Economics Homework Qs

'Marginal' means a. All of the above b. 'A change in' c. Additional or incremental d. Increase or decrease by one unit

A

A _______________ shows the maximum quantity of two products that a person can purchase based on the price of the products and the person's budget. a. budget constraint b. elasticity constraint c. opportunity cost d. income constraint

A

A change in Demand is a. Shown by shifting the demand curve (out and to the right or back and to the left), and occurs because something in the world other than price has changed b. Shown by a movement from point to point along one demand curve, and occurs because the price of the product itself has changed

A

Demand is _____________ when the percentage change in price is smaller than the percentage change in quantity demanded (%∆P < %∆Qd). a. Elastic b. Inelastic c. Perfectly Inelastic d. Unit Elastic

A

Demand is _____________ when the percentage change in price leads to the exact same percentage change in quantity demanded (%∆P = %∆Qd). a. Unit Elastic b. Inelastic c. Perfectly Inelastic d. Elastic

A

Economists use the term Marginal to describe a. All of the above b. A little more or a little less of something c. Incremental changes d. An increase or decrease in one unit

A

In economics, a firm that faces no competitors is referred to as _________________. a. a monopoly b. a perfect competitor c. a single competitor d. an oligopoly

A

The amount spent on wages for the employees is an __________. a. explicit cost b. implicit cost

A

The cost for the delivery truck is an __________. a. explicit cost b. implicit cost

A

The invisible hand a. Shows how producers and consumers interact in the spontaneous market to create the immense and dynamic economy that we see today b. Gives invisible high-fives c. Is the government's control or direction of the economy d. Is only a concept and cannot be seen in the real economy

A

The more time that you have to shop around for the product, the more ____________ the product is. a. Elastic b. Inelastic

A

The sacrificed $3,000 in interest that the business owner gave up when he removed $100K from his bank to start the business is an __________. a. implicit cost b. explicit cost

A

The study of economics is primarily concerned with: a. Making the best use of scarce resources b. Expanding the production of goods and services to maximize a nation's GDP c. The nation's trade balance (or imbalance) d. Equalizing the distribution of consumer income and wealth

A

The term _________________ refers to the additional utility provided by one additional unit of consumption. a. marginal utility b. utility c. negative utility d. Giffen utility

A

The term __________________ describes a situation where in the long-run, the quantity of output rises yet the average cost of production falls. a. economies of scale b. diminishing marginal returns c. diseconomies of scale d. marginal output cost

A

The total revenue test looks at the relationships between what two variables, when determining elasticity? Select one: a. Price and total revenue b. Total revenue and quantity supplied c. Total revenue and quantity demanded d. Price and quantity demanded

A

What are economists referring to if: additional resources are added to the production of a product, yet productivity decreases? a. The law of diminishing returns b. The law of increasing costs c. The law of diminishing productivity d. The law of diminishing marginal utility

A

What are the benefits called when suppliers are willing and able to accept a price lower than equilibrium price, but actually receive equilibrium price? a. Producer Surplus b. Producer Profits c. Producer Revenue d. Producer Utility

A

Who conducts monetary policy? a. Congress b. The president c. All of the above d. The country's central bank

A

Why are we required to use the midpoint formula to calculate percentage change rather than the general percentage change formula? a. All of the above b. If we used the general percentage change formula we would get two different percentages depending on if the variable increased or decreased c. We must have only one percentage change regardless of if the variable is increasing or decreasing

A

Your income increases from $12,000 per year to $32,000 per year; your quantity demanded of hotdogs falls from 90 per year to 10 per year. The income elasticity of demand coefficient is ____________. Based on the sign of the coefficient, hotdogs are a(n) ____________ good. a. Ei = -1.76, Inferior b. Ei = 1.76, Normal c. Ei = -.57, Substitute d. Ei = -1.76, Complementary

A

____________________________ occur when the marginal gain in output (quantity produced) diminishes as each additional unit of variable input is added. a. Diminishing marginal returns b. Diminishing marginal utility

A

"The unemployment rate in April 2014 was 6.3% which was better than the unemployment rate was in March, but it still should have been lower"; this entire statement is an example of: a. Positive economics b. Normative economics c. Classical economics d. Negative economics

B

"The unemployment rate in April 2014 was 6.3%" is an example of a. Normative economics b. Positive economics c. Negative economics d. Keynesian economics

B

A change in Quantity Demanded is a. Shown by shifting the demand curve (out and to the right or back and to the left), and occurs because something in the world other than price has changed b. Shown by a movement from point to point along one demand curve, and occurs because the price of the product itself has changed

B

Demand is _____________ when price changes and the quantity demanded remains the same. (%∆P leads to No ∆Qd). a. Perfectly Elastic b. Perfectly Inelastic c. Unit Elastic d. Inelastic

B

Due to one of the worst winters that Texas has seen in 50 years, there was a large propane shortage. Hank Hill, propane salesman, was unable to quickly and easily increase the quantity supplied of propane. For that time period (winter) the price elasticity of supply for propane was _____________. Select one: a. Elastic b. Inelastic

B

Economics is a. The study of money and production b. The social science that seeks to understand the choices people make in using scarce resources to meet their unlimited wants c. The measure of GDP d. The study of Government spending

B

Fixed inputs are a. Inputs that can never change b. Inputs that cannot be increased or decreased in a short time in order to increase or decrease output c. Inputs that are stationary; i.e. the office building or manufacturing factory d. Not taken into consideration for profit

B

If the product is a necessity, the product will be more____________ . a. Elastic b. Inelastic

B

If the product is a very small percentage of your income, the product will be more ____________. Select one: a. Elastic b. Inelastic

B

If there is an increase in Demand, what will happen to equilibrium Price and equilibrium Quantity? Select one: a. Equilibrium Price will decrease & equilibrium Quantity will decrease b. Equilibrium Price will increase & equilibrium Quantity will increase c. Equilibrium Price will decrease & equilibrium Quantity will increase d. Equilibrium Price will increase & equilibrium Quantity will decrease

B

If you are extremely loyal to the brand of this product, the more ____________ the product is. a. Elastic b. Inelastic

B

In the circular flow model, households: a. Sell products and buy resources (labor, capital & natural resources) b. Buy products and sell resources (labor, capital & natural resources) c. Sell products and resources (labor, capital & natural resources) d. Buy products and resources (labor, capital & natural resources)

B

Janet and Miguel probably have identical utility for the consumption of iPhones. a. True b. False

B

The long-run average total cost curve is unique because a. only marginal costs are allowed to change. b. it allows all factors of production to change. c. its fixed costs cannot be changed. d. only variable costs are allowed to change.

B

The more substitutes for the product, the more ____________ the good is. a. Inelastic b. Elastic

B

The mortgage on the factory is a ___________. a. variable cost b. fixed cost

B

The payment for the input of raw materials is usually a ___________. a. fixed cost b. variable cost

B

The price of the 'Kitten Mittens' increases from $5 to $9; the quantity supplied of Kitten Mittens increases from 20 to 100. The price elasticity of supply coefficient is a. Es = .29 inelastic b. Es = 2.3 elastic c. Es = .43 inelastic d. Es = 1.33 elastic

B

The relationship between price and quantity demanded is a. Direct b. Inverse

B

The role of an assumption in an economic theory is to: a. Cover special cases b. Simplify the theory c. Prove the theory d. Add realism

B

The sacrificed wage that the business owner cannot earn from their old job because they have started a new full-time business is an __________. a. explicit cost b. implicit cost

B

The term _____________ is used to describe the additional cost of producing one more unit. a. variable cost b. marginal cost c. fixed cost d. total cost

B

There is a(n) __________ relationship between the amount of time that you study and how well you perform on the exam. a. Negative b. Direct c. Inverse d. Happy

B

This is a situation where, given fixed factors of production, it is not possible to produce more of one good without decreasing production of another good. a. Allocative efficiency b. Productive efficiency c. Maximum efficiency d. Equilibrium quantity

B

Total revenue is a. Price multiplied by quantity sold b. All of the above c. A synonym for revenue d. The income that the business receives

B

Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit. a. marginal cost b. total revenue c. average cost d. variable cost

B

A firm's ___________ consist of expenditures that must be made before production starts that typically, over the short run, ______________, regardless of the level of production. a. fixed costs; increase as output increases b. variable costs; do not change c. fixed costs; do not change d. variable costs; are constantly changing

C

At the convenience store The Kwik-E-Mart, the price of milk increased %20 and the quantity demanded by Marge decreased by %5. a. Ed = .05 inelastic b. Ed = 4 elastic c. Ed = .25 inelastic d. Ed = .20 inelastic

C

Gross domestic product is... a. The total dollar amount that a country's government spends on final goods and services in one year b. The total dollar amount that that nation's corporations earned regardless of where the products were produced in one year c. The total dollar amount of all final goods and services produce within a country's borders in one year d. A perfect measure of the wellbeing of a country

C

How can society increase productivity? a. Innovation b. More or better land c. All of the above d. More or better labor e. More or better capital

C

In Economic, elasticity seeks to answer the question a. "How much did that rubber band contract?" b. "How far did that rubber band stretch?" c. "By how much did one variable respond to a change in another variable?" d. "Did that rubber band break?"

C

In Economics, the Short run is a. Is less than 2 years b. Is undefined c. A time horizon within which output can be adjusted only by changing the amounts of variable inputs used while fixed inputs remain unchanged; At least one cost is a fixed cost d. Is less than 6 months

C

In a closed economy (no international trade), how does a society choose where on the PPF to produce? a. Society will choose to produce the more expensive of the two products b. Society will choose the point closest to the middle (producing a little of each good) c. Society will choose the combination of the two goods that maximize society's utility d. Society will choose to produce the cheaper of the two products

C

In terms of microeconomic analysis, what is the function of "utils"? a. relates to a consumers original choice b. a form of budget constraint c. a measurement of utility (happiness) d. applies to changes in income

C

Marginal analysis is used to a. Determine whether to consume a product or not consume any of the product b. Show all or nothing situations c. Examine the decisions of incremental change d. Determine whether a company should stay in business or go out of business

C

Microeconomics is concerned with: a. Issues such as national unemployment b. Total output and inflation c. The individual units that make up the whole of the economy d. The total productivity of a country

C

Opportunity cost is a. A true cost that economists incorporate into cost models b. All around us and is part of daily decision making c. All of the above d. What was forgone because you pursued something else that was desired e. The next best alternative

C

The Production Possibility Frontier shows a. A tradeoff between two goods (or services) that could be produced b. The efficient use of resources, points beyond the PPF are unattainable and points inside the PPF are inefficient c. All of the above d. The maximum combinations of two goods (or services) that can be produced given the economy's available knowledge and factors of production

C

The demand curve shows that as the price of a good increases, a. People tend to buy more of this good b. The quantity demanded for the good increases c. The quantity demanded of the good decreases d. The demand curve for the good shifts to the left

C

The law of diminishing marginal utility a. Shows dissatisfaction of a product b. Only works with goods and not services c. Shows the general pattern of higher levels of happiness for the first few units consumed compared to the last few units consumed d. Shows economists what products in the economy will fail because consumers preferences for that good is dwindling

C

To be considered as part of the demand curve for a product, you must a. You don't have to be willing to buy the product; you just have to be rich enough to afford the product b. Qualify for a loan c. Be willing and able to purchase that item d. Buy the product once a week

C

Using the total revenue test, determine which of the following is not correct. a. When price and Total Revenue move in the same direction, the product is inelastic b. When price changes Total Revenue remains constant, the product is unit elastic c. When price and Total Revenue move in opposite directions, the product is inelastic d. When price and Total Revenue move in opposite directions, the product is elastic

C

What is the process in which workers select specialized tasks to make a product? a. Freedom of choice b. Roundabout production c. Division of labor d. Employment possibilities frontier

C

________________________ arises where many firms are competing in a market to sell differentiated products. a. Monogopolised competition b. Oligopolistic competition c. Monopolistic competition d. Perfect competition

C

An economic structure where economic decisions are passed down (through hierarchy) from government planners where factors of production are owned by the government

Command Economy

Demand is _____________ when the percentage change in price is larger than the percentage change in quantity demanded (%∆P > %∆Qd). a. Unit Elastic b. Perfectly Inelastic c. Elastic d. Inelastic

D

Economists are able to determine total utility by: a. multiplying the marginal utility of the last unit consumed by the number of units consumed. b. multiplying the marginal utility of the last unit consumed by the unit price. c. multiplying the marginal utility of the first unit consumed by the number of units consumed. d. summing (adding) the marginal utilities of each unit consumed.

D

Fixed costs are important because, at least in the ___________, the firm _______________. a. short run; can alter them b. business cycle; cannot alter them c. long run; cannot alter them d. short run; cannot alter them

D

If hot dogs and hamburgers are substitutes and the price of hot dogs increases, what do we expect? a. An increase in the quantity of hot dogs demanded b. The demand curve for hot dogs to shift to the right c. The demand curve for hot dogs to shift to the left d. The demand curve for hamburgers to shift to the right

D

If the price of a product increased by 10% which led to a decreased in quantity demanded by 7% the Price Elasticity of Demand Coefficient is a. Ed = 1.4 which is Elastic b. There is not enough information to find the coefficient c. Ed = 0.7 which is Elastic d. Ed = 0.7 which is Inelastic

D

In order to determine ____________, the firm's total costs must be divided by the output. a. fixed cost b. average fixed cost c. variable cost d. average total cost

D

The difference between Economic profit & Accounting profit is Select one: a. Accounting profit can overstate the profits if the business owner has spent a lot of money on implicit costs for the business b. Economic profit incorporates implicit costs into the cost models when calculating profit c. Accounting profit = Total Revenue - Explicit cost & Economic Profit = Total Revenue - Explicit cost - Implicit cost d. All of the above

D

The price of bolts fell by 15% which led to the demanded for nuts to increase 21%. The cross-price elasticity of demand coefficient is ____________. Based on the sign of the coefficient, bolts and nuts are ____________. a. Exy = 1.4 , Unrelated goods b. Exy = .71 , inelastic goods c. Exy = 1.4 , Substitute goods d. Exy = -1.4 , Complementary goods

D

The term ___________________ is used to describe the common pattern whereby each marginal unit of a consumed good provides less of an addition to utility than the previous unit. a. marginal utility pattern b. deteriorating marginal utility c. marginal income utility d. diminishing marginal utility

D

The theory of Consumer Equilibrium is a. Used to illustrate why individuals consume specific amounts of different products - based on marginal utility and price b. A state of affairs in which a consumer cannot increase the total utility gained from a given budget by spending less on one good and more on another c. (MU Good A/ Price Good A) = (MU Good B/ Price Good B) = ... = (MU Good Z/ Price Good Z) d. All of the above

D

This demand curve graphs as a horizontal demand. Select one: a. Unit Elastic b. Inelastic c. Perfectly Inelastic d. Perfectly Elastic

D

Variable inputs are a. Inputs that do not impact output and productivity b. Inputs that constantly change c. Inputs that can be easily substituted or changed for other inputs d. Inputs that can be varied within a short time in order to increase or decrease output

D

We drop the negative sign when calculating the coefficient for a. Income elasticity of demand b. Price elasticity of supply c. Cross-price elasticity of demand d. Price elasticity of demand

D

What is the term that economists use to describe the satisfaction or happiness gained from consuming a product? a. Whoot b. Normative satisfaction c. Economic joy d. Utility

D

When economists refer to underground economies, they are talking about: a. Illegal trade b. Employees being paid under the table c. Black markets d. All of the above

D

When the Invisible hand is correcting the market because it has a surplus, a. Built up inventories will decrease b. Quantity demanded will increase and quantity supplied will decrease c. The equilibrium price will fall d. All of the above

D

Which is not a factor of Production? a. Labor b. Capital c. Natural Resources (Land) d. Money

D

Which of the following is considered to be a tell-tale signal that the point with the highest total utility has been found? (we have reached consumer equilibrium) a. the quantities demanded change so total utility is constant b. the marginal utility per dollar is controlled by trade-offs c. the demand curves are flatter reducing quantity d. the marginal utility per dollar is the same for both goods (or for all goods purchased)

D

Who conducts fiscal policy? a. The executive branch b. Congress c. The nation's legislative body d. All of the above

D

_____________ is calculated by taking the quantity of everything that is sold and multiplying it by the price it was sold at. a. Total profits b. Average profit margin c. Total cost d. Total revenue

D

A product that is produced in the US and sold abroad is a US...

Export

Economists assume that choosing to donating money to a stranger is notrational &/or self-interested. True False

False

An American consumer who buys a Ferrari that was produced in Italy is an example of a US...

Import

Typically an agricultural economy where things are done the same as they have always been done

Traditional Economy

An economy where economic decisions are conducted through spontaneous order, factors of production are owned by individuals and businesses supply goods and services based on demand

Market Economy