Econ 200 Midterm 1

If the amount of carbonated sodas consumed continues to decline as consumers continue to choose to buy healthier products, this will likely

increase the demand for premium water, because premium water and carbonated sodas are considered substitutes

The production possibilities frontier shows the ____________ combinations of two products that can be produced in a particular time period with available resources.

maximum attainable

Olive oil producers want to sell more olive oil at a higher price. Which of the following events would have this effect?

research find that consumption of olive oil reduces the risk of heart disease.

A change in all of the following variables will change the market demand for a product except

the price of a product

Which of the following is a factor or production? A) a necklace produced by a jewlery manufacturer B) 50 shares of google stock C) the security guard at the local bank D) 1,000 in casino chips

the security guard at the local bank

Which of the following statements about price elasticity of demand is false

the value of the price elasticity of demand is the reciprocal of the value of the demand curve's slope

Trinh quits his ​$80,000-a-year job to become a full−time volunteer at a museum. What is the opportunity cost of his​ decision? A. the value he attributes to the joy of working at a museum B. at least​ $80,000 C. depends on the​ "going rate" of museum employees D. 0 since he will no longer be earning a salary

at least 80,000

increasing opportunity cost is represented by a ____________ production possibilities frontier

bowed out

__________ increases economic efficiency because it forces firms to produce and sell good and services as a long as the additional benefit to consumers is greater than the additional cost of production.

competition

Elvira decreased her consumption of bananas when the price of peanut butter increased. For Elvira, peanut butter and bananas are

complements

An article in the Wall Street Journal in early 2001 noted two developments in the market for laser eye surgery. The first development concerned side effects from the surgery, including blurred vision. The second development was that the companies renting eye-surgery machinery to doctors had reduced their charges. In the market for laser eye surgeries, these two developments

decreased demand and increased supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of laser eye surgeries.

Which of the following is a positive economic statement?

if the price of beef falls, a larger quantity of it will be bought.

Harvey Rabbitt pays for monthly cable TV service. Last week the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area. How is the market for cable TV services affected by this?

there is an increase in the supply of cable TV service

Which of the following correctly describes the relationship between economic efficiency and economic equity?

there is often a trade-off between the two

Which of the following is a result of a market economy?

voluntary exchange

The price elasticity of demand for stork ice cream -4. Suppose you're told that following a price increase, quantity demanded fell by 10 percent. What was the percentage change in price that brought this change in quantity demanded?

2.5 percent

Which of the following statements is true?

A increase in demand causes a change in equilibrium price; the change in price does not cause a further change in demand or supply

Due to wildfires in Northern California, agriculture experts predict a 30 percent decline in this year's grape harvest. What happens in the California wine market as a result of this announcement?

The demand curve for California wine shifts to the right in anticipation of higher prices in the future

Which of the following is a microeconomic question?

Will the merger of American Airlines and US Airways increase or decrease airfares?

If, in response to an increase in the price of chocolate, the quantity of chocolate demanded decreases, then economists would describe this as

a decrease in quantity demanded

Which of the following would shift the supply curve for MP3 players to the right?

a decrease in the price of an input used to produce MP3