Economics
Suppose during a year an economy produces $6 trillion of consumer goods, $1 trillion of investment goods, $2 trillion in government services, and has $3 trillion of exports and $2 trillion of imports. GDP would be:
$10 trillion.
In Table 1.1, the highest opportunity cost of missiles in terms of houses is:
10.00 missiles per house.
If the price elasticity of demand is 2.5 then a 40% increase in the price of the good will lead to a X percent increase in the quantity demanded
100
In Table 1.1, what is the opportunity cost of increasing the production of missiles from 2 to 3 in terms of houses?
7.00 houses.
Based on Figure 1.2, if a student wants to achieve a grade-point average of 2.0, he or she should study:
An average of 20 hours per week.
Which of the following is an example of government failure?
An increase in bureaucracy and red tape that fails to improve economic outcomes.
Which of the following would cause the equilibrium price of labor to increase
An increase in the desire for leisure
The law of demand explains why people
Are willing to buy more of a good as price falls.
The law of demand in the law of diminishing marginal utility are related since both
Assume that the first units consumed have a more utility than subsequent units
The equilibrium price for a perfectly competitive firm always occurs
At the intersection of market supply and market demand
It is impossible to
Avoid fixed costs in the short run
The direct exchange of one good for another is known as
Barter
Which of the following is not a characteristic of a perfectly competitive market
Brand loyalty
Which of the following practices is Microsoft accused of using to restrict competition
Bundling products
If consumers want to increase wages and the number of jobs for Strawberry pickers they should
Buy more strawberries
Producers _____ factors of production in the _____ market
Buy; factor
A monopolist
Charges a higher price than a competitive firm
A change in demand means there has been a shift in the demand curve and a change in the quantity demanded
Corresponds to a movement along the demand curve
In the headline article in the text titled dramatic rise in teenage smoking a decrease in the price of cigarettes cost teen smoking to rise dramatically. If the price elasticity of demand is relatively elastic then total revenue
From cigarette sales will increase
In the long run a company will stay in business as long as price is
Greater than or equal to average total cost
If a firm can change market prices by altering its output, then it
Has market power
The largest component of U.S. GDP is:
Household consumption.
The main difference to an Economist between short run and long run is that
In the long run all resources are variable where I was in the short run at least one resource is fixed
Which of the following plays an increasingly important role in the U.S. economy?
International trade.
Which of the following is likely to cause an outward shift of the production possibilities curve?
Investment in telecommunications networks.
A market
Is any place where goods are bought and sold
The demand curve for an individual monopolist
Is the same as the market demand curve
An individual wheat farmer has no market power because
It must accept the equilibrium market price.
Carlos crop dusting service charges competitive prices even though it has no competition this is most likely because
It operates in a contestable market
When comparing GDP per capita, which list ranks countries correctly from largest to smallest?
Japan, Mexico, Haiti.
Which of the following is not an effective barrier to entry
Low capital requirements
According to the law of diminishing returns as more workers are hired
Marginal physical product declines
The law of diminishing returns states that beyond some point the
Marginal physical product of a variable input declines as more of it is used
A monopolist sets price at a point on the demand curve corresponding to the rate of output determined by the intersection of
Marginal revenue and marginal cost
Why would a monopolist never set a price on a point in the inelastic portion of the demand curve
Marginal revenue would be negative and therefore well below the marginal cost curve
The most desirable rid of output is the one that
Maximizes total profit
Which of the following is an example of perfect competition
Mini small farms all produce the same good
The factors of production include all of the following except:
Money
A headline article in the text is titled OPECs cut aims to prop up prices. When OPEC member nations were collectively to set their combined rate of output they're attempting to duplicate what outcomes
Monopoly
If a quantity demand rises significantly following a moderate price cut then demand is
Most likely elastic
Real GDP is a more accurate measure of economic growth than nominal GDP because:
Nominal GDP can increase due to an increase in production or prices or both.
Marginal cost pricing refers to the
Offer of good at prices equal to their marginal cost
Ceteris paribus means
Only one determinant is being changed while all others remain unchanged
Given income and resource constraints the market mechanism typically arrives at the what outcome
Optimal
The price of elasticity of demand is defined as the
Percentage change in quantity demanded divided by the percentage change in price
Which of the following has not been a century-long trend in the United States?
Relative decline in services.
Economic interactions with others are necessary because
Resources are limited
The supply curve for labor is upward sloping to the right because as wages... The quantity of... Rises
Rise; labor supplied
As a person works more hours and leisure time decline the opportunity cost of labor... And the marginal utility of income...
Rises; falls
The market supply of labor
Shift to the right when more workers enter the labor market
A perfectly competitive firm currently sells 30,000 cartons of eggs at $1.25 each if the firm wants to sell more carton of eggs the firm
Should price the carton at $1.25
In economics, which of the following represents entrepreneurship?
Skill in creating products and services.
Which of the following is true about the short run
Some inputs are fixed
The location of the firms products supply curve depends on
Technology
In general, state and local taxes:
Tend to be regressive.
The best measure of the economic cost of doing your homework is
The best opportunity you give up when you do your homework
Total profit can be calculated as
The difference between price and average total cost multiplied by the quantity sold
Which of the following is true about the factors of production?
The factors plus technology determine the physical limits to production.
If the cost of daycare increase is causing some workers to leave the labor market and stay home with their children
The labor supply curve shifts to the left
The opportunity cost of playing tennis with your friend is:
The next-best alternative use of your time that is forgone.
Ceteris paribus which of the following will cause the supply of paper to decrease
The price of lumber, an ingredient in paper production, increases
When economists talk about a tradeoff between "guns and butter," they mean:
The production of more military goods may require fewer consumer goods.
Which of the following is an example of labor as a factor of production?
The skills and abilities of workers.
The market demand for a particular good indicates
The total quantities buyers are willing and able to purchase at alternative prices
GDP most closely measures:
The total value of all final goods and services produced within a nation's borders in a given year.
Which of the following is not true about investment goods?
They increase the retirement benefits for individuals.
Average total cost is defined as
Total cost divided by the quantity produced
The market value of all resources used in producing a good or service is expressed by
Total costs
If a perfectly competitive firm produces and sells more output what will definitely increase
Total revenue
Which of the following is not included in U.S. GDP?
Toys produced by a U.S. firm located in China.
A price increase will cost total revenue to stay the same for a producer only if the price elasticity demand for its product is
Unitary elastic
According to the upward sloping labor supply curve at lower wages
Workers are less willing to supply labor
If there are only four companies that produce tennis balls the market could be considered
an oligopoly
Which of the following is a factor of production for Kathy's cookies
flour
Which of the following market structures has the fewest barriers to entry
perfect competition
Over the last century in the United States there has been an increase in _______ as a percentage of total output.
services
The planning period over which at least one resource input is fixed and quantity is the
short run
Which of the following is not an example of investment?
A business owner uses his profits to play the lottery and wins.
Which of the following will decrease the market demand for labor
A decrease in the price of the product produced by labor
Ceteris paribus, which of the following will cause an inward shift of the production possibilities curve?
A decrease in the size of the labor force.
Which of the following causes demand to be more elastic with respect to price
A higher ratio of price to income
Which of the following is associated with microeconomics?
A specific U.S. industry's sales figures.
Consumer goods:
Account for two-thirds of total U.S. output.
In making a production decision a business owner
Decides the short-run rate of output.
One headline article in the text bitter Florida cold drives up orange juice prices describes the impact of a freeze on Florida crops. What will happen to the equilibrium quantity of citrus crops if the supply decreases?
Decrease
Suppose the price elasticity of demand for tacos is 0.80 if the price of tacos increases by 10% then quantity demanded of tacos should
Decrease by 8%
Which of the following is not a characteristic of a monopoly
Differentiated product
Net exports measures the:
Dollar value of exports minus the dollar value of imports.
The market demand for labor depends on all of the following except
Each worker's willingness to work at alternative wage rates
Which of the following is not considered a barrier to entry
Equilibrium pricing
If the price elasticity of demand is 1.5 and affirm raises its price by 20% the quantity sold by the firm will
Fall by 30%
Total revenue is equal to the
Price of the product multiplied by the quantity sold
In which of the following instances will total revenue decline
Price rises and demand is elastic
In attempting to answer the WHAT question, a society seeks to:
Produce the optimal mix of output.
Which of the following does not influence consumer demand
Producer behavior
An individual competitive firm
Produces a small portion of output relative to the market
Technological advances contribute to:
Productivity increases.
Consumers
Provide dollars to the product market
According to the law of demand if the price of a computer game increases from $25-$30 the
Quantity demanded of computer games will decrease