ECON212 - Practice Quiz 1

Which factor is MOST likely to shift the supply curve for milk to the left? a) a tax on each gallon of milk produced b) an increase in household income, milk being a normal good c) a decrease in the price of feed given to dairy cows d) new dairy farms entering the market

a

Yoghurt is an important ingredient in the production of frozen yoghurt. If the price of yoghurt increases, then one would expect, holding all other things constant: a) the supply curve for frozen yoghurt to shift leftward b) the supply curve for frozen yoghurt to shift rightward c) no change in the supply curve for frozen yoghurt d) a movement along the supply curve for frozen yoghurt, resulting in more frozen yoghurt supplied

a

You like to read GQ and Golf Digest. You have only $6 to spend and can buy only one magazine, so you only buy golf digest. Which economic concept does this statement BEST represent? a) scarcity b) equilibrium c) the marginal principle d) specialization

a

(see #12) a) b) c) d)

c

(refer to #4) a) b) c) d)

a

(see 14) a) b) c) d)

a

A seller in a perfectly competitive market cannot a) raise the market price of a product b) increase the amount he supplies c) decrease its marginal cost d) leave the industry

a

An individual supply curve is a) a graph with quantities of a product that a seller is willing to supply at different price points b) a graph that plots how much a seller produces at different points in time c) a graph that plots the quantities of an item that a buyer plans to buy at different prices d) the quantity a seller is willing to supply at one particular price

a

Dental services can be classified as a) normal goods b) expenses that do not change with income c) inferior goods d) fixed in their demand

a

Diane Jacobs is a student studying economics and currently working on her class schedule for next semester. When she considers taking another economics course rather than taking a math class in the same time slot, she is acknowledging that dependencies exist a) between her own choices b) between people or businesses in the same market c) between markets d) through time

a

For normal goods, a) a tax cut on consumer income will lead to a rise in their demand b) a tax cut on consumer income will lead to a fall in their demand c) changes in consumer income do not affect their consumption d) most consumers will choose to purchase the good regardless of income changes

a

How will the demand for Gucci shoes change today, if the government decides to tax designer shoes next year? a) the demand for Gucci shoes will shift to the right today b) there will be no impact on the demand for Gucci shoes today c) people will stop buying Gucci shoes today d) the demand for Gucci shoes will shift to the left today

a

If Canadian consumers expect the value of the Canadian dollar to depreciate against the US dollar (the Canadian dollar becomes weaker against the dollar), what impact would we expect this to have on Canadians' demand for American made products? a) the demand for American-made times would fall b) the demand for American-made items would not change c) the demand for American-made items would rise d) the demand for American made items would double

a

In the local market for coffee, if a newly opened Starbucks competes with two local coffee shops (the Java Joint and Cup O Joe), the _____ curve shifts to the _______ a) supply, right b) demand, left c) supply, left d) demand, right

a

Spaghetti and salad are related goods. Holding everything else constant, if the price of spaghetti decreases and the demand for salad increases, spaghetti and salad are probably: a) complements b) substitutes c) inferior d) normal

a

The Mile End Deli serves traditional delicatessen food in Brooklyn, New York. Which cost is MOST likely fixed at the deli? a) the chairs customers sit on b) the rye bread used to make pastrami sandwiches c) the tomato sauce used to make soups d) the staff

a

The rational rule summarizes the marginal principle. It says that if something is worth doing, keep doing it until your marginal a) benefits equal your marginal costs b) benefits exceed your marginal costs c) benefits are zero d) costs are less than your marginal benefits

a

see 44 a) b) c) d)

a

Asking "or what?" allows the _____ principle to be analyzed as a simple question a) cost-benefit b) opportunity cost c) marginal d) interdependence

b

Diminishing marginal product occurs when: a) each additional unit of an input adds more total output than the previous unit b) each additional unit of an input adds less to total output than the previous unit c) the marginal product of an input is increasing at a decreasing rate d) the total product decreases

b

German firms import machinery from the UK. What will happen to the supply of German goods manufactured using machinery from the UK, if the value of the euro falls against the British pound? a) the quantity supplied will rise b) the supply curve will shift to the left c) the supply curve will shift to the right d) there will be no effect on the supply

b

Juan McDonald is willing to pay 900 for a new iPad. He offers to pay 800 for an iPad at the Apple store. It costs Apple 700 to produce this iPad. A voluntary economic transaction between Juan and Apple ______ occur because ____ would be better off due to the transaction. a) will; neither Juan nor Apple b) will; both Juan and Apple c) will not; only Juan d) will not; only Apple

b

See #22 a) b) c) d)

b

Spaghetti and lasagna are substitutes. Holding all other things consistent, this means that if the price of spaghetti increases, the demand for a) spaghetti will increase b) lasagna will increase c) both spaghetti and lasagna will increase d) lasagna will decrease

b

The problem of determining what goods and services society should produce: a) exists because we can produce any amount of a good we need or want, making choice difficult b) exists because there are not enough resources to provide all the goods and services people want c) would not exist if all levels of government would agree to supply goods and services to those that do not have enough d) would not exist if a central planning bureau were to decide how to allocate resources

b

see 42 a) b) c) d)

b

A market where no single buyer or seller can influence the price is a: a) buyer's market b) seller's market c) competitive market d) factor market

c

According to the interdependence principle, when faced with a decision, you should ask what a) else might my decision affect? b) else might affect my decision? c) else might my decision affect and what else might affect my decision? d) past decisions might my decision effect?

c

Rising input costs lead to: a) decreased profitability for a seller b) increased supply of the item in the market c) rising marginal costs for a seller d) lower opportunity costs of producing the item

c

See 32 a) b) c) d)

c

Substitutes in production a) are always priced the same b) use substitute inputs in production c) allows a business to have alternative uses of its resources by manufacturing other products using the same inputs d) allows a business to produce goods together

c

The interdependence principle: a) is the same as the cost-benefit principle b) refers to the marginal benefit of consuming additional units of an item c) implies that buyers decisions are affected by many factors other than the price of an item d) implies that consumers depend on each other to make purchase decisions in the market

c

The typical supply curve illustrates that: a) other things equal, as price rises, the quantity supplied of the good fals b) other things equal, as price rises, the supply of good falls c) other things equal, as price rises, the quantity supplied of the good rises d) other things equal, as price rises, the supply of good rises

c

Which factor would cause a DECREASE in the supply of soy candles? a) a decrease in employee wages manufacturing soy candles b) an increase in the number of firms making soy candles c) expectations that the price of soy candles will rise d) an advance in the technology of producing soy candles

c

Which factor would cause a supply curve to shift to the LEFT? a) an increase in the number of firms selling a good b) a technological improvement in the production of a good c) an increase in the cost of an input used to produce a good d) an increase in the price of a good

c

______ forces us to make choices a) opportunity cost b) marginal decision making c) scarcity d) market failure

c

see 25 a) b) c) d)

c

see 26 a) b) c) d)

c

see 40 a) b) c) d)

c

see 48 a) b) c d

c

(see #13) a) b) c) d)

d

Dependencies over time reflect the fact that a) you have limited resources b) society has limited resources c) resources are spread across varying markets d) resources can be spread across time

d

Diane Jacobs is a student studying economics and currently working on her class schedule for next semester. When she considers taking another economics course and how to meet pre-reqs for future economics courses, she is acknowledging dependencies that exist: a) between her own choices b) between people or businesses in the same market c) between markets d) through time

d

Economists convert costs and benefits into money equivalents by evaluating an individual's a) sunk costs b) marginal benefits c) opportunity costs d) willingness to pay

d

Emma spends $40,000 for one year's tuition at university. The opportunity cost of one year at university for Emma is: a) $40,000 b) whatever she would have purchased with the $40,000 had she not attended university c) whatever she would have earned had she not attended university d) whatever she would have purchased with the $40,000 plus whatever she would have earned had she not attended university

d

Jane goes to an all-you-can-eat restaurant and makes three trips to the buffet. After finishing food from her third trip, she felt sick and throws up. Which of the following economic explanations best matches Jane's situation? a) Jane's marginal benefit from eating the third plate was positive but less than that of the second plate b) Jane's marginal benefit from her third trip to the buffet was larger than her marginal benefit from her second trip c) Jane was charged extra for the third plate at the buffet d) Jane's marginal benefit from eating the third plate was negative

d

The principle that your best choice depends on your other choices, the choices others make, developments in other markets, and expectations about the future is known as the ______ principle a) cost-benefit b) opportunity cost c) marginal) d) interdependence

d

Which of the following scenarios does NOT depict a rational seller? a) The Flowery Bower calculates the marginal cost of a bouquet of red roses as $10 and sells it at $45. b) United Airlines determines the marginal cost of an extra passenger to be $55 and sells a discount seat for $150 c) An auto-rickshaw driver in New Dehli, India, calculates a trip to have a marginal cost of 350 rupees and accepts a ride request for 500 rupees d) Main Street Bakery calculates the marginal cost of a multilayer red velvet cake at $9 and sells it for $8

d

see 27 a) b) c) d)

d

(see #20) a) b) c) d)

b

A product with a network effect is a) a drive-through window at a fast food restaurant b) a social media tool such as WeChat in China c) a broadband telecommunications network d) the customer service line at the Department of Motor Vehicles

b