MicroEcon Test 1

Between points b and c in the above figure, the opportunity cost of 250 more bushels of corn is...

200 yards of cloth.

An increase in demand is shown graphically by...

shift of the demand curve to the right.

If more buyers come into a market for a good, we would expect the market demand curve...

shift outward and to the right.

A country operates inside its production possibilities curve; this may be caused by...

unemployment.

Cost of inputs in production is not a...

determinant of demand.

If the demand curve shifts, we know that...

the price of a good is not a factor.

The difference between scarcity and a shortage is that...

scarcity always is part of human life while shortages are usually temporary.

check #9...

In test 1.

Scarcity is not...

a shortage.

Which of the following is an example of the law of demand?

an increase in the price of gasoline is followed by a reduction in the amount of gasoline consumed.

The law of demand states that...

at lower relative prices, a larger quantity of a good will be purchased than at higher relative prices.

If all resources were perfectly adaptable for alternative uses, the production possibilities curve would...

be a strait line.

Fred and Ann decide to see the same movie when they are given free movie tickets. We know that...

both bear an opportunity cost since they could have done other things instead of seeing the movie.

A schedule of amounts of a good that people will purchase at various prices during a specific time period holding other factors constant is...

demand

In economic terminology, an inferior good is a good...

for which demand increases as income decreases.

In the production of goods and services, trade-offs exist because society...

has a limited amount of production resources.

According to the law of demand price and quantity demanded move...

in opposite directions.

All points inside the production possibilities curve indicate...

inefficiency in production.

A demand curve slopes down because of the...

inverse relationship between price and quantity demanded.

Generally, if a nation produces more consumer goods than capital goods...

less of all goods may be produced in the future.

Scarcity implies that people must make...

make choices.

A fundamental principle in demand analysis is that a change in price leads to...

movement along the demand curve.

The concept of opportunity cost exists because...

of scarcity.

The value of the best alternative sacrificed to obtain something you want is referred to as...

opportunity cost.

Determinants of demand

prices of related goods income future price expectations

The shape of the production possibilities curve in the above figure indicates that...

production of both corn and cloth is characterized by increasing cost.

market demand is the total...

quantities demanded of all consumers of a particular item at various prices.

Scarcity arises because...

resources are finite and are inadequate to meet all human wants and needs.

A movement along the production possibiltes curve would imply that...

society has chosen a different set of outputs.

The only variable consider when we move along the demand curve is...

the price of the good itself.

In economics, "demand" refers to...

the quantities of a good that people will buy at various prices.