micro final

one can say with certainty that equilibrium price will decline when supply

increases and demand decreases

if the supply and demand curves for a product both decrease, then equilibrium

quantity must decline, but equilibrium price may rise, fall, or remain unchanged

nation's production possibilities curve is bowed out from the origin because

resources are not generally equally efficient in producing every good.

an effective price floor on wheat will

result in a surplus of wheat

improvement in production technology will

shift the supply curve to the right

Economics may best be defined as the

social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.

a leftward shift of product supply curve might be caused by

some firms leaving an industry

if the income elasticity of demand for store brand macaroni and cheese is -3, this means that

store brand mac and cheese in an inferior good

increase in the excise tax on cigarettes raises the price of cigarettes by shifting the

supply curve for cigarettes leftward

Opportunity costs exist because

the decision to engage in one activity means forgoing some other activity.

other things equal, which of the following might shift the demand curve for gas to the left

the development of a low cost electric automobile

A firm's supply curve is upsloping because

beyond some point, the production costs of additional units of output will rise

an economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. this prediction assumes that

bicycles are normal goods

The price elasticity of demand coefficient measures

buyer responsiveness to price changes.

a 3 percent increase in the price of tea causes a 6% increase in the demand for coffee. the cross elasticity of demand for coffee with respect to the price of tea is

+2.0

Which of the following is a microeconomic statement?

The price of smartphones declined 2.8 percent last year.

suppose the income elasticity of demand for toys is +2.00 this means that

a 10 % increase in income will increase the purchase of toys by 20%

if the demand curve for product b shifts to the right as the price of product a declines, then

a and b are complementary goods

in the past few years, the demand for donuts has greatly increased. this increase in demand might best be explained by

a change in buyer tastes

which of the following would not shift the demand curve for beef

a reduction in the price of cattle feed

bc of the cold weather, the supply of oranges has substantially decreased. this statement indicates the

amount of oranges that will be available at various prices has declined

assuming competitive markets with typical supply and demand curves...

an increase in demand with no change in supply will result in an increase in sales

A perfectly inelastic demand schedule

can be represented by a line parallel to the vertical axis

The demand for a product is inelastic with respect to price if

consumers are largely unresponsive to a per unit price change.

the relationship between quantity supplied and price is --- and the relationship between quantity demanded and price is ---

direct; inverse

a market is in equilibrium

if the amount producers want to sell is equal to the a mount consumers want to buy

You should decide to go to a movie

if the marginal benefit of the movie exceeds its marginal cost.

when the price of oil declines significantly, the price of gasoline also declines. the letter occurs because of an

increase in supply of gasoline

a government subsidy to the produces of a product

increases product supply

if there is a surplus of a product, its price

is above the equilibrium level

The Latin term "ceteris paribus" means

other things equal.

The basic formula for the price elasticity of demand coefficient is

percentage change in quantity demanded/percentage change in price.

"Economics is concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity." This statement is

positive and correct.

the law of demand states that, other things equal

price and quantity demanded are inversely related

if the supply of a product decreases and the demand for the product simultaneously increases then equilibrium

price must rise but equilibrium quantity may ruse, fall, or remain unchanged

The assertion that "there is no free lunch" means that

there are always trade-offs between economic goals.