Total welfare. Total sales. Total utility. Total profits.

The use of market prices and sales to signal desired outputs

The market mechanism may best be defined as

The limitations that exist because of scarce resources

The production possibilities curve illustrates

A shortage exists at the old equilibrium price

When the demand for coffee increases, ceteris paribus, the equilibrium price will also increase because The market supply and demand curves do not intersect. Market demand must be upward-sloping. There must be a surplus of the good. A shortage exists at the old equilibrium price.

The entire curve shifts

When the relationship between two variables changes The entire curve shifts. The curve becomes linear. All of the choices are correct. There is movement from one point on the curve to another point on the curve.

A college student purchases a laptop computer.

Which of the following is a market transaction A college student purchases a laptop computer. A stock increases in value over the 30 years that it is owned. A radio station changes its programming from classical to rock. Weather destroys a farmer's crops, leaving the farmer unable to buy groceries.

Should we have economic growth

Which of the following is not a basic decision that all nations must confront? For whom should goods and services be produced? What goods and services should we produce? Should we have economic growth? How should we produce goods and services?

The cost of the factor inputs

Which of the following is not a determinant of demand? The price of other goods. Desire for the good. Income of the consumer. The cost of the factor inputs.

The price of pizza

Which of the following is not held constant when considering the demand for pizza? The price of pizza. Consumer incomes. Expectations of higher prices for pizzas. The price of spaghetti (a substitute).

What to produce with unlimited resources

Which of the following is not one of the three core economic issues that must be resolved? Who should get the goods and services we produce. What to produce with limited resources. How to produce the goods and services we select. What to produce with unlimited resources.

"I was willing to pay $30 for a dozen roses, but I bought them for $20"

Which of the following statements best captures the concept of consumer surplus? "I was willing to pay $30 for a dozen roses, but I bought them for $20." "I paid $35 for roses last week and just saw them for sale now at $25." "I was willing to pay $30 for roses, but they are selling for $35, so I did not buy." "I saw a sale for flowers, so I bought four bundles."

C

Which panel of Figure 3.3 represents the changes in the market for student housing when university enrollment increases and at the same time the university destroys several older residence halls and apartment buildings?