Microeconomics Quiz

The word economy comes from the Greek word for

"one who manages a household."

According to your professor, the most important thing to maximize your happiness is:

. to control the imaginary swing doors to your brain powered by your faith

According to the graph shown, if price in this market is currently $8, quantity supplied would be

70 and quantity demanded would be 30.

In a market economy, the government should

Both a and b (help when we experience market failure, interfere when we have externality)

As explained in "The Economics of Teeth, and other Beauty Premiums," ugliness in women in penalized more than ugliness in men:

China

As noted in "The Economics of Teeth, and other Beauty Premiums," genetics play the most important role in the better-than-average teeth seen in children of dentists:

False

Which is the most accurate statement about trade?

Trade can make every nation better off.

As noted in "Can Medicare Costs Be Tamed?", as much as one third of US healthcare spending is wasteful and does not improve the quality of care patients receive.

True

As concluded in "After $75,000, Money Can't Buy Day-to-Day Happiness," if you are unhappy now, the fact that overall your life may be going well does not make up for that.

True.

Without trade

a country's production possibilities frontier is also its consumption possibilities frontier

A tax placed on imported goods is called

a tariff.

A surplus exists in a market if the actual price is

above equilibrium price.

When economists attempt to simplify the real world and make it easier to understand they make

assumptions

As explained in cited in "Can Medicare Costs Be Tamed?" when compared to other advanced economies, doctors in the United States have

better ability to set their own prices.

Trade is based on

comparative advantage

People make decisions at the margin by

comparing costs and benefits

The forces that make market economies work are

demand and supply.

In the graph shown below, the movement from frontier A to B can best be described as

economic growth.

When a production possibilities frontier shifts outward, it is showing the concept of

efficiency

Another word used for household is:

family, consumer, custome (all the above)

As reported in "The Economics of Teeth, and other Beauty Premiums," research examining the economic benefits of good teeth studied the impact of:

fluoridated water

A market is a

group of demanders and suppliers of a particular good or service

Microeconomics is the study of

how firms maximize profit.

Economists understand that people respond to

incentives.

In a circular-flow diagram

income payments flow from firms to households, and sales revenue flows from households to firms.

As pointed out in "After $75,000, Money Can't Buy Day-to-Day Happiness," the emotional impact of negative life events, such as divorce, is:

minimized by high income

According to "Can Medicare Costs Be Tamed?" when compared to other advanced economies, U.S. medical care is:

much more expensive.

Good economic models

omit many details to allow us to see what is truly important.

On a production possibilities frontier, production is efficient if the production point is

on the frontier.

What you give up to obtain an item is called your

opportunity cost.

Comparative advantage is based on

opportunity costs.

Both households and societies face many decisions because

resources are scarce.

The law of demand says that when price

rises, quantity demanded falls

A marginal change is a

small incremental adjustment.

Efficiency means that

society is getting the most it can from its scarce resources

According to the graph shown above, if price in this market is currently $14, there would be a

surplus of 40 units and price would tend to fall.

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

the nation is not using all available resources or has inefficiencies

The market demand is

the sum of all individual demands.

For most students, the largest single cost of a college education is

the wages given up to attend school.

Factors of production are

used to produce goods and services.

Which of the following goods best meets the definition of scarcity?

water in a city

A monopoly is a market

with one seller.