final 2

Every point along a typical indifference curve has:

A different MRS

An elected group of officials could be the political governing force in:

A. a command economy B. a market economy C. a mixed economy

Artificially high price supports for a particular product (imposed by the government for example):

A. create perpetual surpluses B. force consumers to pay higher prices than they otherwise would unless they are subsidized C. create an economic benefit for producers

If the "cross price" elasticity of demand for good A with respect to the price of good B is positive 1 then:

A. good A and Good B are substitutes in consumption B. a 1 percent increase in the price of good B will result in a 1 percent increase in demand for good A

Own price elasticity of demand tends to become more elastic when:

A. more substitutes are available B. we are looking at a longer time frame C. the good or service being examined is not a necessity

A law banning the use of a previously used yield improving technology will:

A. shift the MC curve up and to the left C. shift the market supply curve up and to the left

If a law were passed that capped food prices at a price well below current market levels:

A. shortages would develop and rationing would be necessary B. some consumers would be better off C. the food production, processing, and retailing industries would shrink

The supply relationship is:

A. that producers will want to supply more when price is higher B. that the price of a good and quantity supplied have a positive relationship C. that supply curves always slope upward when price is on the vertical axis and Q is on the horizontal axis

the diminishing marginal principle applies to:

A. the fact that the first unit of input used typically results in the most "additional" output produced B. the fact that the first unit of a good consumed typically provides the most "additional" satisfaction C. The fact that the first hour of studying for any given subject is typically the most productive

19. The total cost of studying for one particular final exam includes:

C. the cash costs of snacks and drinks, plus what you had to pay someone to do your chores for you D. cash costs plus a consideration of the fact that you might do poorly on another exam

The rules regarding economic decision maker behavior are:

Consumers are rational and maximize utility, and producers are rational and maximize profits

We would expect the demand for meat in general be more elastic than the demand for beef T-bone steaks.

False

Which is always true for standard input use and production curves?

MPP will be below APP and both will be decreasing at the optimal level of input use

Which two economic relationships are mirror images of each other:

TPP and TC

When deciding on the optimal output mix, if the price of the output graphed on the horizontal axis increases:

The slope of the isorevenue line will become more steep

Ideal weather and planting conditions in the corn belt this spring will likely cause:

a change in the supply of corn and soybeans

We should never increase the minimum wage would be:

a normative statement

New cattle feeding technology developed by OSU Animal Science Department will cause:

a shift in supply

If the aggregate demand for a particular product is very elastic:

a small price incentive will lead to large consumption changes

An economist would advise a small trucking firm in Oklahoma to:

adopt cost reducing technology early

The distinction between "economic" goods and "non-economic" goods would not be that relevant to:

an economist studying a command economy

The supply of Coors beer could shift because of

an increase in electricity costs

Economists nearly universally favor free trade:

because it is easy to show factually that it can improve standards of living for all involved

When deciding on the optimal input combination, keep in mind that:

changes in relative prices change the slope of the isocost line

Labor intensive industries are most likely to be found in:

countries where capital is relative expensive

If the "own price" elasticity of demand is equal to -2, then a price increases of 3 percent will:

decrease quantity demanded by 6 percent

The law of diminishing marginal returns means that:

each additional unit of input used results in less marginal output.

If the price of gasoline increases by one percent, and as a result the quantity supplied of gasoline increases by two percent, then the price elasticity of supply of gasoline is:

elastic

Equilibrium means that prices and quantities will never change from where they are currently at:

false

Even if firms in an industry have market power and are able to influence prices, it is never a good idea to intervene.

false

When the price of trucks increases dramatically relative to the price of cars, profit maximizing vehicle manufacturers should produce the same mix of vehicles as before.

false

Reducing trade barriers between countries will:

improve standards of living in all countries involved

If the number of water melons purchased per week changes from 200 to 198 when the price of water melons increases five percent, then the price elasticity of demand for water melons is:

inelastic

A producer who is earning zero economic profit in a competitive industry:

is earning exactly what one would expect on average based on the resources being used

Over the past several decades consumption of beef has declined while consumption of chicken has increased:

largely because the relative price of beef has increased when compared to chicken

When shortages occur in a market economy:

prices will rise, which will cause the shortage to "self correct"

If all prices in the economy suddenly doubled:

producers and consumers would have no incentive to change behavior

If the price of canola increases by 5 percent, and the elasticity of supply of canola is equal to 3, then:

quantity supplied increases 15 percent

An improvement in production technology, ceteris paribus, will.

shift the supply curve to the right and lower prices

When deciding on the optimal input mix, if the price of the input graphed on the vertical axis increases:

the budget line will become less steep

If the price of gold is expected to increase in the future because of political instability in gold producing countries:

the demand for gold will increase today

If both the supply curve and the demand curve shift to the right, but the demand curve shifts significantly more:

the equilibrium price will rise

The market supply curve is:

the horizontal summation of all individual MC curves above individual minimum AVC

A production function (TPP) shows:

the physical relationship between a variable input and output

An isoquant is:

the physical relationship of two inputs that produce the same level of output

The slope of the isorevenue line changes when:

the price of one output changes relative to another output

If MC is 12 and the price of the output is 9, ATC is 8, and MC is increasing as more output is produced:

the profit maximizing producer will decrease output

If MRP is 6 and MFC is 4 and MRP is decreasing as more inputs are added to the production process:

the profit maximizing producer will increase input usage

If the supply of corn is unitary elastic, and the price of corn increases one percent:

the quantity supplied of corn will increase by one percent

The individual firm supply curve shows:

the relationship between price and quantity supplied at the firm level

In a market economy, when prices are higher than the equilibrium:

the resulting "surplus" will correct itself over time by falling prices

If the price of ipads decreases:

there is a movement along the demand curve for ipads

Producers make decisions based on:

weighing benefits and costs as conditions change

A growing and prosperous Mexican economy?

would benefit the U.S. economy in many ways