Econ 102: Midterm 1
mary has 10$ to spend each week on coffee, qc and magazines qm. The price of a coffee Is 1 and the price of a magazine is 2$. Mary's budget equation is
$1 × Qc + $2 × Qm = $10
consider the budget line in the above figure. If the consumers income is $120 then the price of a book is
$12 per book
the figure above shows tanyas consumption possibilities. Tanya spends $100 per month on movies and restaurant meals. The price of a movie ticket is _______ an dthe price of a resturaunt meal is ______
$5; $20
shanniq consumes only magazine and CD's. Her income equals $60 per month. CD's are $12 each and magazines are $5 each. what is the equation for her budget line
$60= 12QCD+5QM
which of the following shifts the supply curve for oranges
) disastrous weather that destroys about half of this year's orange crop
The above figure gives your budget line between CDs and magazines. The slope of the budget line is ______CD per magazine
-1/2
The figure above gives your budget line for magazines and CD's per month. Given that your income is $60 per month. what is your real income in terms of magazines
12 magazines
The above table gives the demand and supply schedules for Blu-ray discs. Suppose that the price of a Blu-ray disc player increases, resulting in the demand for Blu-ray discs decreasing by 8,000 units at all prices. What are the new equilibrium quantity and equilibrium price of Blu-ray discs?
16,000 and 16
which of the following is NOT a factor of production
175 shares of microsoft stock
based on the above figure showing a budget line, which of the following combinations of soda and bottles water are not affordable
2 bottles of water and 6 cans of soda
Jed had an exam score of 50 percentage points. There is an extra credit assignment that Jed can complete that will raise his exam score by 20 percentage points. Jed has determined that the extra credit assignment will take 10 hours of his time. Jed will complete the assignment if he values the
20 percentage points more than the 10 hours of his time
the above table gives the demand and supply schedules for blu ray discs. Based on the table, the equilibrium quantity and price of a blu ray discs is
20,000 and 20
in the figure above, the marginal cost of the second computer is
3 television sets per computer
in the above figure, at the allocatively efficient level of computer production consumers are willing to give up
3 televisions per computer
in the figure above at the allocative efficient level of computer production the marginal cost of producing a computer is
3 televisions per computer
The above table shows the demand schedule and supply schedule for chocolate chip cookies. An increase in income results in an increase in the demand for chocolate cookies by an amount of 3 pounds at every price. What are the new equilibrium quantity and equilibrium price?
5 pounds, 6.00 per pound
Joe has $50 to spend on pizza and movies. If movies are $5 each and a pizza is $10 then, assuming he spends all his money, he can buy which of the following bundle of goods?
6 movies and 2 pizzas
which of the following is a positive statement
A 10 percent increase in income leads to a 4 percent increase in the consumption of beef.
which of the following is a positive statement
A 5 percent increase in income leads to a 3 percent increase in the consumption of orange juice.
the table shows the demand and supply schedules for jeans
At $40 a pair, there is a shortage of jeans and the price will rise.
choose the best statement
GDP equals aggregate expenditure and equals aggregate income.
________ is gross investment minus ________.
Net investment; depreciation
the above table shows production combinations on a countrys production possibilities frontier. A movement from _____ involves the greatest opportunity cost of increasing the production of good Y
Point B to point A
When the price is less than the equilibrium price
Some consumers will be willing to pay a price higher than the prevailing price. There will be a shortage. The price will be forced higher. (All of the above)
Which of the following is TRUE regarding the circular flow diagram?
The government, households, and firms all have transactions in the goods market. 111 only
opportunity cost is defined as
The highest-valued alternative that must be given up to get something
in the digure above an economy would grow fastest if it produces at point
a
which of the following creates an incentive to increase the amount of an activity
a decrease in the marginal cost of the activity and an increase in the marginal benefit of the activity
consider the demand curves for soft drinks shown in the figure above. suppose the economy is at point a. which of the following could result in a movement to point c
a decrease in the relative price of a soft drink
the figure above shows supply curves for soft drinks, suppose the economy is at point a. movement to point c could be the result of
a decrease in the relative price of a soft drink
considering a ppf with health care services on the vertical axis and other goods and services on the horizontal axis, the increasing production of health care services in the united states as a result of the aging population represents
a movement upward along the ppf
Georgine buys more sweaters when her income increases, for Georgine sweaters are
a normal good
when an economy produces at its allocatively efficient production point
a society can increase the production its allocatively efficient production point
at a price of $10 in the above figure there is
a suurplus of 400 units
a normative statement is
about what ought to be
when we cannot produce more of any good without giving up some other good that we value more highly, we have acheived
allocative efficiency
`Beef is a normal good and people's incomes fall. At the same time a bumper corn crop reduces the cost of feeding steers. These changes result in
an increase in the equilibrium quantity of beef if the shift in the demand curve is smaller than the shift in the supply curve
the "law of demand" predicts that, other things being equal
an increase in the price of pizza decreases the quantity of pizza demanded
a change in which of the following would not shift the supply curve for sneakers
an increase in the price of sneakers
which of the following does not shift the supply curve
an increase in the price of the good
when the price of an inferior good falls, the substitution effect leads to ______ in the quantity purchased and the income effect leads to _________ in the quantity purchased
an increase; a decrease
the term opportunity cost points out that
any decision regarding the use of a resource involves a costly choice.
wants, as the opposed to demands
are the unlimited desires of the consumer
In computing GDP, it is essential to
avoid double counting
Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. If there is exceptionally good growing weather in the wapanzo bean growing region then supply will ________ and demand will ________.
become casew c; stay at case 2
marginal benefit is the
benefit that a person receives from consuming one more unit of a good or service
we measure the marginal ______ of a good by what a ______ for another unit of the good
benefit; person is willing to pay
Fred and Ann are both given free tickets to see a movie. Both decide to see the same movie. We know that
both bear an opportunity cost of seeing the movie because they could have done other things instead of seeing the movie
in the figure above, curve b shows the
bottles of soda that people are willing to forgo to get another bicycle
an economic system in which the government decides what, how, and for whom to produce, directs workers to jobs, and owns all the land and capital is
centrally planned socialism
Economics can be defined as the social science that explains the
choices that we make as we cope with scarcity
a budge line shows the
consumption possibilities of a consumer at a given level of income and prices
a point inside a production possibilities frontier is
could indicate that some resources are unemployed
making choices at the margin means
deciding to do a little bit more or a little bit less of an activity
when moving along the production possibilities frontier, opportunity cost is measured as
decrease in the quantity produced of one good divided by the increase in the quantity produced of another good
the marginal benefit of a good or service
decreases as more is consumed
a decrease in the price of bowling shifts the
demand curve for bowling balls rightward
the figure above shows the market for candy. people become more concerned that eating candy causes them to gain weight which they do not like, as a result the
demand curve shifts from D2 to D1 and the supply curve does not shift.
macroeconomics is concerned with
economy-wide variables
the income earned by the people who sell the services of the factor of production ________ is called __________
entrepreneurship; profit
moving along a ppf, marginal cost is
equal to the opportunity cost of producing one more unit of a good or service.
when there is a surplus in the market, the quantity sold is
equal to the quantity demanded
in the above table, the production of 3 pizzas and 35 cases of soda is
feasible but would involve unedmployed or misallocated resources
The table above shows the marginal benefit from pizza and the marginal cost of pizza in cans of soda forgone. If ________ pizzas are produced, the quantity of soda that people are willing to give up to get an additional pizza is more than the quantity of soda that they must give up to get that additional pizza
fewer than 40
The above figures show the market for oranges. Which figure(s) shows the effect of a new government program that provides each public school child with an orange to start the day?
figure a
which graph shows the impact of scientists developing a more powerful fertalizer
figure a
The above figures show the market for gasoline. Which figure shows the effect of motorists increasing the number of times they take the bus to work rather than driving their own cars?
figure b
The above figures show the market for hamburger meat. Which figure shows the effect when more farmers decide to raise cows that are processed into hamburger meat?
figure d
which of the following is a final good
flour purchased at the store to bake cookies
a normal good is one
for which demand increases when income increases
The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are an inferior good?
from point a to c
The circular flow model shows that consumer goods and services produced by business firms are sold in the
goods market
the circular flow of income shows that
governments purchase goods and services q
opportunity cost menas the
highest valued alternative forgone
In the above figure, flow B represents ________.
household purchases of goods and services
which of the following is an example of a positive statement
households are the primary source of saving
in part, microeconomics is concerned with
how a business firm decides upon the amount it produces and the price it sets
all economic questions are about
how to cope with scarcity
which of the following questions is a topic that would be studied by microeconomics
how will a lower price of digital cameras affecrt the quantity of cameras sold
a president of the united states promises to produce more defense goods without any decrease in the production of other goods. This promise can be valid
if the united states is producing at a point insid its ppf
in the figure above, the marginal cost of producing a computer
increases as more computers are produced
marginal cost
increases as more is produced
a normal good is a good for which demand
increases when income increases
when the opportunity cost of producing more of a good is increasing the marginal cost of producing more of the good is
increasing
In the above figure, in order for this country to move from production possibilities frontier PPF1 to PPF2, it might
increasing the skills and productivity of its work force
which of the following best defines capital as a factor of production
instuments, machines, and buildings used in production
if the good in the above figure is a normal good and income rises, then the new equilibrium quantity
is more than 300 units
a student is studying for an exam 2 hours a day and is debating whether to study an extra hour. The students marginal benefit
is the benefit the student receives from studying an extra hour
copper falls into which factor of production category
land
in economics the term "land" means
land, mineral resources, and nature's other bounties.
If the price of a video download is below its equilibrium price, the quantity supplied is ________ than the quantity demanded. If the price of a video download is above its equilibrium price, the quantity supplied is ________ than the quantity demanded.
less; greater
In every economic system, choices must be made because resources are ________ and our wants are ________.
limited, unlimited
the branch of economics that deals with the analysis of the whole economy is called
macroeconomics
when susan makes the statement " the government should spend less money to take care of national parks" she is
making a normative statement
Gross domestic product is the total ________ produced within a country in a given time period.
market value of all final goods and services
gross domestic product is the ________ in a given time period
market value of final goods and services produced by the economy
the study of the choices made by individuals is part of the definition of
microeconomics
in broad terms the difference between microeconomics and macroeconomics is that
microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy
in a market at the equilibrium price
neither buyers nor sellers can do business at a better price
a nation can produce at a point outside its ppf
never
statements about what ought to be are
normative statements
The word "final" in the definition of GDP refers to
not counting intermidiae goods or services
people must make choices because
of scarcity
which of the following is a positive statement
our planet is warming because of an increased carbon dioxide buildup in the atmosphere
A new 2015 Honda Civic produced in 2015 and purchased in 2016 is
part of gdp in 2015
scarcity is a situation in which
people cannot satisfy all their wants
In the above figure, if D2 is the original demand curve for a normal good and income decreases, which price and quantity might result?
point b, with price P1 and quantity Q1
in a supply and demand figure, the equilibrium price and quantity are found at the
point where quantity supplied = quantity demanded
the statememt " an increase in the price of gasoline will lead to a decrease in the amount purchased" is a ___ statement
positive statement
a shortage causes the
price to rise
i order to determine a households budget line you must know the
prices of the goods bought and the households income
The production possibilities frontier is the boundary between those combination of goods and services that can be
produced and cannot be produced
production efficiency means that
producing one more of one good is psosible only if the production of some other good is decreased
the existence of a shortage
pushes the price up
The quantity of CDs that firms plan to sell this month depends on all of the following EXCEPT the
quantity of cd's that people plan to buy
as the price of a pound of peanuts falls, the
quantity of peanuts supplied decreases
In the circular flow model of an economy, households
receive income from buyers of goods and services
In the figure above, how can the economy represented by the production possibilities frontier move from point C to point F?
redistribute the existing resources to produce more apples and fewer oranges
one of the opportunity costs of economic growth is
reduced current consumption
when graphing a demand curve for corn, we are showing the relationship between the quantity demanded of corn and the
relative price of corn
If a society is operating at a point inside its production possibilities frontier, then this society's
resources are being inefficiently utilized
increasing opportunity cost occurs along a production possibilities frontier because
resources are not equally productive in all activities
for a change in the quantity supplied but not a change In supply to occur there must be a
rightward shift of the demand curve; leftward shift of the demand curve
The demand for a good increases when the price of a substitute ________ and also increases when the price of a complement
rises; falls
The fact that wants cannot be fully satisfied with available resources reflects the definition of
scarcity
The wage rate paid by Walkman producers falls and at the same time the price of raw materials used in the production of Walkmans rises. You predict that the supply curve of Walkmans will
shift either leftward or rightward
an increase inm the nations capital stock will
shift the ppf outward
After Hurricane Katrina devastated parts of Mississippi and New Orleans in 2005, we can be sure that the production possibilities
shifted inward towards the orgin
economic models
simplify reality
Tonya, who is rich, and Jerome, who is less rich, both buy orange juice and croissants for lunch at the student cafeteria. Their budget constraints as drawn on a diagram, with orange juice on the vertical axis and croissants on the horizontal, have the same __________.
slopes
If a producer can use resources to produce either good A or good B, then A and B are
substitutes in production
In 2014, the price of peanuts was rising, which lead peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. In the current market for peanut butter, the price falls and the quantity decreases. This set of results means that
supply decreased by more than supply increased
We observe that the equilibrium price of digital cameras has fallen and the equilibrium quantity of digital cameras has increased. Which of the following events could be responsible for this?
technological advances in digital camera production
the production possibilities frontier shift as
technology changes
GDP does not directly include intermediate goods because
that would count the intermediate goods twice
the marginal benefit is the
the additional gain from one more unit of an activity
microevocnomics is the study of
the choices that individuals and businesses make
production possibilities figure does not illustrate
the exchange of one good or service for another
the opportunity cost of an activity is
the highest valued alternative given up
which of the following is CORRECT: factors of production are
the inputs used to produce goods and services
a fall in the price of a good causes producers to reduce the quantity of the good they are willing to produce. this fact illustrates
the law of supply
An example of a question that might be explored in microeconomics is to determine
the number of workers employed by Intel
the law of demand states that other things remaining the same, the higher
the price of a good, the smaller is the quantity demanded
the statement that _____ is a positive statement
the price of sugar in the united states is higher than the price in austrailia
which of the following increases the demand for a normal good
the price of the good is expected to increase in the future
The supply curve slopes upward when graphed against ________, because of ________.
the price of the good; increasing marginal cost
Which of the following expenditures associated with the production of a new high-performance SUV will be directly included in GDP?
the purchase of new machine tools to manufacture the engines
a marginal benefit curve shows
the quantitiy of one good that people are willing to forgo to get another unit of another good
Using the above figure, suppose that roses are a normal good. If incomes decrease while simultaneously there is an increase in the price of the resources used to produce roses, then
the quantity will definetiely decrease below 10 dozen roses
the ppf shifts if
the resources available to the nation change
if the price of lumbar rises, then in the market for sawdust
the suppply curve of sawdust shifts rightward
A lawn service is deciding whether to add an additional employee to its summer crew. The marginal cost of hiring this worker depends on the
the total amount paid to only the new worker
which of the following is a normative statement
the unemployment rate is too high
Consider a production possibilities frontier with corn on the vertical axis and cars on the horizontal. Unusually good weather for growing corn shifts
the verticle intercept upward but does not shift the horizontal intercepyt
which of the following is NOT a factor of production
the wages paid to workers
In terms of dollars, the marginal benefit of working 5 days a week instead of 4 days a week is
the wages received for working the 5th day of work
the price of a good will fall if
there is a surplus at the current price
suppose the equilibrium price for soft drink is 1.00 if the current price in the soft drink market is 1.25 each
there will be a surplus of soft drinks
which of the following are true regarding positive statements
they descrive what is believed about how the world appears, they can be tested for their accuracy
Any production point outside the production possibilities frontier is
unattainable
scarcity is a situation in which
we are unable to satisfy all our wants
normative statements are about
what ought to be
Which of the following expenditures is for an intermediate good?
you buy new tires for your used car
which of the following is a normative statement
you should eat less candy
The opportunity cost of moving from point a to point b in the above figure is _____
zero