test 1 quiz questions

approximately what percentage of the worlds economies experience scarcity

100%

how many blackboard homework assignments will there be and how many will count

17; 15

19. If the number of buyers in a market decreases, then a. demand will increase. b. demand will decrease. c. supply will increase. d. supply will decrease.

b

the production possibilities frontier provides an illustration of the principle that a. trade can. make everyone better off b. governments can sometimes improve market outcomes c. people face trade offs d. people respond to incentives

c. people face trade offs

23. An increase in the price of a good will a increase demand. b. decrease demand. c. increase quantity demanded. d. decrease quantity demanded.

d. decrease quantity demanded

England can benefit from trade a. only with nations that can produce goods England cannot produce. b. only with less developed nations. c. only with nations outside of Europe. d. with any nation.

d. with any nation

2. The terms equality and efficiency are similar in that they both refer to benefits to society. However, they are different in that a. equality refers to uniform distribution of those benefits and efficiency refers to maximizing benefits from scarce resources. b. equality refers to maximizing benefits from scarce resources and efficiency refers to uniform distribution of those benefits. c. equality refers to everyone facing identical tradeoffs and efficiency refers to the opportunity cost of the benefits. d. equality refers to the opportunity cost of the benefits and efficiency refers to everyone facing identical tradeoffs.

A. equality refers to uniform distribution of those benefits and efficiency refers to maximizing benefit s from scarce resources

13. It once took 90 percent of our population to grow our food. It now takes only 3 percent of the population to grow our food. Which of the following statements is true? a. This loss of jobs has been detrimental to our economy. b. The government should provide subsidies to encourage more people to become farmers. c. The reduction in the number of farmers explains the increase in the price of food. d. This is progress because freed-up labor is used to produce other goods.

D. is is progress because freed up labor is used to produce other goods

3. Senator Fujita argues that replacing the federal income tax with a national sales tax would increase the level of output. Senator Watson objects that this policy would benefit the rich at the expense of the poor. a. Both senators' arguments are primarily about equality. b. Both senators' arguments are primarily about efficiency. c. Senator Fujita's argument is primarily about equality, while Senator Watson's argument is primarily about efficiency. d. Senator Fujita's argument is primarily about efficiency, while Senator Watson's argument is primarily about equality.

D. is primarly about efficiency, watsons is about equality

1. In most societies, resources are allocated by a. a single central planner. b. a small number of central planners. c. those firms that use resources to provide goods and services. d. the combined actions of millions of households and firms.

D. the combined actions of millions of households and firms

10. Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause a(n) a. decrease in the demand for printers and a decrease in the quantity supplied of printers. b. decrease in the supply of printers and a decrease in the quantity demanded of printers. c. decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers. d. increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers.

`a

12. A decrease in the number of sellers in the market causes a. the supply curve to shift to the left. b. the supply curve to shift to the right. c. a movement up and to the right along a stationary supply curve. d. a movement downward and to the left along a stationary supply curve.

a

12. Suppose the number of buyers in a market decreases and a technological advancement occurs also. What would we expect to happen in the market? a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. None of the above is correct.

a

18. A popular celebrity that is paid highly for her time should probably not mow her own lawn because a. her opportunity cost of mowing her lawn is higher than the cost of paying someone to mow it for her. b. she has a comparative advantage in mowing her lawn relative to a landscaping service. c. she has an absolute advantage in mowing her lawn relative to a landscaping service. d. she might sprain her ankle.

a

5. If the government imposes a binding price ceiling on a market, then the price paid by buyers will a. decrease, and the quantity sold in the market will decrease. b. increase, and the quantity sold in the market will increase. c. increase, and the quantity sold in the market will decrease. d. decrease, and the quantity sold in the market will increase.

a

9. Under rent control, bribery is a potential mechanism to a. bring the total price of an apartment (including the bribe) closer to the equilibrium price. b. allocate housing to the poorest individuals in the market. c. force the total price of an apartment (including the bribe) to be less than the market price. d. allocate housing to the most deserving tenants.

a

Table 4-9 An Increase in Supply A Decrease in Supply An Increase in Demand A B A Decrease in Demand C D 3. Refer to Table 4-9. Which combination would produce an increase in equilibrium quantity and an indeterminate change in equilibrium price? a. A b. B c. C d. D

a

Adam Smith asserted that a person should never attempt to make at home a.what it will cost him more to make than to buy b. any good in which that person does not have an absolute advantage c. any luxury good d. any necessity

a, what it will cost him more to make than to buy

14. Refer to Table 3-11. Cuba's opportunity cost of one cooler is a. 0.5 radios, and Denmark's opportunity cost of one cooler is 0.125 radios. b. 0.5 radios, and Denmark's opportunity cost of one cooler is 8 radios. c. 2 radios, and Denmark's opportunity cost of one cooler is 0.125 radios. d. 2 radios, and Denmark's opportunity cost of one cooler is 8 radios.

a. 0.5, 0.125

11. Thousands of people develop lung cancer from second-hand exposure to cigarette smoke. This is an example of a. a market failure caused by an externality. b. a market failure caused by market power. c. a market failure caused by equality. d. There is no market failure in this case.

a. a market failure caused by externality

3. Abby bakes brownies and Liam grows flowers. In which of the following cases is it impossible for both Abby and Liam to benefit from trade? a. Abby does not like flowers and Liam does not like brownies. b. Abby is better than Liam at baking brownies and Liam is better than Abby at growing flowers. c. Liam is better than Abby at baking brownies and at growing flowers. d. Both Abby and Liam can benefit from trade in all of the above cases.

a. abby does not life flowers and liam does not like brownies

21. Refer to Table 2. The values in the table represent the amounts of lemonade and pizzas that Alice and Betty can produce in one week without and with specialization and trade. What are Alice and Betty's gains from specialization and trade? a. Alice gains 9 pitchers of lemonade and 13 pizzas, while Betty gains 12 pitchers of lemonade and 8 pizzas. b. Alice gains 200 pitchers of lemonade and 100 pizzas, while Betty gains 180 pitchers of lemonade and 180 pizzas. c. Alice gains 12 pitchers of lemonade and 8 pizzas, while Betty gains 9 pitchers of lemonade and 9 pizzas. d. Alice gains 113 pitchers of lemonade and 0 pizzas, while Betty gains 0 pitchers of lemonade and 300 pizzas.

a. alice gains 9 and 13, while betty gains 12, and 8

20. Tom produces baseball gloves and baseball bats. Steve also produces baseball gloves and baseball bats, but Tom is better at producing both goods. In this case, trade could a. benefit both Steve and Tom. b. benefit Steve, but not Tom. c. benefit Tom, but not Steve. d. benefit neither Steve nor Tom.

a. benefit both steve and tom

32. Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause a(n) a. decrease in the demand for sugar and a decrease in the quantity supplied of sugar. b. decrease in the supply of sugar and a decrease in the quantity demanded of sugar. c. decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar. d. increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar.

a. decrease in the demand for sugar and a decrease in the quantity supplied of sugar

economists normally a. do not try to explain tastes, but they do try to explain what happens when tastes change b. believe that they must be able to explain peoples tastes in order to explain what happens when tastes change c. do not believe that peoples tastes determine demand, so they ignore the subject of tastes d. incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements

a. do not try to explain tastes but what happens

14. The mainstream view among economists is that a. society faces a tradeoff between unemployment and inflation, but only in the short run. b. society faces a tradeoff between unemployment and inflation, but only in the long run. c. society faces a tradeoff between unemployment and inflation, both in the short run and in the long run. d. no tradeoff exists between unemployment and inflation, either in the short run or in the long run.

a. faces a tradeoff between unemployment and inflation but only in short run

A person can benefit from specialization and trade by obtaining a good at a price that is a. lower than his or her opportunity cost of that good b. the same as his opp cost c. higher than his or her opp cost d. different than his or her opp cost

a. lower than his or her opportunity cost of that good

7. A donut shop sells fresh-baked donuts from 6 a.m. until 5 p.m. every day. The shop does not sell day-old donuts, so all unsold donuts are thrown away at 5 p.m. each day. The cost of making and selling a dozen donuts is $1; there are no costs associated with throwing donuts away. If the manager has seven dozen donuts left at 4 p.m. on a particular day, which of the following alternatives is most attractive? a. Lower the price of the remaining donuts, even if the price falls below $1 per dozen. b. Lower the price of the remaining donuts, but under no circumstances should the price fall below $1 per dozen. c. Throw the donuts away and produce seven fewer dozen donuts tomorrow. d. Starting tomorrow, lower the price on all donuts so they will all be sold earlier in the day.

a. lower the price of the remaining donuts even if the price falls below $1 a dozen

25. If the demand for a good falls when income falls, then the good is called a(n) a. normal good. b. regular good. c. luxury good. d. inferior good.

a. normal good

Which of the following events would cause an increase in the supply of ceiling fans a. the number of sellers increase b. there is an increase in the price of air conditioners, and consumers regard air conditioners and ceiling fans as substitutes c. There is an increase in the price o the motor that powers fans d. all above

a. number of sellers increase

33. Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity supplied? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)

a. panel a

34. Refer to Figure 4-27. Which of the four panels represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)

a. panel a

. Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty seats on a flight. If the marginal cost of flying a passenger is $200 and a standby passenger is willing to pay $300, the airline should a. sell the ticket because the marginal benefit exceeds the marginal cost. b. sell the ticket because the marginal benefit exceeds the average cost. c. not sell the ticket because the marginal benefit is less than the marginal cost. d. not sell the ticket because the marginal benefit is less than the average cost.

a. sell the ticket because marginal benefit exceeds cost

24. When quantity demanded decreases at every possible price, the demand curve has a. shifted to the left. b. shifted to the right. c. not shifted; rather, we have moved along the demand curve to a new point on the same curve. d. not shifted; rather, the demand curve has become flatter.

a. shifted to the left

when computing the opportunity cost of attending a professional football game as a spectator, you should consider a. the price you pay for the ticket the the value of your time b. the price you pay for the ticket but not the value c. the value of time but not the price d. neither price or value

a. the price you pay for the ticket and the value of your time

inflation is defined as a. a period of rising productivity in the economy b. a period of rising income in the economy c. an increase in the overall level of output in the economy d. an increase in the overall level of prices in the economy

an increase in the overall level of prices in the economy

The movement along the supply curve increasing reflects

an increase in the price of a good

10. Each of the following is a determinant of demand except a. tastes. b. production technology. c. expectations. d. the prices of related goods.

b

10. Suppose you make jewelry. If the price of gold falls, then we would expect you to a. be willing and able to produce less jewelry than before at each possible price. b. be willing and able to produce more jewelry than before at each possible price. c. face a greater demand for your jewelry. d. face a weaker demand for your jewelry.

b

14. New oak tables are normal goods. What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the price of the glue used in the production of the new oak tables increased? a. Price will fall, and the effect on quantity is ambiguous. b. Price will rise, and the effect on quantity is ambiguous. c. Quantity will fall, and the effect on price is ambiguous. d. Quantity will rise, and the effect on price is ambiguous.

b

15. Suppose scientists provide evidence that people who drink energy drinks are more likely to have a heart attack than people who do not drink energy drinks. We would expect to see a. no change in the demand for energy drinks. b. a decrease in the demand for energy drinks. c. an increase in the demand for energy drinks. d. a decrease in the supply of energy drinks.

b

16. Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs. As a result of this information, today's demand curve for Mustangs a. shifts to the right. b. shifts to the left. c. shifts either to the right or to the left, but we cannot determine the direction of the shift from the given information. d. will not shift; rather, the demand curve for Mustangs will shift to the right next month.

b

18. At the equilibrium price, the quantity of the good that buyers are willing and able to buy a. is greater than the quantity that sellers are willing and able to sell. b. exactly equals the quantity that sellers are willing and able to sell. c. is less than the quantity that sellers are willing and able to sell. d. Either a) or c) could be correct.

b

2. A price ceiling is a. often imposed on markets in which "cutthroat competition" would prevail without a price ceiling. b. a legal maximum on the price at which a good can be sold. c. often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price ceiling. d. imposed to make sure everyone can earn a fair wage.

b

3. A legal minimum on the price at which a good can be sold is called a a. price subsidy. b. price floor. c. tax. d. price ceiling.

b

3. An increase in the price of blueberries would lead to a(n) a. increased supply of blueberries. b. a movement up and to the right along the supply curve for blueberries. c. a movement down and to the left along the supply curve for blueberries. d. Both a and b are correct.

b

4. Refer to Table 4-9. Which combination would produce an increase in equilibrium price and an indeterminate change in equilibrium quantity? a. A b. B c. C d. D

b

6. A leftward shift of a supply curve is called a(n) a. increase in supply. b. decrease in supply. c. decrease in quantity supplied. d. increase in quantity supplied.

b

16. Refer to Table 3-11. At which of the following prices would both Cuba and Denmark gain from trade with each other? a. 1 radio for 1 cooler b. 1 radio for 4 coolers c. 1 radio for 10 coolers d. 1 radio for 15 coolers

b. 1 radio for 4 coolers

Refer to Table 1. Assume that Cuba and Denmark each has 6 days available for production. Originally, each country divided its time equally between the production of coolers and radios. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of coolers increased by a. 12. b. 36. c. 72. d. 144.

b. 36

9. Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels? a. 200 bushels of wheat b. 400 bushels of wheat c. 600 bushels of wheat d. 800 bushels of wheat

b. 400 bushels of wheat

2. Consider Frank's decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in a store and spend $7,200 on room and board. Frank's cost of going to college is a. $33,800. b. $42,600. c. $49,800. d. $57,000.

b. 42,600

Consider Miray's decision to go to college. If she goes to college, she will spend $24,000 on tuition, $12,000 on room and board, and $1,900 on books. If she does not go to college, she will earn $16,000 working in a store and spend $8,000 on room and board. Miray's cost of going to college is a. 37900 b. 45900 c. 53900 d. 61900

b. 45900

6. Which of the following statements about models is correct? a. Economic models are built to mirror reality exactly. b. A model can be accurately described as a simplification of reality. c. Models cannot be used to explain how the economy functions. d. Economic models are usually plastic representations of the economy.

b. a model can be accurately described as a simplification of reality

Refer to Figure 3-17. Daisy has an absolute advantage in the production of a. both goods and a comparative advantage in the production of pies. b. both goods and a comparative advantage in the production of tarts. c. neither good and a comparative advantage in the production of pies. d. neither good and a comparative advantage in the production of tarts.

b. both goods and a comparative advantage in the production of tarts

35. If consumers often purchase croissants to eat while they drink their cappuccinos at local coffee shops, what would happen to the equilibrium price and quantity of cappuccinos if the price of croissants rises? a. Both the equilibrium price and quantity would increase. b. Both the equilibrium price and quantity would decrease. c. The equilibrium price would increase, and the equilibrium quantity would decrease. d. The equilibrium price would decrease, and the equilibrium quantity would increase.

b. both the equilibrium price and quantity would decrease

36. The imposition of a binding price floor on a market a. causes quantity demanded to be greater than quantity supplied. b. causes quantity demanded to be less than quantity supplied. c. causes quantity demanded to be equal to quantity supplied. d. causes a decrease in demand.

b. causes quantity demanded to be less than quantity supplied

The most obvious benefit of specialization and trade is that they allow us to a. work more hours per week than we otherwise would be able to work b. consume more goods than we otherwise would be able to consume c/ spend more money on goods that are beneficial to society, and less money on goods that are harmful to society d. consume more goods by forcing people in other countries to consume fewer goods

b. consume more goods than we otherwise would be able to consume

A typical society strives to get the most it can from scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of society in a fair manner. In other words, the society faces a tradeoff between a. guns and butter b. efficiency and equality c. inflation and unemployment d. work and leisure

b. efficiency and equality

5. Large or persistent inflation is almost always caused by a. excessive government spending. b. excessive growth in the quantity of money. c. foreign competition. d. higher-than-normal levels of productivity.

b. excessive growth in the quantity of money

12. To improve living standards, policymakers should a. impose restrictions on foreign competition. b. formulate policies designed to increase productivity. c. impose tougher immigration policies. d. provide tax breaks for the middle class.

b. formulate policies designed to increase productivity

8. The "invisible hand" refers to a. how central planners made economic decisions. b. how the decisions of households and firms lead to desirable market outcomes. c. the control that large firms have over the economy. d. government regulations without which the economy would be less efficient.

b. how the decisions of households and firms lead to desirable market outcomes

A decrease in the price of a good would a. increase the supply of the good b. increase the quantity of demanded of the good c. give producers a incentive to produce more to keep profits from falling d shift the supply curve for the good to the left

b. increase the quantity demanded of the good

10. Which of the following is an example of an externality? a. Zima purchases a new pants suit. b. Malik's bird chirps loudly during the night, waking his neighbors. c. Roberto sells a book to Kevin, who uses the book and then gives it to Lee as a gift. d. Kalene watches a scary movie.

b. maliks bird chirps loudly during the night waking his neighbors

suppose that when income rises, the demand curve for doctors visits shifts to the right. In this case we know doctors visits are a. inferior goods b. normal goods c. perfectly competitive goods. d durable goods

b. normal goods

38. Refer to Figure 6-1. In which panel(s) of the figure would there be a shortage of the good at the price ceiling? a. panel (a) only b. panel (b) only c. both panel (a) and panel (b) d. neither panel (a) nor panel (b)

b. panel b only

When an economist points out that you and millions of other people are interdependent, he or she is referring to the fact that we all a. rely upon the government to provide us with basic necessities b. rely upon one another for the goods and services we consume c. have similar tastes and abilities d. are concerned about one anothers well being

b. rely upon one another for goods and services we consume

28. The law of supply states that, other things equal, when the price of a good a. falls, the supply of the good rises. b. rises, the quantity supplied of the good rises. c. rises, the supply of the good falls. d. falls, the quantity supplied of the good rises.

b. rises and the quantity supplied of the good rises

4. The primary determinant of a country's standard of living is a. the country's ability to prevail over foreign competition. b. the country's ability to produce goods and services. c. the total supply of money in the economy. d. the average age of the country's labor force.

b. the country's ability to produce goods and services

in the circular flow diagram, in the markets for a. goods and services households and firms are both sellers b. the factors of production households are sellers and firms are buyers c. goods and services households are sellers and firms are buyers d. the factors of production households and firms are both sellers

b. the factors of production households are sellers and firms are buyers

A university football stadium is always sold out, and students who wait in line for hours may be turned away. This indicates a. the ticket price is above equilibrium b. ticket price is below equilibrium c. ticked price is at equilibrium d. nothing

b. ticket is below equilibrium (shortage)

The demand curve for coffee shifts a. only when income changes b. when a determinant of the demand for coffee other than price of coffee changes c. when the price of coffee changes . both b and c

b. when a determinant other than price changes

1. The presence of a price control in a market for a good or service usually is an indication that a. an insufficient quantity of the good or service was being produced in that market to meet the public's need. b. the usual forces of supply and demand were not able to establish an equilibrium price in that market. c. policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers. d. policymakers correctly believed that price controls would generate no inequities of their own once imposed.

c

10. Under rent control, landlords can cease to be responsive to tenants' concerns about the quality of the housing because a. with rent control, the government guarantees landlords a minimum level of profit. b. they become resigned to the fact that many of their apartments are going to be vacant at any given time. c. with shortages and waiting lists, they have no incentive to maintain and improve their property. d. with rent control, it becomes the government's responsibility to maintain rental housing.

c

11. Which of the following is not correct? a. The economy contains many labor markets for different types of workers. b. The impact of a minimum wage depends on the skill and experience of the worker. c. A minimum wage would be binding for workers with high skills and much experience. d. A minimum wage would not be binding if the equilibrium wage was above the minimum wage.

c

12. Advocates of the minimum wage a. deny that the minimum wage produces any adverse effects. b. emphasize the benefits to teenagers of increases in the minimum wage. c. emphasize the low annual incomes of those who work for the minimum wage. d. All of the above are correct.

c

14. A binding price floor (i) causes a surplus. (ii) causes a shortage. (iii) is set at a price above the equilibrium price. (iv) is set at a price below the equilibrium price. a. (i) only b. (iii) only c. (i) and (iii) only d. (ii) and (iv) only

c

16. If Mike can produce more donuts in one day than Sue can produce in one day, then a. Mike has a comparative advantage in the production of donuts. b. Sue has a comparative advantage in the production of donuts. c. Mike has an absolute advantage in the production of donuts. d. Sue has an absolute advantage in the production of donuts.

c

17. In competitive markets, buyers a. are price takers, but sellers are price setters. b. are price setters, but sellers are price takers. c. and sellers are price takers. d. and sellers are price setters.

c

2. An increase in the price of a good will a. increase supply. b. decrease supply. c. increase quantity supplied. d. decrease quantity supplied.

c

2. Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage? a. The government would provide tax incentives to encourage people to become farmers. b. The government would subsidize the production of food. c. The prices of food and the wages of farmers would adjust. d. There are no mechanisms to remove the shortage.

c

6. A surplus exists in a market if a. there is an excess demand for the good. b. quantity demanded exceeds quantity supplied. c. the current price is above its equilibrium price. d. All of the above are correct.

c

when the prices of peaches changes, the demand curve for peaches a. shifts because the price of peaches is measured on the vertical axis of the graph b. shifts because the quantity demanded of peaches is measured horizontally c. does not shift because the price of peaches is measured on the vertical axis d/ does not shift because price of peaches is measured on horizontal

c does not shift bc peaches prices are on vertical axis

17. Refer to Table 1. Cuba and Denmark would not be able to gain from trade if Denmark's opportunity cost of one radio changed to a. 0 coolers. b. 1 cooler. c. 2 coolers. d. Cuba and Denmark can always gain from trade regardless of their opportunity costs.

c. 2 coolers

22. Refer to Figure 3-6. If Daisy must work 2.5 hours to make each pie, then her production possibilities frontier is based on how many hours of work? a. 6 hours b. 7.5 hours c. 37.5 hours d. 50 hours

c. 37.5 hours

18. Refer to Figure 3-17. Suppose Daisy decides to increase her production of pies by 6. What is the opportunity cost of this decision? a. 8/3 tarts b. 4.5 tarts c. 8 tarts d. 10 tarts

c. 8 tarts

Which of the following would cause the supply curve to shift right in the market for sail boats a. an increase in the price of sailboats b. a decrease in the number of firms c. a decrease in the price of fiberglass and sail cloth d. a decrease in the price of americas cup sailing t shirts

c. a decrease in the price of fiberglass and sail cloth

27. You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that you consider iTunes music downloads to be a. a substitute good. b. an inferior good. c. a normal good. d. a complementary good.

c. a normal good

30. If the demand for a product increases, then we would expect equilibrium price a. to increase and equilibrium quantity to decrease. b. to decrease and equilibrium quantity to increase. c. and equilibrium quantity both to increase. d. and equilibrium quantity both to decrease.

c. and equilibrium quantity both to increase

4. The outer loop of the circular-flow diagram represents the flow of dollars in the economy. Which of the following is not measured in dollars and therefore does not appear on the outer loop? a. Wages b. Income c. Capital d. Rent

c. capital

An improvement in production technology will: a. increase a firms costs and increase supply b. increase a firms costs and decrease supply c. decrease firms costs and increase supply d. decrease firms costs and decrease supply

c. decrease a firm's costs and increase its supply.

12. Suppose the U.S. and Japan can both produce airplanes and televisions and the U.S. has a comparative advantage in the production of airplanes while Japan has a comparative advantage in the production of televisions. Also suppose the U.S. has an absolute advantage in the production of both airplanes and televisions. The U.S. should a. not trade airplanes or televisions with Japan. b. import airplanes from Japan and export televisions to Japan. c. export airplanes to Japan and import televisions from Japan. d. export both airplanes and televisions to Japan.

c. exports airplanes to japan but import telivision form japan

If textbooks and study guides are complements, then an increase in the price of textbooks will result in a. more textbooks being sold b. more study guides being sold c. fewer study guides being sold d. no difference

c. fewer study guides being sold

3. If China decides to trade with France, we know that a. France will benefit, but trade with a less developed country could not benefit China. b. it will not benefit France because workers in China are more productive. c. France and China can both benefit. d. it will not benefit either country because their cultural differences are too vast.

c. france and china can both benefit

Instead of conducting laboratory experiments to generate data to test their theories, economists often a. rely upon hypothetical data that were previously concocted by other economists b. do without data c. gather data from historical episodes of economic change d. substitute assumptions for data when data are unavailable

c. gather from historical episodes

the principle of comparative advantage does not provide answers to certain questions. One of these questions is a. do specialization and trade benefit more than one party to a trade b. is it absolute advantage or comparative advantage that really matters c. how are the gains from trade shared among the parties to a trade d. is it possible for specialization and trade to increase total output

c. how are the gains from trade shared among the parties to a trade

An increase of the price of a good will a. increase supply b. decrease supply c. increase quantity supplied d. decrease quantity supplied

c. increase quantity supplied

Two goods are substitutes when a decrease in the price of one good a. decreases the demand for the other good b. decreases the quantity demanded of the other good c. increases the demand for the other good d. increases the quantity demanded of the other good

c. increases the demand for the other good

6. A farmer has the ability to grow either corn or cotton or some combination of the two. Given no other information, it follows that the farmer's opportunity cost of a bushel of corn multiplied by his opportunity cost of a bushel of cotton a. is equal to 0. b. is between 0 and 1. c. is equal to 1. d. is greater than 1.

c. is equal to 1

suppose that the country of xenophobia chose to isolate itself from the rest of the world. its ruler proclaimed that xenophobia should become self sufficient so it would not engage in foreign trade. From economic perspective, this idea would a. make sense if they had absolute advantage in all goods b. make sense is they has no absolute advantage in any goods c. not make sense as long as they had comparative advantage in some good d. not make sense as long as they had absolute advantage in at least half goods

c. not make sense as long as they had comparative advantage in some good

20. Chloe's college raises the cost of room and board per semester. This increase raises Chloe's opportunity cost of attending college a. even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost reduces Chloe's incentive to attend college. b. even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost increases Chloe's incentive to attend college. c. only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost reduces Chloe's incentive to attend college. d. only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost increases Chloe's incentive to attend college.

c. only if the amount she would have to pay for room and board if she didnt attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost reduces Chloe's incentive to attend college.

16. Normative statements are a. descriptive. b. claims about how the world is. c. prescriptive. d. claims about how variables in the economy normally behave.

c. prescriptive

37. Which of the following is not a rationing mechanism used by landlords in cities with rent control? a. waiting lists b. race c. price d. bribes

c. price

26. A demand schedule is a table that shows the relationship between a. quantity demanded and quantity supplied. b. income and quantity demanded. c. price and quantity demanded. d. price and income.

c. price and quantity demanded

Which of the following events would cause the price of oranges to fall a. shortage b. FDA announces bananas cause strokes and oranges and bananas are substitutes c. price of land throughout Florida decreases, and Florida produces a significant proportion of nations oranges d. all above

c. price of land decreases

an increase in demand is represented by a a. movement downward and to the right along the demand curve b. movement upward and to the left along the demand curve c. rightward shift d. leftward shift

c. rightward shift

1. What term refers to the idea that society has limited resources and therefore cannot produce all the goods and services people wish to have? a. inefficiency b. inequality c. scarcity d. market failure

c. scarcity

29. Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the a. demand for bicycle assembly workers will increase. b. supply of bicycles will shift to the right. c. supply of bicycles will shift to the left. d. firm must increase output to maintain profit levels.

c. supply of bicycles will shift to the left

17. Melody decides to spend three hours working overtime rather than going to the park with her friends. She earns $20 per hour for overtime work. Her opportunity cost of working is a. the $60 she earns working. b. the $60 minus the enjoyment she would have received from going to the park. c. the enjoyment she would have received had she gone to the park. d. nothing, since she would have received less than $60 worth of enjoyment from going to the park.

c. the enjoyment she would have received had she gone to the park

10. The bowed-outward shape of the production possibilities frontier can be explained by the fact that a. all resources are scarce. b. economic growth is always occurring. c. the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing. d the only way to get more of one good is to get less of the other.

c. the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing

39. Refer to Figure 6-7. Suppose a price floor of $8 is imposed on this market. As a result, a. buyers' total expenditure on the good decreases by $20. b. the supply curve shifts to the left; quantity sold is now 30 units and the price is $8. c. the quantity of the good demanded decreases by 10 units. d. the price of the good continues to serve as the rationing mechanism.

c. the quantity of the good demanded decreases by 10 units

a production possibilities frontier is a straight line when

c. the rate of tradeoff between the two goods is being produced is constant

12. Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs.. Given this, we know that a. Ken has an absolute advantage in chairs. b. Ken has a comparative advantage in tables. c Traci has an absolute advantage in chairs. d. Traci has a comparative advantage in chairs.

c. traci has an absolute advantage in chairs

2. An economy's production possibilities frontier is also its consumption possibilities frontier a. under all circumstances. b. under no circumstances. c. when the economy is self-sufficient. d. when the rate of tradeoff between the two goods being produced is constant.

c. when the economy is self sufficient

1. The quantity supplied of a good is the amount that a. buyers are willing and able to purchase. b. sellers are able to produce. c. buyers and sellers agree will be brought to market. d. sellers are willing and able to sell.

d

1. Who gets scarce resources in a market economy? a. the government b. whoever the government decides gets them c. whoever wants them d. whoever is willing and able to pay the price

d

11. Which of the following would increase in response to a decrease in the price of ironing boards? a. the quantity of irons demanded at each possible price of irons b. the equilibrium quantity of irons c. the equilibrium price of irons d. All of the above are correct.

d

13. As a rationing mechanism, discrimination according to seller bias is a. efficient and fair. b. efficient, but potentially unfair. c. inefficient, but fair. d. inefficient and potentially unfair.

d

17. The unique point at which the supply and demand curves intersect is called a. market harmony. b. coincidence. c. equivalence. d. equilibrium.

d

17. When a country has a comparative advantage in producing a certain good, a. the country should import that good. b. the country should produce just enough of that good for its own consumption. c. the country's opportunity cost of that good is high relative to other countries' opportunity costs of that same good. d. then specializing in the production of that good and trading for other goods could allow that country to consume at a point beyond its production possibilities frontier.

d

18. Soup is an inferior good if the demand a. for soup falls when the price of a substitute for soup rises. b. for soup rises when the price of soup falls. c. curve for soup slopes upward. d. for soup falls when income rises.

d

4. If a price ceiling is not binding, then a. there will be a surplus in the market. b. there will be a shortage in the market. c. the market will be less efficient than it would be without the price ceiling. d. there will be no effect on the market price or quantity sold.

d

5. Refer to Table 4-9. Which combination would produce a decrease in equilibrium quantity and an indeterminate change in equilibrium price? a. A b. B c. C d. D

d

6. A market demand curve shows a. the relationship between price and the number of buyers in a market. b. how quantity demanded changes when the number of sellers changes. c. the sum of all prices that individual buyers are willing and able to pay for each possible quantity of the good. d. how much of a good all buyers are willing and able to buy at each possible price.

d

15. If China is capable of producing either shoes or toy trains or some combination of the two, then a. China should specialize in the product in which it has an absolute advantage. b. it would be impossible for China to have an absolute advantage over another country in both products. c. it would be difficult for China to benefit from trade with another country if China is efficient in the production of both goods. d. China's opportunity cost of shoes is the inverse of its opportunity cost of toy trains.

d.

8. Refer to Figure 2-3. The opportunity cost of this economy moving from point D to point C is a. 60 dryers. b. 20 dryers. c. 20 washers and 20 dryers. d. 20 washers.

d. 20 washers

31. Refer to Table 4-12. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament, then what will be the equilibrium price? a. $10 b. $15 c. $20 d. $25

d. 25

which of the following is not an example of the principle that trade can make everyone better off a. americans buy tube socks from china b. residents of maine drink orange juice from flordia c. a homeowner hires the kid next door to mow d. all are examples

d. all are examples of the principle that trade can make everyone better off

13. Suppose Susan can wash three windows per hour or she can iron six shirts per hour. Paul can wash two windows per hour or he can iron five shirts per hour. a. Susan has an absolute advantage over Paul in washing windows. b. Susan has a comparative advantage over Paul in washing windows. c. Paul has a comparative advantage over Susan in ironing shirts. d. All of the above are correct.

d. all of above

14. Which of the following is not an example of the principle that trade can make everyone better off? a. Americans buy tube socks from China. b. Residents of Maine drink orange juice from Florida. c. A homeowner hires the kid next door to mow the lawn. d. All of the above are examples of the principle that trade can make everyone better off.

d. all of above

40. Opponents of the minimum wage point out that the minimum wage a. encourages teenagers to drop out of school. b. prevents some workers from getting needed on-the-job training. c. contributes to the problem of unemployment. d. All of the above are correct.

d. all of above

15. Inflation is defined as a. a period of rising productivity in the economy. b. a period of rising income in the economy. c. an increase in the overall level of output in the economy. d. an increase in the overall level of prices in the economy.

d. an increase in the overall level of prices in the economy

7. According to the circular-flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn, a. the $50 represents a cost of production for Denny's firm. b. the $50 represents wages, rent, and profit to Denny's firm. c Denny acts as a firm who interacted in the markets for factors of production with Mrs. Pendleton. d. Denny acts as a firm who interacted in the markets for goods and services with Mrs. Pendleton.

d. denny acts as a firm who interacted in the markets for goods and services with

Which of the following events would cause a movement upward and to the right along the supply curve for mangos a. number of sellers increase b. advance in technology c. price of fertilizer decreases and thats an input d. price of mangos rises

d. price of mangos rises

in a market economy, economic activity is guided by a. the government b. public interest groups c. central planners d. self interest and prices

d. self interest and prices

In a market economy, a. supply determines demand and demand, in turn, determines prices b. demand determines supply and supply, in turn, determines prices c. the allocation of scare resources determines prices and prices, in turn, determine supply and demand d. supply and demand determine prices and prices, in turn, allocate the economies scarce resources

d. supply and demand determine prices and in turn allocate economies scarce resources

15. Which of the following would likely be studied by a macroeconomist rather than a microeconomist? a. The effect of an increase in the gas tax on fuel consumption b. The impact of a hurricane on prices in the orange industry c. The effect of foreign competition on the United States auto industry d. The effect of changes in the money supply on the inflation rate

d. the effect of changes in the money supply on the inflation rate

13. When two countries trade with one another, it is most likely because a. the wealthy people in each of the two countries are able to benefit, through trade, by taking advantage of other people who are poor. b. some people involved in the trade do not understand that one of the two countries will become worse-off because of the trade. c. the opportunity costs of producing various goods are identical for the two countries. d. the two countries wish to take advantage of the principle of comparative advantage.

d. the two countries wish to take advantage of comparative

11. If labor in Mexico is less productive than labor in the United States in all areas of production, a. then neither nation can benefit from trade. b. then Mexico can benefit from trade but the United States cannot. c. then the United States will have a comparative advantage relative to Mexico in the production of all goods. d. then both Mexico and the United States still can benefit from trade.

d. then both mexico and the US can still benefit

It once took 90 percent of our population to grow our food. It now takes only 3 percent of the population to grow our food. Which of the following statements is true? a. this loss of jobs has been detrimental to our economy b. the government should provide subsidies to encourage more people to become farmers c. the reduction sin the number of farmers explains the increase in the price of food d. this is progress because freed up labor is used to produce other goods

d. this is progress because freed up labor

how often do we have quizzes or tests in class

every class period

to improve living standards, policy makers should a.impose restrictions on foreign competition b. formulate policies designed to increase productivity c. impose tougher immigration policies d. provide tax breaks for the middle class

formulate policies designed to increase productivity

by definition, imports are

goods produced abroad and sold domestically

by definition, exports are

goods produced domestically and sold abroad

how must I complete blackboard homework

hand written

When a surplus exists in a market, sellers

lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated.

comparative advantage is related most closely to which of the following

opportunity cost

what is the two things that prevent economies from advancing their output (PPF)

resources and technology

economists make assumptions to a. minimize the number of experiments that yield no useful data b. develop models when the scientific method cannot be used c. provide issues for political discussion d. simplify the complex world and make it easier to understand

simplify the complex world, make it easier to understand

if i ask professor for extra credit just for me then I should expect

to be politely declined any extra opportunities that were not available to others