Econ

Opportunity cost arises from the fundamental economic problem of

scarcity

A seller in a perfectly competitive market

sells the same product that other sellers sell.

Peanut butter and peanut oil are complements-in-production. When the price of peanut butter rises, the

supply of peanut oil will ris

If expected future profits in an industry ris

supply will shift right

he marginal cost of an additional worker is

the additional cost of hiring one more worker.

Cedar point amusement park reduces its entry fees. As a result of this price fall

the quantity demanded will be higher

Rose Riley's parents have booked and paid for a family trip to Aspen, Colorado, during her spring break.Rose's friends recently decided to drive to Destin, Florida, for spring break. Rose needs to decide whether tojoin her parents in Aspen or drive to the beach with her friends. The opportunity costs of joining her friends onthe trip to Destin include each of the following EXCEPT

the ski lift ticket her parents have already purchased for her

Gary Parker is willing to pay $700 for a new iPad. Apple (the producer of iPads) is selling a new iPad for$600. It costs Apple $400 to produce this iPad. How much economic surplus does Apple receive if Garypurchases this iPad?

$200

Kevin Williamson goes to a local coffee shop and orders a medium-sized latte. His willingness to pay for thatlatte is $6. The price of the latte is $2. The cost to the coffee shop to produce the latte is $1. How mucheconomic surplus does Kevin gain when he purchases the latte?

$4

Which of the following lists only factors that would cause an increase in the supply of an item?

A decrease in input prices; a technological innovation; a fall in the price of a substitute-in-production

Which of the following scenarios depicts a seller who is following the Rational Rule for Sellers?

American Airlines determines the marginal cost of an extra passenger to be $75 and sells a discountseat for $250.

Consider your decision to attend class in college or skip it. Which of the four core principles of economicsapplies to the notion that attending class today will require you to give up time and energy to pay attention, butin doing so you will gain a better understanding of the material?

Cost-benefit principle

What is quantity supplied?

It is the amount of an item that a seller is willing to sell at a particular price.

A beach resort in Bali builds 24 villas with private pools. They also establish two restaurants using state-of-the-art equipment (such as multipurpose ovens, freezers, and food processors). Meals are prepared usingorganic, locally sourced vegetables and meat. The hotel also uses water from the town supplier. Based on thisscenario, what are the variable costs for the beach resort?

Organic vegetables and water

Marie Johnston is a manager at an electronics store and has to decide how many workers to hire. If she hiresone worker, her revenue is $500 per day. If she hires another worker, she can make another $400 per day.The marginal benefit of hiring another worker decreases by $100 with each additional hire. Assuming thatworkers are paid $15 per hour and work eight hours, how many employees should Marie hire, and what willbe the total revenue of her store?

She will hire four workers and the revenue of the store will be $1,400

Sarah Sandoval is a coffee farmer trying to decide how many tons of coffee to produce. She can sell each tonof coffee for $2,500. The cost of producing the first ton of coffee is $500, for the second ton, it's $1000. Foreach additional ton of coffee produced, the marginal cost increases by $500. How many tons of coffee shouldSarah produce, and what is the total cost of her coffee production?

She will produce five tons at a total cost of $7,500

Sarah Sandoval is a coffee farmer trying to decide how many tons of coffee to produce. She can sell each tonof coffee for $3,000. The cost of producing her first ton of coffee is $600, and the second ton costs $1,200.Each additional ton of coffee costs $600 more to produce. How many tons of coffee should Sarah produce,and what is the total cost of her coffee production?

She will produce five tons at a total cost of $9,000

What is the process that a manager can follow to estimate the total market demand for the United States?

Survey some representative customers, find the total quantity demanded for those customers, scale upthe quantities demanded to represent the entire market, and then plot the market demand curve

What happens to the supply curve for new housing when there is a significant amount of new housingconstruction?

The supply curve will shift to the righ

How will the supply of clothing change if the forecast is that clothing prices will rise in the next few months?

The supply of clothing will decrease in the market today.

A large amount of harvested grain used to make flour grows mold due to flooding. How will this affect thesupply of flour in the market?

The supply of flour will decrease in the market

A normal good is

a good for which higher income causes an increase in demand

An inferior good is

a good whose demand decreases when income rises

The key to using the cost-benefit principle is to think about _____ aspects of a decision.

both financial and nonfinancial

A planned economy is an economy where

centralized decisions are made about what is produced, how, by whom, and who gets what

The Rational Rule for Buyers

compares the benefit of buying an additional unit of the item to the cost of that item.

As consumers consume more units of an item, the marginal benefit of each additional unit decreases at anincreasing rate. This can be seen through

demand curves that are steeper at lower quantities and flatter at higher quantities.

You go to Starbucks and see that the price of your favorite tall vanilla latte has gone up by 25 cents. All sizesof the vanilla lattes are now more expensive. As a result of this price increase, you would expect to see a

fall in the quantity demanded of vanilla lattes.

When using the opportunity cost principle, a seller has t

focus on the opportunity cost of producing an item

The difference between a centralized economy and a market economy is that.

governments make production decisions in a centralized economy, and individuals make productiondecisions in a market economy.

When you get hired for a well-paying job, you will most likely view older used cars as.

inferior good

Asking "What else?" allows the _____ principle to be boiled down to a simple question.

interdependence

Frank is a barley farmer in a perfectly competitive market. The market price of barley is $250 per ton. IfFrank charges $245 per ton, he will

lower his profitability by $5 per ton

Ivan has inherited his grandmother's 1963 Chevrolet Corvette, which he values at $50,000. He decides thathe might be willing to sell it, so he posts it on Craigslist for $55,000. Samantha is interested and willing to payup to $72,000 for such a car. A voluntary economic exchange _____ between Ivan and Samantha because_____ positive economic surplus from the transaction.

occurs; both Ivan and Samantha receive

t is a rainy day, and you are considering taking an Uber one mile to meet some friends. You have decided youare willing to pay $20 to avoid getting wet from the rain. The trip would normally cost you $8, but due to theweather the surcharge is triple the regular cost. You should _____ because the benefit to you of taking theUber is _____ than the cost.

walk; less