Economics

Suppose during a year an economy produces $6 trillion of consumer goods, $1 trillion of investment goods, $2 trillion in government services, and has $3 trillion of exports and $2 trillion of imports. GDP would be:

$10 trillion.

In Table 1.1, the highest opportunity cost of missiles in terms of houses is:

10.00 missiles per house.

If the price elasticity of demand is 2.5 then a 40% increase in the price of the good will lead to a X percent increase in the quantity demanded

100

In Table 1.1, what is the opportunity cost of increasing the production of missiles from 2 to 3 in terms of houses?

7.00 houses.

Based on Figure 1.2, if a student wants to achieve a grade-point average of 2.0, he or she should study:

An average of 20 hours per week.

Which of the following is an example of government failure?

An increase in bureaucracy and red tape that fails to improve economic outcomes.

Which of the following would cause the equilibrium price of labor to increase

An increase in the desire for leisure

The law of demand explains why people

Are willing to buy more of a good as price falls.

The law of demand in the law of diminishing marginal utility are related since both

Assume that the first units consumed have a more utility than subsequent units

The equilibrium price for a perfectly competitive firm always occurs

At the intersection of market supply and market demand

It is impossible to

Avoid fixed costs in the short run

The direct exchange of one good for another is known as

Barter

Which of the following is not a characteristic of a perfectly competitive market

Brand loyalty

Which of the following practices is Microsoft accused of using to restrict competition

Bundling products

If consumers want to increase wages and the number of jobs for Strawberry pickers they should

Buy more strawberries

Producers _____ factors of production in the _____ market

Buy; factor

A monopolist

Charges a higher price than a competitive firm

A change in demand means there has been a shift in the demand curve and a change in the quantity demanded

Corresponds to a movement along the demand curve

In the headline article in the text titled dramatic rise in teenage smoking a decrease in the price of cigarettes cost teen smoking to rise dramatically. If the price elasticity of demand is relatively elastic then total revenue

From cigarette sales will increase

In the long run a company will stay in business as long as price is

Greater than or equal to average total cost

If a firm can change market prices by altering its output, then it

Has market power

The largest component of U.S. GDP is:

Household consumption.

The main difference to an Economist between short run and long run is that

In the long run all resources are variable where I was in the short run at least one resource is fixed

Which of the following plays an increasingly important role in the U.S. economy?

International trade.

Which of the following is likely to cause an outward shift of the production possibilities curve?

Investment in telecommunications networks.

A market

Is any place where goods are bought and sold

The demand curve for an individual monopolist

Is the same as the market demand curve

An individual wheat farmer has no market power because

It must accept the equilibrium market price.

Carlos crop dusting service charges competitive prices even though it has no competition this is most likely because

It operates in a contestable market

When comparing GDP per capita, which list ranks countries correctly from largest to smallest?

Japan, Mexico, Haiti.

Which of the following is not an effective barrier to entry

Low capital requirements

According to the law of diminishing returns as more workers are hired

Marginal physical product declines

The law of diminishing returns states that beyond some point the

Marginal physical product of a variable input declines as more of it is used

A monopolist sets price at a point on the demand curve corresponding to the rate of output determined by the intersection of

Marginal revenue and marginal cost

Why would a monopolist never set a price on a point in the inelastic portion of the demand curve

Marginal revenue would be negative and therefore well below the marginal cost curve

The most desirable rid of output is the one that

Maximizes total profit

Which of the following is an example of perfect competition

Mini small farms all produce the same good

The factors of production include all of the following except:

Money

A headline article in the text is titled OPECs cut aims to prop up prices. When OPEC member nations were collectively to set their combined rate of output they're attempting to duplicate what outcomes

Monopoly

If a quantity demand rises significantly following a moderate price cut then demand is

Most likely elastic

Real GDP is a more accurate measure of economic growth than nominal GDP because:

Nominal GDP can increase due to an increase in production or prices or both.

Marginal cost pricing refers to the

Offer of good at prices equal to their marginal cost

Ceteris paribus means

Only one determinant is being changed while all others remain unchanged

Given income and resource constraints the market mechanism typically arrives at the what outcome

Optimal

The price of elasticity of demand is defined as the

Percentage change in quantity demanded divided by the percentage change in price

Which of the following has not been a century-long trend in the United States?

Relative decline in services.

Economic interactions with others are necessary because

Resources are limited

The supply curve for labor is upward sloping to the right because as wages... The quantity of... Rises

Rise; labor supplied

As a person works more hours and leisure time decline the opportunity cost of labor... And the marginal utility of income...

Rises; falls

The market supply of labor

Shift to the right when more workers enter the labor market

A perfectly competitive firm currently sells 30,000 cartons of eggs at $1.25 each if the firm wants to sell more carton of eggs the firm

Should price the carton at $1.25

In economics, which of the following represents entrepreneurship?

Skill in creating products and services.

Which of the following is true about the short run

Some inputs are fixed

The location of the firms products supply curve depends on

Technology

In general, state and local taxes:

Tend to be regressive.

The best measure of the economic cost of doing your homework is

The best opportunity you give up when you do your homework

Total profit can be calculated as

The difference between price and average total cost multiplied by the quantity sold

Which of the following is true about the factors of production?

The factors plus technology determine the physical limits to production.

If the cost of daycare increase is causing some workers to leave the labor market and stay home with their children

The labor supply curve shifts to the left

The opportunity cost of playing tennis with your friend is:

The next-best alternative use of your time that is forgone.

Ceteris paribus which of the following will cause the supply of paper to decrease

The price of lumber, an ingredient in paper production, increases

When economists talk about a tradeoff between "guns and butter," they mean:

The production of more military goods may require fewer consumer goods.

Which of the following is an example of labor as a factor of production?

The skills and abilities of workers.

The market demand for a particular good indicates

The total quantities buyers are willing and able to purchase at alternative prices

GDP most closely measures:

The total value of all final goods and services produced within a nation's borders in a given year.

Which of the following is not true about investment goods?

They increase the retirement benefits for individuals.

Average total cost is defined as

Total cost divided by the quantity produced

The market value of all resources used in producing a good or service is expressed by

Total costs

If a perfectly competitive firm produces and sells more output what will definitely increase

Total revenue

Which of the following is not included in U.S. GDP?

Toys produced by a U.S. firm located in China.

A price increase will cost total revenue to stay the same for a producer only if the price elasticity demand for its product is

Unitary elastic

According to the upward sloping labor supply curve at lower wages

Workers are less willing to supply labor

If there are only four companies that produce tennis balls the market could be considered

an oligopoly

Which of the following is a factor of production for Kathy's cookies

flour

Which of the following market structures has the fewest barriers to entry

perfect competition

Over the last century in the United States there has been an increase in _______ as a percentage of total output.

services

The planning period over which at least one resource input is fixed and quantity is the

short run

Which of the following is not an example of investment?

A business owner uses his profits to play the lottery and wins.

Which of the following will decrease the market demand for labor

A decrease in the price of the product produced by labor

Ceteris paribus, which of the following will cause an inward shift of the production possibilities curve?

A decrease in the size of the labor force.

Which of the following causes demand to be more elastic with respect to price

A higher ratio of price to income

Which of the following is associated with microeconomics?

A specific U.S. industry's sales figures.

Consumer goods:

Account for two-thirds of total U.S. output.

In making a production decision a business owner

Decides the short-run rate of output.

One headline article in the text bitter Florida cold drives up orange juice prices describes the impact of a freeze on Florida crops. What will happen to the equilibrium quantity of citrus crops if the supply decreases?

Decrease

Suppose the price elasticity of demand for tacos is 0.80 if the price of tacos increases by 10% then quantity demanded of tacos should

Decrease by 8%

Which of the following is not a characteristic of a monopoly

Differentiated product

Net exports measures the:

Dollar value of exports minus the dollar value of imports.

The market demand for labor depends on all of the following except

Each worker's willingness to work at alternative wage rates

Which of the following is not considered a barrier to entry

Equilibrium pricing

If the price elasticity of demand is 1.5 and affirm raises its price by 20% the quantity sold by the firm will

Fall by 30%

Total revenue is equal to the

Price of the product multiplied by the quantity sold

In which of the following instances will total revenue decline

Price rises and demand is elastic

In attempting to answer the WHAT question, a society seeks to:

Produce the optimal mix of output.

Which of the following does not influence consumer demand

Producer behavior

An individual competitive firm

Produces a small portion of output relative to the market

Technological advances contribute to:

Productivity increases.

Consumers

Provide dollars to the product market

According to the law of demand if the price of a computer game increases from $25-$30 the

Quantity demanded of computer games will decrease