ECON 102 Questions
The term ceteris paribus means all other things remaining constant or equal. the study of scarcity and choice. value-free and testable. the greatest good for al
all other things remaining constant or equal
The Just Price Theory holds that there's a single price at which each good should be sold. This is: the current consensus among economists an example of normative analysis an extension of the subjective theory of price Adam Smith's theory of where prices come from
an example of normative analysis
If the price of oil rises, producers of oil will increase the quantity of oil supplied supply less oil. cut the price. leave the amount of oil supplied unchanged
increase the quantity of oil supplied
The reason it's important to understand the difference between the "real" and "nominal" values of money is what matters to people is the face value of money what matters to people is the purchasing power of money or income people respond more to explicit, or nominal, costs than to implicit costs
what matters to people is the purchasing power of money or income
According to the law of demand, other things being equal when people's income goes up, then they buy less of a good. when people's income goes up, then they buy more of a good. when the price a good goes up, then people buy less of that good. when the price a good goes up, then people buy more of that good
when the price a good goes up, then people buy less of that good.
A rational individual will never consume a unit of a good if its marginal utility is less than average utility. marginal utility is negative. marginal utility is increasing. marginal utility is diminishing
Correct marginal utility is negative.
Trina's Tropical Fish Store sells goldfish for $2 each and angelfish for $10 each. What is the opportunity cost of buying a goldfish? 1/5 of an angelfish $2 $10 5 angelfish
1/5 of an angelfish
Which of the following is an example of the law of supply? The price of labor has increased and producers decrease supply. The amount of a good purchased increases when the price decreases. The price of gum has increased so producers are making more gum. Producers provide less of a good when the price increases.
The price of gum has increased so producers are making more gum
Typically, an individual takes only one newspaper from the bin because there are limited amounts of newspapers in the bin. total utility will rise with consumption of more than one newspaper. of the low marginal utility of additional newspapers. marginal utility increases with the first consumption of newspapers
of the low marginal utility of additional newspapers
The saying that "You cannot have your cake and eat it too" illustrates the economic concept of physical capital. a positive statement. a normative statement. opportunity cost
opportunity cost
Ceteris paribus, as the price of a good or service increases people will buy more of it. people will buy less of it. people will want more of it. people will want less of it.
people will buy less of it
The concept of "demand" in economics refers to the different types of goods and services that people of different income levels want to buy changes in people's consumption behavior over time the different quantities of a good or service people will buy at different possible prices how changes in the prices of all goods affect people's buying behavior
the different quantities of a good or service people will buy at different possible prices
The opportunity cost of attending college might best be described as the value that the student attaches to not working the highest-valued alternative use of the student's time the lowest-valued alternative use of the student's time. the money that must be paid in order to attend college.
the highest-valued alternative use of the student's time
The principle that "as more of a good is consumed, its extra benefit declines" is known as the law of diminishing marginal utility. the law of comparative advantage. the law of demand. the law of diminishing marginal product.
the law of diminishing marginal utility