Micro Exam 1 Chapters 3&4

If Country A allocates more resources to producing capital goods than does Country​ B, _________. A. Country​ A's production possibilities shrink more this year than Country​ B's as they cut production of consumption goods B. Country A will grow more quickly than Country B and will get closer to eliminating scarcity C. Country B will have more balanced growth than Country A and will incur a lower opportunity cost of growth D. Country A will incur a larger opportunity cost of​ growth, but it will grow more quickly than Country B

Country A will incur a larger opportunity cost of​ growth, but it will grow more quickly than Country B

Consumers eat salsa with taco chips. The price of salsa rises. How does the increase in the price of salsa affect the demand for taco​ chips? A. It increases the demand for taco chips. B. It has no effect on the demand for taco chips. C. It decreases the demand for taco chips. D. It will decrease the demand for taco chips only if taco chips are a normal good. E. It could​ increase, decrease, or have no effect on the demand for taco​ chips, but more information is needed to determine the impact.

It decreases the demand for taco chips.

Assume that an association of young workers has lobbied Congress to require that all workers retire once they reach the age of fifty. What impact would this law have on the​ nation's production possibilities​ frontier? A. no impact at all B. The level of unemployment would decrease so the production possibilities frontier would shift outward. C. The number of young workers would increase so the production possibilities frontier would shift outward. D. The nation would move to a new position on its production possibilities frontier but the frontier itself would not shift. E. The production possibilities frontier would shift inward

The production possibilities frontier would shift inward.

If the automobile​ worker's union successfully negotiates a wage increase for its​ members, how does the wage hike affect the supply of​ automobiles? A. The supply increases. B. The quantity supplied increases. C. The supply decreases. D. The quantity supplied decreases. E. Both answers B and D are correct.

The supply decreases.

Which of the following is the best explanation for why the price of gasoline increases during the summer​ months? A. The number of gas stations open 24 hours a day rises in the summer months and so the price must rise to cover the higher costs. B. Oil producers have higher costs of production in the summer. C. Sellers have to earn profits during the summer to cover losses in the winter. D. There is less competition among oil refineries in the summer. E. There is increased driving by families going on vacation

There is increased driving by families going on vacation.

The law of supply states that other things remaining the​ same, a decrease in the price of a kayak leads to A. an increase in the supply of kayaks. B. a decrease in the supply of kayaks. C. a decrease in the quantity of kayaks supplied. D. an increase in the quantity of kayaks supplied. E. an increase in the supply of kayaks and a decrease in the quantity of kayaks supplied.

a decrease in the quantity of kayaks supplied.

If the demand for digital cameras increases when​ consumers' incomes​ rise, then digital cameras are A. an inferior good. B. a complement to camcorders. C. made using advanced technology. D. a normal good. E. a substitute for camcorders.

a normal good.

An increase in the number of pineapple growers results in A. an increase in the supply of pineapples and a rightward shift in the supply curve of pineapples. B. no change in the supply of pineapples and a movement along the supply curve of pineapples. C. an increase in the quantity of pineapples supplied and no shift in the supply curve of pineapples. D. an increase in the supply of pineapples and a leftward shift in the supply curve of pineapples. E. None of the above answers is correct.

an increase in the supply of pineapples and a rightward shift in the supply curve of pineapples.

A market is defined as A. any arrangement that brings buyers and sellers together. B. a store where people buy physical goods. C. a physical place where people buy only goods. D. a place where one good is bartered for another. E. a physical place where people buy both goods and services.

any arrangement that brings buyers and sellers together.

The United States is one of the richest nations in the​ world, A. so it must have a comparative advantage in the production of all goods. B. so might not have a comparative advantage in producing any goods. C. but it can still benefit from specialization and trade. D. so does not need to trade with poor nations in order to achieve any gains from trade. E. so it must have an absolute advantage in the production of all goods.

but it can still benefit from specialization and trade.

Mulch is shredded wood and is a byminus−product in the production of lumber. Because these two goods are produced​ together, they are A. complements in production. B. normal goods in production. C. not related. D. inputs into the same production process. E. substitutes in production.

complements in production.

A tradeoff faced when deciding how to generate electricity and whether to use wind power is​ ______. A. giving up other goods and services to get clean electricity delivered over​ long, high-cost transmission lines B. locating wind turbines far from cities and in farming areas C. getting something for​ nothing, a ​"free ​lunch" D. the boost that wind power brings to rural economies E. saving coal and oil

giving up other goods and services to get clean electricity delivered over​ long, high-cost transmission lines

Moving from one point to another on a production possibilities frontier implies A. holding the production levels of both goods constant. B. changing the amount of factors of production that are employed. C. decreasing the production of both goods. D. increasing the production of both goods. E. increasing the production of one good and decreasing the production of another

increasing the production of one good and decreasing the production of another.

The negative slope of the production possibilities frontier represents the idea A. that free lunches are possible. B. of unemployment. C. of​ tradeoffs, that in order to produce more of one​ good, the nation must produce less of another. D. of inefficient production. E. that prices rise as less is produced.

of​ tradeoffs, that in order to produce more of one​ good, the nation must produce less of another.

When new and better ways of producing all goods and services are discovered or when the quantity of capital​ increases, _______. A. our economy grows comma but we still face scarcity and opportunity cost B. the opportunity cost of all goods falls to zero C. the PPF rotates outward so that the economy can produce more of the good measured on the x dash axis D. the economy moves along its production possibilities frontier

our economy grows comma but we still face scarcity and opportunity cos

A country has a comparative advantage in the production of a good if it can A. produce more of the good most efficiently. B. produce the good on and remain on its production possibilities frontier. C. produce more of the good than another country. D. produce the good at the lowest opportunity cost. E. tradeoff producing the good for another good.

produce the good at the lowest opportunity cost.

The downward slope of a demand curve A. indicates how the quantity demanded changes when incomes rise and the good is a normal good. B. indicates how demand changes when the price changes and the good is a normal good. C. shows that as the price of a good​ rises, consumers increase the quantity they demand. D. represents the law of demand. E. indicates how demand changes when incomes rise and the good is a normal good.

represents the law of demand.

If the production possibilities frontier between two goods is a straight​ line, then the A. resources are equally productive in both goods. B. opportunity cost is not a ratio. C. line does not qualify as a production possibilities frontier because the unattainable production points are too close to the inefficient production points. D. Both answers A and C are correct. E. Both answers A and B are correct.

resources are equally productive in both goods.

Gains from trade A. always benefit one party but not the other party of any trade. B. occur when people do not specialize. C. occur when one party to the trade has an absolute advantage in both goods. D. occur when opportunity costs are equal. E. result in being able to consume beyond the trading​ individuals' production possibilities frontiers.

result in being able to consume beyond the trading​ individuals' production possibilities frontiers.

Consider the market for cellular phones. Which of the following shifts the demand curve​ leftward? A. a decrease in the quantity demanded of cellular phones B. a decrease in the price of cellular phones C. an increase in the price of cellular phones D. studies showing using cellular phones can cause brain cancer E. an increase in the services provided by cellular​ phones, such as text messaging

studies showing using cellular phones can cause brain cancer

Wheat is used to produce cereal. When the price of wheat​ falls, the A. supply of cereal increases. B. demand for cereal decreases. C. demand for cereal increases. D. demand for wheat increases. E. supply of wheat decreases

supply of cereal increases.

Market equilibrium occurs when A. all markets become equal. B. demand and supply change so that are equal at all possible prices. C. opposing forces pull demand and supply apart. D. demand and supply move in opposite direction. E. the quantity demanded equals the quantity supplied.

the quantity demanded equals the quantity supplied.

If consumers buy a large number of plugminus−in electric​ cars, the equilibrium price of electricity will​ ________ and the equilibrium quantity of electricity will​ ________. A. not​ change; increase B. ​rise; increase C. ​fall; decrease D. ​rise; decrease E. ​fall; increase

​rise; increase

If a freeze destroys oranges before they are​ harvested, the equilibrium price of an orange​ ________ and the equilibrium quantity​ ________. A. ​rises; decreases B. ​falls; decreases C. ​rises; increases D. ​falls; increases E. does not​ change; decreases

​rises; decreases