HW 3 Study
Jeb makes the following four statements about peanuts. Which statement best describes his quantity demanded in the peanut market?
At a price of $1 per pack, I plan to buy 2 packs of peanuts per week.
The restaurant Big Lobster sells lobster and fish, and so too does the restaurant H Salt.If Big Lobster's opportunity cost of preparing lobster exceeds H Salt's opportunity cost of preparing lobster, then ______________.
H Salt has a comparative advantage in preparing lobster
Complete the following sentences.______________ choose the quantities of labor, land, capital, and entrepreneurship to sell or rent.______________ choose the quantities of factors of production to hire.
Households; Firms
Which of the following statements about the market for chicken describes a change in the quantity demanded and which describes a change in demand?I People are buying less chicken because the price of beef has fallen.II People are buying less chicken because the price of chicken has increased.III People are buying more chicken because the price of chicken has fallen.IV The cost of chicken feed has increased.
I is a change in demand and II and III are changes in the quantity demanded.
Which of the following statements is about a normal good, which is about an inferior good, which is about both, and which is about neither?I With incomes falling in the recession, people are buying more chicken.II People are buying more beef now that incomes have increased.III People are buying more chicken because the price of chicken has fallen.IV With higher incomes people are switching from chicken to beef.
I is inferior, II is normal, III is neither, and IV is both
Martha can produce 50 quilts or 200 batches of chocolate chip cookies in a month.Jane can produce 10 quilts or 5 batches of chocolate chip cookies in a month.Distinguish between comparative advantage and absolute advantage.______________ has an absolute advantage in both goods.
Martha
Ed and Ruth grow strawberries and raspberries.Ed has a comparative advantage in producing strawberries if ______________.
Ruth's opportunity cost of producing strawberries is greater than Ed's opportunity cost of producing strawberries
Which of the following statements by Tom demonstrates that his buying plans obey the law of demand?
The only thing that's changed is the price of textbooks: they've become more expensive and now I'm not buying as many.
Which of the following is an example of absolute advantage?
Tom does his math homework in 2 hours while Harry takes only 30 minutes to do the same task.
Complete the following sentence.Social institutions such as firms, markets, property rights, and money ______________.
are required for society to enjoy the benefits of specialization and trade
A market is an arrangement that brings ______________ together and enables them to get information and do business with each other.
buyers and sellers
What generates economic growth?Economic growth comes from ______________.
capital accumulation and technological advance
If, as the price of pasta decreases, the quantity of pasta sauce that people buy increases, then pasta and pasta sauce are ______________.
complements
Why do people specialize and trade?With specialization and trade, people can ______________.
consume at a point outside their PPF
A substitute is a good that is ______________ another good, and a complement is a good that is ______________ another good.
consumed in place of; consumed together with
The restaurant Big Lobster sells lobster and fish, and so too does the restaurant H Salt.If H Salt and Big Lobster decide to specialize and trade, then the source of the gains from the trade between H Salt and Big Lobsteris ______________.
divergent opportunity cost
Miles graduates from college and his income increases by $30,000 a year. Nothing else changes.Miles decreases the quantity of donuts and potato chips that he buys and increases the quantity of bottled water that he buys.For Miles, ______________.
donuts and potato chips are inferior goods
Complete the statement.An economy that uses new technology ______________.
experiences an outward shift of its PPF
Property rights are legally established titles to the ownership, use and disposal of ______________ and goods and services that are enforceable in the courts.
factors of production
Capital accumulation is the ______________, including ______________ capital.
growth of capital resources; human
Ed and Ruth grow strawberries and raspberries.If Ed also has an absolute advantage in growing strawberries and raspberries , he will ______________.
have a comparative advantage in one activity but not both
What is the law of demand and how do we illustrate it?The law of demand states that other things remaining the same, the ______________ the price of a good, the ______________.
higher; smaller is the quantity demanded
Ski trips and ski jackets are complements.If the price of a ski trip decreases , how does the demand for ski jackets change?If the price of a ski trip decreases, the demand for ski jackets will ______________.
increase , and the demand curve for ski jackets will shift rightward
As the average income in China continues to increase, explain how the following will change:a) The demand for beefb) The demand for rice.As the average income in China continues to increase, we would expect the demand for beef to ______________ and the demand for rice to ______________.
increase if beef is a normal good; decrease if rice is an inferior good
If the price of a printer falls from $80 to $40, while all other influences on buying plans are unchanged, the quantity of printers demanded ______________.
increases
A demand curve that illustrates the law of demand ______________.
is downward sloping
Complete the following statement.The opportunity cost of economic growth ______________.
is fewer consumption goods today
In an hour, Simon can catch 4 pounds of pickerel or pick 8 pounds of apples.In an hour, Fred can catch 4 pounds of pickerel or pick 20 pounds of apples. The opportunity cost of catching a pound of pickerel is ______________ for Simon than for Fred, and the opportunity cost of picking a pound of apples is ______________ for Simon than for Fred.
lower; higher
Define the quantity demanded of a good or service.The quantity demanded of a good or service is ______________.
measured as an amount per unit of time
Suppose that the price of a sundae falls but all other influences on buyers' plans remain the same.If the price of a sundae falls , a ______________ the demand curve occurs.If any factor that influences buying plans other than the price changes, then a ______________ the demand curve occurs.
movement down along; shift of
If, as Adrienne's income decreases, her demand for vacations decreases , then for Adrienne , vacations are ______________.
normal goods
The law of demand states that ______________, the ______________ the price of a good, the smaller is the quantity demanded.
other things remaining the same; higher
A demand curve shows the relation between the ______________ and ______________ when all other influences on buying plans remain the same.
quantity demanded of a good; its price
Economic growth is defined as the ______________.
sustained expansion of production possibilities
What are the influences on buying plans that change demand, and do these influences increase or decrease demand? When an event occurs that changes the demand for coffee makers, ______________ if demand increases and ______________ if demand decreases.
the demand curve shifts rightward; the demand curve shifts leftward
The expected price of a smartphone next year rises.What is the result of this event?As a result, ______________.
the demand for smartphones today increases
Technological change is ______________ new goods and of ______________ of producing goods and services.
the development of; better ways
Firms are institutions that organize ______________ of goods and services.
the production
Demand is ______________, when all other influences on buying plans remain the same.
the relationship between the quantity demanded of a good and the price of the good
Is the following statement TRUE or FALSE:The change in the price of a printer illustrates the law of demand in action.
true
A golf club membership is a normal good.If the price of a golf club membership is expected to rise next year, you predict that the demand for golf club memberships ______________ now.
will increase