ECON2110 FINAL QUESTIONS

if demand is Qd = 50 - P and supply is Q = P - 10, total surplus is a. 40 b. 100 c. 200 d. 400 e. none of the above

d. 400

a demand curve represents a. the willingness to pay of all buyers in the market b. the value each buyer in the market places on the good c. the highest price buyers are willing to pay for each quantity d. all of the above

d. all of the above

for which of the following is there a market? a. orange juice b. pedigree dogs c. hiking in national forest land d. all of the above e. a + b

d. all of the above

the idea that "people respond to incentives" would lead us to conclude that class attendance would rise a. if chen takes attendance grade on it b. if chen gives lots of surprise quizes c. if chen offers money to students who come to class d. all of the above

d. all of the above

the market-clearing price is a. the price at which quantity demanded and quantity supplied are equal b. the price at which there is neither a shortage nor a surplus c. the price at which supply and demand curves intersect d. all of the above

d. all of the above

a law that requires water pollution to be completely eliminated a. makes good economic sense because pollution creates negative externalities b. makes good economic sense because pollution is costly to people and should therefore be eliminated c. does not make good economic sense because pollution is a necessary for economic growth d. does not make good economic sense unless the marginal cost of eliminated pollution is less than the marginal benefits

d. does not make good economic sense unless the marginal cost of eliminated pollution is less than the marginal benefits

doug likes tomatoes more than he did last year. therefore a. doug must have received an increase in income b. tomatoes must be a necessity c. the supply of tomatoes has increased d. doug is willing to pay more for tomatoes than last year

d. doug is willing to pay more for tomatoes than last year

smith accidentally runs his car off the road into deep snow. jones happens along in a tow truck, and offers to haul smith out for the outrageous price of $300. smith, though angered by the high price, considers he has no choice and pays the $300. smith's welfare was --- and jones' was --- as a result of jones passing by. a. enhanced, reduced b. reduced, enhanced c. unchanged, enhanced d. enhanced, enhanced e. reduced, reduced

d. enhanced, enhanced

if people are "rational" in the economic sense, they a. never make mistakes b. put making money before any other goal c. seek only their own welfare d. none of the above

d. none of the above

an externality arises when a. the government is unable to intervene in the operation of a market b. markets are not able to reach equilibrium c. a firm sells its products in a foreign market d. one person's actions affect the well-being of others without their consent e. someone ends up paying more for a good than they want

d. one person's actions affect the well-being of others without their consent

if you maintain your yard well, it creases a -- externality because -- a. positive; it increases the sales price of your future home b. positive; it increases pressure on neighbors to do the same c. negative, it makes neighbors feel that their homes are attractive too d. positive, it increases the value of adjacent properties + gives pleasure to passer-bys e. both a + d

d. positive, it increases the value of adjacent properties + gives pleasure to passer-bys

a good is "scarce", as economists use the term, only when a. there is less than an infinite amount of it available b. there is less of the good available than there was in the past c. shortage exists d. something has to be given up to get more of it

d. something has to be given up to get more of it

if peanut butter and jelly are complements, as the price of jelly goes up, a. the supply of peanut butter goes up b. the supply of peanut butter goes down c. the demand for peanut butter goes up d. the demand for peanut butter goes down

d. the demand for peanut butter goes down

we observe that the price of paper clips has risen and the quantity being sold on the market has fallen. which of the following is the most likely explanation a. the demand for paper clips has increased b. the demand for paper clips has decreased c. the suppy for paper clips has increased d. the supply for paper clips has decreased

d. the supply for paper clips has decreased

suppose the manufacturers of potato chips are subjected to a new ten cents tax. how much the market price of potato chips will rise after the tax depends upon a. the cost of producing potato chips b. whether there are any externalities in chip manufacturing c. the law of demand d. whether supply or demand is relatively more elastic e. the market price will rise by exactly 10 cent

d. whether supply or demand is relatively more elastic

continuing the previous question, at a price ceiling of 40, there would be a. a shortage b. a surplus c. quantity demanded would equal quantity supplied d. a negative externality e. a positive externality

a. a shortage

why are taxes so often imposed on things like land or salt? a. because tax revenue is higher when supply or demand is inelastic b. because neither is a necessity c. because wealthier people have more of each d. because demand for each is elastic, so no one minds buying less

a. because tax revenue is higher when supply or demand is inelastic

good economic decisions are those for which a. marginal benefits exceed marginal costs b. total benefits exceed total costs c. marginal costs are declining d. total costs are as low as they can be

a. marginal benefits exceed marginal costs

externalities occur because a. people take primarily the costs and benefits they get themselves into account b. when quantity demanded is less than quantity supplied, shortages occur c. taxes may shirt either demand curves or supply curves d. trade barriers reduce social surplus

a. people take primarily the costs and benefits they get themselves into account

free markets ration goods with a. prices b. long lines c. ration coupons d. discrimination

a. prices

which of the following ae marginal costs associated with studying economics for an extra hour? a. the TV program you would otherwise have watched b. the cost of your economics textbook c. the tuition paid for that economics class d. all of the above

a. the RV program you would otherwise have watched

a tax on cigarette production a. will reduce cigarette consumption more if demand is elastic than if demand is inelastic b. will only reduce cigarette consumption if the demand for cigarettes is elastic c. will only reduce cigarette consumption if the demand for cigarettes is inelastic d. will reduce the quantity of cigarettes supplied but not the quantity demanded

a. will reduce cigarette consumption more if demand is elastic than if demand is inelastic

if you work an additional hour on your homework a. you give up an hour you could have spent doing something else b. you don't give up anything, because you are here to go to school c. you give up something only if you could have spent your time on things more important than homework d. you give up something only if you could have used that hour to make some money

a. you give up an hour you could have spent doing something else

which of the following would reduce the demand for orange juice? a. an increase in the price of grape juice b. a decrease in the price of grape juice c. an early frost that destroys half the florida orange crop d. the discovery that orange juice cures the common cold e. just b + c

b. a decrease in the price of grape juice

if a good is a necessity, demand for that good would tend to be a. elastic b. inelastic c. elastic when price falls; inelastic when it rises d. unit elastic e. horizontal

b. inelastic

what will happen to the equilibrium quantity of potato chips after the tax? a. it will rise b. it will fall c. it will rise if demand is more elastic than supply d. it will rise if supply is more elastic than demand

b. it will fall

as important difference between police protection and office supplies that explains why one is generally provided by the government and the other by private firms is that a. police protection is necessity while office supplies are not b. office supplies can easily be withheld from those who won't pay while police protection cannot be c. the government could not provide office supplies efficiently d. police forces are a powerful political lobby e. government traditionally provide police forces but not office supplies

b. office supplies can easily be withheld from those who won't pay while police protection cannot be

we would expect cigarette taxes to reduce smoking more among younger people than older people if a. older people have a higher level of demand b. older people have less elastic demand c. younger people have a higher level of demand d. younger people have less elastic demand

b. older people have less elastic demand

a new type of netting increases the productivity of tuna fisherman. what happens to the equilibrium price and quantity of cod? a. price increases; quantity increases b. price decreases; quantity increases c. price increases; quantity decreases d. price decreases; quantity decreases

b. price decreases; quantity increases

good weather produces an unexpectedly abundant cocoa crop. what happens to the equilibrium price and quantity of chocolate (cocoa is an ingredient in chocolate production)? a. price increases; quantity increases b. price decreases; quantity increases c. price increases; quantity decreases d. price decreases; quantity decreases

b. price decreases; quantity increases

if the price of cattle feed falls, what happens to the equilibrium price and quantity of beef? a. price rises, quantity falls b. price falls, quantity rises c. price + quantity rise d. price + quantity fall e. price falls, effect on quantity uncertain

b. price falls, quantity rises

if the equilibrium price has fallen from $5.50 to $4.75 while equilibrium quantity has risen from 10,000 to 12,000, we would know that a. demand has decreased b. supply has increased c. demand has increased e. either demand has increased or supply has decreased e. either supply has increased or demand has decreased

b. supply has increased

if price decreases and quantity increases, you know that a. the law of demand has been violated b. supply must have increased c. supply must have decreased d. demand must have increased e. demand must have decrease

b. supply must have increased

what effect would a eduction in the US selling price of japanese-made cars have on the US demand for american-made cars? a. no effect, because price changes affect quantity demanded, not demand b. the demand would decrease c. the demand would increase d. we cannot tell unless we know japan's comparative advatnage e. we cannot tell unless we know what happened to the price of american-made cars

b. the demand would decrease

if you hear that a terrible frost has ravaged the california citrus crop, you would expect a. the equilibrium price + quantity of orange juice to rise b. the equilibrium price of orange juice to rise and the quantity to fall c. the equilibrium price of orange juice to fall and the quantity to rise d. the equilibrium price + quantity of orange juice to fall e. the equilibrium price of orange juice to rise but the effect on quantity to be uncertain

b. the equilibrium price of orange juice to rise and the quantity to fall

what would happen in the market for pens if both the price of ink (an input) and the price of pencil lead falls? a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain d. both equilibrium price and quantity would increase d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain e. equilibrium quantity would decrease, but the impact on the equilibrium price would be uncertain

b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain

what would happen in the market for ramen noodles if the price of wheat (input) falls while consumer income rises (ramen noodles are an inferior good)? a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain d. both equilibrium price and quantity would increase d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain e. equilibrium quantity would decrease, but the impact on the equilibrium price would be uncertain

b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain

if i value your sweater at $25 and you value it at $10, then a. it makes sense to give me the sweater only if i pay you at least $25 b. the gains from trade will be $15 c. the gains from trade will depend on the price we agree on d. no trade is possible seeing that i have no comparative advantage e. all of the above

b. the gains from trade will be $15

if the supply curve of a good is absolute fixed (like a wine bottle in 1983) a. the supply curve will be horizontal b. the supply curve will be vertical c. the supply curve will slope downward d. the good will have no supply curve

b. the supply curve will be vertical

which of the following will lead to an increase in the demand for satellite TV? a. a fall in consumer income (normal good) b. a big satellite tv sale c. a rise in the price of netflix (a substitute) d. all of the above

c. a rise in the price of netflix (a substitute)

attempting to correct a negative externality through regulation a. will always make things better b. can't make thing worse c. might make things better or worse, upon how the regulation is set d. is alway a bad idea e. is the preferred approach of economists

c. might make things better or worse, upon how the regulation is set

is the noise of jet engines a negative externality for baggage handlers at airports a. yes, because even with protection devices, their hearing may be damaged b. yes, because the costs are greater than the benefits c. no, because they are paid to live with the noise d. no, unless it leaves them with permanent hearing loss

c. no, because they are paid to live with the noise

i am considering joining a "shopper's club," where i pay $100 membership fee and then get a 25% discount on all my purchases. in making my decision, i should a. only join if i plan to make at least $100 of purchase b. ignore the membership fee since it is a sunk cost c. only join if i expect to get at least $100 worth of discounts d. only join if they promise to refund my membership fee is im not satisfied

c. only join if i expect to get at least $100 worth of discounts

if a price ceiling prevents a market from clearing a. price will raise b. quantity supplied will rise c. other ways of rationing the good will be found d. all of the above

c. other ways of rationing the good will be found

which of the following is likely to have the least elastic supply? a. coke b. soda c. paintings by rembrandt d. automobiles e. oil

c. paintings by rembrandt

the costs that influence decision to supply are always a. average costs b. marginal costs c. sunk costs d. total costs

c. sunk costs

if quantity supplied responds only slightly to change in price, then a. supply is elastic b. an increase in price will not shift the supply curve much c. supply is inelastic d. supply is perfectly inelastic

c. supply is inelastic

which of the following is NOT an important determinant of the level of demand? a. income b. the price of related goods c. the price of inputs d. tastes e. all of the above are important determinants of the level of demand

c. the price of inputs

suppose the surgeon general releases the results of a study which reveals that chocolate actually makes you lose weight. as a result, the demand for chocolate --, the equilibrium price --, the equilibrium quantity --, and the producer surplus --. a. increases, increases, increases, increases b. increases, increases, increases, decreases c. increases, increases, decreases decreases d. decreases, increases, decreases, decreases e. decreases, decreases, decreases, increases

a. increases, increases, increases, increases

if a 10% increase in the price of beer reduces the quantity demanded by 8%, then demand for beer is a. inelastic b. elastic c. unit elastic d. has increased e. has decreased

a. inelastic

if you calculate the elasticity of demand for a cut in the price of unicorns from $6 to $5, you will find that demand is a. inelastic b. elastic c. unit elastic d. there is not enough information to say e. the elasticity of demand is unaffected by the supplier's choice of price

a. inelastic

the decision whether to purchase the breakfast "all you can eat" buffet vs. ordering from the menu at fixed prices a. is a marginal decision b. is not a marginal decision, because the "all you can eat" price will be sunk once you've paid it c. depends on benefits and costs, but not on marginal benefits and marginal costs d. is not subject to the marginal principle

a. is a marginal decision

the cost to a ski instructor taking a day of a. is higher on the weekend when more people ski b. falls when it snows c. rises when it rains d. rises when there are a lot of other instructors around, so competition is intense

a. is higher on the weekend when more people ski

if the demand for bread increases, what would we expect to happen to the quantity of wheat supplied? a. it to go up b. it to go down c. it to be unchanged, because demand has been affected, not supply d. it to go up, but by less than the quantity demanded

a. it to go up

for which of the following will there be a negative externally? a. jeff bridges brings his hollywood friends to his MT ranch and they clog the road b. jeff bridges makes hi sworks on the ranch work late into the night entertaining guests c. jeff bridges throws empty beer cans out his bedroom window and into his walled-off garden d. all will create negative externalities

a. jeff bridges brings his hollywood friends to his MT ranch and they clog the road

except if supply or demand is perfectly inelastic, when a good is taxed, a. less of it is produced b. the same amount is produced, but it costs more c. producers simply pass the whole tax on to consumers d. all of the above

a. less of it is produced

suppose you sell jewelry boxes and a business consultant you have hired determines that demand for your product is elastic. if you want to increase your total revenue, you should therefoer a. lower the price of your jewelry boxes b. raise the price of your jewelry boxes c. increase the supply of your jewelry boxes d. lower your production costs

a. lower the price of your jewelry boxes

the reason that we see so many cattle on the same land that witnessed the near complete destruction of bison is that a. nobody owned the bison, while the ownership of cattle is clear b. cows are not killed in the number that bison were c. cows are not as much fun to shoot as bison d. people were wilder back in the old days

a. nobody owned the bison, while the ownership of cattle is clear

demand for maple nut ice cream tends to be elastic because a. other flavors of ice cream are almost perfect substitutes b. the market is very broadly defined c. there are few close substitutes d. it must be eaten quickly

a. other flavors of ice cream are almost perfect substitutes

which of the following would you expect to have the least elastic demand? a. penicillin b. bananas c. bananas from colubmia c. bananas from columbia sold at albertson e. all would have equal elasticity of demand, because each would have a downward sloping demand curve

a. penicillin

the fact that more pedestrians were killed after laws made cars safer demonstrates a. people respond to incentives b. laws usually have a bad effect c. people will always drive badly d. cars need to be made safer

a. people respond to incentives

in the range for which the demand curve for a good is above the supply curve a. people value the good more than it costs to make it b. it costs more to make the good than the good is valued c. the law of demand dominates the law of supply d. the quantity supplied is

a. people value the good more than it costs to make it

the demand for potatoes tends to be less elastic than the demand for movies because a. potatoes have many good substitutes b. many people don't like potatoes c. movies have better and closer substitutes d. given the choice, most people prefer potatoes to movies

a. potatoes have many good substitutes

in a freely operating market, when there is excess demand or excess supply a. price adjusts to bring quantity supplied and quantity demanded into balance b. there will be a shortage or surplus c. the country will be an importer or an exporter d. demand will decrease or supply will decrease

a. price adjusts to bring quantity supplied and quantity demanded into balance

researches discover that chocolate reduces weight when consumed in large quantities. what happens to the equilibrium price and quantity of chocolate? a. price increases; quantity increases b. price decreases; quantity increases c. price increases; quantity decreases d. price decreases; quantity decreases

a. price increases; quantity increases

a "normal good" is a good for which a. quantity demanded rises when incomes rises b. quantity demanded rises when price rises c. quantity demanded falls when price rises d. an increase in demand raises price e. an increase in demand raises quantity

a. quantity demanded rises when incomes rises

people tend to "internalize externalities" when a. responsibility for the consequences of actions is more clearly assigned to the actors b. spillover costs and benefits become more common and widespread c. they calculate more carefully their own marginal costs and marginal benefits d. the feel less empathy for others

a. responsibility for the consequences of actions is more clearly assigned to the actors

i can cut down 4 trees or dig 12 holes in an hour. you can cut down 3 tree or dig 6 holes in an hour. use these facts to answer the next 3 questions. we could both be better if I a. specialize in digging holes b. specialize in cutting down trees c. specialize in both digging holes and cutting down trees d. let you specialize in both digging holes and cutting down trees

a. specialize in digging holes

we could both be made better off if i a. specialize in typing b. specialize in math problems c. let you do the typing and math and i do something else d. dropped out of school

a. specialize in typing

which of the following will increase the supply of oranges? a. terrific orange growing weather b. the discovery that oranges cure cancer c. an increase in the supply of grapefruit (substitute) d. all will increase the supply of oranges

a. terrific orange growing weather

the supply curve for pasta reflects a. the cost of the wheat from which pasta is made b. the perceived health benefits of pasta c. the price of spaghetti sauce, a complement d. all of the above

a. the cost of the wheat from which pasta is made

which of the following will not decrease the supply of burritos? a. the discovery that eating burritos causes cancer b. a rise in the price of tortillas used to make burritos c. a rise in the price of wages paid to burrito-making employees d. all of the above will decrease supply of burritos

a. the discovery that eating burritos causes cancer

what is the effect on the market for cherries? (consider whether the demand for cherries or the supply of cherries or both change) a. the equilibrium price increases; the equilibrium quantity increases b. the equilibrium price increases; the equilibrium quantity decreases c. the equilibrium price decreases; the equilibrium quantity increases d. the equilibrium price decreases; the equilibrium quantity decreases e. the equilibrium price decreases; there is not enough information to tell what happens to quantity

a. the equilibrium price increases; the equilibrium quantity increases

what would happen in the market for pizza in restaurants if the price of flour increase and the price of a meal in a chinese restaurant increased? a. the equilibrium price of pizza would increase, but the impact on the amount of pizza sold would be uncertain b. the equilibrium price of pizza would decrease, but the impact on the amount of pizza sold would be uncertain c. both equilibrium price + quantity of pizza would decrease d. the equilibrium quantity of pizza would increase, but the impact on price would be uncertain e. the equilibrium quantity of pizza would decrease, but the impact on price would be uncertain

a. the equilibrium price of pizza would increase, but the impact on the amount of pizza sold would be uncertain

the government bans the use of coal-fired chocolate furnaces (the cheapest way of producing chocolate), at the same time consumer incomes increases (chocolate is a normal good). what happens to the equilibrium price and quantity of chocolate? a. the equilibrium price will increase, but the effect on equilibrium quantity is uncertain b. the equilibrium price will decrease, but the effect on equilibrium quantity is uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity will increase, but the effect on equilibrium price is uncertain e. the equilibrium quantity will decrease, but the effect on equilibrium price is uncertain

a. the equilibrium price will increase, but the effect on equilibrium quantity is uncertain

what would happen in the market for grape jelly if a bad grape harvest accompanies an exceptionally good peanut harvest (peanut butter and grape jelly are complements)? a. the equilibrium price would increase, but the effect on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the effect on equilibrium quantity would be uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity would increase, but the effect on equilibrium price would be uncertain e. the equilibrium quantity would decrease, but the effect on equilibrium price would be uncertain

a. the equilibrium price would increase, but the effect on equilibrium quantity would be uncertain

suppose that the price of oranges and apples rises. what would you expect to happen to the market price and quantity of orange juice? (apple juice is a substitutes) a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain d. both equilibrium price and quantity would increase d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain e. equilibrium quantity would decrease, but the impact on the equilibrium price would be uncertain

a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain

when economists refer to tradeoffs, they are highlighting a. the existence of scarcity b. the fact that trade makes us better off c. the importance of gains from trade d. the importance of ensuring that gains from trade are distributed equitably e. all of the above

a. the existence of scarcity

if the farmer and beekeeper negotiate an arrangement whereby the farmer pays the beekeeper for putting bees in his orchard, a. the externality is internalized b. the beekeeper now benefits from a positive externality c. the externality has switched from the beekeeper to the farmer d. the farmer now faces a negative externality e. all of the above

a. the externality is internalized

at the equilibrium price + quantity in a market a. the good is being produced by the lowest cost sellers b. some trades that would make both parties better off won't occur some of the demanders who place the highest value on the product won't receive it d. all of the above

a. the good is being produced by the lowest cost sellers

good economic decisions are those for which a. the marginal benefits are greater than the marginal cost b. the total benefits are greater than the total costs c. the marginal costs are greater than the totalcosts d. opportunity costs are less than marginal costs

a. the marginal benefits are greater than the marginal cost

if it costs a theater $180,000 to put on four shows and the cost would rise to $200,00 if the theater adds a fifth show, a. the marginal cost of the fifth show is $20,000 b. the marginal cost of the fifth show is $40,000 c. the marginal cost of the fifth show is $200,000 d. the marginal cost of the fifth show is $50,000

a. the marginal cost of the fifth show is $20,000

we would expect a shortage or surplus created by a price control to be greater a. the more elastic demand and supply b. the less elastic demand and supply c. if supply is greater than the demand d. if demand is greater than the supply

a. the more elastic demand and supply

in the case of a negative externality, which of the following is true? a. the person creating the externality does not bear all the costs, so too much of the good is produced b. the person creating the externality does not bear all the costs, so too little of the good is produced c. the person creating the externality does not capture all the benefits, so too little of the good is produced d. the person creating the externality does not capture all the benefits, so too much of the good is produced

a. the person creating the externality does not bear all the costs, so too much of the good is produced

if property rights are clearly-defined and well enforced, a. the possibility of trade means that all costs and benefits will be taken into account, so there will be no externalities b. the possibility of trade means that only positive externalities will occur c. there will still be some externalities, because property rights have only to do with ownership d. the free rider problem may still prevent mutually beneficial trades from taking place

a. the possibility of trade means that all costs and benefits will be taken into account, so there will be no externalities

suppose a landmark court case makes it more expensive to run day care center, but also makes it less likely that children cared for will be harmed. we can expect a. the price of day care services to increase b. the price of day care services to decrease c. the price of day care services to increase only if demand is upward sloping d. the price of day care services to increase only if the change in supply is greater than the change in demand

a. the price of day care services to increase

suppose that there is a binding price ceiling imposed on the market for peaches. as a result, a. the quantity of peaches demand will be greater than the quantity supplied b. the quantity of peaches demand will be equal to the quantity supplied c. the quantity of peaches demand will be smaller than the quantity supplied d. the quantity of peaches demand will be restricted by the price ceiling

a. the quantity of peaches demand will be greater than the quantity supplied

if you are searching for a new pair of skis, it makes sense to keep looking as long as a. the shopping time matters less than what you may gain in a lower cost of skis b. you haven't found the lowest price possible c. there are stores left that you haven't checked d. you face opportunity cossts e. all of the above

a. the shopping time matters less than what you may gain in a lower cost of skis

the opportunity cost to college athletes on scholarship who stay in school is a. the wages they could make otherwise b. the value of the scholarship they receive c. nothing, unless they are good enough to turn pro d. underestimates the value of a college education

a. the wages they could make otherwise

when there is excess supply a. there is downward pressure on price b. there is upward pressure on price c. the market is in equilibrium d. there are too many buyers chasing too few goods e. a shortage will result

a. there is downward pressure on price

when the price of a good or service changes, a. there is movement along the demand curve b. the demand curve shifts in the opposite direction c. the demand curve shifts in the same direction d. any of the above, depending upon whether price increases or decreases

a. there is movement along the demand curve

if we as a country decide to dedicate more resources to making meat safe a. there will be less left over to do other desirable things b. we will have too much safety c. we are not thinking at the margin d. we will never face another case of e-coli poisoning

a. there will be less left over to do other desirable things

which of the following is least likely to shift the demand for the burrito that moe's sells? a. they hold a burrito sale b. a new formula that makes their burritos even more delicious c. chipotle increases its prices d. consumer income falls, and burritos are a normal good e. all will increase the number of burritos sold

a. they hold a burrito sale

Qd = 200 - P Qs = P - 30 if supply increases we would expect that the quantity demanded at $50 a. will equal 150 b. will be greater than 150 c. will be less than 150 d. there is not enough information to say

a. will equal 150

the idea that "people respond to incentives" would lead us to conclude that single parent births a. will increase if public child support increases b. should never happen c. result from complicated social conditions and are thus be unaffected by public assistance d. depend only on the public assistance offered

a. will increase if public child support increases

if you fail to take into account the pain that your piano playing causes the neighbors a. you play too much b. you play too little c. you have a comparative advantage in music d. there is a negative externality

a. you play too much

if you paid $27 for an all-day lift ticket and are about to take your 10th and last ride for the day, the marginal cost of that ride is a. $0 b. $2.70 c. $3 d. $277

a. $0

if you've bought an $80 sticker to park on campus and you plan to park on campus 80 times before the semester ends, the marginal cost to you each time you park is a. $0 b. $1 c. $8 d. $80 e. negative

a. $0

if a firm making widgets lowers its price by 10% and finds that it sells 8% more widgets, the elasticity of demand for this product equals a. 0.8 b. 1.2 c. 8 d. 10 e. there is not enough information to say

a. 0.8

we can expect the total amount spent on coffee to rise if the elasticity of demand is a. 0.8 b. 2.5 c. 9.8 d. we do not have sufficient information to answer

a. 0.8

a trade that would make both bert and ernie better off is a. 1.5 cars for 1 truck b. 1.5 trucks for 1 car c. 2 cars for 1 truck d. 1 car for 2.5 trucks e. no mutually beneficial trade is possible because bert is better at both cars and trucks

a. 1.5 cars for 1 truck

continuing the pervious question, suppose a price ceiling of $40 is established. what would be the quantity transacted? a. 10 b. 20 c. 30 d. 40 e. no sales would occur

a. 10

which of the following will not increase the demand for burritos? a. a big burritos sale b. the discover that eating burritos cures cancer c. a rise in the price of burgers, a substitute d. a fall in the price of guacamole, a complement e. all of the above will increase demand for burritos

a. a big burritos sale

which of the following is most likely to increase the demand for motorcycles? a. a fall in the price of motorcycle helmets b. an increase in the price of motorcycle advertising c. a fall in the price of motorcycles d. all of the above

a. a fall in the price of motorcycle helmets

a demand curve is a. a generally downward-sloping line relating the price of a good with the quantity demanded b. a generally upward-sloping line relating the price of a good with the quantity demanded c. a curve that relates income and the price of substitutes d. just a + c

a. a generally downward-sloping line relating the price of a good with the quantity demanded

supply + demand are always more elastic in the long-run because a. a greater range of actions can be taken in longer periods b. price generally declines over time c. price generally rises over time d. people value wealth more in longer periods e. income rises over time

a. a greater range of actions can be taken in longer periods

the effect of the 1970's price ceiling on gasoline was a. a lot of motorist time wasted waiting in long lines at gas stations b. a fairer distribution of gasoline c. an efficient distribution of gasoline d. b + c

a. a lot of motorist time wasted waiting in long lines at gas stations

which of the following will NOT increase the supply of titanium golf clubs? a. a rise in the demand for golf clubs b. a fall in the price of titanium c. an improvement in golf club making technology d. all of the above will increase supply

a. a rise in the demand for golf clubs

what is the most likely effect of rent control laws, which forbid apartment owners from raising rents a. a shortage of rental apartments b. a surplus of rental apartments c. renters will have an easier time finding cheap apartment d. no apartments will be put up for rent e. homeless people will be helped

a. a shortage of rental apartments

suppose a mysterious disease destroys a huge number of turkeys. we would NOT expect to see a. a turkey shortage b. a rise in the price of turkeys c. turkeys being shipped in from more distant locations d. americans consuming less turkey at their thanksgiving tables e. we would expect to see all of the above

a. a turkey shortage

if the price is raised by $2 and the quantity falls by 20, the elasticity of demand a. equals 2 b. equals 10 c. equals 20 d. is greater than 1 e. cannot be determined without more information

e. cannot be determined without more information

if a 25% increase in the price of skateboards reduces the quantity demanded by 500, then the demand for skateboards a. elastic b. inelastic c. has increased d. has decreased e. downward sloping, but not enough info to know elasticity

e. downward sloping, but not enough info to know elasticity

externalities occur when a. not all the costs of an action are taken into account by the actor b. not all the benefits of an action are taken into account by the actor c. the marginal costs are greater than the marginal benefits d. all of the above e. either a or b

e. either a or b

if the equilibrium price has fallen from $5.50 to $4.75, we would know that a. demand has decreased b. supply has increased c. demand has increased d. either supply has decreased or demand has increased e. either supply has increased or demand has decreased

e. either supply has increased or demand has decreased

suppose the price of tea increases. as a result, we would expect to see a. an increase in the demand for coffee (a substitute) b. an increase in the demand of sugar (a complement) c. a decrease in the demand for tea d. all of the above

a. an increase in the demand for coffee (a substitute)

which of the following would not be expected to decrease the demand for grape soda? a. an increase in the price of grape soda d. decrease in the price of orange soda c. a fall in income (normal good) d. all of the above would decrease the demand for grape soda

a. an increase in the price of grape soda

elasticity of demand depends on a. closeness of substitutes b. whether the good is normal or inferior c. the law of demand d. all of the above

a. closeness of substitutes

the term "externalities" refers to a. consequences that actors do not take into account in making decisions b. most social interactions c. the superficial consequences of economic decisions d.the fact that few people external to economics understand economic reasoning e. goods such as exports that come from external countries

a. consequences that actors do not take into account in making decisions

if you discover that short-run gasoline supply is substantially less elastic than the short-run demand for gasoline, you would expect (after a 50 cent cut in gasoline taxes) a. consumer price to fall by very little b. consumer price to fall by nearly 50 cents c. consumer price to fall by exactly 25 cents d. consumer price to fall by more than 50 cents

a. consumer price to fall by very little

economists use the term "opportunity" cost to highlight the fact that a. costs are really opportunities given up b. more costs involve the opportunity to get something in return c. every opportunity always has its cost d. there are always opportunities to lower the cost

a. costs are really opportunities given up

why does the equilibrium quantity of ice cream fall when summer is unexpectedly cold? a. demand decreases (curve shifts) b. supply decreases (curve shifts) c. the marginal cost of ice cream increases d. all of the above e. just a + b

a. demand decreases (curve shifts)

if the equilibrium price in a market has risen from $1 to $5 and equilibrium quantity has risen from 100 to 500, we would know that a. demand has increased b. supply has increase c. both supply and demand have increased d. the law of demand has been violated

a. demand has increase

what happens in thee market for ink when the price of lead used to make pencils rises? a. demand increases b. demand decreases c. supply increases d. supply decreases e. none of the above, because ink isn't used in lead

a. demand increases

a normal good is one for which a. demand increases when income increases b. demand increases when price decreases c. demand increases when tastes change d. demand is elastic e. demand is inelastic

a. demand increases when income increases

frost that destroys half of florida's orange crop will make orange growers unhappy only if a. demand is elastic b. demand is inelastic c. supply is elastic d. supply is inelastic

a. demand is elastic

if you are told "nobody will buy more of that product even if they cut the price in half," you can conclude that a. demand is inelastic b. demand is elastic c. supply is inelastic d. supply is elastic e. the marginal costs exceed the marginal benefits for the average buyer

a. demand is inelastic

if the supply of peanut butter increases, what would we expect to happen in the market for jelly (a complement)? a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease e. neither the demand nor the supply of jelly would be affected

a. demand to increase

if a price of 9% leads to a rise in quantity supplied of 12%, we know that supply is a. elastic b. inelastic c. unit elastic d. downward sloping

a. elastic

if you drop your prices + total revenue increases, demand must be a. elastic b. inelastic c. unit elastic d. downward sloping, but not enough info to know elasticity

a. elastic

if england can make 10 umbrellas or 5 smoked fish a day wile norway can make 5 umbrellas or 5 smoked fish a. england has the comparative advantage in umbrellas and norway has it it in fish b. norway has the comparative advantage in umbrellas and england has it it in fish c. england is better at both umbrellas and fish d. norway's fish cost the same amount as england's

a. england has the comparative advantage in umbrellas and norway has it it in fish

residents sometimes organize themselves into associations that require well-maintained lawns and fences of certain styles because of a. externalities b. price control c. the law of demand d. high marginal tax rates

a. externalities

making bread at home will be more efficient than buying it from a store a. for people who place a sufficiently high value on home-baked bread b. if the ingredients used to make bread increase in price c. for people who work long hours d. if there are no labor costs in home-baked bread

a. for people who place a sufficiently high value on home-baked bread

if the demand for french bread is elastic and the baker holds a french bread sale a. he will sell a lot more bread b. he may sell more bread, but not a lot more c. he won't sell any more berad d. demand will increase

a. he will sell a lot more bread

if you paid $25,000 for your car just a short while ago, but the best offer you can get for it now is $12,000. you should only sell the car a. if its worth to you is less than $12,000 b. if its worth to you is less than $25,000 c. if you can get something close to what you paid for it d. if you value it more than $12,000

a. if its worth to you is less than $12,000

if you've paid $25,000 for your car just a short while ago, but the best offer you get for it now is $12,000. you should only sell the car a. if its worth to you is less than $12,000 b. if its worth to you is less than $25,000 c. if you can get something close to what you paid for it d. if you value it more than $12,000

a. if its worth to you is less than $12,000

lighting your house will oil lamp instead of electricity may be efficient a. if the cost of lighting with oil lamps is less than the cost of lighting with electric lamps b. if the quality of light from oil lamps is less than the quality of light from electricity c. only if oil lamp technology improves to the point that oil lamps produce as much light as electricity lamps d. only when electricity is not available e. under no conceivable circumstances

a. if the cost of lighting with oil lamps is less than the cost of lighting with electric lamps

based on the concept of opportunity cost, where would you expect to have the least trouble finding someone to clean your house? a. in a high-income area with low unemployment b. in a low-income area with high unemployment c. in a middle class area with medium unemployment d. in any area, because there's always someone willing to clean house

a. in a high-income area with low unemployment

anything that increases the value that potential buyers received from a good may be expected to a. increase demand b. increase supply c. increase both supply and demand d. increase demand but decrease supply

a. increase demand

a supply curve slops upwards because a. increase in price gives producers an incentive provide a larger quantity b. increase in input prices means supply increases c. as more is produced, per unit production costs fall d. the supply curve must intersect demand curve

a. increase in price gives producers an incentive provide a larger quantity

what would happen in the market for shredded wheat cereal if the price of wheat decreased and the price of corn flakes (substitutes) increased? a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain d. both equilibrium price and quantity would increase d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain e. equilibrium quantity would decrease, but the impact on the equilibrium price would be uncertain

d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain

new airplanes that consume less fuel per passenger-miles becomes less efficient for commercial airlines to purchase and use as a. average flight distances lengthen b. fewer non-stop flights are scheduled c. the demand for airline travel increases d. fuel prices fall

d. fuel prices fall

if the price of tickets to chicago bears games rises by 10% and the quantity demanded rises by 8%, we can conclude that demand for bears tickets a. inelastic b. elastic c. unit elastic d. has increased e. has decreased

d. has increased

which of the following is likely to be associated with positive externalities i) child immunizations (insuring that the general population is vaccinated against communicable disease) ii) the research and development of a new drug iii) the release of a new great movie a. all of the above b. ii and iii only c. i and iii only d. i and ii only

d. i and ii only

making cars safer could result in more accidents a. under no possible circumstances b. only if people are irrational c. only if designers are mistaken about how safe a car really is d. if people respond to incentives

d. if people respond to incentives

which of the following is most likely to increase producer surplus in the market for grapes a. a typhoon during grape harvest b. news that eating grapes causes cancer c. a fall in demand for raisins d. increase in demand for wine

d. increase in demand for wine

which of the following would not be expected to reduce the demand for peanut butter? a. increase in price of jelly b. decrease in price of tuna (substitute) c. discovery that peanut butter causes cancer d. increase in price of peanut butter e. all would reduce demand for peanut butter

d. increase in price of peanut butter

the concept of opportunity cost suggests that the cost to airlines of allowing employees to fly for free a. depends on the alternative available to employees b. is 0 c. depends on the value employees place on free travel d. is greater at christmas than in mid-february

d. is greater at christmas than in mid-february

the concept of opportunity cost suggests that the cost to airlines of allowing employees to fly for free a. depends on the alternative available to the employees b. is zero c. depends on the value employees place on free travel d. is greater at christmas than in mid-february

d. is greater at christmas than in mid-february

the real cost of any action a. depends upon the number of suppliers b. is the cost to the consumer plus the cost to the producer c. is greater when demand shifts d. is the value of the alternative sacrificed e. all of the above

d. is the value of the alternative sacrificed

which of the following is most likely to increase the demand for downtown parking a. improved bus service to the downtown area b. lower downtown parking fees c. more downtown parking lots d. lower gas prices

d. lower gas prices

if it costs $5 to produce a bushel of wheat (including materials, labor, rent of the land, and transportation), selling the wheat for less than $5 per bushel a. could never be efficient under any circumstances b. would only be done under a price ceiling c. makes sense only if demand is very inelastic d. might be efficient once some of the costs are sunk

d. might be efficient once some of the costs are sunk

an increase in the price of gasoline a. increases the supply of gasoline (shifts supply curve) b. decreases the demand for gasoline (shifts demand curve) c. both of the above d. none of the above

d. none of the above

if gasoline prices keep rising following war in the middle east, a. there will be a gas shortage b. we can expect to see long lines at the gasoline pumps c. the government will have to think about how to ration gasoline d. none of the above

d. none of the above

anyone who claims that cheaper labor in one country enables that country to produce everything at lower costs than another country, so that no trade is possible, is a. exaggerating the importance of labor costs b. referring only to the comparative, not to absolute cost c. not referring to monetary costs because they are measuring in different currencies d. not considering opportunity cost

d. not considering opportunity cost

i can cut down 4 trees or dig 12 holes in an hour. you can cut down 3 tree or dig 6 holes in an hour. use these facts to answer the next 3 questions. a trade that would help us both is a. one of my holes for 4 of your trees b. one of my trees for 1/4 of your holes c. one of your holes for 1/5 of my trees d. one of your trees for 2.5 of my holes

d. one of your trees for 2.5 of my holes

if the price of peanut butter increases and the demand for jelly increases as a result, then a. pb is a inferior good and jelly is a normal good b. pb + jelly are complements c. pb is a normal good and jelly is an inferior good d. pb + jelly are substitutes e. the law of demand has been violated

d. pb + jelly are substitutes

doctors charge high fees because a. acquiring a medical degree is very expensive b. their practices are costly to maintain c. they hope to retire at a reasonably young age d. people are willing to pay high fees for medical services

d. people are willing to pay high fees for medical services

why does quantity demanded fall as price rises? a. supply decreases b. demand decreases c. BOTH supply and demand decrease d. people switch to substitutes

d. people switch to substitutes

the price of ham rises sharply. what happens to the equilibrium price + quantity of cheese (ham and cheese are complements)? a. price rises, quantity falls b. price falls, quantity rises c. price + quantity rise d. price + quantity fall e. price falls, effect on quantity is uncertain

d. price + quantity fall

"elasticity" measure the relationship between a. supply and demand b. quantity supplied + quantity demanded c. supply and closeness of substitutes d. price and quantity e. none of the above

d. price and quantity

a new report shows that most sardines have high mercury content (mercury is harmful to humans). what happens to the equilibrium price and quantity of cod? a. price increases; quantity increases b. price decreases; quantity increases c. price increases; quantity decreases d. price decreases; quantity decreases

d. price decreases; quantity decreases

if land suitable for shopping center may also be used for go-cart tracks, an increase in the demand for go-cart driving will a. decrease the demand for shopping centers b. increase the supply of shopping centers c. have no effect on the cost of shopping centers d. raise the cost of building shopping centers e. reduce the cost of building shopping centers

d. raise the cost of building shopping centers

our economic model would lead us to predict that if monetary aid per child given ti single parents increases substantially (holding everything else the same), a. children will become less scarce b. single people will have many more children c. single people will have fewer children at the amrgin d. single people will be more likely to have children at the margin e. the number of children is unlikely to change, because the decision to have children is based on opportunity cost, not just aid

d. single people will be more likely to have children at the margin

suppose you study to the point that marginal benefit exactly equal marginal costs. as a result a. you have maximized your grade b. you would be better off if you studied longer c. you minimized the total cost of studying d. studying longer would have produced marginal costs greater than the marginal benefits e. none of the above

d. studying longer would have produced marginal costs greater than the marginal benefits

what would an increase in he price of diamonds do to the supply of diamond rings? a. nothing; price changes quantity supplied, not supply b. nothing; the demand for diamond rings would change, not the supply c supply would increase because diamond rings are a luxury good d. supply would decrease

d. supply would decrease

marginal benefit is the benefit a. that you activity provides to someone else b. of an activity that exceeds its cost c. that arises from the opportunity cost of an activity d. that arises from a small increase in an activity

d. that arises from a small increase in an activity

if 3/4 of the world's cattle are killed by a new disease a. there would be a beef shortage b. the quantity of beef demanded would exceed the quantity supplied c. the price of beef would fall d. the amount of beef purchased would fall

d. the amount of beef purchased would fall

if i tell you the price of cameras has fallen and the number sold has fallen rather than risen, you would know that a. the law of demand has been violated b. supply is greater than demand c. demand is greater than supply d. the demand for cameras has decreased

d. the demand for cameras has decreased

if you discover that the price of college education has risen and the number of students seeking to enroll has increased as well, you would know that a. college education does not obey the law of demand b. the fixed supply of universities and colleges dominates the price increase c. the demand for college education is inelastic d. the demand for college education has increased

d. the demand for college education has increased

if a new technology is developed that allows twice the soybeans to be grown at half the cost, and at the same time a new soybean drink becomes the hottest thing in town, we would expect a. the equilibrium price and quantity of soybeans to rise b. the equilibrium price and quantity of soybeans to fall c. the equilibrium price to rise, but the effect on quantity to be uncertain d. the equilibrium quantity to rise, but the effect on price to be uncertain e. the equilibrium price to fall, but the effect on quantity to be uncertain

d. the equilibrium quantity to rise, but the effect on price to be uncertain

a decrease in oil prices makes it cheaper to transport chocolate to market while the price of peppermint (a substitute) rises. what happens to the equilibrium price and quantity of chocolate? a. the equilibrium price will increase, but the effect on equilibrium quantity is uncertain b. the equilibrium price will decrease, but the effect on equilibrium quantity is uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity will increase, but the effect on equilibrium price is uncertain e. the equilibrium quantity will decrease, but the effect on equilibrium price is uncertain

d. the equilibrium quantity will increase, but the effect on equilibrium price is uncertain

what would happen in the market for news programs if the salaries of anchormen and women fall while the price of newspapers (a substitute) rises? a. the equilibrium price would increase, but the effect on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the effect on equilibrium quantity would be uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity would increase, but the effect on equilibrium price would be uncertain e. the equilibrium quantity would decrease, but the effect on equilibrium price would be uncertain

d. the equilibrium quantity would increase, but the effect on equilibrium price would be uncertain

coal-fired steam locomotives become more efficient compared to oil-burning diesel locomotives as a. coal-fired steam locomotives become larger b. railroad freight rates increase c. the price of coal increases d. the price of oil increases

d. the price of oil increases

if a great harvest leads to a 75% increase in the pumpkin crop right before halloween, we would expect a. a surplus of pumpkins b. excess demand for pumpkins c. that pumpkin would no longer be a scarce good d. the price of pumpkins to fall e. all of the above

d. the price of pumpkins to fall

if a bad frost leads to a 75% fall in orange crop, we would expect a. an orange shortage b. an excess demand for oranges c. the oranges would become a scarce good d. the price of oranges to rise e. all of the above

d. the price of the oranges to rise

suppose you spend the semester watching TV instead of studying economics (your next best alternative use of time). the cost is a. your hourly wage multiplied by hours of TV watched b. the price of the textbook you paid for but didn't use c. the tuition money you wasted d. the resulting decrease in your economics grade e. all of the above

d. the resulting decrease in your economics grade

when airlines increase the number of safety inspections of their engines, a. there is not cost, since more safety benefit everybody b. there is no cost for society as a whole, since only a few firms are affected c. there is a cost only if firms are forced to cancel flights d. there is a cost because firms and consumers must give something up in return

d. there is a cost because firms and consumers must give something up in return

when society requires that firms reduce pollution a. there is no tradeoff, since lower pollution benefits everybody b. there is no tradeoff for society as a whole, since only a few firms are affected c. there is a tradeoff only if firms are forced to close down d. there is a tradeoff because firms and consumers will be left with less money

d. there is a tradeoff because firms and consumers will be left with less money

if quantity demanded falls by 100,00 when price rises by 2 cents, we know that a. demand is elastic b. demand is inelastic c. demand is unit elastic d. there is not enough information to calculate elasticity

d. there is not enough information to calculate elasticity

if quantity demanded falls by 100,000 and price rises by 2 cents, we know that a. demand is elastic b. demand in elastic c. demand is unit elastic d. there is not enough information to calculate elasticity

d. there is not enough information to calculate elasticity

if we raise price by 10 cents + quantity demanded falls by 10,000 units, we would conclude that a. demand is elastic b. demand is inelastic c. demand is unit elastic d. there is not enough information to determine whether demand is elastic or not

d. there is not enough information to determine whether demand is elastic or not

how do buyers and sellers coordinate their desires? a. through market research b. by talking together c. by following the direction of government agencies d. through their independent effect on prices e. they don't

d. through their independent effect on prices

buyers and sellers communicate primarily a. through surveys b. through government agencies c. through advertising d. through their willingness to buy and sell at various prices e. all of the above

d. through their willingness to buy and sell at various prices

the idea that human behavior is "self-interested" assumes that people want a. more of everything b. material goods but not spiritual goods c. money d. to advance projects in which they are interested e. all of the above

d. to advance projects in which they are interested

the cost of attending the last class before an exam a. whatever tuition you paid b. payments on the car you drive to campus if you commute c. the cost of your dorm room you live in if you live in the dorms d. whatever you miss doing because you go to that class e. all of the above

d. whatever you miss doing because you go to that class

if you say that expanding the food stamp program is the right thing to do, and I reply that expanding the program will lead to less spent in other areas, we are unlikely to have a meeting of minds because a. you are emphasizing marginal benefits and i am emphasizing marginal costs b. much of the food stamp program is already a sunk cost c. the benefits and costs of food stamps are likely to be difficult to calculate d. you are making a normative argument and i am making a positive argument e. you are being reasonable and i am being aggravating

d. you are making a normative argument and i am making a positive argument

you are considering whether to take on last ski run before going home. you paid $30 for your all day lift ticket and have taken 9 runs. it is only efficient for you to take a 10th run if a. your marginal benefit is greater than $30 b. your marginal benefit is greater than $3 c. your total benefit will end up greater than $30 d. your marginal benefit is greater than 0 e. your total benefit ends up greater than your total cots

d. your marginal benefit is greater than 0

you are considering whether to take on last ski run before going home. you paid $30 for your lift ticket and have taken nine runs. it is only efficient for you to take a tenth run if a. your marginal benefit is greater than $30 b. your marginal benefit is greater than $3 c. your total benefit will end up greater than $30 d. your marginal benefit is greater than 0 e. your total benefit ends up greater than your total costs

d. your marginal benefit is greater than 0

a change in safety regulation that decreases the demand and increases the supply of airline flights will a. increase ticket prices b decrease ticket prices c. increase ticket prices if the demand change is greater than the supply change d . decrease ticket prices if the demand change is greater than the supply change

b decrease ticket prices

you value your handkerchief at $5, your friend values it at $15, and you agree to sell it for $12. the gains from trade are a. $12 b. $10 c. $7 d. $3

b. $10

if you pay $2 for each ride you take on a roller coaster, and you are about to take your tenth and last ride for the day, the marginal cost of that ride is a. 0 b. $2 c. it depends on the benefits you receive d. $20

b. $2

suppose you pay $2 for each ride you take on a roller coaster and you are about to take your tenth and last ride for the day. the marginal cost for that ride is at least a. 0 b. $2 c. it depends on the benefits you receive d. $20 e. less than $2 because of diminished marginal returns

b. $2

if you value a good at $25 and you buy it from Ed, who values it at $4, for a price of $10, you have created total gains from trade of a. $15 b. $21 c. $6 d. $25

b. $21

what is the elasticity of demand for an increase in the price of unicorns from $1 to $2 a. 0.01 b. 0.1 c. 1 d. 10

b. 0.1

if your raise your price by 50% and quantity demanded falls by 40% the elasticity demanded for your product is a. 8 b. 1.25 c. 0.8 d. 0.5 e. 0.4

b. 0.8

which of the following will increase the demand for snowboards? a. a fall in snowboard prices b. a fall in the price of ski lift tickets c. a new technology that enables snowboards to be manufactured for half the cost d. a big sale on skis e. all of the above will increase the demand for snowboards

b. a fall in the price of ski lift tickets

a decrease in the supply of aluminum bikes could result from a. the development of a low-cost bike-making technology b. a rise in the price of aluminum c. an increase in the supply of aluminum d. a fall in the demand for aluminum bikes

b. a rise in the price of aluminum

which of the following will increase the demand for frisbees? a. a fall in the cost of plastics (an input) b. a rise in the price of nerf footballs (a substitute) c. a fall in the price of frisbees d. new technology that allows frisbees to be made more cheaply e. all of the above

b. a rise in the price of nerf footballs (a substitute)

the law of demand states that a. as individuals become wealthier, their demand increases b. as prices go up, quantity demanded goes down c. as prices go down, demand goes up d. the market clear where quantity demanded equal quantity supplied e. all of the above

b. as prices go up, quantity demanded goes down

if bert can produce 25 cars or 25 trucks with the same resources that ernie can produce 20 cars or 10 trucks, then a. bert has the comparative advantage in cars; ernie in truck b. bert has the comparative advatnage in trucks; ernie in cars c. bert has the comparative advantage in both cars and trucks d. both a and d

b. bert has the comparative advatnage in trucks; ernie in cars

if only two products are made, umbrellas and fish tanks, a ountry can develop a comparative advantage in fish tanks a. if the price of fish tanks increases b. by becoming very inefficient relative to their trading partner at producing umbrellas c. if their trading partner becomes very inefficient relative to them at producing umbrellas d. if they undertake an investment in labor training e. none of the above

b. by becoming very inefficient relative to their trading partner at producing umbrellas

markets provide people with valuable information a. but most people look only at price and ignore the information markets provide b. by indicating how much products are valued c. if firms choose to advertise d. only if there are middlemen such as real estate agents

b. by indicating how much products are valued

if a new technology is developed that lowers the cost of making sunglasses a. consumer surplus will fall b. consumer surplus will rise c. consumer surplus will be unaffected, because supply changes, not demand d. consumer surplus will only increase if demand increases too

b. consumer surplus will rise

suppose the elasticity of demand for apple sauce is less than the elasticity of supply. who will end up paying most of the $1 tax? a. producers b. consumers c. apple growers d. there is not enough information to say

b. consumers

as long as the demand for good X is not perfectly inelastic, a tax on good X enacted in order to raise revenue for meals for homeless children would cause total surplus in the market for good X to a. increase b. decrease c. increase if the elasticity of supply is greater than the elasticity of demand d. increase if the elasticity of demand is greater than the elasticity of supply e. decrease if the elasticity of demand i greater than the elasticity of supply

b. decrease

what happens in the market for tires when the cost of aluminum (a n input to automobile production) increases? a. demand increases b. demand decreases c. supply increases d. supply decreases e. none of the above, because aluminum isn't used in tires

b. demand decreases

if you discover that the equilibrium price and quantity of soybeans has risen, you would conclude that a. demand has decreased b. demand has increased c. supply has decreased d. supply has increased e. none of the above

b. demand has increased

if the supply of orange juice increases, what would we expect to happen in the market for apple juice (a substitute) a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease e. neither the demand nor the supply of apple juice would be affected

b. demand to decrease

if the supply of peanut butter increases, what would we expect to happen in the market for tuna (a substitute for peanut butter on sandwiches) a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease e. neithernthe demand nor supply of tuna would be affected

b. demand to decrease

if the supply of snowboards increase, what would we expect to happen in the market for skis (a substitute)? a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease e. neither the demand nor supply of skis would be affected

b. demand to decrease

if the supply of tea increases, what would we expect to happen in the market for coffee (a substitute)? a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease e. neither the demand nor the supply of tea would be affected

b. demand to decrease

price ceilings on gasoline might be expected to cause a. increased advertising of gasoline b. gasoline to be rationed or allocated to people in different quantities than would have occurred otherwise c. longer hours of operation at most service stations d. poor people to be assured of an adequate supply of gasoline

b. gasoline to be rationed or allocated to people in different quantities than would have occurred otherwise

which of the following would you expect to have the least elastic demand? a. wheat bread made by pepperidge farm b. headache medicine c. wheat bread made by pepperidge farm sold at bi-lo d. there is not enough information to say

b. headache medicine

the law of supply predicts that a. if price goes up, quantity supplied will not fall unless demand changes b. if price goes up, quantity supplied will not fall whether or not demand changes c. supply will shift when demand shifts d. supply will increase when costs fall

b. if price goes up, quantity supplied will not fall whether or not demand changes

traveling by bicycle from clemson to NYC could be more efficient than flying in an airplane a. if airline ticket prices fall enough b. if someone enjoys riding a bike enough c. if time off from work is very hard to get d. under no conceivable circumstances

b. if someone enjoys riding a bike enough

plowing with an ox would be more efficient than plowing with a tractor a. under no conceivable circumstances b. if the price of gasoline were high enough c. if oxen become very rare d. if tractor technology doesn't improve

b. if the price of gasoline were high enough

other things equal, if the price of a product falls, consumer surplus a. decreases b. increases c. is unaffected d. depends on the supply elasticity

b. increases

your comparative advantage as a house painter as opposed to a student a. increases during exam week b. increases during the summer vacation c. depends only on how good you are with a paintbrush d. all of the above

b. increases during the summer vacation

a businesswoman says "no matter how much we cut price, we just can't seem to get any new customers." in other words, she thinks demand for her product is a. elastic b. inelastic c. unit elastic d. less than the supply

b. inelastic

if price rises from 10 to 12 and quantity demanded falls by 12%, we know that demand is a. elastic b. inelastic c. unit elastic d. downward sloping e. there is not enough information to say

b. inelastic

if quantity supplied rises from 10 to 20 when price increases from $2 to $6, supply is a. elastic b. inelastic c. steady d. downward sloping e. unit elastic

b. inelastic

if you raise your price from $1 to $1.50 and quantity demanded falls from 20 to 15, you know demand for the product is a. elastic b. inelastic c. unit elastic d. downward sloping, but there is not enough information to calculate elasticity

b. inelastic

the economic model a. is about how money is made b. is about how people make choice c. assumes that people care most about money d. assumes that people have no choices to make

b. is about how people make choices

the economic model a. is about how money is made b. is about how people make choices c. assumes that people care most about money d. assumes that people have no choices to make

b. is about how people make choices

paul decides to spend an hour playing basketball rather than studying. the tradeoff a, is nothing, because he enjoys playing basketball more than studying b. is the benefit to his knowledge and grades he would get from studying for an hour c. is the increase in skill he would get from playing basketball for an hour d. only exists if he had originally planned to study, and then played basketball instead

b. is the benefit to his knowledge and grades he would get from studying for an hour

suppose supply decreases (curve SHIFTS) while demand stays the same. what happens to consumer surplus? a. it increases b. it decreases c. it stays the same, since demand hasn't change d. there is not enough information to say

b. it decreases

suppose there is any early freeze in california that ruins the lemon crop. what happens to consumer surplus in the market for lemons a. it increases b. it decreases c. it is not affected, because this is a change in supply d. it increases very briefly then decreases

b. it decreases

an economist' view of the minimum wage would be that a. it is an efficient + equitable way of helping the poor b. it is inefficient, but the best way to solve a serious social problem c. it is an inefficient way to help the poor d. it is an efficient way to allocate labor, but not to help the poor

b. it is inefficient, but the best way to solve a serious social problem

a free-rider problem exists when a. senior citizens get discounts on their airline tickets b. it is too costly to make everyone who enjoys a good pay for it c. property rights are well defined and enforced d. none of the above

b. it is too costly to make everyone who enjoys a good pay for it

how does rent control, which limits the amount of rent that apartment owners can charge their tenants, affect property rights a. it transfers some property rights from tenant to owner b. it transfers some property rights from owner to tenant c. it does not change property rights, since the owner continues to own the apartment d. it gives the tenant full property rights to the apartment

b. it transfers some property rights from owner to tenant

if a country has been comparative advantage in a product a. it will be importer b. it will be an exporter c. it will produce more than the efficient amount d. producers of that product will be hurt by trade e. it must take fewer hours to make the good than do other countries

b. it will be an exporter

as a result of the tax, what will happen to the number of jars of apple sauce sold? a. it will increase, because producers like higher prices b. it will decrease c. it will stay the same d. there is not enough information to say

b. it will decrease

suppose you like to make and eat coconut cream pies. what will a rise in the price of coconuts do to your demand for cream? a. it will increase b. it will decrease c. it won't change, since the two are separate products d. supply will be affected, not demand

b. it will decrease

if the demand function is Qd = 40 - 2P and the price raises by 10, what will happen to the quantity demanded? a. it will fall by 10 b. it will fall by 20 c. it will fall, but in order to determine the precise amount, we would need a supply function d. demand will fall, but quantity demanded will not change

b. it will fall by 20

which of the following would make the demand for pepsi more elastic? a. improvement in pepsi formula b. launching of 5 new brands of cola by 5 different companies c. coca cola going bankrupt d. cola is discovered to reduce the risk of colon cancer e. pepsi is discovered to reduct the risk of colon cancer

b. launching of 5 new brands of cola by 5 different companies

which of the following would cause both the equilibrium price and the equilibrium quantity of pears to decrease? a. higher price for apples b. lower price for apple c. increase in consumer income if pears are a normal good d. increase in the cost of fertilizers for growing pears e. the discovery that eating pears reduces risk of heart disease

b. lower price for apples

the demand for kellogg's corn flakes tends to be very elastic because a. there are very few close substitutes b. many other cereals are almost perfect substitutes c. if you leave them for too long, they become stale d. the price of milk has been low in recent years

b. many other cereals are almost perfect substitutes

when externalities exist, buyers and sellers a. neglect the external effects of their actions on others, so the efficient quantity is produced b. neglect the external effects of their actions on others, so the efficient quantity is NOT produced c. do not neglect the effects of their actions on others, because property rights allow trade d. are both free riders

b. neglect the external effects of their actions on others, so the efficient quantity is NOT produced

positive externalities a. occur when people don't take into account the costs hey impose on others b. occur when people don't take into account the benefits they create for others c. are most common in examples of "free riding" d. none of the avbove

b. occur when people don't take into account the benefits they create for others

a trade that will make both countries better off would be a. one watch for 7 pounds of chocolate b. one watch for 6.5 pounds of chocolate c. one watch for 6 pounds of chocolate d. one watch for 7.5 pounds of chocolate e. no such trade exists

b. one watch for 6.5 pounds of chocolate

the supply curve slops upward because a. it must in order to cross the demand curve b. opportunity costs rise with the quantity supplied c. there are very close substitutes d. marginal costs are low

b. opportunity costs rise with the quantity supplied

"a doubling in gasoline prices has not reduced purchases at all." the speaker evidently believes that demand for gasoline is a. perfectly elastic b. perfectly inelastic c. greater than supply d. less than supply e. unit elastic

b. perfectly inelastic

externalities (such as pollution) occur because a. people are childish b. property rights have not been clearly defined c. companies are primarily interested in profits d. the marginal benefits are less than the marginal costs

b. property rights have not been clearly defined

externalities occur because a. people are short-sighted b. property rights have not been clearly defined c. pollution is often a part of producing goods d. all of the above

b. property rights have not been clearly defined

demand is said to be inelastic if a. quantity demanded moves proportionally more than price b. quantity demanded moves proportionally less than price c. quantity demanded moves proportionally the same amount as price price d. quantity demanded moves proportionally the same amount as price e. demand does not decrease very much when price increases

b. quantity demanded moves proportionally less than price

because pollution creates a negative externality a. social welfare will be maximized when all pollution is eliminated b. social welfare can be increased by eliminating some, but not all, pollution c. pollution should be reduced by at least 10% d. all of the above

b. social welfare can be increased by eliminating some, but not all, pollution

releasing exhaust fumes into the air produces a negative externality. therefore, a. social welfare will be maximized when all exhaust fumes are eliminated b. social welfare will be maximized when some but not necessarily all exhaust fumes are eliminated c. exhaust fume should be reduced by 10% d. all of the above

b. social welfare will be maximized when some but not necessarily all exhaust fumes are eliminated

air pollution creates a negative externality. therefore, a. social welfare will be maximized when all pollution is eliminated b. social welfare will be maximized when some, but not necessarily all, pollution is eliminated c. governments should encourage firm to reduce pollution by at least 10% d. polluting firms should be carefully regulated e. all of the above

b. social welfare will be maximized when some, but not necessarily all, pollution is eliminated

suppose that a fall in the price of good X causes less of good Y to be sold. this would mean the X and Y are a. complements b. substitutes c. unrelated d. normal goods e. luxury goods

b. substitutes

if the equilibrium price has riven from $10 to $25 and the equilibrium quantity has fallen from 50,000 to 35,000, we would know that a. demand has increased b. supply has decreased c. demand has decreased d. supply has increased e. both supply and demand have increased

b. supply has decreased

for which of the following will there will be a positive externality? a. ted turner donates a park to clemson b. ted turner re-paves highway 123 so that he can travel from the airport to his new park more comfortable c. pepsi improves its cola's formula so that it taste even more delicious d. i give you some of my frequent flier miles e. all will create positive exteranlities

b. ted turner re-paves highway 123 so that he can travel from the airport to his new park more comfortable

the marginal cost of taking your car for a spin around the block includes which of the following a. the cost of your car b. the cost of the gas you use driving around the block c. the cost of auto-insurance d. the cost of the new tires you just bought e. all of the above

b. the cost of the gas you use driving around the block

if the price of coffee falls and the quantity of coffee demanded falls as well, we know that a. the law of demand has been violated b. the demand for coffee has fallen c. the price of tea (or some other substitute) must have risen d. the supply of coffee must have decreased e. the supply of coffee much have increased

b. the demand for coffee has fallen

if clemson decides to increase tuition so as to raise its revenue, it must believe that a. the demand for education at clemson is elastic b. the demand for education at clemson is inelastic c. the demand for education at clemson is increased d. the supply of education at clemson has increased

b. the demand for education at clemson is inelastic

professional football players receive on average much higher wages than professional soccer players in the US because a. football is a more dangerous sport b. the demand for football is greater c. professional football teams use a draft system d. the soccer season is longer and so players will be unemployed for a smaller portion of the year

b. the demand for football is greater

if the price of olives rises just as new studies reveal additional health benefits from using olive oil, we would expect a. the equilibrium price of olive oil to rise and the quantity to fall b. the equilibrium price of olive oil to rise, but the effect on quantity to be uncertain c. the equilibrium price and quantity of olive oil to rise d. the equilibrium quantity of olive oil to fall, but the effect on price to be uncertain e. the equilibrium quantity of olive oil to rise, but the effect on price to be uncertain

b. the equilibrium price of olive oil to rise, but the effect on quantity to be uncertain

illegal immigration substantially reduces wages in the chocolate industry at the same time researchers discover that eating chocolate makes you fat. what happens to the equilibrium price and quantity of chocolate? a. the equilibrium price will increase, but the effect on equilibrium quantity is uncertain b. the equilibrium price will decrease, but the effect on equilibrium quantity is uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity will increase, but the effect on equilibrium price is uncertain e. the equilibrium quantity will decrease, but the effect on equilibrium price is uncertain

b. the equilibrium price will decrease, but the effect on equilibrium quantity is uncertain

what would happen in the market for silk shirts if the price of silk falls while the price of cotton shirts (a substitute) also falls? a. the equilibrium price would increase, but the effect on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the effect on equilibrium quantity would be uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity would increase, but the effect on equilibrium price would be uncertain e. the equilibrium quantity would decrease, but the effect on equilibrium price would be uncertain

b. the equilibrium price would decrease, but the effect on equilibrium quantity would be uncertain

jon needs 200 cases of cristal champagne to cater a wedding. first, jon visits all the wine shops located within 10 miles, but still is short a few cases. finally jon visits all shops located within 50-100 miles, and gets the last few cases he needs. jon's struggles illustate a. the law of demand b. the law of supply c. the principal of absolute advatnage d. that sometimes the gains from trade aren't worth it

b. the law of supply

a rational decision-maker takes action only if a. the average benefit is greater than the average cost b. the marginal benefit is greater than the marginal cost c. the total benefit is positive d. society will be made better off e. all of the above

b. the marginal benefit is greater than the marginal cost

a rational decision-maker takes action only if a. the average benefit is greater than the average cost b. the marginal benefit is greater than the marginal cost c. the total benefit is positive d. society will be made better off e. all of the avoe

b. the marginal benefit is greater than the marginal cost

the best explanation for why fewer elephants are poached where native populations have been given property rights to the elephants is that a. the natives have heard the messages of western environmentalists and become environmentalists themselves b. the natives now bear the cost when poaching occurs c. the international ban on ivory has made poaching less worthwhile d. the owning tribe gets to know and like the elephants e. killing any elephants will now make no economic sense

b. the natives now bear the cost when poaching occurs

if there is excess demand for burritos, we would expect a. the price of burritos to fall b. the price of burritos to rise c. certain suppliers to stop making burritos d. a burrito shortage

b. the price of burritos to rise

a new style of snowmobile that requires more fuel per mile becomes more efficient relative to traditional snowmobiles if a. the demand for snowmobile travel increases b. the price of fuel falls c. the price of snowmobiles falls d. more snow falls e. none of the above

b. the price of fuel falls

a seller will be willing to sell a product only if a. the price received is less than the cost of production b. the price received is at least as great as the cost of production c. the price received is equal to the cost of production d. there is no general rule about willingness to sell

b. the price received is at least as great as the cost of production

you want to build a garage and ask a contractor for a bid. he gives you a time and price. you ask him to complete the garage in half the time he proposes. what will happen to the price and why a. the price will rise because your willingness to pay is obviously higher b. the price will rise because contractor's opportunity cost will be higher c. the price will fall because the contractor can get your garage out of the way more quickly, and thus move on other projects d. the price will not be affected because the relevant costs are sunk

b. the price will rise because contractor's opportunity cost will be higher

if the elasticity of demand of for camera film is 2.6, and the price of film is raised by 10%, a. the quantity demanded will fall by 2.6% b. the quantity demanded will fall by 26% c. the quantity demanded will fall by 260% d. the quantity demanded must fall, but we need more information to determine by how much

b. the quantity demanded will fall by 26%

if the price of grapes falls a. demand for grapes increases b. the quantity of grapes demanded increases c. there will be a grape shortage d. all of the above

b. the quantity of grapes demanded increases

a demand curve indicates the value consumers get from a good. it is measured as a. the benefits people received less the cost b. the quantity people will buy at various prices c. the prices people prefer to pay d. all of the above

b. the quantity people will buy at various prices

when a good is taxed and neither demand nor supply is perfectly inelastic a. the quantity produced will rise b. the quantity produced will fall c. the quantity produced will not change d. the quantity produced may rise or fall, depending upon whether the producer or the consumer is taxed

b. the quantity produced will fall

to economists, prices are a. the outcome of a haphazard process b. the result of millions of business + consumer decisions c. the responsibility of government planners d. not to be relied on as a method of allocating society's scarce resources e. usually distorted by collusion between firms

b. the result of millions of business + consumer decisions

if you are searching for a new pair of skis, it makes sense to keep looking as long as a. you haven't found the lowest price available b. the shopping time matters less to you than the lower price you expect to get c. there are no stores left that you haven't checked d. you face no opportunity cost at all e. all of the above

b. the shopping time matters less to you than the lower price you expect to get

the recent drought in the midwest has been severe, and experts say that roughly half the corn crop has been damaged. as a result, we would expect a. the demand for corn to decrease b. the supply of corn to decrease c. the demand of corn to increase d. the supply of corn to increase e. both a + b

b. the supply of corn to decrease

if the price of silver falls, you would expect a. the demand for silver jewelry to increase b. the supply of silver jewelry to increase c. the demand for silver jewelry to decrease d. the supply of silver jewelry to decrease e. both a + b

b. the supply of silver jewelry to increase

if there is excess demand for farm laborers, we would expect a. the wage paid to farm laborers to fall b. the wage paid to farm laborers to rise c. the price of farm commodities to fall d. an increase in the supply of farm laborers e. more than one of the above answers is correct

b. the wage paid to farm laborers to rise

what is the most likely effect of agricultural price supports, which guarantee a minimum price for such products as peanuts? a. they lead to shortages b. they lead to surpluses c. they reduce demand d. the increase supply

b. they lead to surplus

in a market economy, resources are allocated primarily a. by a single central planner b. though the combined actions of millions of households c. by a few large corporations d. by the government board of economic planning in the department of commerce

b. though the combined actions of millions of households

if the price of toasters is fixed by law above the market-clearing price, a. a shortage of toasters will results b. toaster inventories at appliance stores will be larger c. toaster sellers will spend less on advertising d. the quantity of toasters purchased will be more than the quantity supplied

b. toaster inventories at appliance stores will be larger

when there is a negative exteranilty a. too little of a good is produced b. too much of a good is produced c. none of the good is produced d. the efficient amount i produced, but some external people pay the cots

b. too much of the good is produced

with a negative externality, you end up getting a. too little of the product produced b. too much of the product produced c. the right amount produced, but not all the benefits taken into account d. the right amount produced, but not all of the costs taken into account e. improper attention paid to property rights

b. too much of the produced produced

Qd = 200 - P Qs = P - 30 if supply increases we would expect that the quantity supplied at $50 a. will be equal to 20 b. will be greater than 20 c. will be less than 20 d. there is not enough information to say

b. will be greater than 20

suppose the government puts a tax on $1 on each jar of apple sauce purchased. as a result of the tax, the price consumers will pay for a jar of apple sauce a. will rise by exactly $1 b. will rise by less than $1 c. will rise by more than $1 d. does not change e. may rise of all, depending on the elasticity of supply

b. will rise by less than $1

the idea that "people respond to incentives" would lead us to conclude that the murder rate a. would rise if tougher penalties are enacted b. would fall if tougher penalties are enacted c. would be unaffected by changes in penalties, since crimes are committed in moments of passion d. depends entirely on the level of penalties enacted

b. would fall if tougher penalties are enacted

could you ever have too much environmental protection? a. no, because it is important to protect the environment b. yes, if the marginal costs are greater than the marginal benefits no, because a clean environment is scarce good d. no, because the benefits of a clean environment outweigh the costs e. yes, if the demand for environmental protection is not very important

b. yes, if the marginal costs are greater than the marginal benefits

if you fail to take into account the benefit of watering your lawn gives to others a. you water too much b. you water too little c. you do not have a comparative advantage in watering d. there is a negative exteranlity

b. you water too little

when you are a student, you are more likely to go by bus; once you have a job, you are more likely to fly. this is because once you have a job a. your demand for transportation becomes more elastic, since your opportunity costs increase b. your demand for transportation becomes less elastic, since your opportunity costs increase c. your demand for transportation becomes more elastic, since your opportunity costs decrease d. your demand for transportation becomes less elastic, since your opportunity costs decrease e. traveling by bus will usually cost you less than traveling by airplane

b. your demand for transportation becomes less elastic, since your opportunity costs increase

what happens to the equilibrium price and quantity of tomato juice after the hurricane? a. price rises, quantity falls b. price falls, quantity rises c. price + quantity rise d. price + quantity fall e. price falls, effect on quantity is uncertain

both price and quantity rise

if cartland sells a rifle for $125 and his producer surplus is $75, his cost must have been a. $125 b. $75 c. $50 d. $25 e. he must have stolen the rifle

c. $50

caitlin would be willing to pay $50 to see les miserables, but buys a ticket for only $30. caitlin values the performance at -- and her consumer surplus is -- a. $30, $50 b. $50, $30 c. $50, $20 d. $30, $20

c. $50, $20

if you are willing to pay $500 for a new suit and are able to buy it for only $350, you value the suit at -- and your consumer surplus is -- a. $500, $350 b. $350, $500 c. $500, $150 d. $350, $150

c. $500, $150

if your raise your price from 5 to 10 and the quantity you sell falls from 20 to 15, the elasticity of demand for your product is a. 25 b. 2.5 c. 0.25 d. 4 e. 40

c. 0.25

if price is raised from 10 to 12 and quantity supplied rises from 100 to 108, elasticity of supply equals a. 9 b. 10 c. 0.4 d. 2.5 e. there is insufficient information to say

c. 0.4

a trade that can make both countries better off would be a. 1 umbrella for 2 fish b. 2 umbrellas for 1 fish c. 1.5 umbrellas for 1 fish d. no trade is possible since a smoked fish costs the same amount in each country e. no trade is possible, because england is at least as good as norway at producing both umbrellas and fish

c. 1.5 umbrellas for 1 fish

i can cut down 4 trees or dig 12 holes in an hour. you can cut down 3 tree or dig 6 holes in an hour. use these facts to answer the next 3 questions. the cost of one of my trees is a. 3/4 of your trees b. 12 holes c. 3 holes d. depends on how much i like trees e. depends on how much you like trees

c. 3 holes

if price elasticity of a demand for a good is 3, then a 10% increas ein price would be expected to result in a. 3% decrease in quality demanded b. 3% increase in quality demanded c. 30% decrease in quality demanded d. 3% decrease in quality demanded e. 3% decrease in quality demanded

c. 30% decrease in quality demanded

if the demand for widgets is Qd = 90 -Pd and the supply of widget is Qs = Ps - 30, what is the total surplus created if widgets sell at the equilibrium price a. 225 b. 500 c. 900 d. 2700 e. -2700

c. 900

which of the following would lead to an increase in both the equilibrium price and quantity of an inferior good, such as macaroni and cheese? a. an increase in income and an even bigger rise in the price of wheat used to make macaroni b. a decrease in income and an even bigger rise in the price of wheat used to make macaroni c. a decrease in income d. a rise in the price of wheat used to make macaroni

c. a decrease in income

which of the following would cause an increase in the demand for potato chips a. a fall in the price of potato chips b. a fall in the price of corn ships, if corn chips and potato chips are substitutes c. a fall in the price of dip if dip and potato chips are complements d. a major increase in the supply of potato chips due to an excellent potato harvest e. none of the above

c. a fall in the price of dip if dip and potato chips are complements

which of the following will increase the demand for waffles? (shift demand outwards) a. a fall in the price of waffles b. a fall in the price of waffle flour c. a fall in the price of waffle syrup d. all of the above

c. a fall in the price of waffle syrup

which of the following will NOT increase the demand for coffee? a. the discovery that coffee cures cancer b. a rise in income and coffee is a normal good c. a great coffee harvest d. all of the above will increase the demand for coffee

c. a great coffee harvest

which of the following results in the production of a positive externality? a. your neighbor has a loud party that lasts until the early hours of the morning b. a homeowner does not maintain his proeprty c. a person buys land to preserve open space that is enjoyed by all passer buy d. all of the above

c. a person buys land to preserve open space that is enjoyed by all passer buy

to produce honey, beekeepers place hives of bees in orchards and crop fields. as bees gather nectar, they pollinate the orchards and fields, increase the yields of fruit and grains. this arrangement results in a. a positive externality that benefits the beekeepers b. a positive externality that penalizes the beekeepers c. a positive externality that benefits the farmer d. a positive externality for which the farmer should be compensated e. no externalities, since the beekeepers loses nothing

c. a positive externality that benefits the farmer

which of the following will increase the demand for tea? a. a blight destroys 30% of the tea crop in india b. wonderful weather doubles the usual tea crop c. a rise in the price of coffee d. new technology that allows tea to be made more cheaply e. all of the above

c. a rise in the price of coffee

if a good is "normal," an increase in income will result in a. no change in demand for the good b. a decrease in demand for the good c. an increase in demand for the good d. no change in demand, but a movement along the demand curve

c. an increase in demand for the good

if a good is "normal," an increase in income will result in a. no change in demand for the good b. a decrease in demand for the good c. an increase in demand for the good d. no change in demand, but a movement along the demand curve

c. an increase in demand for the good

if clemson raises the price of on-campus parking, you would except to see a. a decrease in the demand for on-campus parking b. a decrease in the supply of on-campus parking c. an increase in the demand for off-campus parking d. all of the above

c. an increase in the demand for off-campus parking

if clemson raises the price of on-campus parking, you would expect to see a. a decrease in the demand for on-campus parking b. a decrease in the supply of on-campus parking c. an increase in the demand for off-campus parking d. all of the above

c. an increase in the demand for off-campus parking

which of the following would cause a decrease in the demand for coffee a. an increase in the price of coffee b. an increase in the price of tea, if coffee and tea are substitutes c. an increase in the price of sugar if you drink your coffee with sugar d. a major decrease in the supply of coffee caused by a big drought e. none of the above

c. an increase in the price of sugar if you drink your coffee with sugar

the thing least likely to change the demand (shift the demand curve) for a university education is a. an increase in the demand for university-educated workers b. an increase in the cost of textbooks c. an increase in the university tuition charges d. an increase in the salaries of low-skill (non-university-educated) jobs e. none of the above

c. an increase in the university tuition charges

grocery shoppers who are willing to pay high prices at one supermarket in order to avoid long lines at another a. are not rational shoppers b. would do anything to save money c. are comparing the benefits and costs of their choice d. are not comparing the benefits and costs of their choice

c. are comparing the benefits and costs of their choice

for which of the following is demand likely to be the most elastic? a. bread b. sourdough bread c. bilo's wheat sourdough bread d. all will have equally elastic demand

c. bilo's wheat sourdough bread

if a new technology lowers the cost of growing wheat, we would expect a. both consumer and producer surplus to decrease b. consumer surplus to decrease + producer surplus increase c. both consumer + producer surplus to increase d. price to fall, but consumers and producer surplus to be unchanged

c. both consumer + producer surplus to increase

what would happen in the market for interior house paint if the price of paintbrushes falls while the price of wallpaper (a substitute) rises? a. the equilibrium price would increase, but the impact on quantity would be uncertain b. the equilibrium price would decrease, but the impact on quantity would be uncertain c. both equilibrium price and quantity would increase d. the equilibrium quantity would increase but the impact on price would be uncertain e. the equilibrium quantity would decrease but the impact on price would be uncertain

c. both equilibrium price and quantity would increase

when demand decreases a. price rises and quantity falls b. price falls and quantity rises c. both price and quantity fall d. price rises, but the effect on quantity is uncertain e. quantity falls, but the price stays the same

c. both price and quantity fall

when the demand for something falls a. the price rises + quantity falls b. price falls and quantity falls c. both price and quantity fall e. price rises, but the effect on quantity is uncertain e. quantity falls, but price stays the same

c. both price and quantity fall

a person has a comparative advantage in an activity whenever she a. can do the activity in less time than other people b. has absolute advantage in the activity c. can perform the activity at a lower opportunity cost than can other people d. can do everything better than anyone else e. all of the above

c. can perform the activity at a lower opportunity cost than can other people

a friend of yours tells you that despite the price of coffee reaching an all-time high, coffee growers are drinking more coffee than they did before the price rise. an explanation of this that fits with economic thinking is that a. the farmers grow the coffee, so the price doesn't affect their consumption b. caffeine is addictive so farmers end up drinking more no matter the price c. coffee farmers have been made wealthier by the increase in coffee prices and thus increase their demand for coffee d. higher coffee prices mean lower costs to the farmer e. all of the above

c. coffee farmers have been made wealthier by the increase in coffee prices and thus increase their demand for coffee

according to economists, a binding price ceiling on rental apartments is likely to be a good way to a. help the poor b. make rental apartments affordable for everyone c. create a shortage in rental aparments d. help reduce the rental apartment shortage e. increase the demand for rental apartments

c. create a shortage in rental apartments

a tax on buyers a. decreases the quantity supplied, but not the quantity demanded b. decrease the quantity demanded, but not the quantity supplied c. decreases both the quantity demanded and quantity supplied, unless one or the other is perfectly inelastic d. increases the price that sellers receive

c. decreases both the quantity demanded and quantity supplied, unless one or the other is perfectly inelastic

the cost of producing chocolates decreases. as a result, the equilibrium market price of chocolate --, the equilibrium quantity of chocolate purchased --, and consumer surplus -- a. decreases, decreases, decreases b. decreases, decreases, increases c. decreases, increases, increases d. increases, increases, increases e. increases, decreases, decreases

c. decreases, increases, increases

it seems that every year around valentine's day the price of roses rises sharply. this is probably because a. the quantity of roses demanded increases b. florists reduce supply to force up price c. demand for roses increases d. demand for roses decreases after valentine's day, so now is the time to charge high prices

c. demand for roses increases

someone who, when confronted by a choice, says "its simple: do both!" a. is a high demander b. is an inefficient supplier c. doesn't understand opportunity cost d. is a go-getter

c. doesn't understand opportunity cost

countries usually impose restrictions on foreign trade to protect a. foreign producers b. foreign consumers c. domestic producers d. domestic consumers e. both c + d

c. domestic producer

the fact that more teachers per student are employed now than 20 years ago (i.e., equilibrium quantity has increased) tells us that a. demand has increased b. supply has increased c. either demand or supply has increased d. demand has decreased e. supply has decreased

c. either supply or demand has increased

when the supply and demand for a good both increase, a. equilibrium price will increase b. equilibrium price will decrease c. equilibrium price may increase, decrease, or remain unchanged d. equilibrium price will increase if we are dealing with a normal good

c. equilibrium price may increase, decrease, or remain unchanged

when the supply and demand for a good increase a. equilibrium price will increase b. equilibrium price will decrease c. equilibrium price may increase, decrease, or remain unchanged d. equilibrium price will increase if we are dealing with a norma good

c. equilibrium price may increase, decrease, or remain unchanged

when the supply and demand of a good both increase, a. equilibrium price will increase b. equilibrium price will decrease c. equilibrium price may increase, decrease, or remain unchanged d. equilibrium price will increase if we are dealing with a normal good

c. equilibrium price may increase, decrease, or remain unchanged

a rise in demand a. forces price up + quantity down b. forces price down + quantity up c. forces price + quantity up d. forces price + quantity down

c. forces price + quantity up

hikers frequently claim that livestock grazing in wilderness areas reduces the satisfaction of their hikes. an explanation would be that a. many hikers don't eat beef b. hikers prefer wild animals c. grazing cows excrete externalities on the trail that make hiking less pleasant d. ranchers resist the recreational use of public lands e. cattle should not be allowed to graze on public property

c. grazing cows excrete externalities on the trail that make hiking less pleasant

you miss the last train home on NYE. after walking for an hour, you spot a taxi. its driver wants to charge you $150 to take you home, though the ride usually costs $30. you are furious, but feel you ahve no other option and accept the detail. finding the taxi a. has made you better off and the driver worse off b. has made you worse off and the driver better off c. has made both you and the driver better off d. has made both you and the driver worse off e. has made the driver better off but left your well-being unchanged

c. has made both you and the driver better off

if instead there is a major frost in florida that kills 50% of the orange crop, we would expect to see a. a decreased demand for oranges b. an orange shortage c. higher orange prices d. an increase in quantity demanded

c. higher orange prices

economics is a model of a. money b. buying and selling c. how people make choices d. how people should behave

c. how people make choices

we have too much safety a. if the marginal cost of the last unit of safety was less than the marginal benefit b. if the total value of safety is negative c. if the marginal benefit of the last unit of safety was less than the marginal cost d. if no one ever gets hurt e. all of the above

c. if the marginal benefit of the last unit of safety was less than the marginal cost

driving to work (which takes 10 mins) is more efficient than riding a bike (which takes 1 hour) a. only if fuel costs are less than $1 per gallon b. if exercise is valued more than a fast commute c. if the opportunity cost of time is high enough d. never, since scarce economic resources are wasted by driving e. if you are wealthy enough

c. if the opportunity cost of time is high enough

automobile emissions create negative externalities. to deal with this, the government might a. increase the speed limit b. reduce funding to public transportation c. impose a gas tax d. all of the above e. a + b only

c. impose a gas tax

which of the following will increase the supply of brass key rings? a. rise in demand b. rise in price c. improvement in key-ring making technology d. all of the above e. just a + c

c. improvement in key-ring making technology

demand for a "necessity" is likely to be ---, while demand for a "luxury" is likely to be --- a. elastic, elastic b. inelastic, inelastic c. inelastic, either elastic or inelastic d. elastic, either elastic or inelastic

c. inelastic, either elastic or inelastic

demand for a "necessity" is likely to be --, while demand for a "luxury" is likely to be -- a. elastic, elastic b. elastic, inelastic c. inelastic, either inelastic or elastic d. elastic, either inelastic or elastic

c. inelastic, either inelastic or elastic

an article in the newspaper suggests than an indian tribe should use coal rather than gas power because the tribe owns 114 billion tons of coal reserves. this statement a. is true because if they own the coal, they don't have to pay for it b. is false because coal is more polluting c. is falls because it ignores opportunity costs d. none of the above

c. is falls because it ignores opportunity costs

an article in the newspaper suggest than an indian tribe should use coal rather than gas power because the tribe owns 114 billion tons of coal reserves. this statement a. is true because if they own the coal, they don't have to pay for it b. is false because coal is more polluting c. is false because it ignores opportunity costs d. none of the above

c. is false because it ignores opportunity costs

most economists believe that the assumption of rationality a. is how humans behave in all circumstances b. is the best argument for the economic model c. is not always a realistic assumption, but allows useful predictions to be made nonetheless d. should be supported by teaching people how to act rationally

c. is not always a realistic assumption, but allows useful predictions to be made nonetheless

which of the following is true of the statement "all pollution must be stopped"? a. it ignores the importance of comparing marginal benefits and marginal costs b. it does not consider that we may have too much pollution control c. it ignores the fact that to get more of anything, we must give up something else d. all of the above

c. it ignores the fact that to get more of anything, we must give up something else

according to the economic way of thinking, the price that results in quantity supplied being equal to quantity demand is the best price because a. it results in no shortage b. it results in no surplus c. it maximize the combined welfare of buyers + sellers d. it minimizes amount spent by buyers e. it maximizes profit of sellers

c. it maximize the combined welfare of buyers + sellers

if the government, recognizing that the price of roses goes up at absolutely the worst time for consumers, passes a law that says not more than $1.50 can be charged per rose (instead of the $5 now charged) the most likely outcome would be that a. consumers will buy more roses b. suppliers will sell more roses c. it will be harder to find roses in florists' shops d. the demand for roses will become more elastic

c. it will be harder to find roses in florists' shops

assume demand is linear and suppose the government reduces gasoline taxes by 50 cents by gallon. what will happen to the consumer price? a. it will fall by 50 cents b. it will fall by more than 50 cents c. it will fall by less than 50 cents d. it will fall by exactly 25 cents

c. it will fall by less than 50 cents

for which product is demand likely to be most elastic? a. raisin brain b. kellog's raisin bran c. kellog's raisin bran at bilo d. breakfast cereal e. all of the above equally, as all involve basically the same product

c. kellog's raisin bran at bilo

the cost to a cinema owner of letting someone see a movie for free is a. always equal to the regular ticket price of $8.50 b. usually more than the regular ticket price of $8.50 c. likely to be higher on a saturday night than on a monday night d. always nothing if he/she owns the cinema

c. likely to be higher on a saturday night than on a monday night

this means that dedicating more resources to making meat safer a. is a good idea b. is a bad ida c. may be a good or bad idea, depending on the marginal benefits and costs d. is a rational plan

c. may be a good or bad idea, depending on the marginal benefits and costs

an increase in the price of oranges a. increases the supply of oranges (shifts the supply curve) b. decreases the demand for oranges (shifts the demand curve) c. may be caused either by an increase in demand or a decrease in supply d. leads to a reduction in orange input prices

c. may be caused either by an increase in demand or a decrease in supply

which of the following will increase the supply of photocopiers? a. a fall in the price of photocopy paper (a complement) b. a rise in the price of scanners (a substitute) c. new technology that makes it possible to manufacture photocopiers much more cheaply d. all of the above

c. new technology that makes it possible to manufacture photocopiers much more cheaply

a trade that would help us both is a. one paper for 2.5 math problems b. one paper for 3 math problems c. one paper for 3.5 math problems d. one paper for 4 math problems e. one math problem for 3.5 papers

c. one paper for 3.5 math problems

economic theory would explain that regulated firms often benefit from the regulations because a. the regulated firms are able to manipulate public officials into doing what they want b. regulation is very complicated and mistakes are sometimes made c. politicians worry about pleasing those who care the most and pay the closest attention d. it is nearly impossible to know what public interest requires in the absence of market information e. politicians do not have to worry about being out of office since most incumbents are re-eleced

c. politicians worry about pleasing those who care the most and pay the closest attention

when the demand for something increases a. price + quantity fall b. price falls + quantity rises c. price + quantity rise d. price rises, but the effect on quantity is uncertain e. quantity falls, but price stays the same

c. price + quantity rise

a major oil spill wipes out a substantial portion of ocean cod. what happens to the equilibrium price and quantity of cod? a. price increases; quantity increases b. price decreases; quantity increases c. price increases; quantity decreases d. price decreases; quantity decreases

c. price increases; quantity decreases

the market clearing price of a good is the price at which a. shortages occur b. surpluses occur c. quantity supplied equal quantity demanded d. all of the above e. none of the above

c. quantity supplied equal quantity demanded

an increase in the demand for rental apartments will a. raise the price and create a shortage b. lower the price and product a suprlus c. raise the price and increase the quantity supplied d. raise the price and increase the supply

c. raise the price and increase the quantity supplied

the government is considering taxing popcorn. which of the following is the most accurate statement about who will bear the burden of a tax a. the burden of the tax will always be shared exactly evenly between buyers + sellers b. the burden of the tax will never be shared equally between buyers and sellers c. rarely will the burden of the tax be shared equally; in most case one or the other pays more of the tax d. the burden of the tax depends on whether the government applies it to sellers or buyers

c. rarely will the burden of the tax be shared equally; in most case one or the other pays more of the tax

a decrease in the supply of aluminum bikes could result from a. increase in supply of aluminum b. decrease in income (normal good) c. rise in price of aluminum d. fall in price of aluminum

c. rise in price of aluminum

the "law of demand" a. determines the equilibrium price b. doesn't hold for scarce goods c. says that people buy less of a good when price rises d. applies only to consumer goods

c. says that people buy less of a good when price rises

the "law of demand" a. determines the market-clearing price b. doesn't hold for scarce goods c. says that people don't buy more of a good when price rises d. applies primarily to consumer goods e. measures the relationship between price and quantity demanded

c. says that people don't buy more of a good when price rises

if you buy a motorcycle for $1000 and then discover you hate riding it and will never ride it again, the best thing to do is a. keep the motorcycle because you've paid so much for it b. keep the motorcycle unless you can find someone who will pay you at least $1000 for it c. sell the motorcycle for the best offer you can get d. sell the motorcycle for the best offer you can get, as long as it covers most of what you paid for it

c. sell the motorcycle for the best offer you can get

private contracts between parties with well-defined property rights typically a. lead to positive externalities b. lead to negative exteranlities c. solve some inefficiencies associated with externalities d. are impossible to enforce e. lead to market outcomes in which the public interest is sacrificed for personal gain

c. solve some inefficiencies associated with externalities

if then you discover that you were mistaken, and that, although the price had risen, the equilibrium quantity of soybeans has actually fallen, you would know that a. demand has decreased b. demand has increased c. supply has decreased d. supply has increased e. none of the above

c. supply has decreased

what happens in the market for cream cheese when the price of cream (input) falls? a. demand increases b. demand decreases c. supply increases d. supply decreases e. both b and d

c. supply increases

if the supply of "roots" (an input) increases, what would we expect to happen in the market for root beer? a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease

c. supply to increase

who has comparative advantage? a. switzerland has the comparative advantage in both chocolate and watches b. albania has the comparative advantage in both chocolate and watches c. switzerland has the comparative advantage in chocolate; albania in watches d. albania has the comparative advantage in chocolate; switzerland in watches e. there is not enough information to say

c. switzerland has the comparative advantage in chocolate; albania in watches

if someone tells you that they "can't live without" something, you would assume, a. that they will die if they don't have it b. that their demand is likely to be elastic c. that their demand is likely to be inelastic d. that the law of demand won't apply to them e. that they have excess demand

c. that their demand is likely to be inelastic

we say that there is an externality when a. supply is greater than demand b. demand is greater than supply c. the cost or benefit of an action is imposed on someone without their consent d. people are bearing costs e. external parties provide inputs

c. the cost or benefit of an action is imposed on someone without their consent

if the price of batteries rises, you would expect a. the demand for flashlights to increase b. the demand for electricity to decrease c. the demand for electricity to increase d. the demand for battery powered toys to increase

c. the demand for electricity to increase

if the price of a substitute for goods X increases, then a. the demand for good X increases b. the price of good X falls c. the demand for good X decreases d. the demand for good X will not change

c. the demand for good X decreases

a technological breakthrough reduces the cost of pie crust. what is the effect on the market for cherry pies? (consider whether demand or supply or both change) a. the equilibrium price increases; the equilibrium quantity increases b. the equilibrium price increases; the equilibrium quantity decreases c. the equilibrium price decreases; the equilibrium quantity increases d. the equilibrium price decreases; the equilibrium quantity decreases e. the equilibrium price decreases; there is not enough information to tell what happens to quantity

c. the equilibrium price decreases; the equilibrium quantity increases

if an exceptionally snowy winter makes for great skiing conditions but also raises the cost of shipping in skis, we would expect a. the equilibrium price and quantity of skis to rise b. the equilibrium price and quantity of skis to fall c. the equilibrium price to rise, but the effect on quantity to be uncertain d. the equilibrium quantity to rise, but the effect on price to be uncertain e. the equilibrium price to fall, but the effect on quantity to be uncertain

c. the equilibrium price to rise, but the effect on quantity to be uncertain

what would happen in the market for beef salumi if the prices of both bologna (a substitutes) and cattle feed fall a. the equilibrium price would increase + quantity would decrease b. the equilibrium price would decrease + quantity would increase c. the equilibrium price would decrease + the effect on quantity would be uncertain d. equilibrium quantity would decrease + the effect on price would be uncertain e. equilibrium quantity would increase + the effect on price would be uncertain

c. the equilibrium price would decrease + the effect on quantity would be uncertain

if ricky values his book at $5 and fred values it at $25, and, after bargaining they agree on a price of $24, then a. the gains from trade are $1 b. the gains from trade are $19 c. the gains from trade are $20 d. the gains from trade are $44 e. ricky gains from the trade but fred doesn't

c. the gains from trade are $20

which of the following explains my decision to go to the weight room rather than to a movie? a. i value exercising more than movie watching b. i feel better if i workout c. the marginal benefits of working out rather than going to a movie exceed the marginal costs d. i like exercise more than i like to watch films e. all of the above

c. the marginal benefits of working out rather than going to a movie exceed the marginal costs

how can it be that water, which is a necessity of life, is so cheap while diamonds, which are a luxury, are so expensive? a. the marginal benefit of diamonds must be low b. the marginal benefit of water must be hihg c. the marginal value of water is low even though the total value is high d. the total value of diamonds must be higher than the total value of water

c. the marginal value of water is low even though the total value is high

which of the following would increase demand for aardvark meat? a. a fall in the price of aardvarks b. a fall in the price of aardvark eggs c. the new belief that eating aardvark makes you beautiful d. all of the above

c. the new belief that eating aardvark makes you beautiful

some welfare programs offer assistance to families only if there is no father present in the home. what effect would you expect such programs to have on the number of two-parent, low-income families? a. no effect, since family decisions are based primarily on factors much more important than welfare eligibility b. the number of two-parent, low-income families is likely to rise c. the number of two-parent, low-income families is likely to fall d. it is impossible to form any expectation about this situation

c. the number of two-parent, low-income families is likely to fall

fishing to the point of the extinction of the species occurs primarily because a. fishermen care only about current benefits and not about the future b. the technology of fishing makes it more efficient to catch huge numbers of fish at one time c. the only way to "own" the fish is to catch and kill them d. consumers eat fish without considering the marginal cost e. all of the above

c. the only way to "own" the fish is to catch them and kill them

pollution is a problem that arises principally because a. firms are carless + like to cut corners b. most companies don't care about the environment c. the ownership of certain things is not well-defined d. many people enjoy polluting

c. the ownership of certain things is not well-defined

in the case of a positive externality, which of the following is true? a. the person creating the externality does not bear all the costs, so too much of the good is produced b. the person creating the externality does not bear all the costs, so too little of the good is produced c. the person creating the externality does not capture all the benefits, so too little of the good is produced d. the person creating the externality does not capture all the benefits, so too much of the good is produced

c. the person creating the externality does not capture all the benefits, so too little of the good is produced

if florida has a bumper orange crop, we can expect that a. the price of oranges will rise b. the number of oranges consumed will fall c. the price of grapefruit will fall if grapefruit and oranges are substitutes d. the demand for oranges will increase

c. the price of grapefruit will fall if grapefruit and oranges are substitutes

if the sudden discovery of titanium in colorado doubles the world's known supplies, we would expect a. a titanium surplus b. the quantity of titanium supplied to exceed the quantity demanded at the new price c the price of titanium to fall d. all of the above

c. the price of titanium to fall

when a good is taxed and either the demand or supply IS perfectly inelastic a. the quantity produced will rise b. the quantity produced will fall c. the quantity produced will not change d. the quantity produced may rise or fall, depending upon whether the producer or the consumer is taxed

c. the quantity produced will not change

if i tell you that the price of snowboards has risen and the quantity of snowboards on the market has fallen, you know that a. the law of demand has been violated b. the law of supply has dominated the law of demand c. the supply of snowboards has decreased d. the supply of snowboards has increased e. the demand for snowboards has decreased

c. the supply of snowboards has decreased

whether buyers or sellers are taxes doesn't matter because a. the tax will always be shared equally between buyer and seller b. the buyer will end up paying all of it anyway because the seller will just raise the price c. the tax will always be shared according to relative elasticities d. both buyers and sellers vote

c. the tax will always be shared according to relative elasticities

which of the following is the most important advantage to a society of using money rather than relying exclusively on barter? a. the use of money encourages people to diversify and learn to do more things for themsleves b. the use of money encourages people who want to exchange to become more closely acquainted c. the use of money lowers the cost of exchanging goods d. the use of money reduces opportunities for fraud and theft e. the use of money reduces selfishness because money in itself has no value

c. the use of money lowers the cost of exchanging goods

which of the following is the most important advantage to society of using money rather than relying exclusively on barter a. the use of money encourages people to diversify and learn to do more things for themselves b. the use of money encourages people who want to exchange to become more and closely related c. the use of money lowers the cost of exchanging goods d. the use of money reduces opportunity for fraud and theft e. the use of money reduces selfishness because money in itself has not value

c. the use of money lowers the cost of exchanging goods

if you've purchased an all you can eat ticket to a clam roast for $25, good economic thinking would tell you to take one last plateful if a. the value of that plateful to you is greater than $25 b. the value of that plateful to you is greater than or equal to $1 and you've already taken 24 platefuls that you value at $1 each c. the value of that plateful to you is greater than zero d. none of the above

c. the value of that plateful to you is greater than zero

if after many argument i agree not to play loud music after 10 pm, in return for your washing my car each week a. my music playing has created a positive externality b. your car washing creates a positive externality c. there are no longer externalities (the externality has been "internalized") d. the positive and negative externalities balance exactly

c. there are no longer externalities (the externality has been "internalized")

tom is twice as good as tim at producing widgets and three times as good at producing gadgets. therefore, a. tom and tim would not benefit from trade b. tim's cost of producing widgets is higher than his cost of producing gadgets c. tom's cost of producing widgets is higher than tim's cost of producing widgets d. tim has higher opportunity costs than tom e. there is not enough information to determine who has higher cost or if trade would be mutually beneficial

c. tom's cost of producing widgets is higher than tim's cost of producing widgets

japan can either make 50 pizzas or 100 beers. the US can make either 40 pizzas or 90 beers. as a result a. no trade is efficient because japan has a comparative advantage in both b. no trade is efficient because japan has an absolute advantage in both beer and pizza c. trade is efficient, with japan specializing in pizza and the US in beer d. trade is efficient, with japan specializing in beer and the US in pizza e. both a + b

c. trade is efficient, with japan specializing in pizza and the US in beer

in economics, the cost of something is a. out-of-pocket expense of obtaining it b. always measured in money c. what you must give up to get it d. always higher than people think

c. what you must give up to get it

in economics, the cost of something is a. the out-of-pocket expense of obtaining it b. always measured in money c. what you must give up to get it d. always higher than what people think

c. what you must give up to get it

your company is engaged in two project, one of which has cost $25 million to date, the other of which has cost $10 million to date. it can only afford to finish one of the projects. the expected benefit from each project is the same. which project should it finish? a. the $25 million project, because it has already invested so much b. the $10 million project, because it has cost so little thus far c. whichever can be completed at the least additional cost d. whichever will result in the lowest cost in total by the end of the project

c. whichever can be completed at the least additional cost

could there ever be too little pollution? a. no, because pollution is something we do not want b. only if people find some socially productive use for pollution c. yes if the marginal benefits of the additional pollution reduction are less than the marginal costs d. no, because pollution is bad for a person's health

c. yes if the marginal benefits of the additional pollution reduction are less than the marginal costs

can you ever have too much safety? a. no, because the more safe you are, the better off you are b. no, because people respond to incentives c. yes, if the marginal benefits of safety are less than the marginal cost d. yes, but only if the total benefits of safety are less than the total cost e. yes, because people usually don't want to be safer

c. yes, if the marginal benefits of safety are less than the marginal cost

if you fail to take into account the true joy that your singing in the shower gives to the neighbors a. you sing too much b. you sing too little c. you have a comparative advantage in singing d. there is a negative externality

c. you have a comparative advantage in singing

if you stop studying biology and spend an hour studying economics instead, we can conclude that a. you like studying economics better than studying biology b. you'd rather spend whatever time you have studying economics than studying biology c. you value one additional hour of studying economics more than one additional hour of studying biology d. you value studying economics more than studying biology e. all of the above

c. you value one additional hour of studying economics more than one additional hour of studying biology

if gary sells a shirt for $40 and his producer surplus from the sale is $23, his cost must have been a. $63 b. $40 c. $23 d. $17

d. $17

you see this deal at the supermarket: one frozen pizza for $3, two for $5. your marginal cost for the second pizza a. $5 b. $3 c. $2.50 d. $2 e. zero

d. $2

you get lost in the desert and become so thirsty you would pay $50 for a quart of cold gatorade. you stumble on a grocery store, buy your quart of gatorade, and emerge with a customer surplus of $47.25. how much did you pay for the gatorade a. $50 b. $47.25 c. $97.25 d. $2.75 e. impossible to determine from information given

d. $2.75

you want to purchase two pizzas. the price is $8 per pizza, 2 for $15, or 3 for $20. what will be the marginal cost to you of buying a third pizza? a. $20 b. $12 c. $7 d. $5 e. zero, if you don't plan to eat the third pizza (it becomes a sunk cost)

d. $5

i can type 2 papers or complete 6 math problems in an hour. you can type 3 papers or complete 12 math problems in an hour. the cost of one of your math problems is a. 12 papers b. 4 papers c. 1/3 of a paper d. 1/4 of a paper e. 1/12 of a paper

d. 1/4 of a paper

if price elasticity of demand for a good is -5, then a 10% increase in price would be expected to result in a a. 5% decrease in quantity demanded b. 5% increase in quantity demanded c. 10 % decrease in quantity demanded d. 50% decrease in quantity demanded e. 10% increase in quantity demanded

d. 50% decrease in quantity demanded

which of the following will increase the supply of wheat? a. an increase in the price of wheat b. an increase in the demand for wheat c. an increase in the price of corn d. a decrease in the price of fertilizer

d. a decrease in the price of fertilizer

which of the following will NOT increase the demand for porcelain tea sets? a. a rise in the price of china tea sets (a substitute) b. a fall in the price of tea (a complement) c. a rise in income, and porcelain tea sets are a normal good d. a fall in the price of porcelain e. all of the above will increase demand for porcelain tea sets

d. a fall in the price of porcelain

which of the following actions is most likely to create an externality? a. a new iphone producers a clearer picture than ever seen before b. pepsi cola improves its formula to give more enjoyment to its drinkers c. a book store orders a new book because patrons are requesting it d. a family decides to vacation in yellowstone park this summer e. all of the above equally

d. a family decides to vacation in yellowstone park this summer

which of the following is most likely to have been responsible for the rise in the cost of hiring university faculty? a. a decline in alternative employment opportunities for university faculty b. an increased emphasis on excellent teaching and research skills c. an increase in the time it takes to get a Ph.D. d. a rising demand for college faculty

d. a rising demand for college faculty

which of the following is an example of a scarce good? a. big macs d. TVs c. oil d. all are scarce goods

d. all are scarce goods

which of the following is an example of a scarce good? a. coca cola b. insulin c. diamonds d. all are scarce goods e. just b and c

d. all are scarce goods

for which of these goods would demand by the least elastic? a. breakfast cereal b. breakfast cereal at ingles c. kellogs breakfast cereal at ingles d. all breakfast foods

d. all breakfast foods

which of the following will increase the quantity of surfboards demanded? a. very good surf b. flal in beach user-fees c. fall in price of surfboards d. all of above

d. all of above

a supply curve shows a. the relationship between price and quantity supplied b. how many units of the good will be supplied at various prices c. cost of supplying the good. d. all of the above

d. all of the above

at the equilibrium price and quantity in a market a. the good is being produced by the lowest cost sellers b. the good is being purchased by the consumers who value it most c. total surplus is maximized d. all of the above

d. all of the above

at the intersection of the supply curve and the demand curve a. the quantity supplied equals the quantity demanded b. no buyer who is selling to pay the market prices goes without c. no seller willing to sell at the market price is unable to do so d. all of the above

d. all of the above

because information is costly to collect a. some potentially beneficial trades many not occur b. people have the incentive to gather information and sell it c. people are willing to pay for information d. all of the above

d. all of the above

for which of the following is there a market? a. orange juice b. pedigree dogs c. hiking in national forest land d. all of the above e. just a and b

d. all of the above

how can i raise the price of coming to class? a. charge an admission fee b. schedule class at inconvenient times c. give extra homework to anyone who shows up d. all of the above e. none of the above

d. all of the above

if my neighbors, without my consent, build a garage that leaves my yard in the shade, a. there is a negative exteranlity b. there is property rights problem- who owns the sun? c. they may not be taking costs imposed on me into account d. all of the above

d. all of the above

should you paint your house or hire a painter to do it for you? your comparative advantage as a painter increases as you a. finish all your class assignments so you have a lot of free time b. get laid off from your job c. improve your skills as a painter d. all of the above

d. all of the above

suppose clemson passes a law that forbids the construction of new houses within city limits. we would expect a. price of existing housing to rise b. price of houses around clemson to rise c. more building to occur in the area surrounding clemson d. all of the above

d. all of the above

suppose that an oil embargo raises the price of oil substantially, and, in response, a national security law is passed which forbids gas stations from increasing the price of gasoline to consumers. which of the following would we expect to see a. the quantity of gasoline demanded will exceed the quantity supplied b. the number of dollars charged at the pumps for a gallon of gasoline will be lower than would be the case without the law c. lines would form in front of gas stations d. all of the above

d. all of the above

the cost of a college education includes a. tuition paid b. textbooks purchased c. a foregone salary at alternative employment d. all of the above e. some but not all of the above

d. all of the above

the cost of skipping class a. is higher the day of an exam b. depends on how much you like the class c. is not affected by the tuition revenue you paid d. all of the above

d. all of the above

the development of a lower cost way of making wheat flour a. increases the supply of wheat flower b. decreases the demand for rye flour, if rye flour is a substitute for wheat flour c. increases the supply of wheat bread d. all of the above

d. all of the above

we know tat trade makes people better off because a. it is a voluntary activity b. people wouldn't engage in it otherwise c. it only occurs when there is potential for gains d. all of the above

d. all of the above

which of the following are marginal benefits associated with studying economics for an extra hour? a. higher grade in economics class b. higher overall GPA c. better chance of getting a good job after graduation d. all of the above

d. all of the above

which of the following costs will you consider when deciding whether it is efficient to take a hike one afternoon? a. the gas it takes to get to the hiking trail b. the studying you won't be able to do c. the wear and tear on your hiking boots d. all of the above e. just a and c

d. all of the above

which of the following is a resource allocation question? a. should i have coffee or tea this afternoon? b. should we log yellowstone or leave the land alone? c. should we log yellowstone or mine yellowstone? d. all of the above e. all of the above EXCEPT a

d. all of the above

which of the following is a resource allocation question? a. should the government allow mining or grazing on a parcel of public land? b. should new hours be built in san diego or las vegas or both, and how many? c. should my spouse and i have another child? d. all of the above e. all except c

d. all of the above

which of the following is a substitute for gasoline? a. ethanol b. a car pool c. more fuel efficient cars d. all of the above

d. all of the above

which of the following is characteristic of the market equilibrium a. those most willing to pay obtain the goods b. those with the lowest costs sell the good c. the gains from trade are as large as possible d. all of the above

d. all of the above

which of the following will increase the quantity of coffee consumed? a. fall in the price of coffee following a great coffee crop in colombia b. a rise in the price of tea (a substitute) c. a fall in the price of cream (a complement) d. all of the above e. just b + c

d. all of the above

which of the following will NOT increase the quantity of coffee demanded? a. the discovery that coffee cures cancer b. a rise in income and coffee is a normal good c. a great coffee harvest d. all of the above will increase the demand for coffee

d. all of the above will increase the demand for coffee

which of the following will not increase the demand for rice (will not shift the demand curve) a. the discovery that eating rice reduces the change of heart disease b. an increase in the demand for rice cakes c. an increase in the price of potatoes (a substitute) d. an unusually good rice harvest e. all of the above will increase the demand for rise

d. an unusually good rice harvest

a rise in income will tend to a. increase the demand for a product b. decrease the demand for a product c. leave demand for a product unchanged d. any of the above, depending on the product and your preferences

d. any of the above, depending on the product and your preferences

if a buyer values a product at $19 and a seller's opportunity cost of selling a product is $14, the gains from trade a. can't be determined without knowledge of the price b. are $19 c. are $14 d. are $5 e. are $33

d. are $

if a buyer values a product at $28 and a seller's opportunity cost of providing the product is $12, the gains from trade a. can't be determined without knowledge of the price b. are $28 c. are $12 d. are $16 e. are $40

d. are $16

if you decide to go to a movie this evening rather than study economics, you thereby demonstrate that a. you don't care about getting good grades b. you hate economics c. you would rather have fun than fulfill your responsibilities d. at the margin, you value two hours of movie watching more than two hours of studying economics e. none of the above

d. at the margin, you value two hours of movie watching more than two hours of studying economics

trade between the US and thailand a. is a losing proposition for thailand because US workers are more productive b. is a losing proposition for the US because thailand as cheaper labor c. is like a sports contest: one side wins and the other side loses d. benefits both the US and thailand

d. benefits both the US and thailand

the demand curve represents --- while the supply curve represents --- a. increases, decreases b. decreases, increases c. prices, quantities d. benefits, costs

d. benefits, costs

when the US engages in trade with china a. china reaps economic benefits and the US loses b. the US reaps economic benefits and china loses c. it is an equal tradeoff, so neither side wins or loses d. both china and the US reap economic benefits

d. both china and the US reap economic benefits

if labor in mexico is less productive than labor in the US in ALL industries, a. neither nation can benefit from trade b. mexico can benefit from trade but the US cannot c. mexico will not have a comparative advantage in any good d. both nations can benefit by specializing in goods for which they have a comparative advantage

d. both nations can benefit by specializing in goods for which they have a comparative advantage

if the supply of tea increases, what would expect to happen in the market for coffee (a substitute)? a. the price to rise and quantity to fall b. the price to fall and quantity to rise c. both price and quantity to rise d. both price and quantity to fall e. price to fall, but the effect on quantity to be uncertain

d. both price and quantity to fall

when you go to the supermarket you find that there is exactly the kind of deodorant you wanted on the shelf. this is because a. safeway's managers have your best interests at heart b. safeway carried out an extensive survey c. someone in the central planning office in DC told them to stock more doederant d. changes in price spurred by the actions of many different consumers indicate to safeway the level of demand

d. changes in price spurred by the actions of many different consumers indicate to safeway the level of demand

if a legal ceiling price causes the quantity of a good demanded to be more than quantity supplied a. competition among both buyers + sellers is prvented b. competition among buyers is prevented c. competition among sellers is prevented d. competition among buyers will raise the non-monetary costs of obtaining the good

d. competition among buyers will raise the non-monetary costs of obtaining the good

which of the following is least likely to increase the number of burritos that Moe's sells? a. they hold a burrito sale b. a new formula that makes their burritos even more delicious c. chipotle increases its prices d. consumer income falls, and burritos are a normal good e. all will increase the number of burritos sold

d. consumer income falls, and burritos are a normal good

if we see that the price of a good has risen and the quantity of the good demanded has risen as well, we know that a. quantity supplied must have gone down b. this is a giffen good c. supply has increased d. demand has increased

d. demand has increased

if price and quantity both increase, you know that a. the law of demand has been violated b. supply must have increased c. supply must have decreased d. demand must have increased e. demand must have decrease

d. demand must have increased

if you read in the newspaper that the price of a product has risen, and that the quantity of the product sold in the market has risen as well, you know that a. the law of demand has been violated b. the newspaper story must be wrong c. supply must have shifted d. demand must have increased e. demand must have decreased

d. demand must have increased

jane has a tree in her yard whose roots are beginning to break the plumbing line to dick's house. suppose that the benefits of having a tree is worth $800 to jane and that dick is willing to pay up to $1000 to protect his plumbing. a possible private solution to this problem is that a. jane pays $900 toward dick's plumbing repair b. jane pays $1100 toward dick's plumbing repair c. dick pays jane $1100 to destroy the tree d. dick pays jane $900 to destroy the tree e. any of the above

d. dick pays jane $900 to destroy the tree

suppose that the supply of rootbeer (a complement) increases and the price of ice cream (an input) falls. what would you expect to happen in the market price and quantity of ice cream? a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain d. both equilibrium price and quantity would increase d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain e. equilibrium quantity would decrease, but the impact on the equilibrium price would be uncertain

d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain

which of the following is not an assumption of the economic model? a. ppl respond to incentives b. goods are scarce c. ppl make decisions by comparing marginal benefits and marginal costs d. the only costs that matter are opportunity costs e. all are assumptions of the economic model

e. all are assumptions of the economic model

if congress placed a luxury tax on yachts a. the tax would raise a lot of revenue if the demand for yachts is relatively inelastic b. the tax would raise a lot of revenue if wealthy yacht buyers don't pay much attention to price c. the tax would raise very little revenue if there are close substitutes for a new american-built yacht d. the tax would raise very little revenue if wealthy people can hire lawyers to avoid paying taxes e. all of the above

e. all of the above

if frost kills a significant amount of the brazilian coffee crop, we can expect a. the price of coffee to rise b. the quantity of coffee consumed to fall c. the price of tea to rise, if coffee and tea are substitutes d. the supply of coffee to decrease (shift to left) e. all of the above

e. all of the above

price are important because they a. bring quantity demanded and quantity supplied into balance b. help determine who obtains scarce goods c. help determine how to allocate our scarce resources d. coordinate the choices made by consumers and producers e. all of the above

e. all of the above

suppose a new fee will be charged to developers of open land within city limits. we can except this to a. decrease the demand for open land in city limits b. increase the demand for open land outside city limits c. increase the cost of housing within city limits d. decrease the price farmers within city limits can sell their land for e. all of the above

e. all of the above

the demand for snowboard depends upon a. the price of lift tickets b. the price of skis c. how much people like snowboarding d. how much people like skiing e. all of the above

e. all of the above

which of the following will increase the market price of coffee? a. discovery that coffee cures cancer b. a terrible storm in brazil that destroys half the coffee crop c. an increase in price of tea (substitute) d. a fall in the price of cream (complement) e. all of the above

e. all of the above

which of the following will increase the number of umbrellas sold? a. incomes fall + umbrellas are an inferior good b. the price of raincoats rises and raincoats are a substitute for umbrellas c. extra-rainy weather d. a fall in price of umbreallas e. all of the above

e. all of the above

which of the following will increase the demand for mahogany desks? a. rise in income, and mahogany desks are a normal good b. fall in price of mahogany c. sudden fad for mahogany furniture d. all of the above e. all of the above but b

e. all of the above but b

suppose that the price of a substitutes for good X falls and the price of the raw materials used to manufacture good X increases. what would you expect to happen in the market for good X? a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain c. both equilibrium price + quantity would increase d. equilibrium quantity would increase, but the impact on equilibrium price would be uncertain e. equilibrium quantity would decrease, but the impact on equilibrium price would be uncertain

e. equilibrium quantity would decrease, but the impact on equilibrium price would be uncertain

you buy an all-day ski pass for $50, planning on taking 10 runs and getting $100 worth of enjoyment. after four runs, you find you're not enjoying yourself and want to go home. according to the economic model, you should a.take at least one more run to get your money's worth b. take a fifth run only if the benefit from it is at least $10 c. take more runs unless you've gotten at least $50 worth of enjoyment already d. keep skiing until you've taken 10 runs e. go home

e. go home

because the demand for wheat tends to be inelastic, the development of a new, more productive hybrid wheat would tend to a. increase the total revenue of wheat farmers b. decrease the total revenue of wheat farmers c. weaken the demand for wheat d. decrease the supply of wheat e. increase the elasticity of demand

e. increase the elasticity of demand

if a frost destroys most of the florida orange crop a. the supply of orange juice will decrease b. the price of oranges will rise c. he demand for oranges will decrease d. all of the above e. just a + b

e. just a + b

which of the following will decrease the supply (shift the supply curve) of chocolate cakes a. a rise in the price of chocolate a. a rise in the price of flour c. the news that eating chocolate cake causes cancer d. all of the above e. just a + b

e. just a + b

which of the following will increase the quantity of brass key rings supplied? a. rise in demand b. rise in price c. improvement in key-ring making technology d. all of the above e. just a + c

e. just a + c

the cost of letting senior citizens into a $5 movie for free a. is higher on a saturday night than a monday night b. is lower is the senior citizen would not have gone to the movie without the free pass c. is always $5 d. all of the above e. just a and b

e. just a and b

you are considering renting a car and driving to seattle for christmas. which of the following would be marginal costs that you will consider in making your decisions a. the car rental price b. gasoline c. wear and tear on the car d. all of the above e. just a and b

e. just a and b

fishing to the point of extinction of the species occurs primarily because a. fisherman care only about the current benefits and not about the future b. the technology of fishing makes it more efficient to catch huge numbers of fish at one time c. consumers eat fish without considering the marginal costs d. all of the above e. none of the above

e. none of the above

if Switzerland can make 35 pounds of chocolate or 5 watches while Albania can make 6 pounds of chocolate or 1 watch a. no trade will be profitable for switzerland b. no trade will be profitable for albania c. Albania has higher opportunity costs than Switzerland d. Switzerland has higher opportunity costs than Albania e. none of the above

e. none of the above

in the provision of which of the following will there NOT be a free-rider problem? a. national security b. police protection c. fire departments d. charity e. none of the above

e. none of the above

movie-goers who are willing to put up with long lines at a cinema to get a lower price are a. not rational b. haven't evaluated the marginal cost of the time they give up c. would give up any amount of time to save a little money d. all of the above e. none of the above

e. none of the above

which of the following is/are true? a. a reduction in the price of apricots will increase he demand for apricots b. a reduction in the price of apricots will decrease he demand for apricots c. an increase in the consumer income will decrease the demand for apricots if apricots are a normal good d. all of the above e. none of the above

e. none of the above

which of the following will increase the market price of chocolate eclairs? a. the discovery that chocolate causes cancer b. a much larger than expected chocolate crop c. a fall in the price of cupcakes (a substitute) d. a rise in the price of milk (a complement) e. none of the above

e. none of the above

an airline is considering adding a daily flight from greenville to denver. assuming that it has a plane that would otherwise sit on the runway, which of the following costs should be counted in deciding whether adding the flight is efficient? a. the cost of the pilots and flight attendants who must fly new route b.the payment on the loans it took outto buy plane c. the cost of jet fuel used between greenville + denver d. all of the above b. only a + c

e. only a + c

the law of demand would lead you to expect that if the price of butter goes up, a. people will complain b. people will no longer buy butter c. a butter surplus will occur d. a butter shortage will occur e. people will buy more margarine

e. people will buy more margarine

the quantity supplied will increase with an increase in price only if supply is not a. elastic b. inelastic c. unit elastic d. perfectly elastic e. perfectly inelastic

e. perfectly elastic

the form of rationing we see most often in our society is a. queuing b. lotteries c. allocating goods through the political process d. allocating goods according to need e. price

e. price

suppose that now-illegal drugs are legalized, increasing both the supply and demand. we would expect a. price to go up and quantity to go down b. price to go down and quantity to go up c. both price and quantity to go up d. price to go up, but the effect on quantity to be uncertain e. quantity to go up, but the effect on price to be uncertain

e. quantity to go up, but the effect on price to be uncertain

a good is "scarce" when a. demand is greater than supply b. quantity demanded is greater than quantity supplied c. it is very rare d. there is a shortage e. something must be given up to get more of it

e. something must be given up to get more of it

our principle measure of economic welfare is a. price b. quantity c. GDP d. inflation e. surplus

e. surplus

if an unusually cold summer discourages people from eating ice cream while lowering the cost of storing ice cream, we would expect a. the equilibrium price and quantity of ice cream to rise b. the equilibrium price and quantity of ice cream to fall c. the equilibrium price to rise, but the effect on quantity to be uncertain d. the equilibrium quantity to rise, but the effect on price to be uncertain e. the equilibrium price to fall, but the effect on quantity to be uncertain

e. the equilibrium price to fall, but the effect on quantity to be uncertain

the price of marshmallows (a complement to chocolate consumption) rises while war in the oompaloopia disrupts international deliveries of chocolate. what happens to the equilibrium price and quantity of chocolate? a. the equilibrium price will increase, but the effect on equilibrium quantity is uncertain b. the equilibrium price will decrease, but the effect on equilibrium quantity is uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity will increase, but the effect on equilibrium price is uncertain e. the equilibrium quantity will decrease, but the effect on equilibrium price is uncertain

e. the equilibrium quantity will decrease, but the effect on equilibrium price is uncertain

suppose the price of hershey bars (a substitute) falls and the price of peanuts (an input) rises. what would you expect to happen to the price and quantity of snickers bars on the market? a. the equilibrium price would increase, but the effect on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the effect on equilibrium quantity would be uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity would increase, but the effect on equilibrium price would be uncertain e. the equilibrium quantity would decrease, but the effect on equilibrium price would be uncertain

e. the equilibrium quantity would decrease, but the effect on equilibrium price would be uncertain

sunk costs are irrelevant to economic decision because a. they don't involve monetary expenditures, merely opportunity costs b. opportunity costs with rise the quantity supplied c. they don't affect a firm's profit d. they don't reflect what people actually value e. they cannot be affected by the decision in question

e. they cannot be affected by the decision in question

in the absence of trade, what does a smoke fish cost in england? a. $2 per pound b. there is not enough info to say c. one of norway's fish d. two of norway's fish e. two umbrellas

e. two umbrellas

if you pay $400 for a season pool pass at a private club, the marginal cost to you of swimming on any given weekday will be a. $400 b. $10 if you swim 40 times c. $20 if the swim season lasts twenty weeks d. $3 if the swim seasons last 21 weeks and there are 7 days in a week e. zero

e. zero

a hurricane destroys half of california orange groves. what happens to the equilibrium price and quantity of oranges? a. price rises, quantity falls b. price falls, quantity rises c. price + quantity rise d. price + quantity fall e. price falls, effect on quantity is uncertain

price rises, quantity falls