econ 102 final

The most people live in ___ economies and the fewest people live in ___ economies.

developing; emerging market

Consider the market for peanut butter. If there is an increase in the price of bread (a complement for peanut butter) along with a drought in peanut growing areas, the

equilibrium quantity of peanut butter definitely decreases.

Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to

an increase in the supply electric cars so that the supply curve shifts rightward.

In economics, the factor of production "land" includes all of the following except

plastics

The table above gives the production possibilities frontier for two countries, Anaconda and Bear. The opportunity cost of moving from ___ is greater for _____

point D to point E; Bear

The supply of labor curve has a ____ slope because as the real wage rate rises, ___.

positive; the opportunity cost of leisure rises

Points of the PPF are all

production efficient

Factors of production are the

productive resources used to produce goods and services

Economics is best defined as the social science that studies

the choices that societies, and the people and institutions that make up societies, make in dealing with the issue of scarcity.

The quantity of labor supplied increased as the real wage rises because

the opportunity cost of leisure rises

Milk can be used to produce cheese or butter. If the price of a pound of butter rises, what happens to the supply of cheese?

the supply of cheese decreases

Opportunity cost is best defined as

the value of the highest-valued alternative that is forgone in making a choice

What determines the income flows that households receive?

their ownership of factors of production, how much they sell in the factor markets, and the prices received when sold

Wichita is building a convention center and financing it with revenues raised from a city hotel tax. Local politicians assert that the convention center is essentially free for Wichita residents because out-of-town visitors are paying for it. Someone who is practicing the economic way of thinking would disagree because

there are other projects that could be undertaken with the tax funds

Consider the market for peanut butter. If there is an increase in the price of peanuts

there is a decrease in the supply of peanut butter.

The above figure shows the market for game day t-shirts. If the price of t-shirts is $12, then

there is a surplus and the price of t-shirts will fall.

If Toni has an absolute advantage in both sewing and ironing when compared to Tom, then

they might benefit from trading, but we need more information to determine in which task they should specialize.

The income paid to labor is called

wages

When Ferrari decides to produce 1,200,360 Modenas each year, Ferrari is answering the ______ question.

what

What determines the revenue flows received by businesses?

what they choose to produce, how much is sold, and the price received when sold

Suppose you decide to attend summer school and that this is considered a rational choice. When making this choice

you considered the marginal cost and marginal benefit of your choice

Gregory is considering attending a concert with a ticket price of $40. He estimates that the cost of driving to the concert and parking there will add an additional $20. In order to attend the concert, Gregory will have to take time off from his part-time job. He estimates that he will lose 5 hours at work, at a wage of $8 per hour. In terms of dollars, Gregory's opportunity cost of attending the concert equals

$100

In the table above, how many jackets must Mary forgo for every dress she makes?

1 1/2 jackets

Huey and Steve can grow potatoes or tomatoes. The table above shows the pounds of potatoes and tomatoes Huey and Steve can grow in a week. Based on the table, Huey's opportunity cost of producing one pound of tomatoes is

1.5 pounds of potatoes.

The above figure shows the production possibility frontier for a country. What is the opportunity cost per ton of rice to move from point B to point D?

2 bottles of wine

The table above presents the production possibilities frontier for a nation. Using the information in the table, moving from possibility C to B means that

2 units of capital goods are given up to get 10 additional units of consumption goods

In the United States, the poorest 20 percent of households receive about ___ percent of total income.

3 percent

In the United States, the richest 20 percent of households receive about ___ percent of total income.

50 percent

The world population is approximately ____ people.

7.6 billion

Relative to Al, Joe has ________ if Joe can produce a good at a lower opportunity cost than Al.

A comparative advantage

The table above gives the production possibilities frontier for two countries, Anaconda and Bear. The table shows that

Anaconda has a comparative advantage in the production of corn.

The figure above shows the production possibilities frontier for a country. In order for it to produce at point E, the

Country would need to acquire more resources and/or more advanced technology

The above figure shows the PPF for a country that produces computers and computer factories. Which of the following would most likely shift the PPF from PPF0 in one year to PPF1 in the next?

Decrease the production of computers from 11 million (at point B) to 9 million (at point C) and build 9 new computer factories.

The opportunity cost of economic growth is ________ and the benefit of economic growth is ________.

Decreased current consumption; increased future consumption

Which of the following BEST defines economics?

Economics studies how to choose the best alternative when coping with scarcity.

_____ is the human resource that organizes labor, land, and capital.

Entrepreneurship

The above figures show the market for HD televisions. If cable television providers lower the price of providing HD cable service, which figure shows the effect of this change?

Figure A

The above figures show the market for HD televisions. If research is published showing that watching HD television shows causes eye damage, then which figure shows the effect of this change?

Figure B

Which figure above shows the effect of a decrease in the number of pizza sellers?

Figure C

________ choose the quantities of factors of production to hire and ________ choose the quantities of goods and services to produce.

Firms; firms

Canada has nationalized health care, so that everyone, regardless of their ability to pay, has some access to health care. Based on this observation, Canada has decided that "everyone, regardless of their ability to pay" is the answer to what microeconomic question?

For whom will health care be produced?

Using the figure above, suppose with no trade Liz and Joe each produce at point A on their respective PPFs. Then, Liz suggests that they specialize and trade. She would produce only smoothies and Joe would produce only salads. Then she would sell 10 smoothies to Joe at a price of 2.5 salads per smoothie. In this scenario,

Liz gains 10 smoothies and 5 salads, and Joe gains 5 smoothies.

To help unscramble cause and effect, economists

Must use the ceteris paribus assumption

In stores, it is common to find seasonal products marked down when the season ends. What explains this behavior?

The law of demand is being used to increase the quantity demanded.

The above figure shows the PPF for a country that produces computers and computer factories. The nation's production possibilities frontier is PPF0. At which of the following production points would the economy grow most rapidly?

Point A

Which of the following is NOT classified as an advanced economy?

Russia

The figure above shows how the PPF for cell phones and new cell-phone factories can expand. In the figure, if the economy chose the point on this year's PPF that is below point K, the next year's PPF would

Shift outward along the horizontal axis, but not as far as the new PPF shown in the figure

Of the three major economic questions, which of the following is the BEST example of a "How?" question?

Should we collect tolls on turnpikes using human toll collectors or mechanized toll machines?

Liz has a comparative advantage in ________ because ________.

Smoothies; her opportunity cost of producing smoothies is lower than Joe's

Why is a production possibilities frontier typically bowed out?

The bowed shape reflects increasing opportunity cost.

In the production possibilities frontier model, the vertical axis measures ____ and the horizontal axis measures ____.

The quantity of a good or service; time

Which of the following is an example of a normative economic statement?

Universal access to quality health insurance is the most important domestic policy issue of our time.

Which of the following shifts the supply curve of popcorn leftward?

a decrease in the number of popcorn suppliers

In the figure above, a price of $15 per dozen roses results in A) equilibrium.

a shortage

The important characteristic of normative statements is that they

are based on somebody's values and cannot be tested

John has two hours of free time this evening. He ranked his alternatives, first go to a concert, second go to a movie, third study for an economics exam, and fourth answer his e-mail. What is the opportunity cost of attending the concert for John?

attending a movie

In the circular flow model, governments

collect taxes

Decision making on the margin involves

comparing the marginal cost and marginal benefits when making a decision.

If the price of tangerines increases, the price of oranges also rises because

consumers consider the two good substitutes, and demand for oranges increases

In examining two variables, we find that as one variable changes, the other changes. These variables are said to be

correlated

The tendency for the values of two variables to move in a predictable and related way is known as

correlation

The number of buyers of sport utility vehicles, SUVs, decreases sharply. So the

demand curve for SUVs shifts leftward.

A normative statement

depends on someone's values

Millions of people from Mexico have migrated to the United States. This has reduced the supply of labor in Mexico and increased the supply of labor in the United States. Assume that the demand for labor in Mexico and the United States is unchanged. Then wages in the United States ________ and wages in Mexico ________.

fall; rise

Suppose that over the next few years, the demand for dancing to country and western music decreases. Hence, at country and western dance clubs, the equilibrium price of admission ________, and the equilibrium quantity of dancing ________.

falls; decreases

The figure above shows the production possibilities frontiers for the United Kingdom and France. If the United Kingdom and France specialize and engage in trade, the United Kingdom will export ________ and France will export ________.

fish; wheat

When the federal government decides to pay senators more than it pays soldiers, it answers the ____ question.

for whom

In the circular flow model, consumption goods are bought and sold in the

goods market

John decides to leave college early and play professional sports. Which of the following economic principles does John use? i. personal economic policies ii. marginal cost versus marginal benefit analysis iii. normative versus positive economics

i and ii

The law of supply states that, other things remaining the same

if the price of a good increases, the quantity supplied increases

Which of the following statements is correct? i. As the economy grows, the opportunity costs of economic growth decrease. ii. Economic growth has no opportunity cost. iii. The opportunity cost of economic growth is current consumption forgone.

iii only

An export good is a good produced

in the United States and sold in other countries.

The emerging market economies are

in transition from state-owned production to free markets.

Mothers Against Drunk Driving​ (MADD) campaigned to increase the legal penalties of drunk driving. This successful campaign ____ of drunk driving.

increased the marginal cost

An increase in the number of producers of bird seed ________ the supply of bird seed and shifts the supply curve of bird seed ________.

increases; rightward

A demand schedule

is a list of the quantities demanded at each different price when all other influences on buying plans remain the same.

Which factor of production does human capital enhance? i. land ii. labor iii. capital

labor (ii only)

Nathan drinks three cups of coffee per day. The marginal benefit that he enjoys from drinking the third cup is

less than the marginal benefit that he receives from drinking the second cup and the same as the total benefit from drinking all three cups minus the total benefit of drinking the first two cups

What typically happens to benefits as the amount of an activity is increased?

marginal benefit decreases

The cost of a one-unit increase in an activity is called the

marginal cost

Physical capital differences across countries can be seen in the fact that

more advanced economies typically have more sophisticated technology.

The opportunity cost of one more slice of pizza in terms of sodas is the

number of sodas we have to give up to get one extra slice of pizza.

The saying "There's no such thing as a free lunch," applies

on the production possibilities frontier

In the circular flow model, which of the following owns the factors of production?

only households

Which of the following is true? i. The advanced economies account for more than half of global production. ii. Almost four out of every five people in the world live in the developing economies. iii. In the advanced economies, agriculture accounts for a larger part of total production than in the developing economies.

only i and ii

In the circular flow model, which of the following is true? i. Governments coordinate economic activities of households and firms. ii. Governments buy goods and services in goods markets. iii. Households pay taxes directly to firms.

only ii

In the circular flow model, firms

pay taxes directly to governments

At full employment, actual ____ equals ____.

real GDP equals potential GDP

In the circular flow model, households

receive transfer payments from the government

The figure above shows the production possibilities frontier for a country. If the country is producing at point D (unattainable point), then the

resources are not being used efficiently and/or are unemployed

A supply curve

slopes upward and is a graph of the relationship between quantity supplied of a good and its price

Liz has a comparative advantage in ________ and an absolute advantage in ________.

smoothies only; both goods

Production possibilities frontiers usually curve out and away from the origin. The implication of this curvature is that

some resources are better at producing one good while other resources are better at producing alternative goods.

Consider the market for bread. If the price of wheat rises, then the

supply curve of bread shifts leftward

Social Security tax is deducted from your paycheck. In the circular flow model, this will be shown as

taxes flowing from households to governments

What is the "quantity demanded"?

the amount of a good people are able and willing to buy during a specific time period and at a given price

The "quantity demanded" of any good or service is ___ during a specified time period and at a specified price.

the amount people are willing and able to buy

An opportunity cost is

the benefits of the highest-valued alternative forgone

Congress and the President passed a national health care policy. This is an example of

the government using economic tools to make policy decisions

Which of the following is not shown explicitly in the circular flow model?

the legal system