Exam 1 Principles of economics
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.
"For whom"
The above shows the demand schedule and supply schedule for chocolate chip cookies. What is the equilibrium quantity and price chocolate chip cookies?
4 pounds $5 per pound
price ceiling
A legal maximum on the price at which a good can be sold
In the above figure, a price $15 per dozen for roses would results in
A shortage because a price that low would increase the demand
Which of the following is NOT one of the factors that influences the supply of a product?
Income
In every economic system choices must be made because resources are ------ and our our wants are too.
Limited
Studying the effects choices have on the individual markets within the economy is part of
Macroeconomics
An increase in number of suppliers in a market results in?
Movement up along the supply curve
A supply curve shows the relation of quantity of a good supplied and
The price of a good. Usually a supply curve has negative slope.
Normative economic statements
What "ought" or should be
A price below the equilibrium price results in
excess supply
Rational consumer
means they have well defined goals and try to fufill them as best as they can
seller's surplus
the difference between the price received by the seller and his or her reservation price
Which figure shows the demand for fruit snacks when there is an increase of price of non-fruit snacks?
the price would increase up the line
When China builds a dam using few machines and a great deal of labor, it is answering the ________ question
"How"
When a California farmer decides to harvest lettuce using machines instead of by migrant workers, the farmer is answering the______ part one of the two big economic questions.
"How"
When firms in an economy start producing more computers and fewer televisions, they are answering the ________ part one of the two big economic questions?
"What"
Suppose people buy more of good 1 when the price of good 2 falls. These goods are
Compliments
The quantity demanded of a good or service is the amount that
Consumers plan to buy during a given time at a given price.
Opportunity cost
Cost of the next best alternative use of money, time, or resources when one choice is made rather than another
The above figures show the market for oranges. Which figure shows the effect of changing consumer preferences for more orange juice and less coffee in the morning?
Figure A because it show the movement from left to right showing the decrease in coffee.
The figure above shows the demand for fruit snacks, which movement reflects an increase in demand?
From point a to point d basically means the line moves diagonally to a new line when the demand goes up
Opportunity cost means
Highest-valued alternative forone
Which of the following are TRUE regarding positive statements? I. They describe what "ought" to be II. They describe what is believed about how the world appears III. They can be tested as to their accuracy
II and III
In broad terms the difference between microeconomics and macroeconomics is that
Microeconomics studies individuals and business decisions, while macroeconomics analyzes the decisions made by countries and governments. Microeconomics focuses on supply and demand, and other forces that determine price levels, making it a bottom-up approach.
The term used to emphasize that making choices in the face of scarcity involves a cost is
Opportunity cost
economic surplus
The difference between benefit and cost
The price of cereal rises. As a result, people have cereal for breakfast on fewer days and eat eggs instead. This behavior is an example of
a decrease in quantity demanded because of the substitution effect.
change in supply
a shift of the supply curve, which changes the quantity supplied at any given price
positive economic statement
can be tested against the facts basically can be proved or disproved.
All economic questions are about
how to make money
People buy more of good 1 when the price of good 2 rises. These goods are
substitutes
marginal cost
the cost of an additional unit or activity
buyer's surplus
the difference between the buyer's reservation price and the price he or she actually pays
marginal benefit
the extra benefit of adding one unit
The "Law of demand" states that changes in
the quantity demanded of a good are inversely related to changes in its price.
Economics
the study of how people make choices under conditions of scarcity and of the results of those choices for society
Macro economics topics include
total nationwide employment
