ECO 120

What is the difference between shortage and scarcity A: scarcity will almost always exist, but shortage will exist only if the price Is kept below the equilibrium level B: Scarcity is a result of two or more alternative, uses and quantities of supply and demand adjusting to flexible prices will create shortages C: A shortage will exist when a good is scarce D: there is no distinction between the two

A

A decrease in supply of good X means: A: a shift to the left of the entire supply curve for good X B: a movement down the supply curve as prices of good X go down C: that less of good X will be demanded at every price D: that more of good X will be supplied at every price

A

A fixed interest rate of ____ % with ____ % inflation will yield the highest rate of return for a lender. A: 8;1 B: 11; 5 C: 12; 7 D: 19; 15

A

A new wonder diet that results in a dramatic weight loss sweeps through the United States. The key to the diet is to eat large amounts of red meat (beef) but no poultry or carbohydrate rich foods. As millions of Americans switch to the new diet, we can expect a ______ in the ______ beef, leading to shift to the ___ in the ___ curve for beef and _____ beef prices A: Increase; demand for; right demand; higher B: increase ; demand for; right; demand; lower C: decrease; supply of; left: supply; higher D: decrease; demand for; left; demand; higher

A

For consumers, pizza and hamburgers are substitutes. A rise in the price of a pizza causes _____ in the equilibrium price of a hamburger and _____ in the equilibrium quantity of hamburgers. A: rise; increase B: rise; decrease C: fall; increase D: fall; decrease

A

High fructose corn syrup, which is a derived good from corn, is an important ingredient in the production of many soft drinks. If the price of corn increases, one would expect the : A: supply curve for the soft drinks to shift left B: quantity supplied of soft drinks to increase C: demand for soft drinks increase D: supply curve for soft drinks to shift left

A

If the economy booms and peoples' incomes rise, then the demand curve for a normal good like new houses will ________ and the equilibrium quantity of new houses produced will ________. A: Shifts to right; increase B: not shift; not change C: not shift; increase D: shifts to the left; decrease

A

In an economy whose aggregate real output is growing faster than the total population: A: real GDP per capita is rising B: standard of living is declining C: national income is falling D: nominal GDP per capita is decreasing

A

The primary difference between a change in supply and a change in quantity supplied is that: A: a change in quantity supplied is a movement along the supply curve, while a change in supply is a shift in the supply curve B: both change in quantity supplied and a change in supply are movements along the supply curve, only in different directions C: A change in supply is related to the supply curve, while a change in quantity is related to shifts in the demand curve shift the supply curve D:

A

If a country has a population of 1,000 people, an area of 100 square miles, and a GDP of $5 million, then its GDP per capita is: A: $500 B: $5,000 C: $50,000 D: $5 million

B

If the United States increases tariffs on imports of lumber from Canada ( which raises the price of lumber in the United States), the equilibrium price of new homes in the united states will _______ and the equilibrium quantity of new homes in the United States will ____ A: increase; increase B: increase; decrease C: decrease; increase D: decrees; decrease

B

Suppose you manage a corner grocery store. If peanut butter is an inferior good, what do you suppose would happen to the price and quantity sold of peanut butter as incomes fell during a recession? A: the price would increase and the quantity would decrease. B: the price and quantity would both increase C: the price and quantity would both decrease D: the price would decrease and the quantity would increase

B

The rule of 72 indicates that 6% increase in the level of Real GDP would lead to output doubling in approximately ____ years. A: 6 B: 12 C: 24 D: 30

B

When inflation rises quickly, borrowers will ____ and lenders will _____. A: be hurt ; benefit B: benefit; be hurt C: be hurt; be hurt D: benefit; benefit

B

Which statement is true for an inferior good? A: when income increases, demand remains unchanged B: when income increases, demand decreases C: when income increases, demand increases D: income and demand are unrelated

B

An inferior good is one for which a ____ in buyers incomes causes a ____ . A: Increase; increase in. demand B: increase; increase in quantity demanded C: increase; decrease in demand D: decrease; decrease in demand

C

Consider two competing motorcycle manufacturers, Harley-Davidson and Honda. If Harley-Davidson raises the price of its motorcycles, we can expect: A: a shift to the right in the supply curve of Hondas and lower prices for Hondas B: a shift to the left in the supply curve of Hondas and higher prices for Hondas C: A shift to the right in the demand curve for Hondas and higher prices for Honda D: A shift to the left in the demand curve for Hondas and lower prices for Hondas

C

Economics use real GDP per capita to measure economic growth A: because it ignores the effect of price change B: Because poor nations have a larger population and the population of richer nations is declining C: Because it is the inflation- adjusted value of a country's production of goods and services corrected for the changes in a country's population D: even though nominal GNP per capita is a far superior measure of economic growth

C

Gasoline, a derivative of oil, is a large part of transportation costs for many producers. If the price of oil increases at the same time that incomes fall for many consumers, one would expect the equilibrium price of many normal goods to ________, while their equilibrium quantities would ________. A: fall; rise B: fall, rise, or stay the same; decrease C: decrease; fall, rise, or stay the same D: fall; fall

C

If goods A and B are substitutes, a decrease in the price of good B will: A: increase the demand for good A B: increase the demand for good B C: decrease the demand for good A D: increase the demand for good B and decrease demand for good A

C

If in a competitive market the quantity supplied exceeds the quantity demanded, we expect prices to: A: stay the same B: rise C: fall D: rise first, then fall when demand decreased

C

If real in country A is $500 billion one year and $540 billion the following year, then the growth rate for this country between the two year is A: 4% B: 8% C: 0.8% D: 10%

C

Over the past year, Eli has been working very hard. His employed has taken notice and is giving Eli a 6% raise in salary. During this past year, overall prices in the economy have increased by 4%. Given this information, Eli's real wage has: A: stayed constant B: increased by 6% C: increased by 2% D: decreased by 4%

C

Suppose the local real estate market is in equilibrium. A recession causes local household incomes to decline. At the same time, construction of a large subdivision of new homes has just been completed. Given these two changes and assuming that real estate is a normal good , we can predict the price of real estate will ________ and the quantity of real estate bought and sold will ________. A: fall; fall B: fall; rise C: fall; rise or fall D: rise; fall or rise

C

The market for corn in Kansas is considered to be competitive. This means there are _____ buyers and _____ sellers of corn in Kansas. A: many; few B: few; many C: many; many D: few; few

C

The market for milk is initially in equilibrium . Milk producers successfully advertise to encourage milk drinking. at the same time, more milk producers enter the market. Standard demand and supply analysis tells us that the: A: Equilibrium price and of milk will rise B: equilibrium price and quantity of milk will fall C: Equilibrium quantity of milk will rise, but we can't determine how the equilibrium price will be affected D: Equilibrium price of milk will rise, but we can't determine how the equilibrium quantity will be affected

C

The market price of Arline flights increased recently. Some economists suggest that the price increased because of an increase in the number of business travelers. They believe that, in a, amerce for flights: A: supply increased B: supply decreased C: demand increased D: demand decreased

C

The typical supply curve illustrates that: A: other things equal, the quantity supplied for a good is inversely related to the price of a good. B: Other things equal, the supply of the good creates its own demand for the good C: other things equal, the quantity supplied for a good is positively related to the price of a good D: price and quantity supplied are unrelated

C

When the economy suffers a downturn and income of many people decreases, vacationers are more likely to take car trips than to fly. Which of the following provides the most reasonable explanation for this phenomenon? A: air travel and travel by car are complementary goods B: air travel and travel by car are both normal C: air travel is abnormal good and travel by car is an inferior good D: air travel is an inferior good and travel by car is a normal good

C

Which example is a likely response to inflation? A: People choose to carry higher money balances B: people tend to make fewer transactions C: people tend to make more transactions D: people tend to hold on to fewer interest bearing assets

C

real GDP per capita in the United States increased almost _____ times between 1900 and 2015. A: 2 B: 3 C: 8 D: 10

C

which Staten is true for a normal good? A: when income increases, the demand for the good remains unchanged B: when income increases, the demand for the good decreases C: when income increases, the demand for the good increases D: income and the demand are unrelated

C

If good A and good Z are complements, and increase in the price of good Z will. A: Increase in the demand for good A B: decrease the demand for good B C: decree the demand for good Z D: decrease the demand for both A and good Z

D

If output is growing at 5% annually, how many years will it take for output to quadruple? A: 14 years B: 10 years C: 20 years D: 28 years

D

In a market for tacos, a normal good, you observe that equilibrium price and quantity have increased. This can be caused by: A: an increase in the price of beef B: an increase in the wages of taco shop workers C: fewer taco shops D: an increase in the incomes of people who eat tacos

D

In much of the country, homeowners choose to heat their houses either with natural gas or heating oil, both of which are normal goods. which factor would cause an increase in the demand for natural gas? A: an increase in the price of natural gas B: a decrease in the price of natural gas C: a decrease in the price of heating oil D: an increase in consumers income

D

Suppose that more police and security workers become aware that wearing bulletproof vests can protect them from injury and decide to start wearing bulletproof vest. At the same time, the price of ceramics used to produce the vests falls. The equilibrium price of bulletproof vests ____ and the equilibrium quantity produced ____. A: falls; rise B: decreases; decreases C: probably changes, but in an ambitious direction; probably changes, but in an ambitious direction D: probably changes, but in an ambiguous direction; increases

D

The demand curve for a monthly subscriptions to HBO has shifted to the right. what could have caused it? A: A fall in the price of HBO subscriptions B: an increase in the price of HBO subscriptions C: an increase in the supply of HBO subscriptions D: an increase in the income of buyers

D

The law of demand states that, other things equal, as the price: A: increases, quantity demanded will increase B: Decrease, demand will shift to the right C: increase, demand will decrease D: increase, quantity demanded will decrease

D

The price of microchips used to produce computer falls. As a result, the equilibrium price of computers______ and the quantity____ A: rises; increases B: rises;decraeses C: falls; decreases D: falls; increases

D

There are two countries on a peninsula. The first has a per capita annual growth rate of 2% and its neighbor to the south has an annual growth rate of 5%. How much sooner will the country in the south double its GDP per capita than will its neighbor in the north? A: 5 years B: 10 years C: 15 years D: 21 years

D

When an increase in the price of wheat, an important ingredient in the production of bread, happens at the same time as an increase in the number of people consuming bread A: both the equilibrium price and the quantity price will increase B: equilibrium quantity will decrease, but equilibrium price may, decrease, increase, or stay the same C: both the equilibrium price and quantity will decrease D: equilibrium price will increase, but equilibrium quantity may decrease, increase, or stay the same.

D

Which factor would cause an increase in the supply of a good? A: an increase in the input prices B: a decrees in the number of sellers C: suppliers expectations of higher prices in the future D: an advancement in the technology for producing the good

D