Econ Final

The income effect is best described as:

The change in quantity demanded resulting from a change in income holding prices fixed

A budget constraint is best described as a curve that shows:

The combinations of goods that a consumer can afford using all income

Which of the following best describes the shape of the labor supply curve?

Upward sloping, then backward-bending

Which of the following best describes the effects of an improvement in technology for producers and a decrease in the price of a substitute good?

Equilibrium price decreases, change in equilibrium quantity uncertain

Which of the following is the best government response to a negative externality when the amount of damage and the victim of the damage can be identified

Impose a Pigovian tax

Which of the following best describes the change when the price of Good Y decreases?

Rotation of the budget constraint around a fixed point on the X-axis

Recently gas prices have been increasing. Which of the following is consistent with that trend? I. Elasticity of demand inelastic; reductions in quantity supplied at each price II. Elasticity of supply elastic; movement along the supply curve and the along the demand curve III. Elasticity of supply inelastic; government implementation of a price ceiling IV. Elasticity of demand elastic; improvements of technology in the production of oil

a) I only

Suppose instead that the price of a substitute - the touchscreen - decreases. In a perfectly competitive Wireless Mouse Market, a decrease in the price of a substitute would

decrease the equilibrium price, decrease the equilibrium quantity, and decrease the CS

Suppose that a technological innovation decreases the marginal cost (MC) of producing a wireless mouse. In a perfectly competitive Wireless Mouse Market, a decrease in MC would

decrease the equilibrium price, increase the equilibrium quantity, and increase the CS.

An indifference curve is best described as a curve that shows:

The combinations of goods that give a consumer the same level of satisfaction

Which of the following best describes how a consumer decides how much to purchase of each good?

The consumer maximizes utility subject to his or her budget constraint

Which of the following best describes how the labor demand curve of a firm is derived?

The labor demand curve is the value marginal product curve

The poverty rate is best described as:

The percent of individuals in poverty

Which of the following describes the demand curve for a normal good?

Downward sloping

A normal good is best described as:

A good for which an increase in income, holding prices fixed, leads to an increase in the quantity demanded

Consider a market that consists of a 1 mile stretch of road with monopolistic competition based on location. Customers are equally spaced along the road and purchase from the closest store. Firms enter sequentially and must gain 1/4 of the market to break even. How many stores will there be?

3

Which of the following best describes a compensating differential in the labor market?

A difference in wages between workers in jobs that have different characteristics

An inferior good is best described as

A good for which an increase in income, holding prices fixed, leads to a decrease in quantity demanded

Consider an economy that is small relative to the rest of the world and a market in which the country has a comparative disadvantage. Which of the following best describes the order from lowest to highest of economic welfare in the comparison of autarky, free trade, and a tariff?

Autarky, Tariff, Free Trade

Which of the following best describes the effects of a subsidy compared to the situation with no government involvement (in a situation of autarky)?

Consumer surplus increases, producers surplus increases, government budget worsens, society worse off

Which of the following best describes the shift in the demand curve for an inferior good when income increases?

Demand curve shifts to the left

Which of the following is NOT part of the current debate on Immigration Reform?

Deporting students who are the children of illegal immigrants

Which of the following best describes the effect of an increase in immigration on the labor market?

Economic welfare of employers increases, economic welfare of pre-immigration workers decreases, total economic welfare increases

Which of the following best explains why President Obama issued an executive order giving a path to legalization to 45 percent of current illegal immigrants?

It is unlikely that Congress will pass a bill on immigration reform during this session of Congress

Which of the following best describes the effects of a tariff compared to a situation with free trade?

None of these: Price paid by consumers increases, price received by producers increases, economic welfare increases b) Price paid by consumers decreases, price received by producers increases, economic welfare decreases c) Price paid by consumers increases, price received by producers decreases, economic welfare increases d) Price paid by consumers decreases, price received by producers decreases, economic welfare increases

Which of the following best describes the effects of a tax compared to the situation with no government involvement (in a situation of autarky)?

Price paid by consumers increases, price received by producers decreases, quantity bought and sold decreases

Which of the following best describes the change in the quantity demanded of Good X and Good Y when the preferences of the consumer shift in favor of Good Y?

Quantity demanded of Good X decreases; Quantity demanded of Good Y increases

At graduation, there will be excess demand for parking places at CSULB parking lots. Which of the following could eliminate that excess demand?

Removing a binding price ceiling

Which of the following best describes the reaction of the Republicans to President Obama's executive order?

Republicans tried to eliminate funding for the actions in the executive by adding amendments to the bill funding the Department of Homeland Security