Econ Exam One
At the end of the term Vicki wants to sell her economic textbook for at least $25 otherwise she would keep it. George's looking to buy a textbook because hes taking the class next term and he is willing to pay at the most $60. If Vicky agrees to sell the textbook to G for $45 - George's consumer surplus is $15 in Vicky's producer surplus is $20 -George's consumer surplus is $45 in Vicky's producer surplus is $45 -George's consumer surplus is $60 in Vicky's producer surpluses $25 -George's consumer surplus is $20, Vicky's to producer surpluses $15
A
Suppose that a major drought causes a 30% reduction in the peanut harvest. I'd there is no change in demand, this event would cause at ____ the original equilibrium price, and the equilibrium price will therefore ____ and the equilibrium quantity will ______ - shortage, rise. Fall - shortage, rise, rise - surplus, fall, fall - surplus, fall, rise
A
The supply curve represents the ____ price at which a firm is willing to _____ - minimum, sell various quantities of a good - maximum, awll various quantities of a good - minimum, pay for inputs - maximum, pay for inputs
A
When a large factory closed in the town of Greenville income fell for many residents. As a result, demand for normal goods would ______ and demand for inferior goods would ______. - decrease, increase - increase, increase - decrease, decrease, - increase. Decrease
A
thinking at the margin involves - influencing how indiv. make decisions - making wiser decisions given limited info - maximizing a firm's or ind. well being - weighing the impact of one additional activity
A
In the market for online tutoring there is an increase in the supply of online tutors during finals week but there is an even larger increase in the demand for online tutors. These events will cause the equilibrium price of online tutoring to _____ in the equilibrium quantity to _____ - fall, rise - rise, rise - rise,fall - fall, fall
B
Public goods tend to be ____ because the provider of the goods cannot prevent someone from enjoying the good without paying for it which means the good is _____ - overproduced, nonexcludable - underproduces, nonexcludable - overproduces, non rival - under produced, nonrival
B
Which factor would not cause the demand curve for green tea to shift to the right? - a decrease in the price of lemons, that goes with green tea - decrease in the price of green tea - new research showing that drinking green tea reduces the risk of illnesses - all of these will shift the demand for green tea to the right
B
Which statement is a correct description of the law of demand - as prices kid a good rise, the quantity or that good rises - as prices of a good fall, the quantity demanded or that good rises - as prices kid a good rise, the demand curve shifts to the left - there is a positive relationship between the price of a good and the quantity demanded
B
While steve is cleaning out his garage he finds an old surfboard that he no longer needs. As he walks to the dumpster to throw it out his neighbor John asked if he could have it. John offers Steve a 6-pack of beer worth $10 in exchange which Steve happily accepts. Steve has achieved a producer surplus of -$0, since he was just going to throw out the board - $10, the value of the beer he recieved - $5, because steve and john benefited equally from the $10 transaction - $50, because thats what the surfboard was worth
B
econ. use graphs because - they represent relationships between variables - they are more efficient than models - they are less efficient than models - their use makes the analysis more complicated
B
If There is a lack competition in the market, a failure market results because the quantity of goods sold is ____ then they optimal level while prices are ____ than optimal level - lower, lower - higher, higher, - lower, higher - higher, lower
C
If the price if tapioca Pearl's that are added into bubble tear increase, what will happen to the supply if bubble tea, all else being equal - the supply will increase dramatically - it will increase modestly - it will decrease - it will not change
C
Jackie finds a pair of jeans that she likes but the price tag is missing. She is willing to buy it as long as it does not cost more than a $100. The cashier informed Jackie that the price is $72. Jackie buys the jeans and therefore achieved a consumer surplus of -$100 because that's what she was willing to pay - $72 because that's how.much she paid - $28 because that's the difference between what she was willing to pay and what she actually paid $0 because the Jean's weren't discounted
C
The development of solar panels for home installation has improved due to tech advances and subsidies. These factors shift the supply curve to the _____ and result in the equilibrium price of solar panel installations to _____ - left, fall - left, rose - right, fall - right, rise
C
Which item is not an example of a market -ebay -a neighborhood yard sale - the internal revenue service - New York stock exchange
C
Which of the following price floor for milk would not cause a surplus in the market at the equilibrium price for milk is $3.60 - $3.90 - $3.80 -$3.50 - all price floors cause a surplus
C
Which of these is not a problem caused by an effective price ceiling being placed on the price of electricity - a misallocation of resources - a shortage of electricity - a reduction in deadweight loss - a reduced effort to improve quality of services
C
Another way of referring to a market economy is - demand economy - command economy - ceteris Paribus - price system
D
If the price of used plug in electric cars is expected to rise in 6 months, the reaction in the supply if those cars in the market today would likely be a(n) - upward movement along the supply curve - downward movement along the supply curve - shift of the supply curve to the right - shift of the supply curve to the left
D
In the market for Chinese take out, suppose the process of rice decreases in price. What will happen to the demand for Chinese take out? - demand will be eliminated - it wont change - it will increase - it will decrease
D
Jessica list her faulty treadmill on sale on craigslist but does not disclose the problems with it. If Blake buys the treadmill believing that is problem free get this is an example of market failure due to - The existence of external cost - The existence of public goods - The lack of of competition - Asymmetric information
D
What does the term laissez-faire mean in econ -gov plays a major role in regulating businesses to protect consumers - Gov doesnt interfere in personal decisions but it controls exon decisions - the market econ requires intervention to ensure efficiency - the role of giv should be as minimal as possible
D
When the price of running shoes is higher than the market equilibrium price which of these occurs - Consumer surplus rises and deadweight loss falls -Consumer surplus rises and deadweight loss rises -Consumer surplus falls and deadweight loss falls -Consumer surplus falls and deadweight loss rises
D
Which factor would shift the supply of skateboards to the right? - a new rule banning all skateboards on collage campuses - an increases in income among skateboard enthusiasts - a decrease in the prince of skateboards -a large reduction in the wheels used to produce skateboards.
D
Which statement is not true when a market is in equilibrium - every consumer willing and able to pay for a good is willing to do so - there is no surplus or shortage - the marker has cleared - sellers have enough inventory to satisfy all buyers and some leftover for future demand
D
consider the following statements: I. main Street needs more coffee shops II. anew parking garage on campus will reduce parking congestion III. last winter the state should have spent more money on snow removal
II only
students who never miss class and study hard generally earn higher grades than those who dont. this is an example of - incentives - specialization - market failure - marginal cost
a
when we analyze the relationship between inflation and the money supply, we assume that: - all other factors that affect the rate of inflation remain constant - this relationship holds only in a democratic country - this relationship reflects a nonlinear relationship - the money supply is backed by gold alone
a
which situation deals with more ewuity than efficiency - the red sox signs a star player for $35 mil a year, ten times over everyone elses salary - due to lack of customers, j's pixxa reduced the number of pepperoni slides on each piece - the shop invests in a new lift that makes it easier to change and rotate tires - the reality offers his sales staff a bonus if the annual sales goal is reached
a
which statement is a charc. of econ models - they try to boil down an econ situation to its most basic elements - they are always complex because the econ is complex - they attempt to reproduce exactly - they try to avoid invoking the ceteris paribus assumption
a
if a farmer can grow one hundred tubs of grapefruit or 250 tubs of oranges per acer of land what is the opportunity cost of growing one orange - 0.4 on an orange - 0.4 of a grapefruit - 2.5 oranges - 2.5 grapefruits
b
in what market is gov most likely to interviene and prevent market failure - restaurant market - college edu - designer clothing - jewelry
b
sue gets an enjoyment value of ten on her first ride and a 6 on her second. her marginal benifit from the second ride is - 4 - 6 - 8 - sixteen
b
the most common way in which econ model a problem is by - making sure as many details and facts are included - simplifying the model down to its basic relevant elements -avoiding assumptions as much as possible - using case studies to analyze individual real like ex. problems
b
which of the following is not possible for two countries who trade computers and cars with one another - one country has absolute adv. in production of both products - one has comparative adv. in production of both products - one country has aa in one product and ca in the other - one country does not have aa in either product but has ca in one product
b
which of these would be least likely to increase econ growth - increase in investment in infrastructure sure as new roads - increase in tariffs to protect domestic industries from foreign competition - expansion of financial aid options to college students - protecting intellectual property rights (such as patience) to provide incentives for innovation
b
why is entrepreneurial ability considered a factor of production - bc its a physical input such as land, labor and capital - bc entr. assume the risk of producing output, in important part of production process - bc ent. work very long hours and demand large profits for the work they accomplish - bc its an imput that can be used by itself to produce many goods and services desired by society
b
bc ppl make decisions at the margin, when deciding whether to purchase a second car. they would compare - the dollar cost of having 2 cars with the potential income the two cars may generate - the additional benefits expected from a second car with the total cost of the two cars - the additional benefits expected form a second car with the additional cost of the second car - none of the answers are correct
c
the basic idea of opportunity cost is that - buyers miss opportunities to find better bargains - using resources in an activity imposes costs on other ppl -the decision to use resources in one activity means that the resources cant be used somewhere else - economic agents are always looking for better opportunities
c
tim woke up this morning with a somachache and decided to skip class to get more rest. what is his opportunity cost of sleeping in - the improvement in how he feels by getting more rest - the level of pain he endured from the stomachache - the value of attending class - the enjoyment of laying in bed instead of being in class
c
when an econ uses the most efficient means of farming to grown as much corn as possible, they have achieved - production efficiency and allocative eff. - neither production or allocative - production efficiency but not allocative - allocative but not nonproductive
c
which headline would be LEaST likely to be studied in macro - economic growth rises slow and steady -unemployment falls to a7-year low - GM expands car sales in china - the fed raises interest rates
c
which of these wuestions would not be considered one of the basic econ wuestions - should Braxil continue to produce ethanol - what production method should be used to make batteries for plug-in-ears - when will the new high speed train in calif. be completed - to whom will the production of solar panels be sold to
c
CR is able to produce 50,000 pounds of coffee or 10,000 medical devices per day. V is able to produce 40,000 pounds of coffee or 5,000 medical devices per day. which statement is true - CR has an absolute advantage in medical device production, while V has aa in coffee - CR has comparative advantage in coffee. while V has ca in medical devices -CR has ca in coffee and devices - CR has a ca in medical devices and V had ca in coffee
d
reasons to study econ include all theses except that you - will always live in a world of scarcity and choices - will understand more about how gov and businesses interact -may become a better prepared voter - will learn exactly how to invest your cash short term for the highest return on investment
d
what question would be considered a normative question -how many ppl participated in obstical course racing last yr? - how much does an entry into an obstical course race cost? - when and where are the major obstical races held? - should obstacle races be regulated to ensure the safety of its participants?
d
which policy is most likely to contribute to improved standards of living over time - addressing teacher shortages by closing schools and busing kids to other schools - allowing indv. the freedom to circumvent laws due to personal objections to them - reducing the years that drug patients are valid to speed up production of generic versions - adding after school art and music programs to promote creativity
d
a situation in which output is produced at the lowest possible cost is called allocative efficiency - t- -f
f
the concept of equity related to how quickly something can be produced - t - f
false
macro deals with aggregate variables and micro deals with individual issues -t -f
t
If variable S falls as variable X falls, then S and X have a positive relationship and the slope of the line is positive -t -f
true
economic analysis gives us a structure for making decisions in a rational matter - true -false
true
thinking at the margin means that the ind. thinks about the additional costs and benefits of doing something - t - f
true
production efficiency
when goods are produced at the lowest possible cost
The market collapse
where markets fail to provide efficiently
