macro exam 1 review

. If bagels and doughnuts are substitute goods, then which of the following is likely to occur if the price of bagels is reduced? A) The demand curve for bagels will shift to the left. B) There will be a leftward movement along the bagel demand curve. C) The demand curve for doughnuts will shift to the right. D) The demand curve for doughnuts will shift to the left.

. D) The demand curve for doughnuts will shift to the left.

Suppose that a store sells candy bars for $0.89 for one, and $2.50 for two. The marginal cost of the second candy bar is: A) $1.61. B) $0.75. C) $0.89. D) $1.50.

A) $1.61

If a pizza parlor uses an oven in its production process, the oven is an example of which factor of production? A) capital B) entrepreneurial ability C) labor D) land

A) capital

A decrease in supply causes the equilibrium price to and the equilibrium quantity to . A) rise; fall B) fall; rise C) rise; rise D) fall; fall

A) rise; fall

Suppose Mike has three hours of time to spend and he sets the following activities in order of priority: (1) see a movie; (2) attend a ball game; (3) study economics; 4) sleeping. Assume that each activity takes three hours. What is Mike's opportunity cost of attending a ball game? A) studying economics B) studying economics and sleeping C) sleeping D) either sleeping or studying economics

A) studying economics

1. The study of economics: A) primarily considers the stock market. B) is about people's decisions regarding their use of scarce resources. C) doesn't apply to decisions made by businesses. D) states efficiency and equity don't conflict.

B) is about people's decisions regarding their use of scarce resources.

A society that is able to produce goods and services at the lowest cost possible is experiencing: A) allocative efficiency. B) production efficiency. C) opportunity costs. D) scarcity.

B) production efficiency.

Other factors held constant, as the price of an iPad rises, the: A) demand for iPads falls. B) quantity demanded for iPads falls. C) demand for iPads rises. D) quantity demanded for iPads rises.

B) quantity demanded for iPads falls

. Macroeconomics is concerned with issues such as: A) which orange juice to buy. B) unemployment. C) which job to take. D) what price to charge for goods.

B) unemployment.

. A lawyer can argue a case in court for one hour and make $300. She could alternatively use that hour of time to type a legal brief in her office. What is the opportunity cost of her typing the legal brief? A) nothing, since she would never type a legal brief B) nothing, since she would always hire an administrative assistant to type for her C) $300, since that is the amount she could have made by arguing a case in court D) There is not enough information in this problem to be able to answer the question

C) $300, since that is the amount she could have made by arguing a case in court

In an eight-hour day, Isabel can produce 15 pounds of taffy or 3 pounds of chocolate chip cookies. In an eight-hour day, Ramona can produce 6 pounds of taffy or 6 pounds of chocolate chip cookies. The opportunity cost of producing 1 pound of chocolate chip cookies is: A) one-fifth of an hour for Isabel and one hour for Ramona. B) one hour for Isabel and one hour for Ramona. C) 5 pounds of taffy for Isabel and 1 pound of taffy for Ramona. D) one-fifth of a pound of taffy for Isabel and 1 pound of taffy for Ramona.

C) 5 pounds of taffy for Isabel and 1 pound of taffy for Ramona

Which of the following will NOT cause the supply curve for kayaks to shift to the left? A) an increase in the costs of materials to build a kayak B) a decrease in the number of sellers of kayaks C) an decrease in the price of a kayak D) an increase in the taxes on kayaks

C) an decrease in the price of a kayak

(Figure: Tanks and Health Care) Which of the following points in the figure is obtainable but NOT efficient? A) point a B) point b C) point f D) point g

C) point f

If the demand for iPhones rises as incomes increase, then the iPhone is a(n): A) inferior good. B) abnormal good. C) supply good. D) normal good.

D) normal good.

The law of supply states that as prices , the quantity . A) fall; demanded rises B) fall; supplied rises C) rise; demanded falls D) rise; supplied rises

D) rise; supplied rises

All of the following cause a shift in the demand curve, EXCEPT: A) income. B) expectations. C) prices of related goods. D) technology.

D) technology.

. Scarcity is BEST defined as when: A) the quantity demanded exceeds quantity supplied. B) the quantity supplied exceeds quantity demanded. C) unlimited resources exceed limited wants. D) unlimited wants exceed limited resources.

D) unlimited wants exceed limited resources.