Exam 1-Quiz Study

how an economy's resources are to be owned; how decisions about the resources are to be made

An economic system is the set of rules that define _______ and _______.

comparative advantage

An economy that has the lowest cost for producing a particular good is said to have a(n):

variable

Anything whose value can change is a:

Rent0; Rent1

If rent controls are imposed, they will most likely be set at either _______ or _______.

some renters would be willing to pay a price as high as Rent4 for Q0 units

If rent controls are set at Rent 0:

sole proprietorships and partnerships.

Most firms in the United States today are:

the value of the best alternative forgone in making any choice

Opportunity cost is:

indicate combinations of guns and butter that society can produce using all of its factors efficiently

Points A, B, E, and F:

are factual and can be tested

Positive Statements:

can result in inequitable outcomes.

Price controls:

the fallacy of false cause

Reaching the incorrect conclusion that one event causes another because the events tend to occur together is called:

often help high-income families.

Rent controls:

natural resources

Resources from nature that can be used to produce other goods and services are called:

a choice must be made among two or more alternatives

Scarcity exists when:

constant

Something whose value does not change is a:

relationship between the quantity of a good or service sellers are willing to offer for sale and various prices, all other things unchanged

Supply is best defined as the:

rent seeking

Suppose an oil producer wants to ensure her business by lobbying her government to tax electric cars. This rationale for the tax—handicapping the business of one's competitors—is called:

a and b are true

There is equilibrium in the market when: a. there is no shortage or surplus. b. quantity supplied equals quantity demanded. c. demand equals supply. d. a and b are true

a price floor would be set at P4, causing a surplus of Q3 - Q0

To help farmers:

model

A simplified representation of a particular problem is a:

the scientific method

A systematic set of procedures through which knowledge is created is:

The initial price and quantity (at intersection of S 1 and D) in equilibrium are:

$2.50 and 300 gallons.

All of the above are true

A tax: a. is mandatory. b. is generally linked to some activity, such as a purchase. c. discourages the activity being taxed. d. All of the above are true

a decrease in the number of sellers in the market.

A decrease in supply is caused by:

a shift to the left of the entire supply curve

A decrease in supply means:

consumer preferences and information

A decrease in the demand for eggs caused by concerns over cholesterol is most likely attributable to which demand shifter?

u to v in Figure (d)

A decrease in the fee charged for music downloads would result in a change illustrated by the move from:

the move from p to q in Figure (b)

A decrease in the number of websites supplying music downloads would result in a change illustrated by:

better technology in the production of gasoline

A factor that may have changed supply from S 1 to S 2 is:

sole proprietorship

A firm owned by one individual is called a:

theory

A hypothesis that has been tested extensively without being rejected and has won widespread acceptance is a:

people have unlimited wants facing limited means to satisfy them

A key theme fundamental to all of economics is:

equilibrium price is below the actual price

A market surplus occurs if the:

a hypothesis

A proposition about the relationship between two variables that can be proven false is called:

a factor of production that has been produced

Capital is best considered as:

all other things unchanged

Ceteris Paribus means:

$13

Consider the demand and supply for movie tickets in a small town. When the government imposes a $5 tax on the sale of movie tickets, the (net) price ultimately paid by buyers will be:

$8

Consider the demand and supply for movie tickets in a small town. When the government imposes a $5 tax on the sale of movie tickets, the (net) price ultimately received by sellers will be:

falls from 130 to 80.

Consider the demand and supply for movie tickets in a small town. When the government imposes a $5 tax on the sale of movie tickets, the quantity traded in the marketplace:

factors of production

Economic resources used in the production process are called:

how people choose among the alternatives available to them

Economics, generally speaking, is primarily concerned with:

free international trade

Economists are generally in support of:

concerned with developing theories and interested in solving problems

Economists are:

an increase in demand for potatoes

Given that meat and potatoes are complementary goods, if the price of meat decreases substantially, there would be:

at the old price of $2.50, there will be pressure for the price to fall

Given the equilibrium after a change in supply from S 1 to S 2:

$2.50; rise

Given the initial equilibrium of S 1 and D, any price lower than _____________ will create pressure for the price to ________.

the revenue argument.

Governments often impose taxes because they need money to fund their operations. This rationale for the tax is called:

paternalism

Governments often impose taxes because they want to discourage behaviors that officials believe is undesirable. This rationale for the tax is called:

labor

Human effort that can be applied in the production process is called:

70

If Barbara is only able to purchase 20 bags of chocolate-covered peanuts, the maximum price she is willing and able to pay for each bag is ________ cents.

50

If George is only able to purchase 30 bags of chocolate-covered peanuts, the maximum price he is willing and able to pay for each bag is ________ cents.

105

If George, Barbara, and Dan are the only three buyers in the market, and the price of a bag of chocolate-covered peanuts is 80 cents, the total market demand is ________ bags per month.

Q3 - Q0

If a price floor at P 4 is set to help farmers in terms of income and government wants to assure farmers that their output will be purchased, the government would have to purchase an amount of output equal to:

command socialism

If an economy's factors of production were owned by the government sector and the coordinating activity was done by a government planning board, the economy would be called:

quantity will go down but the effect on price is indeterminate

If demand and supply both decrease:

24

If the economy produces 2 units of consumer goods per period, it also can produce at most _______ units of capital goods per period.

involves a loss of 8 units of guns per period

If the economy were operating at point B, producing 16 units of guns and 12 units of butter per period, a decision to move to point E and produce 20 units of butter:

this is a possible choice, but would involve unemployment and/or inefficiency

If the economy were producing 8 units of guns and 12 units of butter per period:

law of demand

If the price of chocolate-covered peanuts increases from 40 cents to 50 cents, Dan will reduce his quantity demanded from 160 bags to 140 bags due to:

25

If the price of chocolate-covered peanuts is 60 cents, the quantity demanded by George is ________ bags per month.

factors of production are owned privately and decisions about their use are basically made by individuals

In a market capitalist economy:

primarily due to technological change and an increase in the number of sellers.

In the personal computer industry, the reason for the fall in prices and the increase in quantity after 1980 was:

supply shifters

In the textbook, the prices of the factors of production, returns from alternative activities, technology, seller expectations regarding future prices, and the number of sellers are called:

specialization in the production of goods

International trade is possible in part through:

technology

Knowledge that can be applied to the production of goods and services is:

the kinds and quantities of goods and services produced

The answer to, "What goods are to be produced?" deals with:

microeconomics

The branch of economics that examines the choice of consumers and firms is:

corporations

The bulk of the nation's output is produced by:

cannot be attained given the level of technology and the factors of production available

The combination of guns and butter at point H:

what, how, and for whom

The fundamental economic questions that every economic system must answer are:

an increase in the purchases of personal computers results from lower prices

The law of demand is illustrated when:

production possibilities

The model that shows the goods and services the economy is capable of producing is the model of:

8

The opportunity cost of producing the fourth unit of consumer goods is ___ __ units of capital goods.

The equilibrium price falls, and the equilibrium quantity rises

The price of apples falls. What happens in the market for apple pies?

aggregates in the economy

The primary emphasis in macroeconomics in on:

demand

The relationship between the price of a good and the quantity people are willing and able to purchase is:

A and B are true

The relationship between the value and price of a stock suggests that: :a. the equilibrium price of a stock strikes a balance between those who think the stock is worth more and those who think it's worth less at the current price. b. it is the market's best guess regarding the expected value of the company's future profits. c. stocks are overvalued. d. A and B are true

human capital

The set of acquired skills and abilities that workers bring to the production of goods and services is:

capital, labor, and natural resources

The three broad types of factors of production are:

major topics in macroeconomics

Unemployment and inflation are:

the burden does not depend on who the government collects the tax from.

When the government imposes a tax on a product, buyers will be most negatively impacted if:

$1.50; an improvement in refining technology

When the supply curve shifted from the initial equilibrium to the new intersection of supply and demand at a price of ________ and quantity of 400, this could have resulted from ________.

All of the above are true

Which of the following statements is (are) true? a. A model is a set of simplifying assumptions about some aspect of the real world. b. Models are based on assumed conditions that are simpler than those of the real world. c. A model cannot be a complete representation of the real world. d. All of the above are true.

a change in price

Which of the following would result in a movement along the demand curve?

Rent2; Q2

Without rent controls, the equilibrium rent is _______ and the equilibrium quantity is _______.