econ 1100 test practice
the equilibrium price of blue jeans is _____ and the equilibrium quantity is ____.
$30; 8,000
at a price of $15:
a shortage of 8,000 pairs of blue jeans exist
which of the following could result in moving from point A on S1 to point E on S2?
an increase in the number of scooter manufacturers
the economic argument supporting free trade is based on the principle of:
comparative advantage
microeconomics studies the:
decisions and behaviors of individuals and businesses
assume generic goods re inferior goods. A decrease in consumer income (ceteris paribus) will cause the demand for generic goods to ____, and the equilibrium price of generic goods will ____.
decrease; decrease
in the sample circular flow model, business firms:
demand labor in resource markets
if Paul is able to produce a greater number of chairs per hour than kaitlyn then:
paul has the absolute advantage in the production of chairs
both billy and peggy can gain from specialization and trade if peggy produces
pillows, because she has a comparative advantage in the production of pillows
the law of demand states that
price and quantity demanded are inversely (negatively) related, ceteris paribus.
the responsiveness of consumers to changes in the price of product is measured by
price elasticity of demand
if drought conditions in the farm belt result in a decrease in the supply of wheat what will happen to the equilibrium price and quantity of what, other things held constant?
price increases and quantity decreases
if the number of people seeking to purchase new homes in the area increases at the same time that prices of lumber and other homebuilding materials increase, then supply and demand analysis predicts that the equilibrium:
price of new homes will increase but the change in equilibrium quantity cannot be determined from the information given
based on the principle of comparative advantage, england and switzerland could both benefit by england specializing in the production of _____ and switzerland specializing in the production of _____.
umbrellas; radios
the opportunity cost to a student of attending a class lecture is the:
value of the next best alternative use of the student's time
assume an increase in the price of a magazine form $3 to $4 causes the quantity demanded of the magazine to decrease from 5,000 to 4,000 copies per month. Using the midpoint formula, the price elasticity of demand coefficient for the magazine is approx.:
.78
if a 5 percent decrease in the price of a good results in a 10 percent increase in the quantity demanded, the absolute value of the price elasticity of demand coefficient is _____, and demand is said to be _____.
2; elastic
for billy, the opportunity cost of producing 1 pillow is ____; and he has an absolute advantage in the production of
3 blankets; blankets
the opportunity cost of producing one radio in switzerland is
3 umbrellas
if this economy's ability to produce is given by PPF1, the opportunity cost of moving from combination A to combination B is:
5 footballs; 14-9
if the opportunity cost of the third DVR is 3 CD players, how many CD players would be produced at combination D?
9
a perfectly elastic demand is represented by graph
C
Beth quit her job as a computer programmer for a large corporation to begin her own computer repair business in her garage. To do this, she took $10,000 out of her retirement fund and hired her brother, Will, on an hourly basis. As a factor of production, Beth is best classified as _______, and Will is best classified as _______.
entrepreneur; labor
the old statement "what's good for general motors is good for the entire nation is a possible example of the
fallacy of division
if an increase in the price of good A causes the demand for good B to increase, then:
goods A and B are substitutes
all of the following might cause a shift from D1 to D2 except:
increase in the price of a complement for scooters
according to the law of supply, a decrease in the price of binder will, ceteris paribus:
increase in the supply of binders
if the demand for good X is relatively inelastic, then a 10 percent increase in price will cause demanded to decrease by:
less than 10 percent
the above production possibilities schedule
indicates that resources are not equally well suited at producing both CD players and DVRs
if the demand for widgets decreases as consumer income increases, widgets must be a(n) ______ with a _____ income elasticity of demand
inferior good; negative
producing a combination of 14 footballs and 5 baseball gloves:
is possible if the technology used to produce footballs and baseball gloves increases
"McDonald's should raise the wage it pays to all of its hourly employees" is an example of a:
normative microeconomic statement
assume a university wants to increase revenue from parking and hired a consultant to analyze the demand for covered parking on campus. If the consultant determined that the elasticity of demand coefficient for covered parking is .65, then the consultant should advise the university to:
raise the price of covered parking on campus
the study of economics is centered around the condition of:
scarcity, which forces all societies to make decisions about how to allocate scarce resources amount competing uses.
in a capitalist market economy, economic activity is mainly guided by:
self interest and prices
ceteris paribus, if quantity supplied exceeds the quantity demanded at the current market price, then a:
shortage exists and, as result price will rise
if the cross elasticity of demand between goods X and Y is 2, goods X and Y are:
substitute goods
the production possibilities frontier for two outputs is drawn assuming that:
the amount of resources currently available for production is fixed
which of the following is true
the price elasticity of demand decrease as price falls in graph A
ceteris paribus, the demand for a product will be more inelastic when:
the product is a necessity