Tingnan ang lahat ng mga set ng pag-aaral

ECON TEST 1

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

A consumer has $100 to spend on tables and chairs. If his income increases to $200, the prices of the goods remaining unchanged, his budget constraint: A. pivots inward along the vertical axis. B. shifts inward. C. shifts outward. D. pivots outward along the horizontal axis

A market system prevents people from getting as many goods and services as they want due to which of the following? A. The government because it allocates the goods and services. B. Their income. C. Both A and B. D. Neither A nor B.

Horizontal

A perfectly elastic line is.....

A production possibilities frontier (PPF) is A. a curve that shows the potential productive capabilities of the frontier (defined as the area outside of cities) of a developing economy. B. a curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology. C. a curve showing the generally attainable combinations of two products that may be produced with all planned or potential, yet undeveloped technology. D. a curve that illustrates the demand of two goods for the average consumer.

A production possibilities frontier: A. shows how participants in the market are linked. B. shows the act of buying and selling. C. shows the maximum attainable combinations of two goods that may be produced with available resources. D. shows how unlimited wants exceed the limited resources available to fulfill those wants. E. shows the market for a good or service.

A small increase in supply can lead to a large decline in equilibrium price when A. demand is relatively elastic. B. supply is perfectly elastic. C. demand is perfectly elastic. D. demand is relatively inelastic.

A sportswriter writing about the Cleveland Indians baseball team made the following observation: "If the Indians suddenly slashed all tickets to $10, would their attendance actually increase? Not all that much and revenue would drop dramatically." The sportswriter is assuming that the demand for Indians tickets is A. relatively price elastic. B. perfectly price elastic. C. perfectly price inelastic. D. relatively price inelastic.

According to a news story about the bus system in the Lehigh Valley in Pennsylvania, "Ridership fell 14 percent in 2012 after a 33 percent increase" in bus fares. Given this information, the demand for bus trips is___________ A. bus trips are a necessity for those without cars. B. over time people can find alternate forms of transportation. C. these trips are a small portion of someone's budget. D. bus trips only appeal to a certain market.

According to a news story, during the summer of 2015, gasoline prices were expected to decline by 32 percent, while "U.S. drivers are expected to consume slightly more gasoline, a 1.6 percent increase, during the summer." "Summer Gas Prices Expected to Be 32 Percent Lower This Year," . Given this information, the price elasticity of demand for gasoline is ._________ The demand is A. price inelastic because the value is less than zero. B. price elastic because the absolute value is greater than zero. C. price inelastic because the absolute value is less than one. D. price elastic because the value is less than zero.

An omitted variable is a variable that: A. does not cause other variables in a study to change when it changes. B. has been left out, and if included, would explain why the variables considered in a study are correlated. C. is removed from a study as it can lead to the problem of reverse causality. D. is purposely left out as it does not aid an economic analysis.

Assume that a combination of 10 bottles of wine and 2 liters of milk lies on a consumer's budget constraint. If the price of one bottle of wine is $10, and one liter of milk is $1, what is the consumer's income? A. $102 B. $20 C. $100 D. $120

Assume that a consumer can spend $20 on two goods: pens and pencils. If the price of one pen is $5 and the price of one pencil is $2, which of the following combinations of the two goods represents a point on the consumer's budget constraint? A. 2 pens and 3 pencils B. 2 pens and 5 pencils C. 1 pen and 10 pencils D. 3 pens and 2 pencils

Causation occurs when: A. two variables tend to move in the same direction. B. a change in one variable does not cause any change in another variable. C. two variables tend to move in opposite directions. D. a change in one variable is the reason for the change in another variable.

Choco Fantasy is a firm that produces both dark chocolates as well as liquor chocolates. It can produce 10,000 bars of dark chocolate per month if all its resources are used to produce only this variety. Similarly, using all its resources in the production of liquor chocolates, the firm can produce 8,000 bars per month. However, during a given month, the firm produces both varieties. Which of the following, if true, would suggest that the firm is operating on its PPF? A. Even though the demand for both liquor and dark chocolates has increased, the company can increase the production of only one variety. B. The opportunity cost of shifting resources from the production of liquor chocolates to dark chocolates is marginal. C. In an attempt to cut costs, the company is planning to fire its unproductive resources. D. Medical reports earlier this year indicated that higher chocolate consumption increases the risk of heart attack. E. Most domestic consumers prefer the better quality Swiss chocolates imported by the country.

Negative

Compliments Exy

Consider an organization that exists to help the poor. The members of the organization are discussing alternative methods of aiding the poor, when a proponent of one particular method asserts that: "If only one poor person is helped with this method, then all our time and money would have been worth it." If you were a member of the organization, what reply best represents clear economic thinking? This attitude A. recognizes the fact that since the organization is a charity, there is an opportunity cost based on the square root of other peoples' needs. B. is the most logical because it is focussed on helping even one person. C. ignores the fact that the cost of helping that one person has an opportunity cost of what those funds could have been used for to help other people. .D. acknowledges the importance of considering all the alternatives.

Consider firms selling three goodslong dash—one firm sells a good with an income elasticity of demand less than zero, one firm sells a good with an income elasticity of demand greater than zero but less than one, and one firm sells a good with an income elasticity of demand greater than one. In a recession, sales of a good with A. an income elasticity of demand less than zero will increase along with the sales of a good with an income elasticity of demand greater than one. B. an income elasticity of demand greater than one will decline the most and sales of a good with an income elasticity of demand less than zero will increase the most. C. an income elasticity of demand less than zero will decline along with the sales of a good with an income elasticity of demand greater than zero but less than one. D. an income elasticity of demand less than zero will decline the most and sales of a good with an income elasticity of demand greater than one will increase the most.

Consider the demand for cigarettes. Suppose the government decreases the price of cigarettes by lowering cigarette taxes. How will this affect the demand for cigarettes over time? If the price of cigarettes decreases, then the quantity of cigarettes demanded will A. increase, but this effect will likely become smaller (in absolute value) over time. B. decrease, and this effect will likely become larger (in absolute value) over time. C. likely never change either initially or over time. D. increase, and this effect will likely become larger (in absolute value) over time. E. increase, and this effect will likely remain constant over time.

Consider the following statement: "The problem with economics is that it assumes that consumers and firms always make the correct decisions. But we know that everyone makes mistakes." What is the most correct response to this statement? A. Economics does assume that consumers and firms always make the correct decisions. B. Economics is a proven field of study, and it has already solved this problem. C. Economics assumes that consumers and firms are rational, not that they always make the right decisions. D. Economics has a lot of problems such as those that caused the Great Recession.

Consider the markets for BP supreme-grade gasoline, all BP grades of gasoline, and all gasoline. For which of these three markets will demand be most elastic? Demand will be most elastic for A. BP supreme-grade gasoline, then for all BP grades of gasoline, and then for all gasoline. B. all gasoline, then for all BP grades of gasoline, and then for BP supreme-grade gasoline. C. all gasoline, then for BP supreme-grade gasoline, and then for all BP grades of gasoline. D. BP supreme-grade gasoline, then for all gasoline, and then for all BP grades of gasoline. E. all BP grades of gasoline, then for BP supreme-grade gasoline, and then for all gasoline.

Consider the supply of natural gas. What would make the supply of natural gas more elastic? The supply of natural gas would become more elastic if A. more substitutes were available. B. it were more of a luxury. C. it becomes a larger portion of a consumer's budget. D. the time horizon becomes longer. E. the definition of the market becomes narrower.

increase, 3.1, D

Economist X. M. Gao and two colleagues have estimated that the cross-price elasticity of demand between beer and spirits is 0.15 If so, then beer and spirits are ______________________ . Gao and colleagues have estimated that the cross-price elasticity of demand between beer and wine is 0.31 If the price of wine increases by 10 percent, then the quantity of beer demanded will _________________________ by ____________ percent. In addition, Gao and colleagues have estimated the income elasticity of demand for beer to be minus−0.09. If so, then beer is A. a normal good that is a necessity. B. a normal good that may be a luxury or a necessity. C. a luxury that may be a normal good or an inferior good. D. an inferior good. .E. a normal good that is a luxury.

Economists assume that people are rational in the sense that A. they do not respond to economic incentives. B. they use all available information as they take actions intended to achieve their goals. C. they generally make the correct choices. D. they make decisions based on total, rather than marginal, variables.

From the list below, select the variable that will cause the supply curve to shift: A. The cost of raw materials B. Prices of related goods C. Population and demographics D. Consumer income

Holding some oil in storage rather than selling it would A. increase the supply of oil, shifting it to the right. B. decrease the supply of oil, shifting it to the left. C. decrease the supply of oil, shifting it to the right. D. increase the supply of oil, shifting it to the left.

If demand is perfectly elastic, then what is the effect of an increase in price? A. a change in quantity demanded exactly equal to the change in price B. a very small change in quantity demanded C. no change in quantity demanded D. a decrease in quantity demanded to zero

positive, positive, negative

If the price of steak fallswhile the demand for fish falls, is the cross-price elasticity of demand between the pair of products likely to be positive or negative? ___________ Therefore, the cross-price elasticity of demand between "substitutes" is most likely ______________ and the cross-price elasticities of demand between "complements" is most likely _____________ .

If the cross-price elasticity of demand is negative, then the products are: A. luxuries, but if it is positive, then the products are necessities. B. complements, but if it is positive, then the products are substitutes. C. normal goods, but if it is positive, then the products are inferior goods. D. unrelated, but if it is positive, then the products are related. E. substitutes, but if it is positive, then the products are complements.

In a market system, how does society decide what goods and services will be produced? A. What goods and services will be produced is determined by a vote of consumers. B. The government decides what goods and services will be produced. C. Firms alone determine what goods and services will be produced. D. Consumers, firms, and the government determine what goods and services will be produced by the choices they make.

In many cities, firms that own office buildings can renovate them for use as residential apartments. According to a news story, in many cities "residential rents are surpassing office rents." Source: Eliot Brown, "Developers Turn Former Office Buildings Into High-End Apartments," Wall Street Journal, May 7, 2014. The response to an increase in residential rents would be A. a decrease in the supply of office space, shifting it to the right. B. an increase in the supply of office space, shifting it to the left. C. a decrease in the supply of office space, shifting it to the left. D. an increase in the supply of office space, shifting it to the right.

Negative

Income Elasticity Of Demand Inferior

1 or over

Income Elasticity Of Demand Luxury

Positive but under 1

Income Elasticity Of Demand Normal

You buy less

Income effect: Price Of Inferior Good Drops

-.88

In 1916, the Ford Motor Company sold 500,000 Model T Fords at a price of $440. Henry Ford believed that he could increase sales of the Model T by 1,000 cars for every dollar he cut the price. Use this information to calculate the price elasticity of demand LOADING... for Model T Fords. Use the midpoint formula in your calculation. Assuming the price decreases by $1 and the quantity increases by 1000 cars, the price elasticity of demand for Model T Fords is

inelastic. when oil prices dropped quantity supplied changed a little

Is oil supply inelastic or elastic in the short run?

Lawrence Summers served as secretary of the treasury in the Clinton administration and as director of National Economic Council in the Obama administration. He has been quoted as giving the following moral defense of the economic approach. "There is nothing morally unattractive about saying: We need to analyze which way of spending money on health care will produce more benefit and which less, and using our money as efficiently as we can. I don't think there is anything immoral about seeking to achieve environmental benefits at the lowest possible costs." It would be more moral to reduce pollution, A. not taking the cost into account because pollution reduction is typically associated with large benefits. B. not taking the cost into account because pollution is potentially harmful to our health. C. taking the cost into account because reducing pollution often reduces economic growth. D. taking the cost into account because money spent on pollution reduction is not available for other worthy activities. E. taking the cost into account because the total cost of reducing pollution is likely enormous.

have a large change in quantity of workers

Less people drilling oil wells causes a small change in wages to

Like many other cities, Denver experienced a sharp decline in construction of new houses in the years following 2006. Many carpenters, roofers, and other skilled workers left the area or found jobs in other industries. In addition, builders stopped buying and preparing home lots for construction. According to an article in the Wall Street Journal, by 2014, as consumers increased their demand for new homes in Denver, "New-home prices have surged over the past two years ... amid a shortage of home lots and skilled construction workers." In the future, the price increases of new houses in Denver can be expected to be A. larger because supply is less elastic over time. B. smaller because supply is less elastic over time. C. smaller because supply is more elastic over time. D. larger because supply is more elastic over time.

MIT economist Jerry Hausman has estimated the price elasticity of demand for Post Raisin Bran cereal to be minus−2.5 and the price elasticity of demand for all types of breakfast cereals to be minus−0.9. The demand for Post Raisin Bran cereal is __________ , and the demand for all types of breakfast cereals is ____________ . Why might the demand for Post Raisin Bran cereal be more elastic than the demand for all types of breakfast cereals? Post Raisin Bran cereal A. Is defined more broadly B. is consumed over a shorter period of time. C. is more of a necessity. D. is a smaller share of a consumer's budget. E. has more substitutes available

Manager 1: "The only way we can increase the revenue we receive from selling our graphing calculators is by cutting the price." Manager 2: "Cutting the price of a product never increases the amount of revenue you receive. If we want to increase revenue, we have to increase price." Do you agree with the reasoning of Manager 2? A. I agree. Cutting the price will not increase the amount of revenue, you have to increase price. B. I disagree. Cutting the price will increase the revenue only if the demand is inelastic. C. I disagree. Cutting the price will increase the revenue if the demand is price elastic. D. I agree. Cutting the price will never increase the amount of revenue you receive.

Microsoft charges a price of $599 for a copy of Windows 7. Is this pricing decision rational? A. We cannot assume that this pricing decision was rational because we do not have enough information to make an assumption. B. When we assume the managers at Microsoft have used all available information and have weighed all known benefits and costs, we are assuming rationality. C. Microsoft's choice cannot be rational: the price is clearly more than most people are willing and able to pay. D. Microsoft's choice was rational: the price will maximize profit.

One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls A. rationality. B. the market. C. economics. D. scarcity.

Over the past 30 years, the price of oil has been relatively unstable, fluctuating between $11.00 and well over $100 per barrel. Which of the following potentially contributes to oil-price instability? Oil prices are relatively unstable because A. the market for oil is relatively competitive. B. the supply of oil is inelastic. C. the income elasticity of demand for oil is negative. D. OPEC has been successful in controlling the quantity of oil its members supply. E. the demand for oil is elastic.

Scarcity is central to the study of economics because it implies that A. every choice involves an opportunity cost. B. economic agents are rational. C. society must make decisions at the margin. D. wants are unlimited.

Scenario: Maria has to choose between driving and taking a train to destination A. Travelling by train will cost her $400 and will take 4 hours. Driving to destination A takes 6 hours and the required amount of gasoline costs $250. Her opportunity cost of time is $15 per hour. Refer to the scenario above. Maria should choose to: A. travel by train, as it will save her $30 in travel time. B. travel by train, because it is quicker. C. drive, as it will save her $120. D. drive, as it will give her a real savings of $150.

Soo Jin shares a oneminus−bedroom apartment with her classmate. Her share of the rent is $700 per month. She is considering moving to a studio apartment which she will not have to share with anyone. The studio apartment rents for $950 per month. Recently, you ran into Soo Jin on campus and she tells you that she has moved into the studio apartment. Soo Jin is as rational as any other person. As an economics student, you rightly conclude that A. the cost of having one's own space outweighs the benefits. B. Soo Jin did not have a choice; her roommate was a slob. C. Soo Jin figures that the additional benefit of having her own place (as opposed to sharing) is at least $250. D. Soo Jin figures that the additional benefit of having her own place (as opposed to sharing) is at least $950.

Positive

Substitutes Exy

short term, long term

Supply curves are usually inelastic in ____________ and elastic in ____________

Suppose Wendy's hamburgers haveWendy's hamburgers have manymany close substitutes available. If so, then an increase in the price of Wendy's hamburgersWendy's hamburgers will likely A. not change the quantity of Wendy's hamburgersdemanded. B. increase the quantity of Wendy's hamburgers demanded by a relatively large amount. C. decrease the quantity of Wendy's hamburgers demanded by a relatively small amount. D. decrease the quantity of Wendy's hamburgers demanded by a relatively large amount. .E. increase the quantity of Wendy's hamburgers demanded by a relatively small amount.

-.52, inferior, b

Suppose income increases by 25 percent and, as a result, the quantity of a particular brand of automobile demanded (holding the price for this particular automobile constant) decreasesby 13 percent. The income elasticity of demand for this brand of car is __________________ This particular brand of automobile is a(n) __________ good. In another example, suppose market research shows that a particular brand of truck is a normal good and a necessity If so, then the income elasticity of demand for this truck is A. positive B. less than 1 but greater than 0 C. zero. D. greater than 1 E. negative

553, 0

Suppose the demand for a Czech novel translated into English is perfectly inelastic. Assume the initial price of the translated novel is $27.00 and the quantity demanded is 553copies per year. If the price of the translated novel increases by $1.00 then the quantity demanded will be ____________________ copies per year. Next, suppose the demand for a mystery novel by Stephen King is infinitely elastic. In this example, assume the initial price of the novel is $22.00 and the quantity demanded is 99 thousand copies per year. If the price of the mystery novel increases by $2.00, then the quantity demanded will be ________ copies per year.

-.1, complements, c

Suppose the price of pepper increases by 10 percent and, as a result, the quantity of salt demanded (holding the price of salt constant) decreases by 11 percent. The cross-price elasticity of demand between pepper and salt is ___________________________(Enter your response rounded to two decimal places and include a minus sign if appropriate.) In this example, pepper and salt are _____________________________________ . Instead, suppose pepper and salt were substitutes If so, then the cross-price elasticity of demand between pepper and salt would be A. less than 1. B. less than minus−1. C. positive. .D. negative. E. zero.

The demand curve for canned peas is downward sloping. If the price of canned peas, an inferior good, rises, A. the income effect which causes you to increase your canned peas purchases is smaller than the substitution effect which causes you to reduce your purchases, resulting in a net decrease in the quantity demanded. B. both the income and substitution effects reinforce each other to decrease the quantity demanded. C. the income and substitution effects offset each other but the price effect of an inferior good leads you to buy more canned peas. D. the income effect which causes you to reduce your canned peas purchases is smaller than the substitution effect which causes you to increase your purchases, resulting in a net increase in quantity demanded.

The demand curve for corn is downward sloping. If the price of corn, an inferior good, falls, A. the income effect which causes you to reduce your corn purchases is smaller than the substitution effect which causes you to increase your corn purchases, resulting in a net increase in quantity demanded. B. the income effect which causes you to increase your corn purchases is larger than the substitution effect which causes you to reduce your corn purchases, resulting in a net increase in quantity demanded. C. the income and substitution effects offset each other but the price effect of an inferior good leads you to buy less corn. D. both the income and substitution effects reinforce each other to increase the quantity demanded.

The demand for opera tickets to the Metropolitan Opera is (decreased from price increase) A. inelastic because total revenue from ticket sales decreased following the price increase. B. elastic because total revenue from ticket sales increased following the price increase. C. inelastic because total revenue from ticket sales increased following the price increase. D. elastic because total revenue from ticket sales decreased following the price increase.

The grading system plays an important role in student learning. In their book Effective Grading: A Tool for Learning and Assessment in College, Barbara Walvoord and Virginia Anderson state that "grading infuses everything that happens in the classroom." They also argue that grading "needs to be acknowledged and managed from the first moment that an instructor begins planning a class." Source: Barbara E. Walvoord and Virginia Johnson Anderson, Effective Grading: A Tool for Learning and Assessment in College, 2nd edition, San Francisco: Jossey-Bass, 2010, p. 1. The grading system used by a teacher can affect the incentives of students to learn the course material by A. altering the payoffs to achieving success on the various components of the course. B. doubling the points assigned to each component of the course. C. uniformly weighting all course components. D. none of the above since student performance is based on innate intelligence.

increase; decrease

The income effect causes quantity demanded to ________ when the price of a normal good decreases, and causes quantity demanded to ________ when the price of an inferior good decreases. decrease; increase increase; decrease decrease; decrease increase; increase

The income effect of a decrease in the price of macaroni and cheese (assume this is an inferior good) results in A. an increase in the demand for macaroni and cheese. B. an increase in the quantity of macaroni and cheese demanded. C. a decrease in the quantity of macaroni and cheese demanded. D. a decrease in the demand for macaroni and cheese.

The price elasticity of demand in the United States for crude oil has been estimated to be minus−0.061 in the short run and minus−0.453 in the long run. The demand for crude oil A. is more price inelastic in the long run than in the short run because in the short run a substitute for crude oil may be found. B. is equally price inelastic in both the short and long run as there are not many substitutes for crude oil. C. is more price elastic in the long run than in the short run because in the long run a substitute for crude oil may be found. D. is price elastic in both the short and long run as there exists many substitutes for crude oil.

a change in price making the good more or less expensive relative to other goods

The substitution effect is the change in the quantity demanded of a good that results from ______________, holding constant the effect of the price change on consumer purchasing power. the tendency of people to be unwilling to sell something they own a change in the price of a substitute for the good a change in price making the good more or less expensive relative to other goods an increase in the usefulness of a product as the number of consumers who use it increases

The three economic questions that every society must answer are A. What are the prices of goods, how are they determined, and who will pay for them? B. What goods will be produced, how will they be produced, and who will receive the goods? C. What economic system will be used, how will it be implemented, and who will make market decisions? D. What kind of government will the society have, how will it be run, and who will run it?

The wrist watch industry in a country is not very competitive. There are limited brands available and the existing firms use their market power to keep prices high. Envy, one of the leading brands in the market, is planning to increase the price from $1,000 to $1,100 per watch. The firm is expecting the quantity demanded to fall by only 7 percent. However, after the price is increased to $1,100, quantity demanded actually declined by 12 percent. Sonia, a student of economics, knows that the average income level in this country has increased over the last year. When actual sales of Envy watches turn out to be lower than anticipated, she concludes that the income elasticity of demand for Envy watches is negative. Her conclusion is flawed because A. she is assuming that the government of this country does not import watches. B. she is ignoring the fact that the cost of production of Envy watches could be high. C. she is confusing between consumer and producer surplus. D. she is assuming that rival firms have reduced the price of their watches. E. she is confusing between price elasticity of demand and income elasticity of demand

The cross-price elasticity of demand is A. the percentage change in quantity demanded of one good divided by the percentage change in the quantity of another good. B. the percentage change in quantity demanded divided by the percentage change in income. C. the percentage change in quantity demanded of one good divided by the percentage change in the price of another good. D. the percentage change in quantity demanded divided by the percentage change in price. E. the percentage change in quantity supplied divided by the percentage change in price.

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

Utility refers to how much consumers utilize a product or service. A. True B. False

We can show economic efficiency: A. with points outside the production possibilities frontier. B. with points on and outside the production possibilities frontier. C. with points on the production possibilities frontier. D. with points inside and on the production possibilities frontier. E. with points inside the production possibilities frontier.

We can show economic inefficiency: A. with points inside and on the production possibilities frontier. B. with points inside the production possibilities frontier. C. with points on the production possibilities frontier. D. with points on and outside the production possibilities frontier. E. with points outside the production possibilities frontier.

What are the implications of this idea for the shape of the production possibilities frontier? A. The production possibilities frontier will be bowed outward. B. The production possibilities frontier will have a positive slope. C. The production possibilities frontier will be a straight line. D. The production possibilities frontier will have a negative slope. E. The production possibilities frontier will be bowed inward.

What does increasing marginal opportunity costs mean? A. Increasing the production of a good requires larger and larger decreases in the production of another good. B. Increasing the production of a good requires decreases in the production of another good. C. The economy is unable to produce increasing quantities of goods and services. D. Increasing the production of a good requires smaller and smaller decreases in the production of another good. E. Production is not occurring on the production possibilities frontier.

What happens if a country produces a combination of goods that efficiently uses all of the resources available in the economy? A. The country is operating on its production possibilities frontier. B. The country has eliminated scarcity. C. The country is maximizing its opportunity cost. D. All of the above occur if a country uses all available resources

What is the economic definition of utility? Utility is (NOT MEASURABLE) A. the enjoyment or satisfaction people receive from consuming goods and services. B. the change in enjoyment or satisfaction a person receives from consuming one additional unit of a good or service. C. the decrease in additional satisfaction consumers receive as they consume more of a good or service during a given period of time. D. the sum of consumer and producer surplus. E. the difference between the highest price a consumer is willing to pay and the price the consumer actually pays.

When quantity demanded is completely unresponsive to price, what is the value of price elasticity of demand? A. A negative number B. 0 C. 1 D. A number between 0 and 1

it changes the relative price of the product causing a substitution effect and at the same time it changes the purchasing power of the buyer causing an income effect as well.

When the price of a product changes, it changes the relative price of the product causing a substitution effect and at the same time it changes the purchasing power of the buyer causing an income effect as well.. it changes the relative price of the product causing a network effect and at the same time it changes the purchasing power of the buyer causing an income effect as well. it only causes an income effect by changing the purchasing power of the consumer. it only causes a substitution effect by changing the relative price of the product.

Which of the following best describes scarcity? A. Wants cannot be fulfilled and thus all goods must be rationed. B. Markets cannot properly allocate resources. C. Unlimited wants exceed the limited resources available. D. Prices of goods are very high.

Which of the following claims is most likely to suffer from reverse causality? A. Crime rate is seen to be lower in countries having a higher level of poverty. B. Higher income increases consumption. C. Relatively wealthy people tend to be relatively healthy. D. More hours of study is likely to lead to better results.

Which of the following describes the substitution effect of a price change? A. The change in demand that results from a change in price, making the good more or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power. B. The change in quantity demanded of a good that results from the change in the price of a substitute for the good. C. The change in quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power. D. The change in quantity demanded of a good that results from the effect of a change in price on consumer purchasing power, holding everything else constant.

Which of the following goods is likely to have an income elasticity of demand greater than one? A. Diamond jewelry B. Salt C. Gasoline D. Bread

Which of the following illustrates the law of supply? A. A change in price causes a shift of the supply curve. B. An increase in price causes an increase in the quantity supplied, and a decrease in price causes a decrease in the quantity supplied. C. An increase in the number of firms in an industry causes a shift of the supply curve. D. All of the above illustrate the law of supply.

Which of the following is most likely to be an example of causation? A. A student wins money by scratching a ticket with a particular coin. He decides to scratch all tickets with the same coin in the future. B. The crime rate is high in a country. The literacy rate is high as well. C. A soccer player scores 4 goals when he wears red socks. He concludes that the red socks helped him score the goals. D. A firm producing CFLs installs new machinery. The per-day production of CFLs increases.

Which of the following is the textbook's definition of a supply curve? A. a table that shows the relationship between the price of a product and the quantity of the product supplied B. a curve that shows the relationship between the price of a product and the quantity of the product supplied C. the quantity of a good or service that a firm is willing to supply at a particular price D. None of the above.

Which of the following is the textbook's definition of a supply schedule? A. a table that shows the relationship between the price of a product and the quantity of the product supplied B. a curve that shows the relationship between the price of a product and the quantity of the product demanded C. the quantity of a good or service that a firm is willing to supply at a particular price D. None of the above.

Which of the following statements identifies a difference between correlation and causation? A. A causal relationship exists between two variables when they are correlated, but correlation does not necessarily exist if there's a causal relationship between two variables. B. Causation cannot arise when correlation is present, and correlation cannot arise when causation is present. C. Correlation implies a mutual relationship between two things, whereas causation occurs when one thing directly affects another. D. Correlation occurs when one thing directly affects another, whereas causation implies a mutual relationship between two things.

Which of the following statements is true about data? A. Facts that describe the world are not considered data. B. Empiricism does not necessarily involve data. C. Consistency of models can be checked using data. D. Convincing data analysis in economics relies on using a small sample.

Which of the following statements is true of the scientific method? A. Arguments based on a few anecdotes are mostly true. B. The larger the size of the data set, the greater the scope of inaccuracy in an analysis. C. When a researcher looks at a large data set, she is more likely to jump to the wrong conclusions. D. Empirical arguments are more credible when they are based on a large data set.

Which of the following statements is true? A. An individual does not require information to make optimal decisions. B. It is not necessary to consider the risks of a particular alternative while making an optimal decision. C. The principle of optimization is only accurate when it comes to making monetary decisions. D. Rational economic agents maximize more than just monetary income.

Which of the following statements is true? A. Normative economic statements can be confirmed or disproven. B. Positive economics recommends what people ought to do. C. Positive economics deals with issues that are subjective. D. Normative statements depend on personal preferences.

Inelastic

Which supply curves have largest change in price for equilibrium shift

Would a decline in oil prices ever cause a reduction in the supply of oil? A. No, a decline in oil prices would reduce the quantity of oil supplied, not the supply of oil. B. No, the supply of oil is fixed. C. Yes, a decline in oil prices would reduce the supply of oil, but not the quantity of oil supplied. D. Yes, a decline in oil prices would reduce both the quantity of oil supplied and the supply of oil.

_________________ occurs when the direction of cause and effect is mixed up in a study. A. Limited information bias B. Adverse causality C. Reverse causality D. Omitted variable bias

a. The observation that an increase in ticket prices to the opera "backfired' means that A. total revenue from ticket sales increased following the price increase. B. ticket sales increased following the price increase. C. total revenue from ticket sales decreased following the price increase. D. ticket sales decreased following the price increase.

.48, inelastic

if a 23 percent increase in the price of Cheerios causes a 11 percent reduction in the number of boxes of cereal demanded, the price elasticity of demand for Cheerios is ------- . The demand for cheerios is _________ .

or which of the following products is the price elasticity of demand (in absolute value) the largest? A. automobiles B. milk C. Tide liquid detergent D. cigarettes

"We find evidence that Economics s a good choice of major for those aspiring to become a CEO [chief executive officer]. When adjusting for size of the pool of graduates, those with undergraduate degrees in Economics are shown to have had a greater likelihood of becoming an S&P 500 CEO than any other major." A list of famous economics majors published by Marietta College includes business leaders Warren Buffet, Donald Trump, Ted Turner, and Sam Walton, as well as former presidents George H.W. Bush, Gerald Ford, and Ronald Reagan. Why might studying economics be particularly good preparation for being the top manager of a corporation or a leader in government? A. Economics is just as valuable to a cashier as it is for a CEO. B. Management and politics have more to do with public relations than economics. C. Economics teaches us how to look at the tradeoffs involved in every decision. D. Economics is less of an issue as you climb the corporate ladder because you usually hire accountants to handle your money.

Scenario: Maria has to choose between driving and taking a train to destination A. Travelling by train will cost her $400 and will take 4 hours. Driving to destination A takes 6 hours and the required amount of gasoline costs $250. Her opportunity cost of time is $15 per hour. Refer to the scenario above. If Maria borrows her parents' car and pays for only the gasoline, what is her total cost of driving to destination A? A. $340 B. $300 C. $90 D. $250

Scenario: Maria has to choose between driving and taking a train to destination A. Travelling by train will cost her $400 and will take 4 hours. Driving to destination A takes 6 hours and the required amount of gasoline costs $250. Her opportunity cost of time is $15 per hour. Refer to the scenario above. If the opportunity cost of time increases to $80 per hour, which of the following statements is true? A. Maria should choose to drive as it saves her $150. B. Maria should choose to travel by train as it saves her $150. C. Maria should choose to travel by train as it saves her $10. D. Maria should choose to drive as it saves her $10.

ECON TEST 1

Kaugnay na mga set ng pag-aaral

APCSP Exam

Biomechanics ch. 3 review

Physical Science 1110 Checkup #1

NC Life Agent Exam

Dimensions of Nursing Practice Exam #3 Chapter 25

NCLEX questions for chapter 86

AP Gov ch. 3-4

HESI BSN 246 Part II

Care of the Client with Peripheral Artery Disorders

PCE Studying

Section: 2 Studying Earthquakes

reach for the stars

Middle East Exam 2 Terms

Lecture 7: Population

PrepU Chapter 15

Series 66 Chapter 24

Utah laws and rules pertinent to insurance chapter 8 exam

Intro Film Questions

Penny Review

APUSH CHAPTER 18-19