exam 1 study questions
according to the law of demand, consumers buy more of a good as
that good's price decreases
all else being equal, if supply decreases
the equilibrium price will rise and the equilibrium quantity will fall
if both supply and demand increase simultaneously, we will be certain that
the equilibrium quantity will increase
If we observe that gasoline prices rise after the government lowers the highway speed limit, then we can conclude that these two ___ are ___, but we cannot conclude that ___ exists between them
variables negatively related causation
suppose that a given year the rate of inflation is 3 percent and the nominal interest rate is 2 percent. The real interest rate is:
-1 percent real interest is nominal minus inflation
which of the following leads to a rightward shift of the demand curve? an increase in the good's own price a decrease in the number of consumers an expectation of an increase in the good's price in the future A decrease in the price of a substitute
an expectation of an increase in the good's price in the future
when solving for opportunity cost: lets say we have apples and strawberries, when looking for the opportunity cost of picking apples we ____. When looking for the opportunity cost of picking strawberries we ___.
divide strawberries / apples divide apples / strawberries
gains from trade occurs as a result of
economic interaction
In what way do economic models differ from models in the physical science
economic models attempt to explain human behavior
What is the relationship? Variable X increases but variable Y remains unchanged? Variable X decreases when variable Y decreases Variable X decreases when variable Y increases
No relationship positive relationship negative relationship
which of the following causes a rightward shift to the supply curve? a gov tax on production an increase in the price of the good being sold a decrease in the number of producers a decrease in the cost of production
a decrease in the cost of production
quantity response is higher with a ___ slope, not a ___ slope
flatter steep
the key elements of a market economy include all of the following except: free exchanges of goods and services freely determined prices government support of market supply property rights
government support of market supply
slope shows
growth rate
if a firm adopts a technology that can increase production without increasing labor or other resource inputs, then
it will reach a point that is previously unattainable
demand is ___ supply is ___
negative positive
ceteris paribus means
other things being equal
surplus occurs when
the quantity supplied exceeds the quantity demanded at the current price level