econ test 1

instead of attending class, one could have worked an extra hour at the cafe for $10 or watched a neighbor's child for $15. The opportunity cost of attending class is:

$15

When four roommates agree to specialize in chores they are most efficient, this can lead to: - a situation in which less time is spent on chores by every roommate -some roommates doing many more chores than others -one roommate who is most efficient doing all of the chores -no chores getting at all

- a situation in which less time is spent on chores by every roommate

which of the following would cause the demand curve for ice cream to shift to the right? -a reduction in the price of ice cream -a reduction in the cost of producing ice cream -a rise in the price of popsicles, a substitute for ice cream -an unexpected cold and rainy summer season

-a rise in the price of popsicles, a substitute for ice cream

which of the following is most likely to shift the supply curve for pet grooming services leftward? -an increase in the cost of pet grooming supplies -a rise in the price of pet grooming services -an increase in the number of pet groomers seeking employment -a decrease in the number of owners taking their pets to be groomed

-an increase in the cost of pet grooming supplies

the supply curve is upward sloping because higher prices .... -encourage customers to switch to substitute goods -are needed to cover higher marginal costs -are needed to reflect higher marginal utility -make customers willing to pay more for a good

-are needed to cover higher marginal costs

consider the demand for socks. what would cause a movement from one point on the demand curve to a point further down the curve? -big sale on socks -increased demand for a kind of shoe typically worn without socks -increase in the price of socks -decreases demand for a kind of shoe typically worn without socks

-big sale on socks

which of the following is a decision that follows the net marginal benefit principle? -deciding whether to spend one more hour studying for an exam -choosing to give up eating meat due to concerns regarding the treatment of animals -deciding to order a dessert at a non-buffet restaurant more often than you have dessert at a buffet -choosing among different roller coasters based on their distance from the theme park entrance

-deciding whether to spend one more hour studying for an exam

college students often buy cheap pizza because it is more affordable. suppose after graduating, college students find high-paying jobs. the demand for cheap pizza will likely: -decrease because demand for cheap pizza is negatively related to income -decrease because demand for cheap pizza is positively related to income -increase because demand for cheap pizza is negatively related to income -increase because demand for cheap pizza is positively related to income

-decrease because demand for cheap pizza is negatively related to income

If Switzerland can produce more watches in a year than Austria, we know that Switzerland: -has neither a comparative advantage nor an absolute advantage in producing watches -definitely has both a comparative advantage and an absolute advantage in producing watches -definitely has an absolute advantage in producing watches -definitely has a . comparative advantage in producing watches

-definitely has an absolute advantage in producing watches

since nearly all smartphones have built-in cameras, what will happen to the market for traditional camera? -demand for traditional cameras will fall, pushing prices lower -demand for traditional cameras will rise, pushing prices lower -demand for traditional cameras will fall, pushing prices higher -demand for traditional cameras will rise, pushing prices higher

-demand for traditional cameras will fall, pushing prices lower

what is the main problem addressed with scarcity? -trying to satisfy the basic needs of everyone to eliminate poverty -making sure that critical resources such as oil and forests are not depleted -determining how to address unlimited wants with limited resources -ensuring that an adequate standard of living is achieved

-determining how to address unlimited wants with limited resources

an economist uses the scientific method when trying to explain economic observations. what makes the economists task of developing/supporting theories different than that of a chemist? - because they both use the scientific method, economists and chemists develop and test theories in the same way -chemists cannot conduct controlled experiments like an economist can -chemists can utilize natural experiments offered by history, whereas the economist cannot -economists, unlike chemists, cannot conduct controlled experiments as easily to offer support for their theories

-economists, unlike chemists, cannot conduct controlled experiments as easily to offer support for their theories

which term best describes the situation that, relative to England, France can produce beef at a lower cost of production?

absolute advantage

an outward parallel shift to the production possibility frontier signals: -a shrinkage of the economy due to rising opportunity cost -the employment of previously unused resources into production -an expansion of the productive capacity of the economy -an ability to produce more of one but not both goods represented by the ppf

an expansion of the productive capacity of the economy

which of the following would be most closely related to microeconomics? -the extent to which people leaving the labor force affects unemployment -how rising prices cause standards of living to fall -the effect of improving consumer confidence on economic growth -how rising wages affect the choice of working instead of going to school

how rising wages affect the choice of working instead of going to school

If farmers begin using better fertilizers to grow corn, we would expect a(n) __________ in the supply of corn. -small decrease -no change -large decrease -increase

increase

a shortage in the market for economics textbooks will ... the price of textbooks -decrease -initially not change but then decrease -increase -not change

increase

at the current market price in the market for smartphones, the quantity of buyers is larger than the quantity of sellers. given this situation, we expect the market price of smartphones to: -increase -decrease -remain the same

increase

currently the market for pizza is at equilibrium. if a large number of people move into the area, we would expect he market price of pizza to: -increase -decrease -remain unchanges

increase

suppose the following two events occur at the same time: the Chicago Cubs win the World Series, and the workers who make Cubs merchandise overseas go on strike. Holding everything else constant, we would expect the price of Cubs' merchandise next season to ... and the quantity of merchandise sold to ....

increase; increase or decrease

suppose you have a very efficient study system. then, as you increase the hours that you study for an economic exam, the opportunity cost for studying for the exam:

increases

a point inside the curve is

inefficient

absolute advantage can be determined by comparing different producer's ...

input requirements per unit of output

Sally can type 100 words per minute and David can type 200 words per minute. Given these numbers, society would be better off if which one of the two was employed as a typist?

it depends

macro or microeconomics as a result of a severe recession, the total output, or gross domestic product, of a nation falls by 4%.

macro

macro or microeconomics increased consumer spending causes the national unemployment rate to fall

macro

macro or microeconomics increased consumer spending causes the rate of inflation to rise

macro

macro or microeconomics optimism about future car sales leads General Motors to hire more auto workers

micro

macro or microeconomics robotic technology reduces the demand for auto workers

micro

macro or microeconomics a tax on tires increases the price of tires paid by car owners.

microeconomics

a country does not have an absolute advantage in the production of any good or service -cannot benefit from trade under any circumstances -can specialize but will not gain from trade -can benefit from trade if another country gives up all its gains - can benefit from trade by specializing in goods in which it has a comparative advantage

can benefit from trade by specializing in goods in which it has a comparative advantage

which of the following words best describes what economics is about?

choices

which of the items wis most likely to be a complement to coffee? -tea -decaf coffee -creamer -baked beans assume that a monsoon destroys the coffee crop in vietnam, one of the world's largest coffee distributers, what is most likely to occur? -there will be no market change -consumers will try to find alternatives to coffee due to increases in the price of coffee -the price of sugar and creamer will increase

creamer -consumers will try to find alternatives to coffee due to increases in the price of coffee

suppose you and your roommate have the following agreement when it comes to cleaning your apartment: each person washing her own dishes after each meal. the principle of trade you just learned tells you that it would be more efficient if:

one of you wash all the dishes while the other does a different chore

suppose you have a choice between studying one more hour for your history exam or studying one more hour for your psychology exam. your decision should be based on

the additional benefits of studying for each class

tyrone has three options on how to spend his Saturday afternoon: to go out with friends, watch a movie, or was his car. tyrone's opportunity cost of washing his car would be:

the value of going out with friends OR watching a movie

the price of gasoline is $2.50 per gallon at the closest fas station, but is only $2.30 per gallon at a gas station two miles away. by driving to the farther gas station, the opportunity cost is:

the value of one's time and expense to go to the father gas station

because of scarcity: - we face tradeoffs in nearly every choice we make -wants are limited -choices are unlimited -resources are limitless

we face tradeoffs in nearly every choice we make

your friend tells you the following: "the law of demand does not work ALL the time. for example, think about the demand for luxury cars. Demand for such cars increases when the price of the car increases"

wrong; demand is not the same as quantity demanded

can a production possibility frontier ever shrink inwards?

yes, if new regulations restrict a country's capacity to produce goods

which of the following factors would most likely cause a shift in the demand curve the candles? -improved technology that makes candles less costly to produce -an increase in the price of wax used to make candles -a decrease in the number of factories making candles -falling incomes, due to a weakening economy

-falling incomes, due to a weakening economy

assuming everything else stays the same, an increase in the price of smartphone will -increase the supply -increase the quantity supplied -decrease the quantity supplied -decrease the supply

-increase the quantity supplied

if japan produces 3 rice cakes or 6 seaweed salads in an hour, while indonesia can produce 2 rice cakes or 5 seaweed salads in an hour, which of the following is true? -japan has a comparative advantage in producing seaweed salads -japan has a comparative advantage in producing both goods -indonesia has a comparative advantage in producing seaweed salads -indonesia has a comparative advantage in producing rice cakes

-indonesia has a comparative advantage in producing seaweed salads

if more states legalized recreational marijuana, what is the likely effect on the supply of marijuana? -it would not change -it would increase as the risk of prosecution falls -it would increase because prices will rise -it would decrease as the risk of prosecution rises

-it would increase as the risk of prosecution falls

If a technology company introduces a new gadget to the market which creates long lines of eager customers at stores, what is true about this market? -quantity demanded exceeds quantity supplies and a surplus occurs -quantity supplies exceeds quantity demanded and a surplus occurs -quantity demanded exceed quantity supplied and shortage occurs -quantity supplied exceed quantity demanded and a shortage occurs

-quantity demanded exceed quantity supplied and shortage occurs

when an economic model is used, it tends to: -include many caveats to ensure that the model is realistic -start with very few details in order to simplify the model -start with many details and then become simpler over time -use a case study approach by focusing on one specific real life example

-start with very few details in order to simplify the model

if the price of beef rises significantly, what will happen in the market for fast-food hamburgers assuming nothing else happens to the market? -supply increases, pushing prices lower -supply decreases, pushing prices higher -supply decreases, pushing prices lower -supply increases, pushing prices higher

-supply decreases, pushing prices higher

If a public offering of new stock is initially priced too high relative to market demand, the result would be a: -shortage of shares, causing the price to rise -shortage of shares, causing prices to fall -surplus of shares, causing prices to fall -surplus of shares, causing prices to rise

-surplus of shares, causing prices to fall

if the price of copper rises, which oft he following may occur? -the quantity of copper supplied falls -the government increases the copper content of pennies -thefts of copper wire decline -the profits of copper producers increase

-the profits of copper producers increase

if the government offers a tax deduction to companies producing solar panels, what will happen in the market for solar panels? -the supply curve will shift to the left, decreasing supply -the supply curve will shift to the right, increasing supply -the supply curve will shift to the right, decreasing supply -the supply curve will shift to the left, increasing supply

-the supply curve will shift to the right, increasing supply

if the price of foam blanks used in surfboard production falls, what will happen in the market for surfboard? -the supply of surfboards will fall, putting upward pressure on price -there will be no change in the market for surfboards -the demand for surfboards will rise, putting upward pressure on price -the supply of surfboards will rise, putting downward pressure on price

-the supply of surfboards will rise, putting downward pressure on price

if an economy moves from a point on a production possibility frontier line to a point to the right of the ppf, what event might have occurred? -the government has places new restrictions on energy production -a tornado that has caused tremendous damage -there has been a discovery of new technology that expands production possibilities -the economy has recovered from a downtown and unemployment in dropping

-there has been a discovery of new technology that expands production possibilities

if the price of tennis balls goes up from 7.99 to 14.99, what can be expected from suppliers of tennis balls as a result? -there will be an increase in supply -there will be a decrease in quantity supplies -there will be an increase in quantity supplied -the quantity supplied will not change

-there will be an increase in quantity supplied

which is a reason(s) why economists may disagree? -value systems -scientific judgement -difference between perception and reality

-value systems -scientific judgement

scientific method in order

-you observe that college students eat lots of candy -you hypothesize that college students eat more candy than other demographic groups -you collect data to test the hypothesis -you reject or fail to reject your hypothesis -you repeat the process

Lisa is choosing between three alternatives: a)working at her job that pays 60 dollars b) writing a term paper which values at 40 dollars or c) going out with friends, which she values at 80 dollars. the opportunity cost of writing the paper is

80 dollars

vincent and jean are two cooks who work in a village. each of them can either bake cakes or make pizzas. every ingredient is readily available to them, and the only scarce resource is the cooks' time. vincent can bake 10 cakes or make 5 pizzas in an hour. jean can bake 12 cakes or make 8 pizzas in an hour. 1. which cook has the absolute advantage in baking cakes? 2.which cook has the absolute advantage in making pizza? 3.which cook has the comparative advantage in baking cakes? 4. which cook has the comparative advantage in cooking pizza/

1. jean 2. jean 3. vincent 4. jean

A farmer produces both beans and corn on her farm. If she must give up 16 bushels of corn to be able to get 6 bushels of beans, then her opportunity cost of 1 bushel of beans is ______________

2.67 bushels of corn

having a comparative advantage in producing a good means that:

a country can produce the good at a lower opportunity cost that other countries

which of the following situations represents an economic problem? a) a student trying to decide how to spend his weekly allowance b) a country choosing to sacrifice some privacy in order to gain more secrurity c) neither d) both

both

suppose you are trying to understand the effect that an increase in the price of grapes will have on the market for wine. An effective model to determine this effect is one that evaluates the change in the price of grapes on the market quantity of wine assuming: -buyers incomes also change -buyers preferences and incomes also change -some wines use different grapes -no other change takes place

buyers preferences and incomes also change

if cream cheese and bagels are complements, then an increase in the price of cream cheese will .... bagels -increase -not change -increase or decrease -decrease

decrease

assuming everything else stays the same, an increase in the price of laptop computers will -decrease the quantity demanded -increase the demand -increase the quantity demanded -decrease the demand

decrease the quantity demanded

assume the market for DVD movies is initially at equilibrium. a decrease in the price of streamed movies, a substitute for DVD movies will .... the equilibrium price and ... the equilibrium quantity of DVD movies.

decrease;decrease

Many Super Bowl football tickets are resold online for several times their face value. As the game day approaches, unsold tickets will likely: -rise in price to make up for unsold tickets -fall in price to avoid letting the ticket go unsold -fall in price because demand falls as game day nears -rise in price to target desperate last minute buyers

fall in price to avoid letting the ticket go unsold

you see a large group of stranded passengers standing next to a disabled, bus, and have to decide which 3 passengers to rescue because of:

scarcity