Microeconomics

If the demand for pickles shifts to the left as consumers' incomes rise, pickles are

inferior goods.

If the demand for steak increases as income increases, this means that steak is a(n):

normal good

The central concern of economics is:

scarcity.

Suppose the price of gasoline increases and that sport utility vehicles get poor gas mileage compared to other available cars. One would expect:

the demand for sport utility vehicles to decrease.

Economic surplus is:

the difference between the benefit gained and the cost incurred of taking an action.

An increase in the quantity demanded of tea occurs whenever:

the price of the tea falls

Amy is thinking about going to the movies tonight. A ticket costs $7 and she will have to cancel her dog-sitting job that pays $30. The cost of seeing the movie is:

$37

Suppose that a disease that affects people who consume beef has been discovered in the United States. One likely result is:

A decrease in the demand for beef.

What might cause a supply function to shift to the right(supply curve shifts rightward)?

A decrease in the price of one of the inputs to making the product.

What might cause a demand function to shift to the right?

An increase in the price of a substitute

What might cause a demand function(demand curve) to shift to the right?

An increase in the price of a substitute.

If the price elasticity of demand for a good is greater than one, then the demand for that good, with respect to price, is:

Elastic.

Generally speaking, demand for a good will be more inelastic:

If few substitutes exist.

If the price of soft drink A increases, the demand for soft drink B will

If the price of soft drink A increases, the demand for soft drink B will increase because the two goods are substitutes.

In most markets, scarce goods or services are rationed among competing users, and ______ perform that task.

Monetary prices

When all buyers have identical demand curves, we can derive the market demand curve by:

Multiplying each quantity by the number of consumers.

The price elasticity of demand for a good is the response of:

Quantity demanded to a one percent change in price of that good.

For which of the following products is demand likely to be least price elastic?

Salt.

Suppose the price of gas tripled, and analysts expected the price to remain permanently higher. In response to the gas price increase people began biking more. What is likely to happen in the market for bicycles?

The demand for bicycles will increase.

The marginal cost of an activity is the:

change in the cost of the activity that results from an extra unit of the activity.

Economic questions always deal with:

choice in the face of limited resources.

As the price of flour (an input into the cookie production process) increases, firms that produce cookies will:

decrease the supply of cookies.

The seventh glass of soda that Tim consumes will produce an extra benefit of 10 cents and has an extra cost of zero (Tim is eating at the cafeteria). The cost-benefit principle predicts that Tim will:

drink the seventh glass and continue until the marginal benefit of drinking another glass of soda is zero.

A market in disequilibrium would feature:

either excess supply or excess demand.

The marginal benefit of an activity is the:

extra benefit associated with an extra unit of the activity.

The range of topics or issues that fit within the definition of economics is:

extremely wide, requiring only the ideas of choice and scarcity.

When a person decides to pursue an activity as long as the extra benefits are at least equal to the extra costs, that person is:

following the cost-benefit principle.

If the price of tennis racquets falls, the demand for tennis balls will

increase because the two goods are complements

If bagels are a normal good and buyers' incomes decrease, then

the demand for bagels will decrease

For two goods X and Y to be classified as substitutes, it must be the case that

when the price of X rises, the demand for Y increases