ECON Final UARK Cooperstein

Block's sells 500 bottles of perfume a month when the price is $7. A huge increase in resource costs causes price to rise to $9 and Block's only manages to sell 460 bottles of perfume. The price elasticity of demand is:

0.33 and inelastic

Among competing issues, the most important concern of economics is with the:

efficient use of limited productive resources to satisfy economic wants

When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. In this range of prices, demand for this product is:

elastic

In a market system, well-defined property rights are important because they:

encourage economic activity

As a consequence the condition of scarcity:

individuals and communities have to make choices from among alternatives

By free enterprise, we mean that:

individuals may obtain resources, organize production, and sell the resulting output in any legal way they choose

Henry wants to buy a book. The economic perspective suggests that Henry will buy the book if:

the marginal benefit of the book is greater than its marginal cost

Why might a company use barter rather than money to make a transaction?

Barter can enable two firms to trade when their cash flows are limited

Which of the following would not shift the demand curve for beef?

A reduction in the price of cattle feed

The federal income tax is consistent with the BLANK principle of taxation, whereas an excise tax on sporting event tickets is consistent with the BLANK principle of taxation.

Ability-to-pay; benefits-received

Which of the following os the best example of a market failure?

Alex and others in a community want a new outdoor soccer field and are willing to pay to use it, but no private business is willing to build it

The relationship between quantity supplied and price is BLANK and the relationship quantity demanded and price is BLANK.

Direct; inverse

According to the Zuckerberg, Seacrest, and Swift illustration:

Opportunity cost vary greatly between individuals and matter in decision making

Economic systems differ according to what two main characteristics?

Ownership of resources and methods of coordinating economic activity

Which is an example of a market failure?

Polio shots and chest x-rays provide widespread benefits to the community as a whole as well as to the individuals who get them

Which of the following does not explain why specialization increases output?

Specialization promotes self-sufficiency and independence

Which statement best describes a capitalist economy?

The production and allocation of goods and services is determined primarily through markets

If a 2 percent increase in the price of X causes the demand for product Y to increase by 6 percent:

X and Y are substitutes

Those who oppose the legalization of cocaine and heroine argue that:

addict demand is inelastic, but the demand by occasional users is elastic

An increase in the price of a product will reduce the amount of it purchased because:

consumers will substitute other products for the one whose price has risen

If there are external or spillover benefits associated with consumption and production of a product, it can be said that the:

demand curve understates the total benefit from the product and resources are under allocated to its production

On a production possibility curve, the optimal or best combination of output for any society:

depends upon the preferences of society

An emission fee levied against polluters will tend to:

internalize the external cost of pollution

The key concept that serves as the basis for the study of economics is:

scarcity

"Rivalry" in consumption means that:

when one person buys a god, it is not available for another person to buy