review

12. If Scout has an absolute advantage over Dill:

D. Scout can accomplish more in a given period of time than can Dill. 12.

Chris has a one-hour break between classes every Wednesday. Chris can either stay at the library and study or go to the gym and work out. The decision Chris must make is: :

: D. an economic problem because Chris has only one hour during which he can study or work out.

49. If the quantity demanded of a good is Q when the price for the good is P, the price elasticity of demand for that good at that point is:

A. (P/Q)*(1/slope)

50. If the slope of the demand curve is -1.4, price is $5 and quantity demanded is 13 units, the price elasticity of demand is:

A. 0.27

36. What might cause a demand function to shift to the right?

A. An increase in the price of a substitute.

34. A movement along a demand curve from one price-quantity combination to another is called:

A. a change in quantity demanded.

38. Suppose that the technology used to manufacture laptops has improved. The likely result would be:

A. an increase in supply of laptops.

37. If the price of computers increases and the demand for monitors decreases as a result, then:

A. computers and monitors are complements.

If the percentage change in the price of a good is less than the percentage change in the quantity demanded of that good then the demand for that good, with respect to price, is:

A. elastic.

19. Application of the Principle of Comparative Advantage leads to:

A. greater specialization of labor and other factors of production.

18. Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: Joe's opportunity cost of selling a car is ______ than Ralph's, and Joe's opportunity cost of selling a car is ______ than Larry's.

A. less; greater

27. Gertie saw a pair of jeans that she was willing to buy for $35. The price tag, though, said they were $29.99. Therefore:

C. Gertie should buy the jeans because the price is less than her reservation price.

3. If all the world's resources were to magically increase a hundredfold, then:

A. the scarcity principle would still govern behavior.

14. Which of the following statements is always true?

B. Comparative advantage does not require absolute advantage. C. Absolute advantage requires comparative advantage.

25. You have noticed that your next-door neighbor, Mary, always works in the garden and her husband, Joe, always walks the dog. Based on this observation, you conclude that:

B. Joe has a comparative advantage in walking the dog.

15. Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: ________ has an absolute advantage in selling cars and __________ has an absolute advantage in selling trucks.

B. Larry; Ralph

The seventh glass of soda that Tim consumes will produce an extra benefit of 10 cents and has an extra cost of zero (Tim is eating at the cafeteria). The cost-benefit principle predicts that Tim will:

B. drink the seventh glass and continue until the marginal benefit of drinking another glass of soda is zero.

28. The supply curve illustrates that firms:

B. increase the quantity supplied of a good when its price rises.

47. Jeans in general have fewer close substitutes than any specific brand of jeans. Therefore, the demand for jeans in general would be _______ than the demand for a specific brand of jeans.

B. more inelastic

35. If the demand for a good decreases as income decreases, it is a(n): A. complementary good.

B. normal good.

41. The percentage change in quantity demanded that results from the percentage change in price is known as the:

B. price elasticity of demand.

42. If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent, then demand for textbooks is:

B. price inelastic.

2. The central concern of economics is:

B. scarcity.

4. At the very least, Joe Average and Bill Gates are both identically limited by:

B. the 24 hours that comprise a day.

10. The opportunity cost of an activity is the value of:.

B. the next-best alternative forgone.

the price elasticity of demand for tickets to a football game is 2 then, when the price increases by 1%, quantity demanded decreases by:

C. 2%.

48. Satellite TV is a close substitute for cable TV. In the 1990's, small satellite TV units were developed that made it more practical for individual consumers to subscribe to satellite TV service. This caused the price elasticity of demand for cable TV service to:

C. become more elastic..

Refer to the figure above. Point y ___________________________ point v.

C. is equally as efficient as

Refer to the figure above. Becky's maximum production of sandals per hour is represented by point: Refer to the figure above. Of the labeled points, ______________ are efficient.

C. onlyw,x,y,z,andv

26. The demand curve illustrates the fact that consumers:

C. tend to purchase more of a good as its price falls.

40. In general, when the demand curve shifts to the right and supply remains constant then:

C. the equilibrium quantity will rise.

The production possibilities curve shows:

C. the maximum production of one good for every possible production level of the other good.

13. Having a comparative advantage in a particular task means that:

C. you give up less to accomplish that task than do others.

17. Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: For Ralph, the opportunity cost of selling a truck is:

D. 1/4 car not sold

16. Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: For Larry, the opportunity cost of selling a truck is:

D. 2 fewer cars sold.

24. According to the principle of increasing opportunity cost, expanding production requires using resources in which order?

D. Starting with the resource with the lowest opportunity cost and proceeding to the higher opportunity cost

29. A market comprised of a downward-sloping demand curve that intersects an upward-sloping supply curve is said to be stable because:

D. at any price other than equilibrium, forces in the market move price towards the equilibrium

30. A market in disequilibrium would feature:

D. either excess supply or excess demand.

Refer to the figure above. At a price of $9, the market will experience______________ in the amount of __________ units.

D. excess supply; 5 units

When the demand for a good is inelastic, that good is likely to have:

D. few close substitutes.

The cost-benefit principle indicates that an action should be taken:

D. if the extra benefit is greater than or equal to the extra costs.

Refer to the figure above. If supply were to shift to the left, and demand were to also shift to the left, in the new

D. quantity would be lower, but the direction of the price change cannot be determined.

11. Sally earned $25,000 per year before she became a mother. After she became a mother, she told her employer that her opportunity cost of working is now $50,000, and so she is not willing to work for anything less. Her decision is based on:

D. the value she places on spending time with her child.

1. Economic questions always deal with

D.choice in the face of limited resources.

43. Price elasticity of demand is often expressed as a positive number because:

it's convenient to use absolute values even though the formula yields non-positive numbersIf

31. A shortage occurs when:

quantity demanded exceeds quantity supplied