ES 212 Final Exam
An ________ is represented by a rightward shift of the demand curve while an ________ is represented by a movement along a given demand curve. a. increase in demand; increase in quantity demanded b. increase in demand; decrease in demand c. decrease in demand; decrease in quantity demanded d. increase in quantity demanded; increase in demand
A
Assume that the price for lawn care has fallen and sales of lawn care services have also fallen. One can conclude that a. the demand for lawn care service has decreased. b. the law of supply has been violated. c. the number of lawn care service companies has increased. d. lawn care services are deliberately charging low prices because they want to discourage people from maintaining their own lawns.
A
Assume there is a surplus in the market for hybrid automobiles. Which of the following statements correctly describes this situation? a. The price of hybrid automobiles will fall in response to the surplus; as the price falls the quantity demanded will increase and the quantity supplied will decrease. b. the surplus will cause an increase in the equilibrium price of hybrid automobiles. c. The supply of hybrid automobiles is greater than the demand for hybrid automobiles. d. Some consumers will be unable to obtain hybrid automobiles at the market price and will have an incentive to offer to buy the product at a higher price.
A
Dollar bills in the modern economy serve as money because a. people have confidence that others will accept them as money. b. they can be redeemed for gold by the central bank. c. they are backed by the gold stored in Fort Knox. d. they have value as a commodity independent of their use as money.
A
Electric car enthusiasts want to buy more electric cars at a lower price. All of the following events would have this effect except a. an increase in the price of gasoline. b. technological advancement in the production of electric car batteries. c. a decrease in the price of lithium, which is used in the electric car batteries. d. an increase in the number of manufacturers of electric cars.
A
If the quantity demanded for a product exceeds the quantity supplied, the market price will rise until a. quantity demanded equals quantity supplied. The market price will then equal the equilibrium price. b. quantity demanded equals quantity supplied. The equilibrium price will then be greater than the market price. c. the quantity demanded equals the quantity supplied. The product will then no longer be scarce. d. only wealthy consumers will be able to afford the product.
A
If, in response to a decrease in the price of coffee, the quantity demanded of coffee increases, economists would describe this as a. an increase in quantity demanded. b. an increase in demand. c. a change in consumer income. d. an increase in consumers' taste for coffee
A
If, in response to an increase in the price of pineapples, the quantity demanded of pineapples decreases, economists would describe this as a. a decrease in quantity demanded. b. an decrease in demand. c. a change in consumer income. d. a decrease in consumers' taste for coffee.
A
Imports are goods and services bought domestically a. but produced in other countries. b. and not subject to tariffs. c. and resold at a profit. d. and produced domestically.
A
Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What happens in the market for solar panels if the government offers tax breaks to encourage manufacturers to produce more solar panels? a. S increases, D no change, P decreases, Q increases b. D and S increase, P and Q decrease c. D no change, S increases, P decreases, Q decreases d. D increases, S no change, P and Q increase
A
Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What happens in the market for sushi if the Surgeon General announces that a majority of the raw fish that is imported to make sushi contains high levels of toxic mercury? a. D decreases, S no change, P and Q decrease b. D no change, S increases, P decreases, Q decreases c. S decreases, D no change, P increases, Q decreases d. D and S decrease, P and Q decrease
A
Refer to Figure 3-2. An increase in the price of the product would be represented by a movement from Select one: a. A to B. b. B to A. c. S1 to S2. d. S2 to S1.
A
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for laptop computers. Which panel best describes what happens in this market when the price of computer hard drives falls? Select one: a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)
A
Refer to Figure 7-2. With the tariff in place, the United States produces a. 18 million pounds of coffee. b. 20 million pounds of coffee. c. 26 million pounds of coffee. d. 38 million pounds of coffee.
A
Refer to Figure 7-2. Without the tariff in place, the United States produces a. 12 million pounds of coffee. b. 26 million pounds of coffee. c. 33 million pounds of coffee. d. 45 million pounds of coffee.
A
Suppose the labor force stays constant, and the working-age population stays constant, but a greater number of persons who were unemployed become employed. The labor force participation rate will a. remain constant. b. decrease. c. increase. d. not change in a way that can be predicted.
A
Suppose the working-age population of a fictional economy falls into the following categories: 90 are retired or homemakers; 60 have full-time employment; 20 have part-time employment; 20 do not have employment, but are actively looking for employment; and 10 would like employment but do not have employment and are not actively looking for employment. The official unemployment rate as calculated by the U.S. Bureau of Labor would equal a. (20/100) × 100. b. (20/80) × 100. c. (20/60) × 100. d. (30/80) × 100.
A
The economic analysis of minimum wage involves both normative and positive analysis. Consider the following consequences of a minimum wage: a. The minimum wage law causes unemployment. b. Unemployment would be lower without a minimum wage law. c. Minimum wage laws benefit some workers and harm others. d. The minimum wage should be more than $7.25 per hour. Which of the consequences above are positive statements and which are normative statements? a. a, b, and c are positive statements and d is a normative statement. b. a and c are positive statements, b and d are normative statements. c. a and b are positive statements, c and d are normative statement. d. Only a is a positive statement, b, c and d are normative statements.
A
The phrase "demand has increased" means that a. a demand curve has shifted to the right. b. a demand curve has shifted to the left. c. there has been an upward movement along a demand curve. d. there has been a downward movement along a demand curve.
A
Which of the following goods is directly counted in GDP? a. a 12-inch Subway sandwich purchased by a student b. the plastic bags that Subway purchases to wrap its sandwiches c. the lettuce that Subway purchases for its sandwiches d. the bread that Subway purchases for its sandwiches
A
Which of the following is a consequence of minimum wage laws? a. Employers will be reluctant to offer low-skill workers jobs with training. b. Low skilled workers benefit because minimum wage increases the number of jobs providing low skilled workers with training. c. Producers have an incentive to offer workers non-wage benefits such as health care benefits and convenient working hours rather than a higher wage. d. All workers benefit when the minimum wage is increased.
A
Which of the following transactions represents the purchase of a final good? Select one: a. Your father buys a new John Deere riding lawn mower. b. Apple computer buys computer processors from Intel. c. Starbucks purchases coffee beans. d. Delta buys a new European-made jetliner.
A
Which of the following will not shift the demand curve for a good? a. an increase in the price of the good b. a decrease in the price of a substitute good c. an increase in population d. an increase in consumer incomes
A
A tax imposed by a government on imports of a good into a country is called a. an import levy. b. a tariff. c. an import quota. d. an import fine.
B
As job opportunities for women and the wages those jobs pay have increased, the opportunity cost of doing housework has ________, so many families have chosen to hire specialists in households chores, such as cleaning services and lawn care services, because the cost of these specialists is ________ than the cost of the wife (or husband) performing those chores. a. decreased; lower b. increased; lower c. decreased; higher d. increased; higher
B
Electric car manufacturers want to sell more electric cars at a higher price. Which of the following events would have this effect? a. an increase in the number of manufacturers of electric cars. b. an increase in the price of gasoline. c. technological advancement in the production of electric car batteries. d. a decrease in the price of lithium, which is used in the electric car batteries.
B
Figure 7-1 shows the U.S. demand and supply for leather footwear. Refer to Figure 7-1. Under autarky, the consumer surplus is area a. S + V. b. R. c. R + S + V. d. S.
B
Frictional unemployment is the result of a. the ups and downs in inflation. b. the search process of matching workers with jobs. c. a slowdown in the economy. d. a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs.
B
George Jack Lawns Mowed 10 6 Gardens Cultivated 5 4 Table 2-4 shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. Refer to Table 2-4. What is George's opportunity cost of cultivating a garden? a. half a garden cultivated b. two lawns mowed c. two-thirds of a garden cultivated d. one and a half lawns mowed
B
George Jack Lawns Mowed 10 6 Gardens Cultivated 5 4 Table 2-4 shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. Refer to Table 2-4. Which of the following statements is true? a. George has a comparative advantage in both tasks. b. Jack has a comparative advantage in garden cultivating and George in lawn mowing. c. Jack has a comparative advantage in lawn mowing and George in garden cultivating. d. Jack has a comparative advantage in both tasks.
B
Gross domestic product understates the total production of final goods and services because of the omission of a. intermediate goods. b. household production. c. exports. d. inflation.
B
Hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the Gulf coast states. In the market for gasoline, a. the demand curve shifted to the left resulting in a decrease in the equilibrium price. b. the supply curve shifted to the left resulting in an increase in the equilibrium price. c. the demand curve shifted to the right resulting in an increase in the equilibrium price. d. the supply curve shifted to the right resulting in an increase in the equilibrium price.
B
Hurricane Katrina damaged a large portion of refining and pipeline capacity when it swept through the Gulf coast states in August 2005. As a result of this, many gasoline distributors were not able to maintain normal deliveries. At the pre-hurricane equilibrium price (i.e., at the initial equilibrium price), we would expect to see a. a surplus of gasoline. b. a shortage of gasoline. c. an increase in the demand for gasoline. d. the quantity demanded equal to the quantity supplied
B
If in the market for apples the supply has decreased then a. there has been a movement upwards along the supply curve for apples. b. the supply curve for apples has shifted to the left. c. there has been a movement downwards along the supply curve for apples. d. the supply curve for apples has shifted to the right.
B
If whole tomatoes were money, which of the following functions of money would be the hardest for tomatoes to satisfy? a. medium of exchange b. store of value c. certificate of gold d. unit of account
B
In 2013, Caterpillar laid off employees who produced mining machinery at its South Milwaukee plant. The laid-off employees who were not able to find jobs at another factory due to a permanent decline in demand in the mining industry would be considered a. seasonally unemployed. b. structurally unemployed. c. frictionally unemployed. d. cyclically unemployed.
B
Product Quantity Price Sweatshirts 50 $35.00 Dental examinations 40 75.00 Coffee drinks 1,000 4.00 Coffee beans 2,000 0.50 Refer to Table 8-2. Suppose that a simple economy produces only four goods and services: shoes, DVDs, tomatoes, and ketchup. Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households. Using the information in the above table, nominal GDP for this simple economy equals a. $7,400. b. $6,400. c. $5,800. d. 2,440 units.
B
Refer to Figure 2-1. ________ is (are) unattainable with current resources. a. Point A b. Point C c. Point B d. Points A and C
B
Suppose Bob works for Mary as a proofreader. Mary and Bob fall deeply in love, marry and have eight children. Bob stops working for Mary in order to care for the children. What will be the effect on GDP? a. GDP will increase. b. GDP will decrease. c. GDP will not change. d. GDP may increase or may decrease depending on inflation.
B
Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 7-2 shows the impact of this tariff. Refer to Figure 7-2. The tariff revenue collected by the government equals a. $10 million. b. $15 million. c. $19.875 million. d. $35 million.
B
Suppose there is a bank panic. Which of the following would not be a consequence of this bank panic? a. Individual banks would have to shrink the value of loans they made. b. Required reserves would increase. c. The economy would likely enter into a recession. d. Bank checking account balances would decrease. e. Bank total reserves would decrease.
B
The minimum wage is an example of Select one: a. a subsidy for low-skilled workers. b. a price floor. c. a black market. d. a price ceiling.
B
The minimum wage is an example of a. a subsidy for low-skilled workers. b. a price floor. c. a black market. d. a price ceiling.
B
Which of the following is not directly counted in GDP? a. investment expenditures b. intermediate goods c. consumer goods d. government purchases
B
Which of the following statements is true? a. GDP growth distributes income equally to people in the economy. b. GDP accounting rules do not adjust for production that pollutes the economy. c. Household production is counted in GDP as it amounts to real production. d. A decrease in the crime rate increases GDP as people will spend more on security.
B
Which of the following would cause an increase in the supply of cheese? a. an increase in the price of cheese b. an increase in the number of firms that produce cheese c. a decrease in the price of wine (assuming that cheese and wine are complements) d. an increase the price of a product that producers sell instead of cheese
B
Which of the following would cause both the equilibrium price and equilibrium quantity of oysters (assume that oysters are a normal good) to decrease? a. a technological advancement in the production of oysters b. a decrease in consumer income c. an oil spill that sharply reduces oyster output d. an increase in consumer income
B
Which of the following would cause the equilibrium price of ketchup to increase and the equilibrium quantity of ketchup to decrease? a. an increase in the price of mustard, a substitute for ketchup b. an increase in the price of tomatoes c. an increase in the price of french fries, a complement for ketchup d. a decrease in the price of tomatoes
B
________ means the supply curve has shifted to the right, while ________ refers to a movement along a given supply curve in response to an increase in price. a. A decrease in supply; an increase in supply b. An increase in supply; an increase in quantity supplied c. A decrease in supply; a decrease in quantity supplied d. An increase in supply; a decrease in supply
B
________ shows that if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good. a. The mixed market system b. The production possibilities frontier model c. Comparative advantage d. Absolute advantage
B
A central bank like the Federal Reserve in the United States can help banks survive a bank run by a. raising the discount rate. b. increasing the required reserve ratio. c. acting as a lender of last resort. d. printing money.
C
Currency $1,000 Checking Account Balances $2,000 Savings Account Balances $5,000 Small-Denomination Time Deposits $6,000 Non institutional Money Market Fund Shares $7,000 Refer to Scenario 14-1. M1 in this simple economy equals a. $1,000. b. $2,000. c. $3,000. d. $8,000.
C
During the 1990s positive technological change in the production of chicken caused the price of chicken to fall. Holding everything else constant, how would this affect the market for pork (a substitute for chicken)? a. The demand for pork would increase because consumers could afford to buy more chicken and pork. b. The supply of pork would increase and the equilibrium price of pork would decrease. c. The demand for pork would decrease and the equilibrium price of pork would decrease. d. The demand for pork would decrease and the equilibrium price of pork would increase.
C
Figure 7-1 shows the U.S. demand and supply for leather footwear. Refer to Figure 7-1. Under autarky, the equilibrium price is a. $54. b. $24. c. $30. d. $0.
C
George Jack Lawns Mowed 10 6 Gardens Cultivated 5 4 Table 2-4 shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. Refer to Table 2-4. What is Jack's opportunity cost of mowing a lawn? a. half a garden cultivated b. two lawns mowed c. two-thirds of a garden cultivated d. one and a half lawns mowed
C
Gross domestic product is calculated by summing up a. the total quantity of goods and services produced in the economy during a period of time. b. the total market value of goods and services in the economy. c. the total market value of final goods and services produced in the economy during a period of time. d. the total quantity of goods and services in the economy.
C
If in the market for apples the supply has decreased then a. there has been a movement downwards along the supply curve for apples. b. the supply curve for apples has shifted to the right. c. the supply curve for apples has shifted to the left. d. there has been a movement upwards along the supply curve for apples.
C
If you have trouble finding a job because of a slowdown in the overall economy, we would say that you are a. structurally unemployed. b. frictionally unemployed. c. cyclically unemployed. d. seasonally unemployed.
C
In July, market analysts predict that the price of gold will rise in August. What happens in the gold market in July, holding everything else constant? a. The quantity demanded and the quantity supplied of gold increase. b. The supply curve shifts to the right. c. The supply curve shifts to the left. d. The demand curve shifts to the left.
C
In calculating gross domestic product, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced. This means that the BEA a. simply counts the total number of goods produced in the market place and then adds them up. b. simply counts the total number of goods and services produced in the marketplace and then adds them up. c. values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up. d. values goods at their market prices, multiplies them by the quantity produced, and then adds them up.
C
One would speak of a movement along a supply curve for a good, rather than a change in supply, if a. prices of substitutes in production change. b. the cost of producing the good changes. c. the price of the good changes. d. supplier expectations about future prices change.
C
Product Quantity Price Sweatshirts 50 $35.00 Dental examinations 40 75.00 Coffee drinks 1,000 4.00 Coffee beans 2,000 0.50 Refer to Table 8-1. Suppose that a simple economy produces only four goods and services: sweatshirts, dental examinations, coffee drinks, and coffee beans. Assume all of the coffee beans are used in the production of the coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals a. 3,090 units. b. $7,250. c. $8,750. d. $9,750.
C
Refer to Figure 3-2. A decrease in the price of inputs would be represented by a movement from a. A to B. b. B to A. c. S1 to S2. d. S2 to S1.
C
Refer to Figure 3-2. A technological advancement would be represented by a movement from a. A to B. b. B to A. c. S1 to S2. d. S2 to S1.
C
Refer to Figure 3-2. A technological advancement would be represented by a movement from a. A to B. b. B to A. c. S1 to S2. d. S2 to S1.
C
Refer to Figure 3-3. The figure above shows the supply and demand curves for two markets: the market for original Michelangelo sculptures and the market for Ray Ban sunglasses. Which graph most likely represents which market? a. Graph B represents both the market for original Michelangelo sculptures and Ray Ban sunglasses. b. Graph A represents both the market for original Michelangelo sculptures and Ray Ban sunglasses. c. Graph B represents the market for original Michelangelo sculptures and Graph A represents the market for Ray Ban sunglasses. d. Graph A represents the market for original Michelangelo sculptures and Graph B represents the market for Ray Ban sunglasses.
C
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for blu-ray discs. Which panel best describes what happens in this market if there is a substantial increase in the price of blu-ray players? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)
C
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt when the price of ice cream, a substitute product, increases? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)
C
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements. What panel describes what happens in this market when the price of bratwurst falls? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)
C
Soldiers in a World War II prisoner-of-war camp a. used gold as a fiat money. b. used U.S. dollars as a commodity money. c. used cigarettes as money. d. used cowrie shells as money.
C
The phrase "demand has increased" means that a. there has been a downward movement along a demand curve. b. there has been an upward movement along a demand curve. c. a demand curve has shifted to the right. d. a demand curve has shifted to the left.
C
To compete in the automobile market, Tesla must make many strategic decisions such as whether to introduce a new car model, how to sell and service its cars, and where to advertise. At Tesla's Fremont, California plant, managers must decide on the monthly production quantities of their S and X models. In making this decision, the managers a. will always decide on production quantities in which revenues are maximized. b. will choose to only produce the quantity of S and X models where marginal cost equals zero. c. face a trade-off, because producing more of one model means producing less of the others. d. face no trade-off because the Fremont plant only produces these two models of the many Tesla models produced worldwide.
C
Which of the follow is a result of imposing a rent ceiling? a. There is an increase in the quantity of apartments supplied. b. The marginal benefit of the last apartment rented is less than the marginal cost of supplying it. c. There is an increase in the quantity of apartments demanded. d. Some consumer surplus is converted to producer surplus.
C
Which of the following is a normative economic statement? a. The federal government is considering raising the gasoline tax to promote the use of public transportation. b. Rising global demand for diesel and heating oil has led to increases in the price of crude oil. c. Fashion designers should be allowed to copyright designs to promote innovation. d. With falling home prices and rising mortgage interest rates, the amount of foreclosures has increased.
C
Which of the following would cause the equilibrium price of ketchup to increase and the equilibrium quantity of ketchup to decrease? a. a decrease in the price of tomatoes b. an increase in the price of mustard, a substitute for ketchup c. an increase in the price of tomatoes d. an increase in the price of french fries, a complement for ketchup
C
Which term refers to a legally established maximum price that firms may charge? a. a subsidy b. a tariff c. a price ceiling d. a price floor
C
A demand curve shows the relationship between a. the price of a produce and the demand for the product. b. the quantity that consumers are willing and able to buy and the quantity that sellers are willing and able to offer. c. the amount of a product sellers are willing to sell at a particular price and the amount consumers are willing to buy at that price. d. the price of a product and the quantity of the product demanded.
D
A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat. This lumberjack would be a. frictionally unemployed. b. cyclically unemployed. c. seasonally unemployed. d. structurally unemployed.
D
Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen. One can conclude that a. personal trainers are deliberately charging high prices because they provide services for wealthy clients. b. the law of demand has been violated. c. the number of personal trainers has increased. d. the demand for personal trainers has increased.
D
Commodity money a. is backed by a valuable commodity such as gold. b. has little to no value independent of its use as money. c. can be used to purchase commodities, but not services. d. has value independent of its use as money
D
Currency $1,000 Checking Account Balances $2,000 Savings Account Balances $5,000 Small-Denomination Time Deposits $6,000 Non institutional Money Market Fund Shares $7,000 Refer to Scenario 14-1. M2 in this simple economy equals a. $3,000. b. $8,000. c. $14,000. d. $21,000
D
Economic growth is represented on a production possibilities frontier model by the production possibility frontier a. becoming steeper. b. becoming flatter. c. shifting inward. d. shifting outward.
D
Economic models a. can not be used to analyze real-world issues. b. magnify the complexity of economic issues in order to provide useful data. c. make no assumptions in order to remain as accurate as possible. d. are simplified versions of reality.
D
Economies where goods and services are traded directly for other goods and services are called ________ economies. Select one: a. seigniorage b. trade c. direct d. barter
D
Figure 7-1 shows the U.S. demand and supply for leather footwear. Refer to Figure 7-1. Under autarky, the producer surplus is area a. S + T + V + W + X. b. V. c. T + W+ X. d. S + V.
D
For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces. Which of the following is true about the comparative advantage between the two countries? a. Switzerland has the comparative advantage in chocolate. b. Germany has the comparative advantage in watches. c. Germany has the comparative advantage in watches and chocolate. d. Switzerland has the comparative advantage in watches.
D
George Jack Lawns Mowed 10 6 Gardens Cultivated 5 4 Table 2-4 shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. Refer to Table 2-4. Which of the following statements is true? a. Jack has an absolute advantage in both tasks. b. Jack has an absolute advantage in lawn mowing and George in garden cultivating. c. Jack has an absolute advantage in garden cultivating and George in lawn mowing. d. George has an absolute advantage in both tasks.
D
If the government implements a price ceiling on insulin, this will a. encourage manufacturers to produce and sell more of insulin to increase their profits. b. increase the price consumers will pay for insulin. c. have to be set above the market equilibrium price to be effective. d. decrease the quantity of insulin the manufacturers will be willing to supply.
D
If you are considering buying either an Apple iPhone or a Samsung Galaxy, and you choose the Samsung only because the price is lower, then you consider a. the iPhone to be an inferior good and Galaxy to be a normal good. b. the iPhone and the Galaxy to be complements. c. the iPhone to be a normal good and the Galaxy to be an inferior good. d. the iPhone and the Galaxy to be substitutes.
D
If you are considering buying either an Apple iPhone or a Samsung Galaxy, and you choose the Samsung only because the price is lower, then you consider a. the iPhone to be an inferior good and Galaxy to be a normal good. b. the iPhone to be a normal good and the Galaxy to be an inferior good. c. the iPhone and the Galaxy to be complements. d. the iPhone and the Galaxy to be substitutes
D
Last month, the Tecumseh Corporation supplied 400 units of three-ring binders at $6 per unit. This month, the company supplied the same quantity of binders at $4 per unit. Based on this evidence, Tecumseh has experienced (hint: think carefully!) a. an increase in the quantity supplied. b. a decrease in the quantity supplied. c. a decrease in supply. d. an increase in supply.
D
Refer to Figure 3-2. A decrease in the number of firms in the market would be represented by a movement from a. A to B. b. B to A. c. S1 to S2. d. S2 to S1.
D
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for ramen noodles, an inferior good. Which panel describes what happens in this market as a result of an increase in income? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)
D
Refer to Figure 7-1. Suppose the government allows imports of leather footwear into the United States. The market price falls to $24. What area represents domestic producer surplus? a. V + W + X + Y b. W + X + Y c. T + U d. V
D
Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 7-2 shows the impact of this tariff. Refer to Figure 7-2. Without the tariff in place, the United States consumes a. 12 million pounds of coffee. b. 26 million pounds of coffee. c. 33 million pounds of coffee. d. 45 million pounds of coffee.
D
The law of demand implies, holding everything else constant, that as the price of yogurt a. decreases, the quantity of yogurt demanded will decrease. b. decreases, the demand for yogurt will increase. c. increases, the demand for yogurt will increase. d. increases, the quantity of yogurt demanded will decrease.
D
To affect the market outcome, a price floor a. must be set above the price ceiling. b. must be set above the black market price. c. must be set above the legal price. d. must be set above the equilibrium price.
D
Which of the following is a positive economic statement? a. Everyone should live at the same standard of living. b. The government should close income tax loopholes. c. U.S. firms should not be allowed to outsource production of goods and services. d. If the price of gasoline rises, a smaller quantity of it will be bought.
D
