ECON 2105
The figure shows Felicia's PPF. Felicia currently produces 15 bags of chips and no candies. If Felicia decides to produce 1 bag of candies, her opportunity cost of the bag of candies is _______ of chips. A. 3 bags B. 1 bag C. 0 bags D. 1/3 of a bag
A. 3 bags
A decrease in the supply of sports cars brings a ______ of sports cars at the original price and a ______ in their price. A. shortage; rise B. shortage; fall C. surplus; rise D. surplus; fall
A. shortage; rise
An increase in the demand for pasta together with a decrease in the supply of pasta brings a ______ of pasta at the original price and a ______ in its price. A. shortage; rise B. surplus; rise C. surplus; fall D. shortage; fall
A. shortage; rise
The table gives the demand and supply schedules for batteries. Suppose that demand increases by 50 batteries a day and supply decreases by 100 batteries a day. What is the new equilibrium price of a battery and what is the new equilibrium quantity of batteries? The new equilibrium price is $ -- per battery. The new equilibrium quantity is --- batteries per day.
2/ 650
A shortage is the amount by which the ----------- exceeds the -----------. quantity demanded?quantity supplied?
quantity demanded, quantity supplied
A rational choice is _______. A. one that compares costs and benefits and achieves the greatest benefit over cost for the person making the choice B. always the right choice C. best for the person making that choice in the long run but not in the short run D. best for the person making that choice in the short run but not in the long run
A. one that compares costs and benefits and achieves the greatest benefit over cost for the person making the choice
The graph shows the production possibilities frontiers for India and the United States. The United States does not produce tea because _______. A. India has a comparative advantage in producing tea and the United States has a comparative advantage in other goods and services B. the United States has an absolute advantage in producing other goods and services C. India has an absolute advantage in producing tea D. India's labor force is better at labor-intensive work
A. India has a comparative advantage in producing tea and the United States has a comparative advantage in other goods and services
Economics is _______. A. a social science B. a subject that tells countries what good they must trade C. a subject that teaches us how to eliminate scarcity D. a subject that tells government what they must do
A. a social science
Along this PPF, the quantities of ______. A. all goods other than pillows and quilts remain constant B. all goods other than pillows and quilts are increasing C. all goods other than pillows and quilts are decreasing D. pillows and quilts are either increasing or decreasing, so there is no scarcity
A. all goods other than pillows and quilts remain constant
A choice on the margin is a choice that is made by comparing all the relevant _____ systematically and _____. Marginal cost is the _____ that arises from one unit _____ in an activity. Marginal benefit is the _____ that arises from one unit _____ in an activity. A. alternatives; incrementally; opportunity cost; increase; benefit; increase B. prices; incrementally; opportunity cost; decrease; revenue; increase C. costs; incrementally; total cost; decrease; benefit; decrease D. profits; totally; total cost; increase; opportunity cost; decrease
A. alternatives; incrementally; opportunity cost; increase; benefit; increase
A market is an arrangement that brings _____ together and enables them to get information and do business with each other. A. buyers and sellers B. central banks and commercial banks C. sellers and entrepreneurs D. governments and producers
A. buyers and sellers
The production possibilities frontier is the boundary between the combinations of goods and services that _____, given the available factors of production and the state of technology. A. can be produced and the combinations that cannot be produced B. can be produced and the prices paid for those C. we want to produce and what we want to consume D. we want to produce but cannot consume
A. can be produced and the combinations that cannot be produced
In January 2010, the price of gasoline was $2.70 a gallon. By spring 2010, the price had increased to $3.00 a gallon. Assume that there were no changes in average income, population, or any other influence on buying plans. Explain how the rise in the price of gasoline would affect a. The demand for gasoline. b. The quantity of gasoline demanded. Given the law of demand, you would expect the rise in the price of gasoline to ______ the quantity of gasoline demanded and ______ the demand for gasoline. A. decrease; not change B. decrease; decrease C. increase; decrease D. not change; decrease
A. decrease; not change
A tradeoff is _______. A. giving up one thing to get something else B. always in the social interest C. the key to reconciling self-interest and social interest D. the benefit you receive from an increase in an activity
A. giving up one thing to get something else
What is the law of supply and how do we illustrate it? The law of supply states that other things remaining the same, the _______ the price of a good, the _______. A. higher; greater is the quantity supplied B. lower; greater is the quantity supplied C. higher; greater is the supply of the good D. higher; smaller is the quantity supplied A supply curve that illustrates the law of supply _______. A. shows that the quantity supplied increases as the price rises B. shows that the quantity supplied remains the same when the price falls C. slopes downward to a minimum and then slopes upward D. shows that the quantity supplied decreases as the price rises
A. higher; greater is the quantity supplied A. shows that the quantity supplied increases as the price rises
What is the law of demand and how do we illustrate it? The law of demand states that other things remaining the same, the _______ the price of a good, the _______. A. higher; smaller is the quantity demanded B. higher; greater is the quantity demanded C. lower; greater is demand D. lower; smaller is the quantity demanded A demand curve that illustrates the law of demand ______. A. slopes upward to a maximum comma and then slopes downward B. shows that the quantity demanded increases as the price falls C. shows that the quantity demanded decreases as the price falls D. is horizontal
A. higher; smaller is the quantity demanded B. shows that the quantity demanded increases as the price falls
Which of the following questions is a microeconomic question? A. how does HP decide what price to charge for a computer? B. what is the cause of inflation? C. does the united states benefit form international trade? D. can the congress bring prosperity by cutting tax rates?
A. how does HP decide what price to charge for a computer?
Factors of production are grouped into four categories, which are _______. A. land, labor, capital, and entrepreneurship B. capital, human capital, financial capital, and labor C. land, labor, capital, and human capital D. land, capital, human capital, and entrepreneurship
A. land, labor, capital, and entrepreneurship
Monday Island produces only tomatoes and bananas. Complete the following sentence. The marginal cost of a tomato is the number of bananas that ______ to get one more ______. A. must be forgone; tomato B. people are willing to forgo; tomato C. people are willing to forgo; banana D. must be forgone; banana
A. must be forgone; tomato
The marginal benefit curve you have drawn illustrates that the greater the quantity of yoga mats we have, _______. A. the fewer protein shakes people are willing to pay for an additional yoga mat B. the smaller the marginal cost of producing a yoga mat C. the more protein shakes people are willing to pay for an additional yoga mat D. the greater the opportunity cost of a yoga mat
A. the fewer protein shakes people are willing to pay for an additional yoga mat
Complete the following. In the market for sunscreen, the supply of sunscreen will increase if ______. A. the number of sunscreen manufacturers increases B. the future expected price of a sunscreen increases C. price of a sunscreen increases D. the price of UVA absorbing ingredients increases
A. the number of sunscreen manufacturers increases
Suppose the price of a bag of chips is 60 cents. To return to equilibrium, ______. A. the quantity demanded decreases and the quantity supplied increases B. demand decreases and supply increases C. the quantity demanded increases and the quantity supplied decreases D. demand increases and supply decreases
A. the quantity demanded decreases and the quantity supplied increases
Complete the statement. Allocative efficiency occurs when ______. A. we are producing at a point on the PPF such that marginal benefit at the quantity produced equals marginal cost B. we are producing at a point on the PPF nbsp C. marginal cost is minimized D. we cannot produce more of any good without giving up some other good
A. we are producing at a point on the PPF such that marginal benefit at the quantity produced equals marginal cost
Every day, we make many choices. We can't avoid having to make choices because ________. A. we don't have enough time to do all the things we'd like to do B. there is too much available C. we have too much time on our hands D. we keep changing out minds E. we can't find enough things to do to fill our day
A. we don't have enough time to do all the things we'd like to do
Read the news article, then answer the following questions. [Amazon Delays Opening of Cashier-Less Store to Work Out Kinks Amazon.com Inc. is delaying the public opening of its first cashier-less convenience store because of technical complications. Amazon Go was due to launch to the public by the end of the month, ... It is unclear when it will now open, as it works out kinks in the technology to automatically charge customers when they leave, instead of needing to have cash registers, checkouts and lines. The store in Amazon's hometown of Seattle uses cameras, sensors and algorithms to watch customers and track what they pick up, ... But Amazon has run into problems tracking more than about 20 people in the store at one time, ... The store will continue to need employees to help ensure the technology is accurately tracking purchases for the near future. ... Wall Street Journal, March 28, 2017] The news clip deals with the ______ questions. A. what and how B. how and when C. why and when D. what and why The news clip implies a tradeoff between ______. A. using traditional check-out methods and using cashier-less technology B. buying from Amazon and not buying from Amazon C. Amazon and its competitors D. having more than twenty people in the store and having less than twenty people in the store
A. what and how A. using traditional check-out methods and using cashier-less technology
The equilibrium price is ______. A. $2.50 per hamburger B. $2.50 times 2.5 million hamburgers C. 2.5 million hamburgers D. unknown because we don't know the number of hamburgers actually sold
A. $2.50 per hamburger
Leisure Island has 50 hours of labor a day that it can use to produce entertainment and good food. The table shows the maximum quantity of each good that Leisure Island can produce with different quantities of labor. 1. Can Leisure Island produce 4 shows and 14 meals a week? A. No, it cannot produce these quantities. B. Yes, it can produce these quantities 2. If Leisure Island produces 4 shows and 9 meals a week, is production efficient? A. No, it is not efficient B. Yes, it is efficient 3. If Leisure Island produces 8 shows and 5 meals a week, do the people of Leisure Island face a tradeoff? A. No, it doesn't face a tradeoff. B. Yes, it faces a tradeoff. 4. Suppose that Leisure Island produces 4 shows and 12 meals a week. Calculate the opportunity cost of producing 2 additional shows a week. The opportunity cost of producing 2 additional shows per week is ------- per week.
A. No, it cannot produce these quantities. A. No, it is not efficient B. Yes, it faces a tradeoff. 3 meals
Think about the following news items. Which items involve a microeconomic issue and which involve a macroeconomic issue? A. More Americans are satisfied with their standard of living than eight years ago B. WHO recommends tax of at least 20 % on sugary drinks C. The U.S. is borrowing less from China comma more from everybody else D. Why are incomes growing much faster in China and India than in the United States question mark Statement A involves a ______ issue. Statement B involves a ______ issue. Statement C involves a ______ issue. Statement D involves a ______ issue.
A: macro B: micro C: macro D: macro
Both Mia and Mario produce only the item in which they have a comparative advantage. Then they trade one pasta for one pizza. Before specialization and trade started, Mia and Mario were each producing 4 dishes of pasta and 4 pizzas an hour. The total gains from trade are ______ dishes of pasta and ______ pizzas an hour. A. 12, 4 B. 4, 4 C. 4, 12 D. 12, 12
B. 4, 4
Which of the following pairs does not match? A. Entrepreneurship; profit B. Land; wages C. Capital; interest D. Labor; wages
B. Land; wages
Which of the following illustrates scarcity? A. Mary loves watching movies B. Megan wants to buy a CD that costs $25 but has only $10 to spend. C. Ron will travel to New York City for Thanksgiving D. I got a new dress from my mother
B. Megan wants to buy a CD that costs $25 but has only $10 to spend
Which of the following is an example of entrepreneurship? A. facebook is a social networking site B. Sam Walton created the multinational retail corporation bran Walmart in 1962 C. industrial output in China is increasing D. Honda Civic and Toyota Corolla are the best-selling compact cars in North America
B. Sam Walton created the multinational retail corporation bran Walmart in 1962
______ is an example of ______. A. Upper A police officer; entrepreneurship B. Upper A hospital administrator; labor C. An interstate highway; land D. The Florida Everglades; capital
B. Upper A hospital administrator; labor
Complete the following statement. Specialization and the gains from trade make the economy PPF outward bowed because _______. A. as more of a good is produced, people are willing to pay less for each additional unit of the good B. a good is initially produced by producers with lower opportunity costs and eventually produced by producers with higher opportunity costs C. all producers have bowed-out PPFs, and the economy PPF is the horizontal sum of the individual PPFs D. a good is initially produced by producers with higher opportunity costs and eventually produced by producers with lower opportunity costs
B. a good is initially produced by producers with lower opportunity costs and eventually produced by producers with higher opportunity costs
In a low-income country, _________. As a country invests in capital and uses more advanced technologies _______. A. tourism accounts for the largest percentage of total production; manufacturing becomes a greater percentage of total production and tourism continues to grow B. agriculture accounts for a large percentage of total production; manufacturing becomes a greater percentage of total production and agriculture shrinks C. manufacturing accounts for a large percentage of total production; the country becomes self-sufficient in food production D. agriculture accounts for a large percentage of total production; agriculture becomes an even larger percentage of total production but some manufacturing occurs In a high-income country like the United States _______. A. technological advances increase agricultural and industrial productivity, so agriculture and industry are a larger percentage of total production than services B. agricultural production, industrial production, and services are equal percentages of total production C. technological advances increase jobs in manufacturing and manufacturing is an increasing percentage of total production D. technological advances release labor from industrial production and move the labor into service production
B. agriculture accounts for a large percentage of total production; manufacturing becomes a greater percentage of total production and agriculture shrinks D. technological advances release labor from industrial production and move the labor into service production
The effect of the new dip on the market for potato chips is _______. A. a decrease in the supply of potato chips and an increase in the quantity of potato chips demanded B. an increase in demand and an increase in the quantity of potato chips supplied C. an increase in the supply of potato chips D. an increase in demand and an increase in the supply of potato chips
B. an increase in demand and an increase in the quantity of potato chips supplied
The figure shows the production possibilities frontier for a firm that produces pet food. Complete the following sentences. Point A is ______ and point B is ______. A. attainable; attainable B. attainable; unattainable C. unattainable; attainable D. unattainable; unattainable This PPF ______ illustrate scarcity because ______. A. does not; there is sufficient dog food and cat food produced to feed everyone's pet B. does not; the firm can produce any quantity it wants if it is willing to pay a high enough price C. does; the firm cannot produce points outside the frontier and as the firm moves along the PPF, it cannot produce more dog biscuits without producing less cat food D. does; because the firm can attain the points outside the frontier but not inside the frontier
B. attainable; unattainable D. does; because the firm can attain the points outside the frontier but not inside the frontier
A power generating plant is an example of the factor of production _________. A. human capital B. capital C. labor D. service
B. capital
Complete the following sentence. Upper A decrease in the price of bread, a substitute in production of cakes, will ______ the equilibrium price of cakes and ______ the equilibrium quantity of cakes. A. increase; increase B. decrease; increase C. decrease; decrease D. increase; decrease
B. decrease; increase
When a surplus arises, the price ______ to its equilibrium, which _______. A. rises; decreases demand and increases supply B. falls; increases the quantity demanded and decreases the quantity supplied C. rises; decreases the quantity demanded and increases the quantity supplied D. falls; increases demand and decreases supply
B. falls; increases the quantity demanded and decreases the quantity supplied
complete the following statement. Failure to specialize and reap the games from trade is _______ because _______. A. efficient; it leads to self-sufficiency B. inefficient; production is at a point inside the economy's PPF C. inefficient; production occurs on the PPF but consumption occurs inside the PPF D. inefficient; resources are not fully employed
B. inefficient; production is at a point inside the economy's PPF
The law of demand states that ______, the ______ the price of a good, the smaller is the quantity demanded. A. other things remaining the same; lower B. other things remaining the same; higher C. even when other factors change; higher D. even when other factors change; lower
B. other things remaining the same; higher
Zach is an engineering student who is considering taking an extra course in Spanish. An incentive that might encourage him to take the Spanish course is _______. A. an increase in Spanish teachers' wages B. softer grading in Spanish C. an increase in the salaries fo engineering graduates D. an increase in tuition
B. softer grading in Spanish
Now suppose that the price is 80 cents a pack. Describe the situation in the gum market and explain how the price adjusts. If the price is 80 cents a pack, there is a ______ of gum, so the price of a pack of gum ______. A. surplus; rises B. surplus; falls C. shortage; falls D. shortage; rises As the market moves toward the equilibrium price, the quantity demanded _______ and the quantity supplied _______. A. increases; increases B. decreases; decreases C. decreases; increases D. increases; decreases
B. surplus; falls D. increases; decreases
Which of the following topics is studied in macroeconomics? A. all aspects of scarcity B. the national economy and the global economy C. big businesses D. the choices that individuals make
B. the national economy and the global economy
Along the supply curve, _______. A. the quantity supplied increases as the price rises because the expected future price also rises B. the price changes but all other influences on producers' planned sales remain the same C. the quantity supplied increases as the price rises because the prices of substitutes in production also rise D. the quantity supplied increases as the price rises because technology advances
B. the price changes but all other influences on producers' planned sales remain the same
Read the news clip, then answer the following question. When Kanye West gave away tickets, what was free and what was scarce? [Kanye West Offers Free Concert Tickets Kanye West has teamed with Los Angeles inner-city schools to offer free passes for students. Source: consequenceofsound.net, November 27, 2016] A. the publicity that Kanye receives for giving the concert is not free because he spent many hours in rehearsal preparing for the concert B. the seats available for the concert are scare because there are only a certain number available C. the time that a student spends in line to obtain a pass is free because students don't have jobs D. the time that reporters use to attend and report on the concert is free because attending a concert doesn't feel like work.
B. the seats available for the concert are scare because there are only a certain number available
Rent is the income paid for the use of _____. Wages are income paid for the services of _____. Profit (or loss) is the _____ earned by an entrepreneur for running a business. Interest is the income paid for the use of _____. A. goods and services; capital; rent; loans B. land; labor; income; capital C. labor; land; capital; capital D. labor; land; income; capital
B. land; labor; income; capital
Which of the following is an example of comparative advantage? A. Angela makes better pastries than Sherrie. B. The United States produces less textile products and more electronic products. C. Dave makes 4 pizzas giving up 6 jars of milk shakes while Rob makes 2 pizzas giving up 4 jars of milk shakes. D. Michael Jordan is an American basketball player. Which of the following is an example of absolute advantage? A. Tom does his math homework in 2 hours while Harry takes only 30 minutes to do the same task. B. Amy is smart and performs well in exams. C. Charlie enjoys skiing while Ryan enjoys hiking. D. Nick has an advantage over others in the industry because he knows many software programs.
C. Dave makes 4 pizzas giving up 6 jars of milk shakes while Rob makes 2 pizzas giving up 4 jars of milk shakes. A. Tom does his math homework in 2 hours while Harry takes only 30 minutes to do the same task.
_____, is an example of a choice in the self-interest. _____, is an example of a choice in the social interest. A. It is too cold in North Dakota; Louisiana suffered from Hurricane Katrina B. Texas has a very high per capita GDP; We cancelled our trip to India because of the devastating floods C. I buy pizza for lunch; I am collecting funds to help the flood victims D. I go home on Thanksgiving; I would like to buy a new cellphone
C. I buy pizza for lunch; I am collecting funds to help the flood victims
Which of the following news headlines does not deal with scarcity? A. the cost of going green B. home health aides: minimum wage hikes could deepen shortage C. Netflix stock soars to new high D. saving coral reefs requires war on global warming
C. Netflix stock soars to new high
Pam, Pru, and Pat are deciding how they will celebrate the New Year. Pam prefers to go on a cruise, is happy to go to Hawaii, but does not want to go skiing. Pru prefers to go skiing, is happy to go to Hawaii, but does not want to go on a cruise. Pat prefers to go to Hawaii or to take a cruise, but does not want to go skiing. Their decision is to go to Hawaii. What is the opportunity cost of the trip to Hawaii for each of them? A. The opportunity cost for Pam and Pat is the airfare to Hawaii minus the cost of a cruise and for Pru, it's the airfare minus the cost of a ski trip. B. The opportunity cost for each of them is the airfare to Hawaii minus the cost of a cruise. C. The opportunity cost for Pam and Pat is a cruise and for Pru it is skiing. D. The opportunity cost for each of them is the airfare to Hawaii.
C. The opportunity cost for Pam and Pat is a cruise and for Pru it is skiing.
What conditions must be satisfied if resources are used efficiently? Suppose a country produces only pencils and erasers. Pencil production is efficient if the marginal _______ a pencil equals the marginal _______. A. cost of; cost of an eraser B. cost of; benefit from an eraser C. benefit from; cost of a pencil D. benefit from; benefit from an eraser
C. benefit from; cost of a pencil
Production efficiency is a situation in which the economy is getting all that it can from its resources and _____ produce more of one good or service without producing _____ of something else. A. cannot; more B. cannot; equal C. cannot; less D. can; less
C. cannot; less
The graph shows a production possibilities frontier. Complete the following sentence. Production efficiency is achieved at points A, B, and C because to increase the production of x as we move from A to B to C, _______ . A. the production of y also increases B. the production of y decreases and the value of the y forgone is worth less than the additional x produced C. we are giving up the minimum amount of y possible to increase the production of x D. the production of y remains unchanged
C. we are giving up the minimum amount of y possible to increase the production of x
Why does economic growth destroy and create jobs? As a country experiences economic growth, investment in capital and advances in technology _________. A. increase production in services but decrease service jobs. Jobs are created in the agricultural industry but many American workers are unwilling to do farm work and the jobs are given to immigrants B. decrease production in services but increase service jobs. Labor moves from industrial production into the service industry but the move is slow because many workers lack the necessary education C. increase industrial production but decrease industrial jobs. Jobs are created in the service industry but many workers lack the necessary skills or are unwilling to relocate D. increase industrial production and increase industrial jobs. Labor moves from the service industry and the agricultural industry into industrial production
C. increase industrial production but decrease industrial jobs. Jobs are created in the service industry but many workers lack the necessary skills or are unwilling to relocate
1. "Fracking" _________. A. decreases U.S. production possibilities B. has an undetermined effect on U.S. production possibilities C. increases U.S. production possibilities D. has no effect on U.S. production possibilities 2. Advances in technologies for producing other goods and services _______. A. have no effect on U.S. production possibilities B. decrease U.S. production possibilities C. have an undetermined effect on U.S. production possibilities D. increase U.S. production possibilities 3. Assume that the U.S. PPF measures oil and gas production on the x-axis and production of other goods and services on the y-axis. If fracking" is the only technological advance, _________. A. the U.S. PPF rotates outward, increasing the x-axis intercept with no change in the y-axis intercept B. the U.S. PPF rotates outward, increasing the y-axis intercept with no change in the x-axis intercept C. the U.S. PPF shifts outward, increasing the x-axis intercept and the y-axis intercept D. the U.S. PPF does not change 4. If "fracking" had been the only technological advance, the opportunity cost of producing oil and gas would have been _________. A. higher than it actually was B. the same as it actually was C. equal to the opportunity cost of producing other goods and services D. lower than it actually was
C. increases U.S. production possibilities D. increase U.S. production possibilities A. the U.S. PPF rotates outward, increasing the x-axis intercept with no change in the y-axis intercept D. lower than it actually was
Why does the PPF bow outward and what does that imply about the relationship between opportunity cost and the quantity produced? The PPF bows outward because as we move from point A to point B to point C, the opportunity cost of producing a pair of blue jeans ______. A. does not change. Resources are equally productive in all activities B. increases. And the opportunity cost of producing a winter coat also increases C. increases. Resources are not equally productive in all activities D. decreases. Resources are not equally productive in all activities
C. increases. Resources are not equally productive in all activities
Sports cars and gasoline are complements. If the price of a sports car decreases, how does the demand for gasoline change? If the price of a sports car decreases, the demand for gasoline will _______. A. not change, but there will be a movement along the demand curve for gasoline B. decrease, and the demand curve for gasoline will shift leftward C. increase, and the demand curve for gasoline will shift rightward D. increase or decrease, but the demand for sports cars will not change
C. increase, and the demand curve for gasoline will shift rightward
The resources that are used to produce goods and services - _____ are factors of production. A. land, labor, stocks and bonds B. labor and capital C. land, labor, capital, and entrepreneurship D. physical and financial capital
C. land, labor, capital, and entrepreneurship
Maria graduates from college and her income increases by $35 comma 000 a year. Nothing else changes. Maria decreases the quantity of pasta and chocolate chip cookies that she buys and increases the quantity of books that she buys. For Maria, _______. A. pasta and chocolate chip cookies have become complements B. books and chocolate chip cookies are normal goods C. pasta and chocolate chip cookies are inferior goods D. pasta and books have become substitutes
C. pasta and chocolate chip cookies are inferior goods
The production possibilities frontier is the boundary between those combinations of goods and services that can be _____ and those that ______. A. consumed; cannot be consumed B. purchased; can be consumed C. produced; cannot be produced D. produced; can be consumed
C. produced; cannot be produced
An increase in the demand for ramen noodles brings a ______ in the price of ramen noodles and ______ in the quantity of ramen noodles supplied. A. fall; a decrease B. fall; an increase C. rise; an increase D. rise; a decrease
C. rise; an increase
_____ are examples of goods and _____ are examples of services. A. weather forecasts; interest rates B. donations to flood victims; football games C. shoes; haircuts D. haircuts; shoes
C. shoes; haircuts
Economics is the _____ the choices that individuals, businesses, governments, and entire societies make as they _____, and the influences on those choices, and the arrangements that coordinate them. A. set of personal opinions about; cope with scarcity B. set of personal opinions about; settle disgreements C. social science that studies; cope with scarcity D. social science that studies; settle disagreements
C. social science that studies; cope with scarcity
Why does demand not change when the price of a good changes with no change in the other influences on buying plans? Consider the demand for onions. The demand for onions does not change when a change in _______ occurs. A. the price of dried onion left parenthesis dried onion is a substitute for onions right parenthesis B. the price of tomatoes (tomatoes are a complement of onions) C. the price of onions D. the population An increase in the price of onions _______. A. decreases the demand for onions and shifts the demand curve for onions leftward B. increases the quantity of onions demanded and results in a movement down along the demand curve for onions C. decreases the quantity of onions demanded and results in a movement up along the demand curve for onions D. increases the demand for onions and shifts the demand curve for onions rightward
C. the price of onions C. decreases the quantity of onions demanded and results in a movement up along the demand curve for onions
Firms are institutions that organise _____ of goods and services. A. imports B. exports C. the production D. the consumption
C. the production
The what, how, and for whom questions in economics are questions about ______. A. what are the factors of production, how do we pay the factors of production, and who supplies the factors of production B. what goods and services do we produce in the United States and what goods and services do we buy from other countries, how do we ship goods and services into the United States from abroad, and who benefits from shipping goods into the United States C. what goods and services do we produce, how do we use the factors of production to produce these goods, and who consumes the goods and services that are produced D. what incomes do we pay the people who produce the goods and services we consume, how do firms generate enough income to pay their employees, and who wants the goods and services that are produced
C. what goods and services do we produce, how do we use the factors of production to produce these goods, and who consumes the goods and services that are produced
The _____ that people devote to produce goods and services is labor. A. time and money B. time C. work time, and work effort D. money and consumption goods and services
C. work time, and work effort
The money price of a can of shave gel is $2.50, and the relative price of a can of shave gel in terms of bananas is 5.00 pounds of bananas per can of shave gel. What is the money price of a pound of bananas? The money price of a pound of bananas is _______. A. the opportunity cost of a pound of bananas B. $2.50 C. the opportunity cost of a can of shave gel D. $0.50
D. $0.50
Explain why a relative price is an opportunity cost. The money price of a pack of frozen burritos is $0.50 and the money price of a can of shave gel is $1.50. The opportunity cost of a can of shave gel is _______. A. $1.50, the price of a can of shave gel B. $0.50, the money price of a pack of frozen burritos C. 0.33 cans of shave gel D. 3.00 packs of frozen burritos, which is the relative price of a can of shave gel The relative price of a can of shave gel is an opportunity cost because ______. A. the relative price tells us how many packs of frozen burritos we must give up to get a can of shave gel B. it is expressed as a money price C. the relative price tells us how many cans of shave gel we must give up to get a pack of frozen burritos D. it is constant
D. 3.00 packs of frozen burritos, which is the relative price of a can of shave gel A. the relative price tells us how many packs of frozen burritos we must give up to get a can of shave gel
Choose the correct statement. A. Entrepreneurship decreases over time. nothing B. Entrepreneurship is not a factor of production. C. Entrepreneurship includes the tools and instruments that we work with. D. Entrepreneurs make business decisions.
D. Entrepreneurs make business decisions.
Choose the statement that is incorrect. A. To live off campus instead of on campus is a rational choice if the benefit from living in residence near the library is less than the cost of living with all-night parties in residence. B. To quit college and train to become a plumber is a rational choice if the benefit received from working with your hands exceeds the cost of spending hours and hours trying to learn economics. C. To spend the weekend at home with your family is a rational choice if the benefit from your mother's cooking exceeds the cost of traveling home. D. It is never a rational choice to decide to enter the labor force immediately following high school.
D. It is never a rational choice to decide to enter the labor force immediately following high school.
When production is efficient, ______. A. there is no tradeoff between pizza and pasta B. some resources are unused or misallocated C. Mario's can produce more pasta without producing less pizza D. Mario's can produce more pasta only by producing less pizza
D. Mario's can produce more pasta only by producing less pizza
Pam, Pru, and Pat are deciding how they will celebrate the New Year. Pam prefers to go on a cruise, is happy to go to Hawaii, but does not want to go skiing. Pru prefers to go skiing, is happy to go to Hawaii, but does not want to go on a cruise. Pat prefers to go to Hawaii or to take a cruise but does not want to go skiing. Who faces a tradeoff? A. Pam and Pat face a tradeoff but Pru does not face a tradeoff B. Pat and Pru face a tradeoff but Pam does not face a tradeoff C. Pam and Pru face a tradeoff but Pat does not face a tradeoff D. Pam, Pat, and Pru face a tradeoff.
D. Pam, Pat, and Pru face a tradeoff.
Which of the following illustrates an efficient outcome? A. Ted cuts the price of his sausages and his profit decreases. B. Ted pays his workers a higher wage and his profit takes a dive. C. Ted pays $10,000 for a new meat slicer that operates at double the speed of his old one. D. Ted cuts the price of his sausages and his profit increases.
D. Ted cuts the price of his sausages and his profit increases.
Choose the correct statement. A. The opportunity cost of an activity is constant, regardless of the time of day at which you pursue the activity. B. The opportunity cost of doing more of an activity is the opportunity cost of the activity. C. The opportunity cost of an activity you do not enjoy is zero. D. The opportunity cost of something is the highest-valued alternative that must be given up to get it.
D. The opportunity cost of something is the highest-valued alternative that must be given up to get it.
Rational choice is a choice that uses the available resources to _____ of the person making the choice. A. maximize the benefit B. increase the marginal benefit C. minimize the opportunity cost D. best achieve the objective
D. best achieve the objective
The night before an economics test, you decide to watch television instead of studying for your test. You get 60 percent on your test compared with the 75 percent that you normally score. You ______, and the opportunity cost of your evening watching television was ______. A. faced a tradeoff between a higher test score and an evening watching television; the mark of 60 percent on your exam B. did not face a tradeoff because your roommates agreed you should watch television and not study; zero C. did not face a tradeoff because you made the best choice; zero D. faced a tradeoff between a higher test score and an evening watching television; the 15 percent fall in your grade
D. faced a tradeoff between a higher test score and an evening watching television; the 15 percent fall in your grade
For each news item below, indicate whether it involves a what, how, or for whom question. "Health dash care professionals and drug companies say Medicaid drug rebates should be available to everyone in need" involves a ______ question. "Wal dash Mart to carry 'morning dash after' contraception" involves a ______ question. A. what; how B. what; what C. for whom; how D. for whom; what "Fiber replaces aluminum in airplanes" involves a _______ question. A. for whom B. how C. what
D. for whom; what B. how
Land is the _____ that we use to produce goods and services. A. tool B. financial capital C. good D. gifts of nature or natural resources
D. gifts of nature or natural resources
Complete the following statements. The opportunity cost of producing a cake is ______ at point A than at point B. The opportunity cost of producing a loaf of bread is ______ at point B than at point A. A. greater; less B. less; greater C. less; less D. greater; greater
D. greater; greater
Complete the sentence. The market for gasoline is a competitive market _______. A. if many people buy gasoline comma but only a few firms sell gasoline B. if few people buy gasoline comma so sellers can hold out for a high price C. only if the buyers and sellers of gasoline are spread around the world and never meet D. if many people buy and many firms sell gasoline, so no single buyer or seller can influence the price
D. if many people buy and many firms sell gasoline, so no single buyer or seller can influence the price
Ann currently produces at point A in the figure. Complete the following sentence. If Ann moves from point A to point C, her opportunity cost of a modem _______. A. remains the same B. is zero C. decreases D. increases
D. increases
Human capital _____ that people obtain from education, on-the-job training, and work experience. _____ that have been produced in the past and that businesses now use to produce goods and services is capital. A. are goods and services; inputs B. are inputs; natural resources and other goods C. are productive resources; inputs and outputs D. is the knowledge and skill; Tools, instruments, machines, buildings, and other items
D. is the knowledge and skill; Tools, instruments, machines, buildings, and other items
an increase in the demand for pasta and an increase in the supply of pasta occur together. What is the effect on the price and quantity of pasta? An increase in the demand for pasta together with an increase in the supply of pasta ______ create a surplus or a shortage of pasta at the original price. The equilibrium price of pasta ______. A. might; will rise B. will not; will not change C. will not; will fall D. might; might fall, rise, or not change The equilibrium quantity of pasta _______. A. decreases B. increases if the price rises and decreases if the price falls C. increases or decreases but we don't know for sure D. increases
D. might; might fall, rise, or not change D. increases
When a shortage arises, the price ______ to its equilibrium, which _______. A. rises; decreases demand and increases supply B. falls; increases demand and decreases supply C. falls; increases the quantity demanded and decreases the quantity supplied D. rises; decreases the quantity demanded and increases the quantity supplied
D. rises; decreases the quantity demanded and increases the quantity supplied
What is the fundamental fact of life from which all economic problems arise? A. wars create poverty B. it is unfair that poor people face scarcity but rich people do not face scarcity C. the poor are getting poorer and the rich are getting richer D. society faces scarcity
D. society faces scarcity
The virus decreases the _______. A. supply of potato chips and decreases the demand for potato chips B. supply of potato chips and decreases the quantity of potato chips supplied C. demand for potato chips because the price of potato chips rises D. supply of potato chips and decreases the quantity of potato chips demanded
D. supply of potato chips and decreases the quantity of potato chips demanded
When an event occurs that changes the demand for coffee makers, _______ if demand increases and ______ if demand decreases. A. a movement up along the demand curve occurs; a movement down along the demand curve occurs B. the demand curve shifts leftward; the demand curve shifts rightward C. a movement down along the demand curve occurs; a movement up along the demand curve occurs D. the demand curve shifts rightward; the demand curve shifts leftward
D. the demand curve shifts rightward; the demand curve shifts leftward
The opportunity cost of the Rio Olympics is _______. [Cost of Rio Olympics Brazilian federal, state, and local governments spent R$2.8 billion and private sponsors spend R$4.2 billion on 17 new Olympic facilities, 10 of which will be used for sporting events after the Olympics. Source: Financial Times, August 6, 2016] A. the goods and services that would have been purchased with the R$2.8 billion if the Brazilian government would have spent this money anyway to give Brazilian athletes a place to train B. the goods and services that would have been purchased with R$4.2 billion. Government expenditure is never included in opportunity cost C. R$7.0 billion D. the goods and services that would have been purchased with R$7.0 billion if the facilities were not built unless Rio hosted the Olympics
D. the goods and services that would have been purchased with R$7.0 billion if the facilities were not built unless Rio hosted the Olympics
