ECON2023

Select all that apply Which of the following are examples of resources? -An oven used to bake bread at a bakery. -Workers hired to pick grapes at a vineyard. -Social Security payments made to retired workers. -A new technology improving the production process for tractors.

- An oven used to bake bread at a bakery. - Workers hired to pick grapes at a vineyard.

The law of supply tells us that: - higher prices of goods result in higher quantities of goods being demanded. - lower prices of goods result in higher quantities of goods being supplied. - lower prices of goods result in higher quantities of goods being demanded. - higher prices of goods result in higher quantities of goods being supplied.

- higher prices of goods result in higher quantities of goods being supplied.

When the supply curve shifts to the left,: -lower quantities of a good, service, or resource are produced at all prices. -it is called a decrease in supply. -more of a good, service, or resource is produced at all prices. -it is called an increase in supply.

- lower quantities of a good, service, or resource are produced at all prices. - it is called a decrease in supply.

When the supply curve shifts right,: - more of a good, service, or resource is produced at all prices. - it is called an increase in supply. - it is called a decrease in supply. - less of a good, service, or resource is produced at all prices.

- more of a good, service, or resource is produced at all prices. - it is called an increase in supply.

Taxes and subsidies matter because they: - stimulate production or collect revenue. -increase the disposable income of consumers. -have unanticipated effects on other markets. -increase the volume of trade among countries. -increase efficiency in production by altering the allocation of resources.

- stimulate production or collect revenue. -have unanticipated effects on other markets.

What is the effect of a subsidy being placed on the market? -An increase in government revenue -An increase in technological advances -A decrease in buyers' willingness to purchase the product -A decrease in the cost of production

-A decrease in the cost of production

Which of the following would shift the supply curve for guitars? -A change in the price of guitars -A change in the price of saxophones, a substitute in consumption -A tax is implemented on guitars -A change in the number of buyers

-A tax is implemented on guitars

The quantity traded when the quantity supplied of a good, service, or resource equals the quantity demanded is the _____ quantity. (Enter one word answer.) -supplied -market -equilibrium -demanded

-Equilibrium

The price that balances demand and supply is called the: -expected price. -market position. -equilibrium quantity. -Equilibrium price

-Equilibrium price

Which of the following is not true of equilibrium? -Price and quantity will never change. -Adjustments by buyers and sellers move the market toward equilibrium. -Changes in the determinants of demand change the equilibrium price. -Changes in the determinants of supply change the equilibrium price.

-Price and quantity will never change.

Another term for the factors of production used to produce goods and services is: -the production process. -labor. -resources. -suppliers.

-Resources

Inputs used to produce goods and services are: -resources. -products. -goods. -services.

-Resources

Producers expect the price of lumber to increase next month. How will producers respond today? -Quantity of lumber supplied will decrease. -Supply of lumber will decrease at every price. -Quantity of lumber supplied will increase. -Supply of lumber will increase at every price.

-Supply of lumber will decrease at every price.

Shortages: -generally occur after surpluses. -typically cause prices to fall. -are usually indicated by high prices. -are usually the product of price controls.

-are usually the product of price controls.

Shortages and surpluses are represented by the: -vertical distance between a point on the demand curve at a particular price and a point on the supply curve at the same price. -vertical distance between the market price and the equilibrium price. -horizontal distance between a point on the demand curve at a particular price and a point on the supply curve at the same price. - horizontal distance between the market price and the equilibrium price.

-horizontal distance between a point on the demand curve at a particular price and a point on the supply curve at the same price.

Suppose that at a price of $5, consumers want 50 units, and producers want to sell 75 units. This is: -not an equilibrium, because the quantity supplied does not equal the quantity demanded. -not an equilibrium, because the quantity cannot change. -an equilibrium, because the quantity supplied does not equal the quantity demanded. -not an equilibrium, because the price cannot change.

-not an equilibrium, because the quantity supplied does not equal the quantity demanded.

The supply curve in the current period will shift to the: -left when producers expect lower prices in the future. -right when producers expect lower prices in the future. -right when producers expect higher prices in the future. -left when consumers expect higher prices in the future.

-right when producers expect lower prices in the future.

The price that consumers pay and that producers receive exactly balances the marginal benefit and marginal cost of consuming and producing a good or service when: -firms are earning profits. -the market is in equilibrium. -consumers are making choices. -the market is in flux.

-the market is in equilibrium.

3 parts of a long-run average total cost curve:

1. Economies of Scale 2. Neither Economics nor Diseconomies of Scale 3. Diseconomies of Scale

subsidy

A payment made by the government that does not necessarily require an exchange of economic activity in return. Most often take to form of payments to businesses.

Tax

A payment made to government that is the result of economic activity. Taxes are generally collected from both individuals and firms.

When a nonprice determinant of supply changes what will be the effect on the market? - A shift in the supply curve below the market price, but not above - Movement along an existing supply curve - A shift in the supply curve above the market price, but not below - A shift in the supply curve at all possible prices

A shift in the supply curve at all possible prices

Economics

A study of rational human behavior in the face of scarcity

Which of the following events would increase the cost of production? -A tax is placed on the market. -A subsidy is placed on the market. -A technological advance improves the production process. - Resource prices fall.

A tax is placed on the market.

Consumer Surplus is... The difference between what a consumer is willing to pay, and what the consumer actually pays (the price). The area beneath the demand curve and above the price. A measure of the pleasure consumers get from consuming goods and services, net of the cost of obtaining those goods and services. All of the above. None of the above.

All the above

Producer Surplus is... The difference between the price of a good, and the marginal cost to the firm of producing that good. The difference between what a firm receives for selling a good, and the minimum price at which it would have been willing to sell that good. The difference between what a firm receives for selling a good, and the opportunity cost of producing that good. The difference between what a firm receives for selling a good, and the value of the resources that must be used to produce that good. The benefit to producers from producing and selling a good. All of the above. None of the above.

All the above

Market supply is the ______ summation of the quantities supplied by individuals, firms, states, or even nations at each price over a fixed time period.

horizontal

Economies of Scale

Average Total Cost falls as firm uses more fixed inputs to produce more output

Neither Economics nor Diseconomies of Scale

Average Total Cost neither rises or falls as firm gets bigger

Diseconomies of Scale

Average Total Cost rises

The surgeon general announces that wearing a hat significantly reduces your chance of getting skin cancer. Also, hats look cool (provided you choose the right kind) and you want to look cool, right? As a result, many more people buy and wear hats. What happens in the market for hats? Demand shifts to the right, price rises, quantity rises. Demand shifts to the right, price falls, quantity falls. Supply shifts to the right, price falls, quantity falls. Supply shifts to the left, price rises, quantity falls. The higher price of hats causes quantity demanded to fall.

Demand shifts to the right, price rises, quantity rises.

Which of the following statements is correct? In equilibrium, Total Surplus is maximized. Total Surplus is Consumer Surplus minus Producer Surplus. Total Surplus is Producer Surplus minus Consumer Surplus. Total Surplus is maximized when the price is zero. When Total Surplus is maximized, this is inefficient. All of these statements are correct None of these statements are correct.

In equilibrium, Total Surplus is maximized.

On the supply side of the market, when the price of a good increases, the quantity supplied of the good: Increases Decreases Remains constant

Increases

Which principle states that as the price of a good increases the quantity supplied will increase?

Law of supply

The sum of individual supply curves added together reflect the: marginal productivity. market supply. opportunity cost. overall cost.

Market Supply

Total Revenue Formula

Price * Quantity = Total Revenue

A blizzard had stopped shipments of gasoline to the northeast United States. Now the snow has melted, and gasoline shipments resume. What does this (i.e., the resumption of shipments) do to the price of gasoline in the northeast united States? Price falls. The price does not change. Price rises.

Price falls

The price of french fries rises. What does this do to the price of hamburgers? Price falls. The price does not change. Price rises.

Price falls

The market for razor blades is in equilibrium. Then, two things happen at the same time. First, a new company, Barry's Razors, enters the market with its precision German-made razors (heavily advertised on podcasts, because that's where all the hip kids' ears are these days). Second, a new medical cream is invented that will prevent the growth of new hair in whatever area to which it is applied (it is not permanent, and has no side effects, except that it makes the user strongly dislike swimming, inflicting medical irony on professional swimmers). What is the effect of these two things (a new razor producer enters the market, and a new drug can prevent the regrowth of hair) in the market for razors? Price rises, quantity falls. Price falls, quantity falls. Price falls, quantity is indeterminate. Price is indeterminate, quantity falls.

Price falls, quantity is indeterminate.

The price of synthetic rubber rises. What does this do to the price of tires? Price falls. The price does not change. Price rises.

Price rises

Inputs used to produce goods and services are: -services. -resources. -goods. -products.

Resources

Market participants who are willing and able to sell goods, services, or resources are known as: -sellers. -buyers. -entities. -constituents.

Sellers

To simplify analysis in economics, supply curves are often drawn as:

Sloping lines

Scarcity

Stuff is limited

A ______ to producers lowers the cost of producing.

Subsidy

A payment made by the government that does not necessarily require an exchange of economic activity in return is called a: -purchase. -tax. -substitute. -subsidy.

Subsidy

When the number of sellers increases,: -supply decreases. -demand decreases. -supply increases. -demand increases.

Supply increases

The price of wheat is $5.00 per bushel. Then....nothing happens. Price falls. The price does not change. Price rises.

The price does not change.

seller expectations

The anticipated future outcomes, including prices, that sellers associate with the production of a good, service, or resource.

Technology

The knowledge, inventions, and innovations that can potentially increase resource productivity.

ATC * Output =

Total Cost

Subsidies most often take the form of payments to businesses by governments. (True or False)

True

Average Variable cost * Output =

Variable Cost

In economics, a downward-sloping or upward-straight line is often called: an expected relationship. a linear object. a curve. an equation.

a curve

When less output is being produced at every price, we say there is: a decrease in supply. an indication of a normal good. a decrease in the quantity supplied. a decrease in demand.

a decrease in supply.

The supply curve will shift to the right or left when: -a non-price determinant of demand changes. -the price changes. -a non-price determinant of supply changes. -the quantity changes.

a non-price determinant of supply changes.

A shift in the supply curve at every price is the result of a change in:

a nonprice determinant of supply.

A shift in the supply curve at every price is the result of a change in: -the number of buyers in the market. -the price of the good. -buyers' willingness and ability to supply the good. -a nonprice determinant of supply.

a nonprice determinant of supply.

An increase in the quantity of a good - service - or resource supplied at every price is: an increase in supply. an increase in demand. rare. an increase in the quantity supplied.

an increase in supply.

Resources (such as land) and technology (such as the ability to draw water from a well): -influence the likelihood that consumers will purchase the product. -contribute to how a good or service is produced for the market. -cannot be influenced by producers. - are the most expensive inputs that producers use.

contribute to how a good or service is produced for the market.

The principle that if at least one input of production is fixed, the marginal productivity of additional variable resources will eventually fall, all else held constant, is known as: diminishing measured production. diminishing marginal productivity. demonstrated marginal productivity. diminishing measured productivity.

diminishing marginal productivity.

The price of a good and the quantity supplied are:

directly related

The price that balances demand and supply is called the _________ price.

equilibrium

The quantity supplied of a good, service, or resource equals the quantity demanded at the ________ quantity.

equilibrium

If the quantity supplied equals the quantity demanded: -equilibrium will stay the same if all else is equal. -the market price cannot change. -the market quantity cannot change. -equilibrium will stay the same if there are only market forces acting on it.

equilibrium will stay the same if all else is equal.

total cost - variable cost =

fixed cost

According to the law of diminishing marginal productivity, the marginal productivity of additional variable resources will eventually fall, all else held constant, if at least one input is _______ .

fixed.

The supply curve will shift to the left in the current period when producers expect: -lower prices in the future and there are fewer sellers. -lower prices in the future and there are fewer buyers. -lower prices in the future and there are more buyers. -higher prices in the future and there are fewer sellers.

higher prices in the future and there are fewer sellers.

Market supply is the _____ summation of the quantities supplied by individuals - firms - states - or even nations at each price over a fixed time period. vertical estimated periodic horizontal

horizontal

On the supply side of the market, when the price of a good increases, the quantity supplied of the good ______________ .

increase

A tax on producers _________ the cost of producing

increases

A tax on producers: -decreases the cost of producing. -increases the quantity. -lowers the price. -increases the cost of producing.

increases the cost of producing.

A tax on producers: -decreases the cost of producing. -lowers the price. -increases the cost of producing. -increases the quantity.

increases the cost of producing.

According to the law of supply, as price ________, quantity supplied ________. increases or decreases; does not change increases; increases increases; decreases decreases; increases

increases; increases

A subsidy: - is a tax levied on the sale of specific types of assets such as stocks, bonds, and real estate. - is a benefit given by the government to individuals or businesses. - is a payment that one country voluntarily makes to another. - is a tax on the purchase of a good or a service.

is a benefit given by the government to individuals or businesses.

Technology refers to: -buildings and equipment used to produce goods and services. -the acquired skills of workers that make them productive. -the set of finished goods or goods used in production held by a business. -knowledge, inventions, and innovations that can potentially increase resource productivity.

knowledge, inventions, and innovations that can potentially increase resource productivity.

A subsidy to producers: -decreases the product quantity. -increases the product price. -lowers the cost of producing. -raises the cost of producing.

lowers the cost of producing.

A subsidy to producers: -increases the product price. -lowers the cost of producing. -raises the cost of producing. - decreases the product quantity.

lowers the cost of producing.

The sum of individual supply curves added together reflect the __________ supply curve.

market

Sellers

market participants who are willing and able to sell goods, services, or resources

Sellers are: -individuals who want to enter the market. -market participants who are willing and able to purchase goods, services, or resources. -market participants who are willing and able to sell goods, services, or resources. -market determinants who are willing and able to develop goods, services, or resources.

market participants who are willing and able to sell goods, services, or resources.

Firms will be willing and able to produce more output only when prices rise, because the _________ cost of production is rising.

opportunity

A change in taxes and subsidies on producers alters market ______.

price

firms want to maximize

profit

Any change in the availability and quality of resources and technology will likely affect the: -existence of taxes and subsidies in the market. -quality and regulation of the product. -quantity consumers are willing and able to purchase at every price. -quantity producers are willing and able to supply to the market at every price.

quantity producers are willing and able to supply to the market at every price.

Another term for the factors of production used to produce goods and services is: -the production process. -labor. -resources. -suppliers.

resources.

long-run average total cost curve

shows the relationship between output and average total cost when fixed cost has been chosen to minimize average total cost for each level of output

Taxes and _______ alter the costs or benefits of producing goods and services.

subsidies

A __________ to producers lowers the cost of producing.

subsidy

The law that states that as the price of a good, service, or resource rises, the quantity supplied will increase, all else held constant, is the law of marginal choice. supply. demand. opportunity cost.

supply

A payment made to the government that is the result of economic activity is called a ______________.

tax

The knowledge, inventions, and innovations that can potentially increase resource productivity are known as ________.

technology

A tax is a payment made to: -the government that is the result of economic activity. -another business that is the result of exchange. -another individual that is the result of exchange. -the government that is not the result of economic activity.

the government that is the result of economic activity.

Resources are

the inputs used to produce goods and services, also known as factors of production. Resources fall into one of four categories: Land, labor, capital, and entrepreneurial ability.

If a nonprice determinant of supply causes an increase in supply,: -there is movement upward, to the right, along a supply curve. -the supply curve will shift to the right. -the supply curve will shift to the left. -there is movement downward, to the left, along a supply curve.

the supply curve will shift to the right.

If a nonprice determinant of supply causes an increase in supply,: -there is movement upward, to the right, along a supply curve. -the supply curve will shift to the right. -there is movement downward, to the left, along a supply curve. -the supply curve will shift to the left.

the supply curve will shift to the right.

The Long Run:

the time period in which all inputs can be varied

A decrease in the supply of cellphones implies: - the quantity of cellphones produced will decrease in the long run. - the price of cellphones has decreased. - there is a decrease in the quantity of cellphones supplied at each price. - the cost of producing cellphones has decreased.

there is a decrease in the quantity of cellphones supplied at each price.

fixed cost + variable cost =

total cost

Profit formula

total revenue - total cost = profit or Profit = Total Revenue - Total Cost or Profit = P * q -Total Cost