01.09 Module One Exam

What would cause the overall demand for books to increase?

A celebrity commercial encouraging reading

Use the above graph to answer the following question. Pretend this graph represents the market for books. Which situation would cause the graph to shift from line 1 to line 2?

A fire that destroys the paper factories

A console game, ZOMBIES!, has come out recently. It sells for $60. Which of these might lower the price of the game?

A negative article about the game from a well-known reviewer, causing sales to drop

You are in charge of your country's currency, which is backed by a gold standard. Unfortunately, gold production is dropping sharply and is not expected to recover. What is your best option?

Move to fiat currency.

An increase in demand causes the demand curve to

shift to the right

Sam takes a five-dollar bill from his wallet. He exchanges the bill for four quarters and four one-dollar bills. He then uses the change to buy a bottle of water from a vending machine. Which characteristics of money has Sam best demonstrated?

Acceptability, divisibility, and portability

Felicia knits scarves and sells them to her friends. The first week, she knits four scarves and sells three for $50 each. The next week she buys her yarn at a discount, so she knits six scarves and is able to sell five for $40 each. Which number represents quantity demanded at $40?

Five

Jen is starting a nonprofit store. She plans to sell handmade African scarves and jewelry. Which economic question(s) would Jen still need to answer?

For whom to produce?

If the x-axis is Quantity, and the y-axis is Price, what does line S1 represent? Red line rises up and to the right from 0, 1 in positive x and y directions. Blue line rises up and to the right from 45, 1 in positive x and y directions. Green line descends from 35, 11 in a positive x, negative y direction and intersects the blue line at 85, 5. Arrow points to left from end of the blue line, toward the red line.

The supply of a product at time 1

When new technology for the more efficient production of peanut butter was implemented, the supply curve for peanut butter

shifted to the right

Andy's two nephews want to travel to Philadelphia with him to see a show. Andy has two free plane tickets and three tickets to the show. Which of the following best describes the two plane tickets?

A scarce resource

Creative Commons Attribution-Share Alike 3.0 Unported, and Creative Commons Attribution-Share Alike 2.5 Generic license The supply and demand curves reflect the availability and cost of a new gaming system. If the gaming system market is currently at Demand and Supply 1, which change to the graph would have to occur to increase equilibrium price while lowering equilibrium quantity?

Add Supply 2 to left of Supply 1.

Use the cost-benefit analysis table to answer the question: Cost 1. Losing an opportunity for fun with friends 2. Losing an opportunity to work on her tan 3. Getting tired from working extra hours. Benfits 1. Not spending money at the beach 2. Earning holiday pay of $15 per hour. 3._______________________________ Clara works a summer job that pays $10 per hour. She has two choices for the Fourth of July weekend. She can continue to work and earn holiday pay, or she can go with her friends to the beach. She creates a cost-benefit analysis table to examine her choices. What statement would best complete the chart, and why?

Her employer may see she is reliable and hire her in the fall, helping her save more for college.

Which of the following best addresses the economic question For whom to produce?

InFocus conducts focus groups to determine its target market

Creative Commons Attribution-Share Alike 3.0 Unported Look at the graph. Where P is price and Q is quantity, how are point A and line S related? Line S starts at 10 on the Y axis and rises in a curve in a positive direction for both x and y-axes. Dashed lines extend from the x and y-axes to point A 10, 15. Dashed lines extend from the x and y-axes to point B 30, 30.

Point A is the quantity supplied at a given price; line S represents the total supply.

Based on the graph, how is quantity demanded related to price? The graph is at a negative slope (100, 5) In the beinging then the last point is (500, 1)

Quantity demanded decreases as price increases.

The supply and demand curves show data for the latest paperback edition in a popular young adult fiction series that has been turned into a film. Which change must be made to the graph if the publisher offers a complementary download of a song from the newest film version with purchase?

Shift D1 right, showing an increase in demand and an increase in equilibrium price.

Use the cost-benefit analysis table to answer the question: Should Mrs. Baxter allow her students to take an open-book test? Cost 1. Students will not want to study as hard 2. Students may not learn the material as well 3. Mrs. Baxter may have to reteach the material. Benefit 1. Students will feel better about the test 2. Students will be happier with Mrs. Baxter. 3.______________________________ Which of the following would best fill the blank space?

Student test scores should increase.

You go to the bank to trade a dirty dollar for a new, clean one. The cashier tells you the trade is not necessary because currency is

You go to the bank to trade a dirty dollar for a new, clean one. The cashier tells you the trade is not necessary because currency is

Which of the following addresses all three of the basic economic questions?

You start your own lunch delivery service serving area businesses and featuring all organic meals baked in your home.