Econ 2100 Unit 1

Please list these in the order they go in a) A frost freezes fruit b) The supply of fruit goes down

a) 1 b) 2

What is a market? a) Anyplace that buyers and sellers meet to exchange goods and services. b) Only a farmers market is considered a market c) Only the labor market matters. This is where our wages are determined. d) Only the stock market is a true market. e) The illegal underground blank market

a) Anyplace that buyers and sellers meet to exchange goods and services.

Demand for a good goes up. Because of this the price of the good rise. a) True b) False

a) True

Does the budget constraint implies there is an opportunity cost when choosing between two goods. a) True b) False

a) True

As the __________ substitute for low-skill labor becomes available, the demand curve for low-skill labor will shift to the left. a) technology b) high-skill labor c) lower wage d) market

a) technology

In the market for labor. What happens to real wages when there is an increase in the demand curve? a) will stay the same b) will decrease c) will increase d) may increase, decrease or stay the same depending on the relative slopes.

c) will increase

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is: a) $0 b) $4 c) $40 d) $44

d) $44

Today the Broken Window Fallacy can similarly be applied to the fear of jobs being lost due to a rise in a) wages b) scarcity c) opportunity cost d) robotics

d) robotics

Choose the correct statement concerning natural disasters. a) They create jobs at the expense of other jobs, and they destroy wealth b) They create jobs, and create wealth c) They destroy jobs, but create wealth d) They destroy jobs, and destroy wealth

a) They create jobs at the expense of other jobs, and they destroy wealth

What does a budget constraint show? a) Various combinations of goods or services an individual can purchase with their income. b) The items a person wants, but cannot afford c) Government Spending Budget Wish List d) The ups and down of the stock market

a) Various combinations of goods or services an individual can purchase with their income.

Which of the following best describes a fiscal policy tool? a) government spending b) bank lending c) financial capital markets d) household spending

a) government spending

Philosophers draw a distinction between positive statements, which describe the world as it is, and ___________________s, which describe how the world should be. a) normative statement b) budget constraint c) trade-off d) opportunity cost

a) normative statement

The "law of supply" functions in labor markets; that is, a higher __________ for labor leads to a higher quantity of labor supplied. a) price b) demand c) supply d) quantity

a) price

The opportunity cost of attending university is likely to include all except which of the following? a) the cost of haircuts received during the school term b) the income you forgo in order to attend classes c) tuition fees d) the cost of required textbooks

a) the cost of haircuts received during the school term

As depicted in _________________________________, it is necessary to give up some of one good to gain more of the other good. a) the production possibilities frontier b) allocative efficiency c) scarcity d) utility

a) the production possibilities frontier

Macroeconomic topics do not usually include: a) the profit maximizing decisions of an individual manufacturer. b) the rate of inflation c) the rate of unemployment d) economic growth

a) the profit maximizing decisions of an individual manufacturer.

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of: a) the supply curve. b) the demand curve, as consumers try to economize because of the shortage. c) both the supply and demand curves. d) the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.

a) the supply curve.

Match the terms with the actions a) The demand curve shifts to the right b) There is a movement up the demand curve c) The demand curve shifts to the left d) There is a movement down the demand curve 1. Demand goes down 2. Demand goes up 3. Quantity demanded goes down 4. Quantity demanded goes up

a) 2 Demand goes up b) 3 Quantity demanded goes down c) 1 Demand goes down d) 4 Quantity demanded goes up

What is a chart that shows all possible combinations a country can produce of two different goods. It shows the trade off of producing more of one good over another one. a) A Productions Possibility Frontier b) Scarcity c) Incentives d) Opportunity Cost

a) A Productions Possibility Frontier

Who wrote: "The Wealth of the Nations"? a) Adam Smith b) Karl Marx c) John Maynard Keynes d) Milton Friedman

a) Adam Smith

In the Circular Flow Model do businesses demand or supply? (tricky question, think about it, there are two markets in the model) a) Both b) Demand c) Supply d) Neither

a) Both

If a window gets broken and somebody says, 'do not fret, this creates wealth because it creates a job for the glass maker'. What is that an example of: a) Broken Window Fallacy b) Scarcity c) Choices d) Production Possibilities Frontier

a) Broken Window Fallacy

What items could cause equilibrium quantity to go up a) Demand goes up b) Demand goes down c) Supply goes up d) Supply goes down

a) Demand goes up

Most economic decisions about what to produce, how to produce it, and for whom to produce it are made by buyers and sellers. a) Market-oriented economy b) Macroeconomy c) Microeconomy d) Command economy

a) Market-oriented economy

Interpret the following statement: "An increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market." a) The statement is correct. b) The statement would be correct if "quantity of wheat demanded" were substituted for "quantity of wheat supplied." c) The statement is incorrect because it confuses a change in quantity supplied with a change in supply. d) The statement would be correct if it read that a "decrease in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market."

a) The statement is correct.

Steel mill wage costs increase by 18 percent over a year. What is the likely economic effect on the market for steel? a) There is an increase in the cost of producing steel, which shifts the supply curve of steel to the right, thereby increasing the price of steel. b) There is an increase in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel. c) There is a decrease in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel. d) The increase in wage costs will shift the demand curve for steel to the left, increasing the cost of steel.

b) There is an increase in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel.

After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is: a) no change; only the supply curve for beef is likely to be affected. b) a shift of the demand curve for beef to the left. c) a movement down along the demand curve for beef to the right. d) a shift of the demand curve for beef to the right.

b) a shift of the demand curve for beef to the left.

Specialization a) leads to greater self-sufficiency. b) can lead to an increase in overall production. c) allows workers to develop skills by working on a large number of tasks d) is always the result of an inefficient use of resources

b) can lead to an increase in overall production.

Economic models like the _____________________ are not physical models, but instead are diagrams or graphs or even mathematical equations that represent economic patterns or theories. a) financial capital market b) circular flow diagram c) financial investment market d) specialization model

b) circular flow diagram

The ____________ is the quantity where quantity demanded and quantity supplied are equal at a certain price. a) quantity demanded b) equilibrium quantity c) demand schedule d) supply schedule

b) equilibrium quantity

In a market for a good, if there is a shift in supply (supply goes up). What happens to demand? a) Demand goes down b) Demand goes up c) There is a movement down along the demand curve. d) There is a movement up along the demand curve e) None of the above

c) There is a movement down along the demand curve.

Which of the following will not result in a rightward shift of the market supply curve for labor? a) a decrease in non-wage income b) an increase in the working-age population c) an increase in labor productivity d) an increase in immigration

c) an increase in labor productivity

Which of the following will not result in a leftward shift of the market demand curve for labor? a) a decrease in labor productivity b) a decrease in demand for the firm's product c) an increase in the wage rate d) a decrease in the firm's product price

c) an increase in the wage rate

In the ______________, households receive goods and services and pay firms for them. a) labor market b) financial capital market c) goods and services market d) savings market

c) goods and services market

Improvements in the productivity of labor will tend to: a) decrease wages b) decrease the supply of labor c) increase wages d) increase the supply of labor

c) increase wages

In the ____________, households work and receive payment from firms. a) financial investment market b) financial capital market c) labor market d) savings market

c) labor market

When nations desire a healthy macroeconomy, they typically focus on three goals, one of these being: a) balanced budget b) prudent monetary policy c) low inflation d) assuring competition between firms

c) low inflation

The basic difference between macroeconomics and microeconomics is: a) microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade. b) microeconomics concentrates on the behavior of individual consumers while macroeconomics focuses on the behavior of firms. c) microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy. d) microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment.

c) microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.

A more efficient means of processing algae to produce an anticancer drug is discovered. As a result, the supply curve for the drug will: a) shift to the right, increasing the price of the drug. b) shift to the left, increasing the price of the drug. c) shift to the right, decreasing the price of the drug d) shift to the left, decreasing the price of the drug.

c) shift to the right, decreasing the price of the drug

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the __________________ . a) demand curve to the right b) supply curve to the left c) supply curve to the right d) demand curve to the left

c) supply curve to the right

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is: a) nothing, because he enjoys playing basketball more than studying. b) the increase in skill he obtains from playing basketball for that hour. c) the benefit to his grades from studying for an hour d) nothing, because he had a free pass into the sports complex to play basketball.

c) the benefit to his grades from studying for an hour

When consumers and businesses have greater confidence that they will be able to repay in the future, _______________________. a) the quantity demanded of financial capital at any given interest rate will remain unchanged. b) the quantity demanded of financial capital at any given interest rate will shift to the left. c) the quantity demanded of financial capital at any given interest rate will shift to the right. d) the quantity demanded of financial capital at any given interest rate will achieve equilibrium.

c) the quantity demanded of financial capital at any given interest rate will shift to the right.

The information that markets generate to guide the distribution of resources is called: a) Opportunity cost b) Magic c) Scarcity d) Price Signals e) Economics

d) Price Signals

Which of the following results in a rightward shift of the market demand curve for labor? a) a decrease in labor productivity b) a decrease in the firm's product price c) an increase in the wage rate d) an increase in demand for the firm's product

d) an increase in demand for the firm's product

The nature of demand indicates that as the price of a good increases: a) suppliers wish to sell less of it b) more of it is produced c) more of it is desired d) buyers desire to purchase less of it

d) buyers desire to purchase less of it

Scarcity exists because of: a) the market mechanism. b) specialization and division of labor. c) the allocation of goods by prices d) unlimited wants and limited resources.

d) unlimited wants and limited resources.

In the circular flow model looking at just firms and households. Do physical goods and money flow in the same direction? a) True b) False

b) False

The budget constraint line shows opportunity cost goes away with a rise in income. a) True b) False

b) False