Econ 102: Midterm 1

mary has 10$ to spend each week on coffee, qc and magazines qm. The price of a coffee Is 1 and the price of a magazine is 2$. Mary's budget equation is

$1 × Qc + $2 × Qm = $10

consider the budget line in the above figure. If the consumers income is $120 then the price of a book is

$12 per book

the figure above shows tanyas consumption possibilities. Tanya spends $100 per month on movies and restaurant meals. The price of a movie ticket is _______ an dthe price of a resturaunt meal is ______

$5; $20

shanniq consumes only magazine and CD's. Her income equals $60 per month. CD's are $12 each and magazines are $5 each. what is the equation for her budget line

$60= 12QCD+5QM

which of the following shifts the supply curve for oranges

) disastrous weather that destroys about half of this year's orange crop

The above figure gives your budget line between CDs and magazines. The slope of the budget line is ______CD per magazine

-1/2

The figure above gives your budget line for magazines and CD's per month. Given that your income is $60 per month. what is your real income in terms of magazines

12 magazines

The above table gives the demand and supply schedules for Blu-ray discs. Suppose that the price of a Blu-ray disc player increases, resulting in the demand for Blu-ray discs decreasing by 8,000 units at all prices. What are the new equilibrium quantity and equilibrium price of Blu-ray discs?

16,000 and 16

which of the following is NOT a factor of production

175 shares of microsoft stock

based on the above figure showing a budget line, which of the following combinations of soda and bottles water are not affordable

2 bottles of water and 6 cans of soda

Jed had an exam score of 50 percentage points. There is an extra credit assignment that Jed can complete that will raise his exam score by 20 percentage points. Jed has determined that the extra credit assignment will take 10 hours of his time. Jed will complete the assignment if he values the

20 percentage points more than the 10 hours of his time

the above table gives the demand and supply schedules for blu ray discs. Based on the table, the equilibrium quantity and price of a blu ray discs is

20,000 and 20

in the figure above, the marginal cost of the second computer is

3 television sets per computer

in the above figure, at the allocatively efficient level of computer production consumers are willing to give up

3 televisions per computer

in the figure above at the allocative efficient level of computer production the marginal cost of producing a computer is

3 televisions per computer

The above table shows the demand schedule and supply schedule for chocolate chip cookies. An increase in income results in an increase in the demand for chocolate cookies by an amount of 3 pounds at every price. What are the new equilibrium quantity and equilibrium price?

5 pounds, 6.00 per pound

Joe has $50 to spend on pizza and movies. If movies are $5 each and a pizza is $10 then, assuming he spends all his money, he can buy which of the following bundle of goods?

6 movies and 2 pizzas

which of the following is a positive statement

A 10 percent increase in income leads to a 4 percent increase in the consumption of beef.

which of the following is a positive statement

A 5 percent increase in income leads to a 3 percent increase in the consumption of orange juice.

the table shows the demand and supply schedules for jeans

At $40 a pair, there is a shortage of jeans and the price will rise.

choose the best statement

GDP equals aggregate expenditure and equals aggregate income.

________ is gross investment minus ________.

Net investment; depreciation

the above table shows production combinations on a countrys production possibilities frontier. A movement from _____ involves the greatest opportunity cost of increasing the production of good Y

Point B to point A

When the price is less than the equilibrium price

Some consumers will be willing to pay a price higher than the prevailing price. There will be a shortage. The price will be forced higher. (All of the above)

Which of the following is TRUE regarding the circular flow diagram?

The government, households, and firms all have transactions in the goods market. 111 only

opportunity cost is defined as

The highest-valued alternative that must be given up to get something

in the digure above an economy would grow fastest if it produces at point

a

which of the following creates an incentive to increase the amount of an activity

a decrease in the marginal cost of the activity and an increase in the marginal benefit of the activity

consider the demand curves for soft drinks shown in the figure above. suppose the economy is at point a. which of the following could result in a movement to point c

a decrease in the relative price of a soft drink

the figure above shows supply curves for soft drinks, suppose the economy is at point a. movement to point c could be the result of

a decrease in the relative price of a soft drink

considering a ppf with health care services on the vertical axis and other goods and services on the horizontal axis, the increasing production of health care services in the united states as a result of the aging population represents

a movement upward along the ppf

Georgine buys more sweaters when her income increases, for Georgine sweaters are

a normal good

when an economy produces at its allocatively efficient production point

a society can increase the production its allocatively efficient production point

at a price of $10 in the above figure there is

a suurplus of 400 units

a normative statement is

about what ought to be

when we cannot produce more of any good without giving up some other good that we value more highly, we have acheived

allocative efficiency

`Beef is a normal good and people's incomes fall. At the same time a bumper corn crop reduces the cost of feeding steers. These changes result in

an increase in the equilibrium quantity of beef if the shift in the demand curve is smaller than the shift in the supply curve

the "law of demand" predicts that, other things being equal

an increase in the price of pizza decreases the quantity of pizza demanded

a change in which of the following would not shift the supply curve for sneakers

an increase in the price of sneakers

which of the following does not shift the supply curve

an increase in the price of the good

when the price of an inferior good falls, the substitution effect leads to ______ in the quantity purchased and the income effect leads to _________ in the quantity purchased

an increase; a decrease

the term opportunity cost points out that

any decision regarding the use of a resource involves a costly choice.

wants, as the opposed to demands

are the unlimited desires of the consumer

In computing GDP, it is essential to

avoid double counting

Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. If there is exceptionally good growing weather in the wapanzo bean growing region then supply will ________ and demand will ________.

become casew c; stay at case 2

marginal benefit is the

benefit that a person receives from consuming one more unit of a good or service

we measure the marginal ______ of a good by what a ______ for another unit of the good

benefit; person is willing to pay

Fred and Ann are both given free tickets to see a movie. Both decide to see the same movie. We know that

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

in the figure above, curve b shows the

bottles of soda that people are willing to forgo to get another bicycle

an economic system in which the government decides what, how, and for whom to produce, directs workers to jobs, and owns all the land and capital is

centrally planned socialism

Economics can be defined as the social science that explains the

choices that we make as we cope with scarcity

a budge line shows the

consumption possibilities of a consumer at a given level of income and prices

a point inside a production possibilities frontier is

could indicate that some resources are unemployed

making choices at the margin means

deciding to do a little bit more or a little bit less of an activity

when moving along the production possibilities frontier, opportunity cost is measured as

decrease in the quantity produced of one good divided by the increase in the quantity produced of another good

the marginal benefit of a good or service

decreases as more is consumed

a decrease in the price of bowling shifts the

demand curve for bowling balls rightward

the figure above shows the market for candy. people become more concerned that eating candy causes them to gain weight which they do not like, as a result the

demand curve shifts from D2 to D1 and the supply curve does not shift.

macroeconomics is concerned with

economy-wide variables

the income earned by the people who sell the services of the factor of production ________ is called __________

entrepreneurship; profit

moving along a ppf, marginal cost is

equal to the opportunity cost of producing one more unit of a good or service.

when there is a surplus in the market, the quantity sold is

equal to the quantity demanded

in the above table, the production of 3 pizzas and 35 cases of soda is

feasible but would involve unedmployed or misallocated resources

The table above shows the marginal benefit from pizza and the marginal cost of pizza in cans of soda forgone. If ________ pizzas are produced, the quantity of soda that people are willing to give up to get an additional pizza is more than the quantity of soda that they must give up to get that additional pizza

fewer than 40

The above figures show the market for oranges. Which figure(s) shows the effect of a new government program that provides each public school child with an orange to start the day?

figure a

which graph shows the impact of scientists developing a more powerful fertalizer

figure a

The above figures show the market for gasoline. Which figure shows the effect of motorists increasing the number of times they take the bus to work rather than driving their own cars?

figure b

The above figures show the market for hamburger meat. Which figure shows the effect when more farmers decide to raise cows that are processed into hamburger meat?

figure d

which of the following is a final good

flour purchased at the store to bake cookies

a normal good is one

for which demand increases when income increases

The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are an inferior good?

from point a to c

The circular flow model shows that consumer goods and services produced by business firms are sold in the

goods market

the circular flow of income shows that

governments purchase goods and services q

opportunity cost menas the

highest valued alternative forgone

In the above figure, flow B represents ________.

household purchases of goods and services

which of the following is an example of a positive statement

households are the primary source of saving

in part, microeconomics is concerned with

how a business firm decides upon the amount it produces and the price it sets

all economic questions are about

how to cope with scarcity

which of the following questions is a topic that would be studied by microeconomics

how will a lower price of digital cameras affecrt the quantity of cameras sold

a president of the united states promises to produce more defense goods without any decrease in the production of other goods. This promise can be valid

if the united states is producing at a point insid its ppf

in the figure above, the marginal cost of producing a computer

increases as more computers are produced

marginal cost

increases as more is produced

a normal good is a good for which demand

increases when income increases

when the opportunity cost of producing more of a good is increasing the marginal cost of producing more of the good is

increasing

In the above figure, in order for this country to move from production possibilities frontier PPF1 to PPF2, it might

increasing the skills and productivity of its work force

which of the following best defines capital as a factor of production

instuments, machines, and buildings used in production

if the good in the above figure is a normal good and income rises, then the new equilibrium quantity

is more than 300 units

a student is studying for an exam 2 hours a day and is debating whether to study an extra hour. The students marginal benefit

is the benefit the student receives from studying an extra hour

copper falls into which factor of production category

land

in economics the term "land" means

land, mineral resources, and nature's other bounties.

If the price of a video download is below its equilibrium price, the quantity supplied is ________ than the quantity demanded. If the price of a video download is above its equilibrium price, the quantity supplied is ________ than the quantity demanded.

less; greater

In every economic system, choices must be made because resources are ________ and our wants are ________.

limited, unlimited

the branch of economics that deals with the analysis of the whole economy is called

macroeconomics

when susan makes the statement " the government should spend less money to take care of national parks" she is

making a normative statement

Gross domestic product is the total ________ produced within a country in a given time period.

market value of all final goods and services

gross domestic product is the ________ in a given time period

market value of final goods and services produced by the economy

the study of the choices made by individuals is part of the definition of

microeconomics

in broad terms the difference between microeconomics and macroeconomics is that

microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy

in a market at the equilibrium price

neither buyers nor sellers can do business at a better price

a nation can produce at a point outside its ppf

never

statements about what ought to be are

normative statements

The word "final" in the definition of GDP refers to

not counting intermidiae goods or services

people must make choices because

of scarcity

which of the following is a positive statement

our planet is warming because of an increased carbon dioxide buildup in the atmosphere

A new 2015 Honda Civic produced in 2015 and purchased in 2016 is

part of gdp in 2015

scarcity is a situation in which

people cannot satisfy all their wants

In the above figure, if D2 is the original demand curve for a normal good and income decreases, which price and quantity might result?

point b, with price P1 and quantity Q1

in a supply and demand figure, the equilibrium price and quantity are found at the

point where quantity supplied = quantity demanded

the statememt " an increase in the price of gasoline will lead to a decrease in the amount purchased" is a ___ statement

positive statement

a shortage causes the

price to rise

i order to determine a households budget line you must know the

prices of the goods bought and the households income

The production possibilities frontier is the boundary between those combination of goods and services that can be

produced and cannot be produced

production efficiency means that

producing one more of one good is psosible only if the production of some other good is decreased

the existence of a shortage

pushes the price up

The quantity of CDs that firms plan to sell this month depends on all of the following EXCEPT the

quantity of cd's that people plan to buy

as the price of a pound of peanuts falls, the

quantity of peanuts supplied decreases

In the circular flow model of an economy, households

receive income from buyers of goods and services

In the figure above, how can the economy represented by the production possibilities frontier move from point C to point F?

redistribute the existing resources to produce more apples and fewer oranges

one of the opportunity costs of economic growth is

reduced current consumption

when graphing a demand curve for corn, we are showing the relationship between the quantity demanded of corn and the

relative price of corn

If a society is operating at a point inside its production possibilities frontier, then this society's

resources are being inefficiently utilized

increasing opportunity cost occurs along a production possibilities frontier because

resources are not equally productive in all activities

for a change in the quantity supplied but not a change In supply to occur there must be a

rightward shift of the demand curve; leftward shift of the demand curve

The demand for a good increases when the price of a substitute ________ and also increases when the price of a complement

rises; falls

The fact that wants cannot be fully satisfied with available resources reflects the definition of

scarcity

The wage rate paid by Walkman producers falls and at the same time the price of raw materials used in the production of Walkmans rises. You predict that the supply curve of Walkmans will

shift either leftward or rightward

an increase inm the nations capital stock will

shift the ppf outward

After Hurricane Katrina devastated parts of Mississippi and New Orleans in 2005, we can be sure that the production possibilities

shifted inward towards the orgin

economic models

simplify reality

Tonya, who is rich, and Jerome, who is less rich, both buy orange juice and croissants for lunch at the student cafeteria. Their budget constraints as drawn on a diagram, with orange juice on the vertical axis and croissants on the horizontal, have the same __________.

slopes

If a producer can use resources to produce either good A or good B, then A and B are

substitutes in production

In 2014, the price of peanuts was rising, which lead peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. In the current market for peanut butter, the price falls and the quantity decreases. This set of results means that

supply decreased by more than supply increased

We observe that the equilibrium price of digital cameras has fallen and the equilibrium quantity of digital cameras has increased. Which of the following events could be responsible for this?

technological advances in digital camera production

the production possibilities frontier shift as

technology changes

GDP does not directly include intermediate goods because

that would count the intermediate goods twice

the marginal benefit is the

the additional gain from one more unit of an activity

microevocnomics is the study of

the choices that individuals and businesses make

production possibilities figure does not illustrate

the exchange of one good or service for another

the opportunity cost of an activity is

the highest valued alternative given up

which of the following is CORRECT: factors of production are

the inputs used to produce goods and services

a fall in the price of a good causes producers to reduce the quantity of the good they are willing to produce. this fact illustrates

the law of supply

An example of a question that might be explored in microeconomics is to determine

the number of workers employed by Intel

the law of demand states that other things remaining the same, the higher

the price of a good, the smaller is the quantity demanded

the statement that _____ is a positive statement

the price of sugar in the united states is higher than the price in austrailia

which of the following increases the demand for a normal good

the price of the good is expected to increase in the future

The supply curve slopes upward when graphed against ________, because of ________.

the price of the good; increasing marginal cost

Which of the following expenditures associated with the production of a new high-performance SUV will be directly included in GDP?

the purchase of new machine tools to manufacture the engines

a marginal benefit curve shows

the quantitiy of one good that people are willing to forgo to get another unit of another good

Using the above figure, suppose that roses are a normal good. If incomes decrease while simultaneously there is an increase in the price of the resources used to produce roses, then

the quantity will definetiely decrease below 10 dozen roses

the ppf shifts if

the resources available to the nation change

if the price of lumbar rises, then in the market for sawdust

the suppply curve of sawdust shifts rightward

A lawn service is deciding whether to add an additional employee to its summer crew. The marginal cost of hiring this worker depends on the

the total amount paid to only the new worker

which of the following is a normative statement

the unemployment rate is too high

Consider a production possibilities frontier with corn on the vertical axis and cars on the horizontal. Unusually good weather for growing corn shifts

the verticle intercept upward but does not shift the horizontal intercepyt

which of the following is NOT a factor of production

the wages paid to workers

In terms of dollars, the marginal benefit of working 5 days a week instead of 4 days a week is

the wages received for working the 5th day of work

the price of a good will fall if

there is a surplus at the current price

suppose the equilibrium price for soft drink is 1.00 if the current price in the soft drink market is 1.25 each

there will be a surplus of soft drinks

which of the following are true regarding positive statements

they descrive what is believed about how the world appears, they can be tested for their accuracy

Any production point outside the production possibilities frontier is

unattainable

scarcity is a situation in which

we are unable to satisfy all our wants

normative statements are about

what ought to be

Which of the following expenditures is for an intermediate good?

you buy new tires for your used car

which of the following is a normative statement

you should eat less candy

The opportunity cost of moving from point a to point b in the above figure is _____

zero