Microeconomics quiz 1

Figure 2.2 If Indonesia chooses to produce 160 pounds of vegetables, how much meat can it produce to fully utilize its resources?

0 pounds of meat.

Table 2.6 What is Haley's opportunity cost of making a necklace?

0.75 of her bracelet.

Figure 2.2 What is the opportunity cost of one pound of meat in Indonesia?

1.33 Pounds of vegetables.

Figure 2.2 Suppose Indonesia is currently producing 60 pounds of vegetables per period. How much meat is it also producing, assuming that resources are fully utilized?

75 pounds of meat.

The phrase "demand has increased" means?

A demand curve has shifted to the right.

What does the term marginal mean in economics?

An additional or extra

The revenue received from the sale of _ of a product is a marginal benefit to the firm.

An additional unit

If, in response to a decrease in the price of coffee, the purchase and consumption of coffee increases, economists would describe this as?

An increase in quantity demanded.

Which of the following will not shift the demand curve for a good?

An increase in the price of the good.

Economists assume that individuals?

Are rational and respond to incentives.

If the marginal cost of producing a TV set is constant at $200, then the firm should produce a TV?

As long as the marginal benefit it receives is equal or greater than $200.

The attainable production points on a production possibility curve are?

Both the points along and inside the production possibility frontier.

The PPF model shows that?

If all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.

Figure 2.1 Point A is?

Inefficient in that not all resources are being used.

The production possibilities frontier shows the _ combinations of two products that can be produced in a particular time period with available resources.

Maximum attainable

In economics, choices must be made because we live in a world of?

Scarcity

When applied to PPF, the principle of opportunity cost is that?

The economic cost of using a factor of production is the alternative use of that factor that is given up.

A demand curve shows the relationship between?

The price of the product and the quantity of the product demanded.

Figure 3.1 This graph represents demand for cable TV services. Suppose that there is an increase in the price of TV sets. How would this affect the market for cable TV services?

There will be a shift from D2 to D1.

The additional cost to a producer of hiring an additional unit of labor is called the marginal cost?

True

Figure 2.1 Point C is?

Unattainable with current resources.

Making optimal decisions "at the margin" requires?

Weighing the costs and benefits of a decision before deciding if it should be pursued.