Economics Exam 1 Review

Autoworkers negotiate a wage increase; how does this change affect the supply of cars?

it decreases the supply

Scarcity requires that people must:

make choices

When Al makes the statement, the cost of living has increased 10 percent over the past 10 years," he is:

making a positive statement

"Ceteris paribus" means:

other things being equal

The most fundamental economic problem is:

scarcity

A substitute is a good:

that can be used in place of another good

The opportunity cost of something you decide to get is:

the highest valued alternative you give up to get it.

Normative statements are statements about:

what ought to be

Which of the following decreases the supply of popcorn?

a decrease in the number of popcorn suppliers

The law of demand implies that if nothing changes, there is:

a negative relationship between the price of a good and the quantity demanded

"Ceteris paribus" is latin for the expression for:

an expression that means "other things being equal"

The demand curve for a normal good shifts leftward if _____ or the expected future price _____.

decreases; falls

When the price is below the equilibrium price, the quantity demanded:

exceeds the equilibrium quantity. the quantity supplied is less than the equilibrium quantity.

A surplus occurs when the price is:

greater than the equilibrium price.

During the summer you have made the decision to attend summer school, which preludes you from working at you usual summer job in which you normally earn $6,000 for the summer. Your tuition costs $3,000, books and supplies cost $300, and room and board cost $1,000. The opportunity cost of attending summer school is:

$10,300

The law of demand implies that, other things remaining the same,

as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will decrease

Which of the following is an example of a positive statement?

Households are the primary source of saving

Because we face scarcity, every choice involves:

an opportunity cost

Which of the following is NOT an example of an opportunity cost?

because Mary snow being paid a higher wage, she can afford to buy a new car even though she is moving into a bigger apartment

A decrease in the price of a game of bowling shifts the:

demand curve for bowling balls rightward

If a good is an inferior good, then purchases of that good will decrease when:

income increases

A shortage causes the :

price to rise