ECON Final

c. surplus; 8,000

If a price of $10 temporarily exists in this market, a (blank) of (blank) bushels will result. a. shortage; 10,000 b. shortage, 8,000 c. surplus; 8,000 d. surplus; 4,000

a. surplus; 4,000

If a price of $8 temporarily exists in this market, a (blank) of (blank) bushels will result. a. surplus; 4,000 b. surplus; 6,000 c. shortage; 2,000 d. shortage; 4,000

c. Ivy should buy more offer and fewer books

Suppose Ivy buys only two things, books and coffee, and receives the same satisfaction from the last book bought as she did from the last coffee bought. Books cost twice as much as coffee, and she has spent all of her money. Diminishing marginal utility applies to both goods. If sh is trying to maximize her utility: a. Ivy should buy more coffee and more books b. Ivy is making the right choice c. Ivy should buy more offer and fewer books d Ivy should buy more books and less coffee

d. rise; fall; fall; rise; rise

Suppose perfectly competitive market is suddenly transformed into one that operates as a monopoly market. We would expect price to (blank), output to (blank), consumer surplus to (blank), producer surplus to (blank), and deadweight loss to (blank). a. rise; fall; fall; fall; rise b. fall; rise; rise; fall; fall c. rise; fall; rise; rise; fall d. rise; fall; fall; rise; rise

b. substitues; complements

Suppose the cross-price elasticity of demand for butter and margarine is equal to .96 but the cross-price elasticity for water and lemons is -.13. This means that butter and margarine are (blank), while water and lemons are (blank). a. complements; substitutes b. substitues; complements c. inelastic goods; elastic goods d. elastic goods; complements

b. This is a possible choice but its inefficient

Suppose the economy produced 8 guns and 12 pounds of butter per period a. something must be done to reduce the amount of employment b. This is a possible choice but its inefficient c. this combination invalidates the notion of increasing opportunity cost d. the economy is still efficient but does not buy as much as it could

c. ceiling; $40

Suppose the government believes textbooks are too expensive and it wants to make sure textbooks are affordable to more students. This type of price control is called a price (blank), and one possible binding price control would be (blank). a. floor; $100 b. floor; $40 c. ceiling; $40 d. Ceiling; $100

d. a decrease in total economic output

specialization and trade should lead to all of the following except: a. higher living standards b. individuals learning specific skills and earning a salary c. the exchange of goods and services in markets d. a decrease in total economic output

d. the quota rent plus the wedge that represents the difference between the demand price and the supply price

when the government imposes a quota on sales of a good or service, it usually licenses the right to sell a given quantity of the good. The market price of the license is equal to: a. the demand price of the good b. the wedge that represents the difference between the demand price and the supply price c. the quota rent d. the quota rent plus the wedge that represents the difference between the demand price and the supply price

a. an increase in demand with no change in supply

which of the following always results in an increase in price and quantity? a. an increase in demand with no change in supply b. decrease in demand and supply c. an increase in supply and a decrease in demand d. an increase in supply with no change in demand

b. money flows from. households to firms as households offer factors of production for sale

which of the following is FALSE about the circular-flow diagram? a. money flows in the direction opposite to goods and services and factors of production b. money flows from. households to firms as households offer factors of production for sale c. households are the primary demanders of goods and services d. firms are the primary supplies of goods and services

d. you will be better off if you eat one more slice

while eating pizza you discover that the marginal benefit of eating one more slice is greater than the marginal cost of that slice. You conclude that: a. you will be no better off and no worse off it you eat one more slice b. you will be worse off if you eat one more slice c. the total cost of eating the pizza will be more than the total benefit of eating the pizza d. you will be better off if you eat one more slice

b. 350

A business produces 10 pairs of eyeglasses. It incurs $30 in average variable cost and $5 in average fixed cost. The total cost of producing 10 pairs of eyeglasses is: a. $300 b. 350 c. 50 d. 35

d. an increase in the quantity demanded

A decrease in the price of a good will result in: a. an increase in supply b. more being supplied c. an increase in demand d. an increase in the quantity demanded

d. quantity of eggs demanded

A decrease in the price of eggs will result in an increase in the: a. demand for eggs b. supply of eggs c. quantity of eggs supplied d. quantity of eggs demanded

a. elastic; elastic

A higher rate is more likely to decrease the amount of revenue that the government collects from an excise tax if demand is (blank) and supply is (blank) a. elastic; elastic b. elastic; inelastic c. inelastic; elastic d. inelastic; inelastic

d. people have unlimited wants but limited means to satisfy them

A key theme fundamental to all of economics is that: a. the united states is a rich country, but we are simply not aware of it b. resources are unlimited c. wants are limited d. people have unlimited wants but limited means to satisfy them

b. demand

A negative relationship between quantity demanded and price is called the law of a. supply b. demand c. increasing returns d. market clearing

c. the quantity of the good is less than the equilibrium quantity

A price floor is likely to cause deadweight loss because: a. a black market emerges and the good sells at prices above the price floor b. some buyers who want to buy at the control price are unable to find a seller willing to sell at that price c. the quantity of the good is less than the equilibrium quantity . buyers incur additional search costs looking for the scarce good

b. $8; surplus

A price of (blank) will result in a (blank). a. $6; shortage b. $8; surplus c. $8; shortage d. $4; surplus

c. shortage; 8,000

A temporary price of $2 in this market would result in a (blank) of (blank) bushels. a. surplus; 10,000 b. surplus; 4,000 c. shortage; 8,000 d. shortage; 10,000

a. intensive; abundant

According tot he Hecksher-Ohlin model, Brazil will have a comparative advantage in oranges if the factors (blank) in the production of organs are (blank) a. intensive; abundant b. intensive; imported c. that are scarce; imported d. intensive; inexpensive

c. C; sellers

All other things unchanged, when a good or service is characterized by a relatively elastic demand, as shown in panel (blank), the greater share of the burden of an excise tax on it is borne by (blank). a. D; buyers b. D; sellers c. C; sellers d. C; buyers

a. equilibrium quantity will decrease, but equilibrium price may decrease, increase, or stay the same

An increase in the price of sugar and an increased concern about tooth decay by the consumption of soft drinks will result in which of the following in the soft drink market? a. equilibrium quantity will decrease, but equilibrium price may decrease, increase, or stay the same b. equilibrium quantity will increase, but equilibrium price may decrease, increase, or stay the same c. there will be an increase in both the equilibrium price and quantity d. there will be a decrease in both equilibrium price and quantity

a. variable

An input whose quantity can be changed in the short run is an (blank) input. a. variable b. marginal c. fixed d. incremental

b. inelastic; elastic

As part of an anti-obesity program, the government levies an excise tax on high-fat foods. We expect consumers to pay almost all of this tax if demand is (blank) and supply is (blank) a. inelastic; inelastic b. inelastic; elastic c. elastic; elastic d. elastic; inelastic

b. rises

As the economy moves from point A towards point D, it will find that the opportunity cost of each additional submarine: a. falls b. rises c. remains unchanged d. doubles

c. A + B + D + E

Assume that Pa is the autarky price and Pw is the world price. Consumer surplus after international trade is equal to the area: a. A b. A + B c. A + B + D + E d. A + B + D + E - C

a. A + B + C

Assume that Pa is the autarky price and Pw is the world price. Total surplus before international trade is equal to the area: a. A + B + C b. A + B c. A + B - D - E d. A

a. less; more

Assume that the price of good X is $2 per unit and the price of good Y is $1 per unit, that you consume three units of good X and three units of Good Y, and that you are spending all of your income. To maximize utility, assuming that the goods are divisible, you would consume (blank) of X and (blank) of Y. a. less; more b. less; less c. more; less d. more;more

c. increase by less than $5

Assuming a normal upward sloping supply curve and downward sloping demand curve, if the government imposes a $5 excise tax on leather shoes and collects the tax from the suppliers the price of leather shoes will: a. increase by $5 b. increase by more than $5 c. increase by less than $5 d. increase, but we cannot determine by how much

b. an excess demand of 40 DVD rental s

At a rental price of $3, there will be: a. an increase in demand b. an excess demand of 40 DVD rental s c. equilibrium in the rental market for DVDs d. an excess supply of 40 DVD rentals

c. equilibrium price will increase, but equilibrium quantity may decrease, increase, or stay the same

Because of an increase in the price of wheat, an important ingredient in the production of bread, combined with an increase in the number of people consuming bread: a. both the equilibrium price and quantity will decrease b. both the equilibrium price and quantity will increase c. equilibrium price will increase, but equilibrium quantity may decrease, increase, or stay the same d. equilibrium quantity will decrease, but equilibrium price may decrease, increase, or stay the same

c. higher prices

Because of monopoly, consumers experience (blank) than with perfect competition. a. larger quantities b. high quality c. higher prices d. more choices

c. a combo resource

Bluefin tuna travel in schools throughout the world's oceans. Fishing boats from many nations harvest bluefin tuna as the schools migrate through their national waters. The school of bluefin tuna are best described as: a. public good b. an artificially scarce resource c. a combo resource d. a private good

c. coffee only

Brazil has comparative advantage in producing: a. neither b. both c. coffee only d. salmon only

d. 1

Britain must give up the production of 25 hats to produce 25 additional sweaters. The opportunity cost of producing 3 hats is (blank) sweaters. a. 22 b. 28 c. 3 d. 1

a. $2000

Calculate consumer surplus when the market is at equilibrium a. $2000 b. $4000 c. $3000 d. $5000

d. the change in price is indeterminate; quantity increases

Consider the market for corn. What happens if there is an increase demand for corn tortillas and at the same time a new corn seed become available that dramatically increases the yield per acre? a. the change in price is indeterminate; quantity decreases b. price increases; the change in quantity is indeterminate c. price and quantity decrease d. the change in price is indeterminate; quantity increases

a. the change in price is indeterminate and quantity decreases

Consider the market for iPods. What happens if a fantastic new alternative MP3 player is develop and at the same time a boat carrying a large shipment of iPods is attacked by pirates and sunk? a. the change in price is indeterminate and quantity decreases b. price decreases and quantity increases c. price increases and the change in quantity is indeterminate d. price increases and quantity increases

c. when some inputs are fixed and some are variable

Diminishing returns to an input occur: a. when all inputs are variable b. only when there are no fixed inputs c. when some inputs are fixed and some are variable d. when all inputs are fixed

a. 0

Each month Jesica buys exactly 15 big macs regardless of the price. Jesica's price elasticity of demand for big macs is: a. 0 b. 1 c. greater than 1 d. less than 1 but greater than 0

a. may change, but we cannot determine the change without more information

Equilibrium in the market for peanut butter is disturbed by an increase in the price of peanuts. Assuming that the supply curve of peanut butter is upward-sloping, producer surplus in the peanut butter market: a. may change, but we cannot determine the change without more information b. will not change c. will increase d. will decrease

d. 50

Figglenuts is a monopolist in the figglenut market. If the government wanted to regulate figglenuts, such that it would minimize the deadweight loss while allowing the firm to break even, it would impose a price ceiling of: a. $46 b. 65 c. 40 d. 50

a. utility

For economists, the satisfaction an individual derives from the consumption of good and services is best described as: a. utility b. opportunity cost c. usefulness d. happiness

d. c

For some time, Antonio has had $5 per month to spend on oranges and apples. The price of an orange is $.50 and the price of an apple is $.25. Which of the charts shows what will happen to his budget line if his income decreases to $2.50? a. b b. d c. a d. c

c. A

For some time, Antonio has had $5 per month to spend on oranges and apples. The price of an orange is $.50 and the price of an apple is $.25. Which of the charts shows what will happen to his budget line if his income increases to $6? a. B b. D c. A d. C

a. should Hong work an additional hour or take a short nap

For which of the following decisions would marginal analysis be MOST relevant? a. should Hong work an additional hour or take a short nap b. should vivid emigrate to the united states or stay in india c. should george accept a job with delta airlines or with greenpeace d. should mary go to graduate school after graduating from college?

a. should I eat another donut?

For which of the following decisions would marginal analysis be most relevant? a. should I eat another donut? b. should i use $20,000 as a down payment on a house or to buy a car? c. should i get married? d. should I go to college or work after graduating from high school?

d. specialization in production

Gains from trade arise because of: a. marginal analysis b. individual choice c. specialization in consumption d. specialization in production

b. shortage of .8

IF a government price ceiling of $600 is imposed on this market, the result will be an inefficiency in the form of a (blank) million apartments. a. surplus of .8 b. shortage of .8 c. shortage of .6 d. surplus of .6

d. 200

If 400 hamburgers are sold, producer surplus will equal: a. 650 b. 400 c. 510 d. 200

c. a unit-elastic

If a 20% price increase generates a 30% decrease in quantity demanded, then this is (blank) response a. an inelastic b. an elastic c. a unit-elastic d. a perfectly elastic

a. greater than

If a country's price in the absence of trade is lower than the price with trade, then the domestic quantity supplied with trade is (blank) the domestic quantity demanded a. greater than b. less than c. equal to d. not comparable to

b. is maximized

If a monopolist is producing a quantity that generate MC=MR, then profit: a. can be increased by increasing production b. is maximized c. can be increased by decreasing production d. is maximized only if MC=P

b. shortage of .6

If a price ceiling of $700 is imposed on this market, the result will be an inefficiency in the form of a (blank) million apartments. a. surplus of .6 b. shortage of .6 c. surplus of .2 d. shortage of .2

a. shortage of .2

If a price ceiling of $900 is imposed on this market, the result will be an inefficiency in the form of a (blank) million apartments a. shortage of .2 b. shortage of .6 c. surplus of .2 d. surplus of .6

a. decrease in the demand for beef

If chicken and beef and substitutes, then a fall in the price of chicken will bring about: a. decrease in the demand for beef a. decrease in the quantity demanded of beef c. no change in the demand for beef d. an increase in the demand for beef

d. the number of phone calls made while driving will be more than the socially optimal quantity

If drivers decide to make a phone calls without considering the costs imposed on others, the: a. marginal social cost curve will like below the marginal cost of production curve b. marginal social benefit curve will lie below the marginal social cost curve c. number of phone calls made will driving will be fewer than the socially optimal quantity d. the number of phone calls made while driving will be more than the socially optimal quantity

a. 1.2

If income changes form $1000 to $1400 per month, by the midpoint method, the income elasticity of demand at a price of $10 per pizza is: a. 1.2 b. -1.2 c. .825 d. .40

c. Rent 0; Rent 1

If rent controls are imposed and the government wants them to immediately effective, they will most likely by set at either (blank) or (blank) a. Rent 2; Rent 4 b. Rent 3; Rent 4 c. Rent 0; Rent 1 d. Rent 1; Rent 3

c. some renters will be willing to pay a price as high as Rent 4 for Q0 units

If rent controls are set at Rent 0: a. there will be a surplus of rental units b. the shortage of rental units is the distance Q1 - Q3 c. some renters will be willing to pay a price as high as Rent 4 for Q0 units d. non one will have to pay a higher actual price than Rent 0, nor will anyone be willing to do so

a. the shortage of rental units is the distance Q3 - Q1

If rent controls are set at Rent 1: a. the shortage of rental units is the distance Q3 - Q1 b. some renters will be willing to pay a price as high as Rent 4 for Q 1 units c. no one will have to pay a higher actual price than Rent 0, nor will anyone be willing to do so d. there will be a surplus of rental units, but it is impossible to tell how large the surplus is based on the information provided

c. are insufficient to provide enough goods and services to satisfy all human material wants and needs

If resources are scarce, it means that they are: a. have no opportunity cost b. have an unlimited supply c. are insufficient to provide enough goods and services to satisfy all human material wants and needs d. are probably not valued by consumers

c. shifts to the left

If steak and potatoes are complements, when the price of steak goes up, the demand curve for potatoes: a. stays the same b. shifts to the right and then moves back c. shifts to the left d. shifts to the right

a. is using its resources inefficiently

If teal and is producing 10 million scones and 10 million cups of tea (point A), we know that the economy: a. is using its resources inefficiently b. is fully employing its resources c. has found new resources d. is using its resources efficiently

a. a 20% decrease in the price of foreign travel will increase quantity demanded by 80%

If the estimated price elasticity of demand for foreign travel is 4: a. a 20% decrease in the price of foreign travel will increase quantity demanded by 80% b. the demand for foreign travel is inelastic c. a 10% increase in the price of foreign travel will increase quantity demanded by 40% d. a 20% increase in the price of foreign travel will increase quantity demanded by 80%

b. increase from 2 to 2.25

If the government assesses a tax of .75 on each latte, the price the consumer pays for a latte after the tax will: a. change, but we cannot determine by how much b. increase from 2 to 2.25 c. increases from 2 to 2.75 d. increase from 2 to 2.50

c. .8

If the price of chocolate-covered peanuts decreases from $1.10 to $.95 and the quantity demanded increase from 190 bags to 215 bags, then the price elasticity of demand (by the midpoint method) is: a. 1.25 b. .5 c. .8 d. 2

c. substitution effect

If the price of coffee cups falls and the consumer decides to buy more coffee cups solely because they are less expensive, this describes the: a. consumer surplus effect b. marginal-maximizing rule c. substitution effect d. income effect

a. $50

If the price of hamburger is $1 and 200 hamburgers are supplied, producer surplus will equal: a. $50 b. $360 c. $65 d. $60

c. government restrictions to entry

If the state government gave you the exclusive right to sell cement to municipalities, your monopoly would result from: a. economics of scale b. location c. government restrictions to entry d. sunk costs

a. left; right

It is certain that the equilibrium price will rise when the supply curve shifts to the (blank) and the demand curve shifts to the (blank) a. left; right b. left; left c. right; right d. right; left

c. Laurence's opportunity cost of writing programs is less than Carrie Anne's

If they spend all night writing computer programs, Laurene can write 10 programs, and Carrie Anne can write 5. If they spend all night making sunglass, Laurence can make 6 pairs, and Carrie Anne can make 4. We know that: a. Carrie Anne's opportunity cost of writing programs is less than Laurence's b. Carrie Anne's opportunity costs of writing programs and of making sunglasses are less than Laurence's c. Laurence's opportunity cost of writing programs is less than Carrie Anne's d. Laurence's opportunity costs of writing programs and of making sunglasses are less than Carrie Anne's

b. national security

In 2002, the steel industry argued that higher tariffs on steel were necessary to help fight the war on terrorism. This is an example of the (blank) argument a. infant industry b. national security c. job creation d. predatory pricing

d. F + G + H; J + K

In autarky, the price is P1, consumer surplus equals (blank), and producer surplus equals (blank). a. F + G + H + I; J + K b. F; G + H + I + J + K c. F + I; J + K d. F + G + H; J + K

d. the value associated with one more unit of an activity

In economics: a marginal value refers to: a. a value that is most appropriately identified in a footnote b. the value associated with an unimportant, or marginal, activity c. a value entered as an explanatory item in the margin of a balance sheet or other accounts d. the value associated with one more unit of an activity

d. supply ; left

In the local market for coffee, If Joyce's Java and Everyday Joe's coffee shops go out of business, the (blank) curve shifts to the (blank) a. demand; right b. supply ; right c. demand ; left d. supply ; left

b. a decrease in the price of tacos

In the market for tacos, each of the following shifts the supply curve to the left except: a. fewer taco shops b. a decrease in the price of tacos c. an increase in the wages of taco shop workers d. an increase in the price of beef

c. an increase in the incomes of people who eat tacos

In the market for tacos, you observe that the equilibrium price and quantity have increase. this can be caused by: a. fewer taco shops b. an increase in the price of beef c. an increase in the incomes of people who eat tacos d. an increase in the wages of taco shop workers

c. 15; 30

In this market, whose sulfur emissions are a result of production, an efficient solution takes place at a price of (blank) and a quantity of (blank). a. 15; 15 b. 5; 40 c. 15; 30 d. 25; 30

b. the supply curve shifts to the right and the demand curve shifts to the left

It is certain that the equilibrium price will fall when: a. the supply curve and the demand curve both shift to the right b. the supply curve shifts to the right and the demand curve shifts to the left c. supply and demand both increase d. supply decreases and demand stays the same

c. supply shifts to the left and demand stays the same

It is certain that the equilibrium quantity will fall when: a. the supply curve shifts to the right and the demand curve shifts to the left b. the supply curve shifts to the left and demand shifts to the right c. supply shifts to the left and demand stays the same d. the supply curve and the demand curve both shift to the right

b. fall; rise

John consumers pizza and pasta, both normal goods. He is maximizing his utility in consumption of both goods The price of pasta rises. Assuming that diminishing marginal utility applies to both goods, as he adjust to this event, the marginal utility of pizza will (blank), and the marginal utility of pasta will (blank). a. fall; fall b. fall; rise c. rise; fall d. rise; rise

c. normal; negative

Kayla and Jada are roommates in NYC. Both Kayla and Jada recently received raises. Kayla now buys more album downloads than before, but Jada buys beer. Kayla behaves as if album downloads are (blank) goods, and Jada's income elastic of demand for album downloads is (blank). a. inferior; positive b. inferior; negative c. normal; negative d. normal; positive

b. the economy has unemployment and/or inefficiently allocates resources

Look at the figure. Suppose the economy is operating at point G. This implies that: a. the economy can move to a point such as C only if it improves its technology b. the economy has unemployment and/or inefficiently allocates resources c. the economy lacks the resources to achieve a combination such as C d. people in this economy don't really like submarines or strawberries

b. individual decision makers in the economy

Microeconomics deals with: a. gross domestic product b. individual decision makers in the economy c. the working of the entire economy or large sectors of it d. economic growth

c. individual decision makers in the economy

Microeconomics deals with: a. the working of the entire economy or large sectors of it b. economic growth c. individual decision makers in the economy d. gross domestic product

d. individual decision makers in the economy

Microeconomics deals with: a. economic growth b. gross domestic product c. the working of the entire economy or large sectors of it d. individual decision makers in the economy

a. a normal good

Nico rents 10% more DVDs when his income increases by 20%. Based on this, we know that DVDs are: a. a normal good b. an inferior good c. have many substitutes d. have come down in price

b. workers offering to work off the books for less than the minimum wage

One of the consequences of the minimum wage has been: a. decreased unemployment for low-skill workers b. workers offering to work off the books for less than the minimum wage c. lower production costs for small businesses d. increased employment for high-skill workers

d. the value of the best alternative forgone in making any choice

Opportunity cost is: a. about half of the monetary cost of a product b. the dollar payment for a product c. the benefit derived from a product d. the value of the best alternative forgone in making any choice

c. the value of the best alternative forgone in making any choice

Opportunity cost is: a. the benefit derived from a product b. about half of the monetary cost of product c. the value of the best alternative forgone in making any choice d. the dollar payment for product

c. will increase

Peanut butter and jelly are complements in consumption. Assuming that the supply curve of peanut butter is upward-sloping, if there is a decrease in the price of jelly, producer surplus in the peanut butter market: a. may change, but it is impossible to tell whether it will increase or decrease b. will not change c. will increase d. will decrease

c. will increase

Peanut butter and jelly are complements in consumption. Assuming that the supply curve of peanut butter is upward-sloping, if there is a decrease in the price of jelly, producer surplus in the peanut butter market; a. may change, but it is impossible to tell whether it will increase or decrease b. will not change c. will increase d. will increase

a. less elastic; higher; more elastic; lower

Price discriminating firms will impose a price structure that offers customers with a (blank) demand a (blank) price and offers customers with an (blank) demand a (blank) price. a. less elastic; higher; more elastic; lower b. lower; higher; higher; lower c. seasonal; lower; unchanging; higher d. less elastic; lower; more elastic; higher

d. the more price-elastic the demand is relative to supply

Producers in a particular market will bear the greater burden of an excise tax: a. the less price-elastic demand is relative to supply b. if demand has the same price elasticity as supply c. regardless of the price elasticity of demand or supply d. the more price-elastic the demand is relative to supply

d. give owners of goods and services the right to use and dispose of those goods and services as they choose

Property rights are an important feature of an effective market because they: a. are the basis for an equitable tax system b. lead to the development of government control over prices c. prevent harm to the environment from pollution d. give owners of goods and services the right to use and dispose of those goods and services as they choose

d. an increase in the quantity supplied of rent-controlled apartments

Rent controls in NYC cause all of the falling except: a. inefficiently low-quality apartments b. wasted resources resulting from the opportunity cost of time associated with trying to find an apartment c. black markets d. an increase in the quantity supplied of rent-controlled apartments

a. we do not have sufficient resources to produce all of the goods and services we want

Scarcity in economics means that: a. we do not have sufficient resources to produce all of the goods and services we want b. the wants of people are limited c. there must be poor people in rich countries d. shortages exist in nearly all markets

b. the exchange of goods and services in markets

Specialization and trade usually lead to: a. lower economic growth b. the exchange of goods and services in markets c. lower living standards d. higher prices

c. the price of sweaters will increase by less than $10

Suppose the government imposes a $10 excise tax on the sale of sweaters by charging suppliers $10 for each sweater sold. If the demand curve is downward sloping and the supply curve is upward-sloping: a. the price of sweaters will increase by $10 b. consumers of sweaters will bear the entire burden of the tax c. the price of sweaters will increase by less than $10 d. the price of sweaters will decrease by $10

c. benefit for all individual citizens adds up to at least $100,000

Suppose the town of falls valley has a mosquito problem. After a bad summer, the town accountants explain that the marginal cost of providing one more treatment for mosquito control is $100,000. The town should revive the additional mosquito control only if the marginal: a. social cost of mosquito control is more than $100,000 b. social cost of mosquito control is less than $100,000 c. benefit for all individual citizens adds up to at least $100,000 d. benefit for any individual is at least $100,000

b. the price and quantity would both increase

Suppose you manage a corner grocery store. If peanut butter is an inferior good, what do you suppose would happen to the price and quantity sold of peanut butter as incomes fell during a recession? a. the price would increase and the quantity would decrease b. the price and quantity would both increase c. the price and quantity would both decrease d. the price would decrease and the quantity would increase

b. herring only

Sweden has a comparative advantage in producing: a. cell phones only b. herring only c. both cell phones and herrings d. neither

d. 5 million scones

Tealand is producing at point C on its production possibility frontier. What is the opportunity cost of increasing the production of tea from 20 million cups to 30 million cups? a. the answer is impossible to determine from the information given b. 10 million scones c. 10 million cups of tea d. 5 million scones

c. changes; marginal utility

The amount by which total utility (blank) when an additional unit of a good is consumed is (blank). a. increases; the income effect b. decreases; maximum utility c. changes; marginal utility d. changes; average utility

a. cannot be attained, given the level of technology and the factors of production available

The combination of guns and butter at point H: a. cannot be attained, given the level of technology and the factors of production available b. is attainable but would increase unemployment c. can be attained but would cost too much d. has no meaning, since it does not relate to the preferences of consumers

b. average variable

The curve x represents the firm's (blank) cost curve. a. average total b. average variable c. marginal d. average fixed

b. $6

The equilibrium price for pumpkins is $8 and the equilibrium quantity is 5. At the equilibrium price and quantity, Andy's consumer surplus is: a. $0 b. $6 c. $10 d. $8

d. two; $6

The equilibrium price for pumpkins is $8 and the equilibrium quantity is 5. at the equilibrium price and quantity, Diane sells (blank) pumpkins and her producer surplus is (blank) a. three, $8 b. one; $4 c. four; $11 d. two; $6

b. b + d

The government recently levied a $10 tax on the producers of blue jeans. What areas or area in the graph identify tax revenue? a. a + b + c b. b + d c. c + e d. d + e + f

b. $500

The government recently levied a $10 tax on the producers of blue jeans. What is the deadweight loss? a. $1000 b. $500 c. $250 d. $1250

a. ownership of scarce inputs

The land you own has the only source of aloe needed to make anti-itch lotion. In this case, your monopoly results from: a. ownership of scarce inputs b. government restrictions c. location d. sunk costs

d. increases, the quantity demanded will decrease

The law of demand states that others things equal, as the price: a. increases, the quantity demanded will increase b. decreases, the demand curve will shift to the right c. increases, demand will decrease d. increases, the quantity demanded will decrease

d. tradable emissions permits

The licenses that are exchangeable an that enable the holder to pollute up to a specified amount during a given period are called: a. pigovian taxes b. emission taxes c. environmental standards d. tradable emissions permits

d. $11

The marginal cost of the second sweatshirt is: a. $29 b. $9 c. $20 d. $11

d. a standardized product

The market for breakfast cereal contains hundreds of similar products, such as front loops, cornflakes, and rice krispies, that are considered to be different products by different buyers. This situation violates the perfect competition assumption of: a. ease of exit b. ease of entry c. many buyers and sellers d. a standardized product

d. many; many

The market for corn in Kansas is considered to be competitive. This means there are (blank) buyers and (blank) sellers of corn in Kansas. a. few; few b. many ; few c. few; many d. many; many

c. 4 bushels; profit; $0

The market for corn is perfectly competitive. If the price of a bushel of corn is $14, in the short run, the farmer will produce (blank) of corn and earn an economic (blank) equal to (blank). a. 4 bushels; profit; jess less than $80 per bushel b. 2 bushels; loss; just more than $80 per bushel c. 4 bushels; profit; $0 d. 2 bushels; profit; $0

c. the equilibrium quantity of milk will rise, but we can't determine how the equilibrium price will be affected

The market for milk is initially in equilibrium. Milk producers successfully advertise to encourage milk drinking. At the same time, more milk. producers enter the market. Standard demand and supply analysis tells us that: a. the equilibrium price and quantity of milk will rise b. the equilibrium price and quantity of milk will fall c. the equilibrium quantity of milk will rise, but we can't determine how the equilibrium price will be affected d. the equilibrium price of milk will rise, but we can't determine how the equilibrium quantity will be affected

a. 5

The market for tomatoes is perfectly competitive. If market price of a bushel of tomatoes is $18, in the short run the farmer's profit-maximizing output is (blank) bushels. a. 5 b. 4 c. 2 d. 3

a.. what is given up to acquire it

The opportunity cost of something is: a.. what is given up to acquire it b. less during periods of falling prices c. greater during periods of rising prices d. equal to the money cost

c. where the marginal social benefit curve intersects the marginal social cost curve

The optimal level of pollution is: a. where the marginal social cost curve intersects the quantity axis b. zero, since no pollution is best for society c. where the marginal social benefit curve intersects the marginal social cost curve d. where the marginal social benefit curve intersects the quantity axis

d. quantity demanded; the price

The price elasticity of demand is computed as the percentage change in the (blank) divided by the percentage change in (blank) a. quantity demanded; the quantity supplied b. price; the quantity demanded c. quantity demanded; income d. quantity demanded; the price

b. 6;2

The price of milkshakes is $2 and the price of burgers is $5. If davids income is $22, to maximize his utility, he buys (blank) shakes and (blank) burgers. a. 5;1 b. 6;2 c. 6; no d. 1;1

c. J

The profit maximizing quantity is at point: a. L b. W c. J d. K

d. bagel

The student center on campus has burritos, bagels or burgers for lunch, and they all cost the same. You decide to have a burger today but if they were out of burgers, you would have bought a bagel. Your opportunity cost of buying a burger is your enjoyment of the: a. bagel and the burrito b. burrito c. burger d. bagel

b. bayer aspirin to be more price elastic

There are several close substitutes for Bayer aspirin but fewer substitutes for a complete medical examination. Therefore, all other things equal, you would expect the demand for: a. medical exams to be more price-elastic b. bayer aspirin to be more price elastic c. bayer aspirin to be more price inelastic d. the two to be equally price elastic

d. $14

There are two consumers, Andy and ben, in the market for pumpkins. Their willingness to pay for each pumpkin is shown in the table Pumpkin Market. There are two producers of pumpkins, Cindy and Diane, and their costs are also shown. The equilibrium price of pumpkins is $8 and the equilibrium quantity is 5. At the equilibrium price and quantity, total producer surplus is: a. $0 b. $8 c. $11 d. $14

c. compares all of the benefits and costs of eating another brownie

Thinking in economic terms, when Mary Sweet-Tooth is deciding whether to eat another brownie, she: a. insiders only the price of the brownie b. considers how much an additional exercise she will need to do to work off the calories associated with eating another brownie c. compares all of the benefits and costs of eating another brownie d. considers whether she can do so without anyone else noticing

d. lower than the equilibrium price

To be binding a price ceiling must be set at a price: a. higher than the equilibrium price b. the same as the equilibrium price c. any price ceiling is binding d. lower than the equilibrium price

d. lower than the equilibrium price

To be binding, a price ceiling must be set a a price: a. higher than the equilibrium price b. the same as the equilibrium price c. any price ceiling is binding d. lower than the equilibrium price

d. for both to become better off, each should specialize in the production of some good. However, since hank is equally productive in both goods, it doesn't matter which good each specializes in.

Tom produces and consumes nine fish and two coconuts, and Hank produces and consumes three fish and two coconuts. Now they decide to engage in trade. Which of the following statements is INCORRECT? a. for both to become better off, each should specialize completely in the production of the good in which he has comparative advantage b. after trade it is possible for tom to consumer 9 fish and 2.5 coconuts and for hank to consume 3 fish and 2.5 coconuts c. for each individual, the consumption point after trade will lie outside that individual's production possibility frontier d. for both to become better off, each should specialize in the production of some good. However, since hank is equally productive in both goods, it doesn't matter which good each specializes in.

d. the sum of consumer and producer surplus

Total surplus is: a. equal to the area below the demand curve b. the different between price and the cost to the seller c. always more for consumers than producers d. the sum of consumer and producer surplus

a. -$12,000

Unit recently rosemarie worked as an accountant, earning $30,000 annually. Then she inhered a piece of commercial real estate that had been renting for $12000 annually. Rosemarie decided to leave her job and operate a Peruvian restaurant in the space she inherited. At the end of the first year, her books showed total revenues of $260,000 and total costs of $230,000 for food, utilities, cooks, and other supplies. Her economic profit at the end of one year is: a. -$12,000 b. 230,000 c. 30,000 d. 0

`a. $29

Vonda and Aleiyah are shopping together at the mall for new jeans. Vonda is willing to pay $90 and Aleiyah is willing to pay $50 for a pair of jeans. What is the gain in total consumer surplus when the price decrease from $59 to $40? a. $29 b. $60 c. $10 d. $31

c. $29

Vonda and Aleiyah are shopping together at the mall for new jeans. Vonda is willing to pay $90 and Aleiyah is willing to pay $50 for a pair of jeans. What is the gain in total consumer surplus when the price decrease from $59 to $40? a. $60 b. $10 c. $29 d. $31

b. scarcity ill almost always exist, but a shortage will exist only if the price is kept below the equilibrium level

What is the different between a shortage and scarcity? a. there is no distinction between the two. They are the same thing b. scarcity ill almost always exist, but a shortage will exist only if the price is kept below the equilibrium level c. scarcity is a result of two or more alternative uses, and quantities of supply and demand adjusting to flexible prices will create shortages d. a shortage will exist when a good is scarce

a. .54

What is the price elastic of demand between $1.00 and $.75? a. .54 b. .66 c. . 75 d. 1.00

a. 1

What is the price elasticity of demand (by the midpoint formula) when the price decreases from 6 to 4? a. 1 b. .67 c. .5 d. . 55

a. $50

What is the total fixed cost for this bicycle firm? a. $50 b. 100 c. 70 d. 40

c. no mutually beneficial trades are missed

When a market is in equilibrium and there is no outside intervention to change the equilibrium price: a. total surplus is minimized b. inefficiency is maximized c. no mutually beneficial trades are missed d. some mutually beneficial trades may be missed

b. price-inelastic

When a public transit system (such as a subway or bus line) raises its fares, its total revenue may increase. This suggests that demand is: a. unstable b. price-inelastic c. price-elastic d. price unit-elastic

c. there is no way to make some people better off without making other people worse off

When is a market efficient: a. there are ways to make everyone better off b. producers whose willingness to accept a price above the market price can sell their good c. there is no way to make some people better off without making other people worse off d. consumers who value buying a good the least are the ones who can purchase the good

b. falling

When marginal cost is BELOW average variable cost, average variable cost must be: a. rising b. falling c. at its minimum d. at its maximum

b. C2-Q2

When the government imposes a tariff on imported oranges, the price of oranges in South Africa rises from Pw to Pt and the volume of imports falls to: a. C1-C2 b. C2-Q2 C. Q2 - Q1 d. C1=Q1

a. an increase in demand with no change in supply

Which of the following ALWAYS results in an increase in price and quantity? a. an increase in demand with no change in supply b. a decrease in demand and supply c. an increase in supply and a decrease in demand d. an increase in supply with no change in demand

b. Michelle's apartment rent increases, so she cancels her subscription to a monthly magazine

Which of the following best describes the income effect of a price increase? a. the tuition at the public university increase, so michelle attends a community college b. Michelle's apartment rent increases, so she cancels her subscription to a monthly magazine c. the price of corn chips increases, so michelle buys potato chips d. the price of bacon increases, so michelle buys more sausage

c. a change in the price of that good

Which of the following factors would result solely in a movement along the demand curve for a particular good? a. a change in the size of the population b. a change in the prices of related goods c. a change in the price of that good d. both a change in the price of that good and a change in the size of that population

a. fire protection

Which of the following good is most likely a public good? a. fire protection b. the internet c. a city park d. a pair of pants

a. your right to use and dispose of your property as you see fit

Which of the following is a key factor in the effectiveness of well-function markets? a. your right to use and dispose of your property as you see fit b. outcomes that are equitable for consumers and producers c. the role of the government to deliver economic signals to consumers and producers d. a significant degree of government intervention to maximize efficiency

c. the minimum wage is an important tool in fighting poverty and should be increased

Which of the following is a normative statement? a. a higher minimum wage is expected to increase the price of a fast-food cheeseburger b. the minimum wage has not kept pace with inflation c. the minimum wage is an important tool in fighting poverty and should be increased d. the minimum wage can cause higher unemployment for teens and unskilled workers

d. to improve our economic security, we should reduce our dependence on oil imports

Which of the following is a normative statement? a. higher expenditures on health care will reduce infant mortality rates b. increased defense spending will lead to higher budget deficits c. international trade leads to expanded consumption opportunities d. to improve our economic security, we should reduce our dependence on oil imports

b. there has been an increase in the rate of inflation

Which of the following is a positive economic statement? a. government has grown too large and should be reduced b. there has been an increase in the rate of inflation c. government should be subject to the same rules as all other institutions d. women should be paid as much as men for the same work

a. limit on the total number of shoes imported from Italy

Which of the following is an example of an import quota? a. limit on the total number of shoes imported from Italy b. regulations specifying that each imported toy from China must meet certain safety guidelines c. A tax of $100 on each Suzuki motorcycle produced in the US d. a tax of 10% of the value of each Suzuki motorcycle imported from Japan

c. money flows from households to firms as households offer factors of production for sale

Which of the following is false about the circular flow diagram? a. households are the primary demanders of goods and services b. firms are the primary supplies of goods and services c. money flows from households to firms as households offer factors of production for sale d. money flows in the direction opposite to goods and services and factors of production

a. money flows from households to firms as households offer factors of production for sale

Which of the following is false about the circular-flow diagram? a. money flows from households to firms as households offer factors of production for sale b. money flows in the direction opposite to goods and services and factors of production c. firms are the primary suppliers of goods and services d households are the primary demanders of goods and services

c. an increase in the price of inputs used to produce good X

Which of the following will NOT cause an increase in the supply of good X? a. an improvement in the technology used to produced good X b. a decrease in the price of good Y, a substitute in production c. an increase in the price of inputs used to produce good X d. a decrease in the price of inputs used to produce good X

b. P2; Q2; Q2

With a nonbonding price floor, the price could be equal to (blank), consumers would demand (blank), and producers would supply (blank). a. P1; Q1: Q3 b. P2; Q2; Q2 c. P1; Q3; Q1 d. P3; Q2; Q1

c. the real cost of something is what you must give up to get it

You decide to join the economics club, but this means you can't join the account club because it meets at the same time. This statement best represents this economic concept: a. how much is a decisions at the margin b. there are gains from trade c. the real cost of something is what you must give up to get it d. people usually exploit opportunities to make themselves better off 4

a. consumer and producer surplus are maximized

`If the market for grapefruit is in equilibrium without any outside intervention to change the equilibrium price: a. consumer and producer surplus are maximized b. total surplus is minimized c. there is some deadweight loss d. a few mutually beneficial trades are missed

b. a decrease in the demand for cigarettes

an announcement that smoking will harm your ability to think clearly will most likely result in: a. an increase in the quantity of cigarettes demanded b. a decrease in the demand for cigarettes c. no change in smoking habits d. an increase in the price of cigarettes

d. the quantity demanded will decrease from 50 to 30 rentals per weekend

if the rental price of DVDs rises from $5 to $7: a. the quantity supplied will increase from 50 to 60 rentals per weekend b. supply will increase from 50 to 70 rentals per weekend c. demand will decrease from 50 to 30 rentals per weekend d. the quantity demanded will decrease from 50 to 30 rentals per weekend

a. the real cost of something is what you must give up to get it

if you decide to co to Cancun with your friends during spring break, you cannot go to Paris with your sister in the summer. This statement best represents this economic concept: a. the real cost of something is what you must give up to get it b. how much is a decision at the margin c. people usually exploit opportunities to make themselves better off d. there are gains from trade