Econ Exam 1

There are empty candy shelves at Walmart on the day before Halloween. Which of the following explains this event?

There is a shortage in the candy market.

A planned economy is an economy where

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

A surplus is

excess supply

Shifts and market demand can result from a change in

the type and number of buyers

Why are supply curves typically upward slipping?

they slope upward because higher prices lead individual businesses to supply a larger quantity and more businesses are willing to supply goods and services

Equilibrium is the

point at which there is no tendency for change

What happens to the equilibrium price and quantity when demand increases and at the same time supply decreases, but the demand shift is larger than the supply shift?

Both the equilibrium price in the equilibrium quantity rise

Caroline Bates is a junior in college studying economics. She has created a new software application that applies the four principles of economic decision making to any potential decision that a user faces. She is considering leaving school after this academic year to pursue further development of her app. Caroline should consider all of the following costs when calculating the opportunity cost of staying in college except the

Cost of supplies and the technology fees she paid during the first 3 years of college

The opportunity cost of attending college includes the

Cost of tuition

Consider your decision to attend class in college or skip it. Which of the four core principles of economics applies to the notion that each additional class you attend helps increase your likelihood of mastering the material?

Cost-benefit principle

As consumers consume more units of and each additional unit decreases at an increasing rate. This can be seen through

Demand curves that are steeper at lower quantities and flatter at higher quantities

Which of the following scenarios does not illustrate the law of demand?

Freya buys more donuts when the price of donuts is higher

Consider the decision to read your economics textbook. Which of the four core principles of economics applies to the notion that reading this textbook will help you to establish a solid foundation of understanding economics, which will be beneficial for future courses?

Interdependence principal

If a firm expects lower prices in the future

It will increase supply today

When face with a quantity decision, economic economic surplus stops increasing when

Marginal benefits equal marginal cost

The cost benefit principle will lead you to make unselfish decisions if you

Maximize economic surplus

Dependencies between markets reflect the fact that

Resources are spread across different markets

Marie Johnston is a manager at an electronics store, and she has to decide how many workers to hire. It she hires one worker, her revenue is $400 per day. If she hires another worker, she can make another $350 per day. The marginal benefit of hiring another worker decreases by with each additional hire. Assuming that workers are paid $20 per hour and work eight hours, how many employees should Marie hire, and what will be the total her store

She will hire five workers in the revenue of the store will be $1500

If Canadian consumers expect the value of the Canadian dollar to depreciate against the US dollar ( the Canadian dollar becomes weaker against the dollar), what impact would we expect us to have on Canadians demand for American made products?

The demand for American made items would fall

What will happen in the market for clothing with a major department store shifts it's production of clothing to a low labor cost country?

The lower cost of production will lead to an increase in supply in a fall in the price of clothing

The order in which you should apply the four core principles of economics is;

The marginal principle, the cost benefit principle, the opportunity cost principle, the interdependence principal

Which of the following explains why a seller may charge a high price on a new video game console when it is first released and then lower the price as time goes by?

The seller can charge a high price to consumers who want to be the first ones to own a newly released product

Exxon imports a significant amount of oil from Canada. What would happen to the supply curve if the value of the U.S. dollar falls against the Canadian dollar?

The supply curve will shift to the left

A meat processing plant produces both steak and ground beef. What effect would rising market prices for steak have on the market for ground beef?

The supply of ground beef will decrease

According to the interdependence principle when faced with the decision you should ask

What else my decision affects and what else might affect my decision

Juan McDonald willing to pay 650 for a new iPad. He offers to pay 600 for an iPad at the Apple store. It costs Apple 700 to produce this iPad voluntary economic transaction between Juan and Apple occur because would be better off due to the transaction

Will not; only Juan

Fast food is a good example of

a inferior good

Complements in production

allows a business to produce goods together

Rising marginal cost imply

an upward sloping supply curve

What is quantity supplied?

the amount of a good that sellers are willing and able to sell

If Tesla cars become less expensive, what will happen in the market for other electric cars?

The demand for other electric cars will fall

Jane goes to an all-you can restaurant and makes three trips to the buffet. After finishing food from her third trip, she felt sick and throws up Which of the following economic explanations best matches Jane's situation

James marginal benefit from eating the third plate was negative

A market consists of ten similar suppliers that are making the same supply decisions. To find the market supply of these ten suppliers, you

Multiply the individual supply of one of the suppliers by 10

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

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

Which principle tells you that the true cost of something is the next best alternative you have to give up to get it

The opportunity cost principle

Alan Patel is a college student living alone in a campus apartment. He finished cooking dinner with his friends and texted him to join them at the dining hall on campus for dinner. He now has to decide whether to eat dinner he prepared or walk to campus to meet his friends at the dining hall. Alan should consider all the following costs when making this decision except the

Time he spent cooking the dinner

The Bangtan Boys (BTS) sold out their first US concert almost as soon as the tickets became available. Moreover, tickets for the BTS tour were on average twice as expensive as tickets for Taylor Swift's 2018 Reputation tour, How can you explain this difference in ticket prices?

The demand for BTS tickets is larger than the demand for Taylor Swift tickets

In March 2019, airlines around the world grounded their Boeing 737 max aircraft after two of them crash. What would we expect to happen in the market for this aircraft?

The demand for the Boeing 737 max would decrease due to concerns about the safety of the aircraft.

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

The quantity demanded will be higher