intro to econ

11 Joe is willing to pay $4 for his first slice of pizza and $3 for his second slice of pizza. If the market price is $2, on his two slices of pizza Joe receives a total consumer surplus of A)$3. B) $1. C) $2. D) $4.

A) $3

The minimum wage A) Is a Price floor B) Will cause a shortage of labor C) Will reduces demad for labor D) All of the above

A) Is a Price floor

Which of the following would NOT shift the demand curve for pizza? A) a change in the price of pizza B) ) an increase in income C) a decrease in the price of wrapsD) a change in tastes for pizza

A) a change in the price of pizza

The law of diminishing returns states that as A) a firm uses more of a variable input, given the quantity of fixed inputs, the marginal product of the variable input eventually diminishes. B) a firm uses more of a variable input, given the quantity of fixed inputs, the firm's average total cost will decrease eventually. C) the size of a plant increases, the firm's fixed cost increases. D) the size of a plant increases, the firm's fixed cost decreases.

A) a firm uses more of a variable input, given the quantity of fixed inputs, the marginal product of the variable input eventually diminishes.

The law of diminishing returns states that as A) a firm uses more of a variable input, given the quantity of fixed inputs, the marginal product of the variable input eventually diminishes. B) a firm uses more of a variable input, given the quantity of fixed inputs, the firm's average total cost will eventually decrease. C) the size of a plant increases, the firm's fixed cost increases. D) the size of a plant increases, the firm's fixed cost decreases.

A) a firm uses more of a variable input, given the quantity of fixed inputs, the marginal product of the variable input eventually diminishes.

Which of the following would shift the demand curve for turkey? A) an increase in income B) a change in the price of a turkey C) a decrease in the price of turkey feed D) a change technology used in raising turkeys

A) an increase in income

The price will fall and the equilibrium quantity might increase, decrease, or stay the same when the A) demand for a good decreases and the supply of it increases. B) demand for a good increases and the supply of it decreases. C) demand and the supply of a good both decrease. D) demand and the supply of a good both increase

A) demand for a good decreases and the supply of it increases.

If both the demand and supply increase, the equilibrium quantity A) increases and the effect on the equilibrium price is indeterminate. B) decreases and the equilibrium price rises. C) decreases and the effect on the equilibrium price is indeterminate. D) increases and the equilibrium price falls.

A) increases and the effect on the equilibrium price is indeterminate.

8) When a private market uses resources inefficiently, ________ exists. A) market failure B) resource failure C) monopoly always D) an externality

A) market failure

Consumer purchases of steak increases as income increases, this means that steak is a(n) A) normal good B)complementary good. C) inferior good. D) consumer good.

A) normal good

4) When the production possibilities frontier bows outward from the origin, A) opportunity costs are increasing as more of a good is produced. B) opportunity costs are decreasing as more of a good is produced. C) some of society's resources are unemployed. D) opportunity costs are constant.

A) opportunity costs are increasing as more of a good is produced

Demand is elastic when a price ________ results in total revenue ________. A) rise, decreasing B) fall, decreasing C) fall; remaining constant D) rise, increasing

A) rise, decreasing

31 Economic growth can be pictured in a production possibilities frontier diagram by A) shifting the production possibilities frontier outward. B) making the production possibilities frontier less bowed out. C) making the production possibilities frontier more bowed out. D) shifting the production possibilities frontier inward.

A) shifting the production possibilities frontier outward.

Marginal cost is calculated as A) the increase in total cost divided by the increase in output. B) the increase in total cost divided by the increase in labor, given the amount of capital. C) total cost divided by output. D) total cost minus total fixed cost.

A) the increase in total cost divided by the increase in output.

Marginal cost is calculated as A) the increase in total cost divided by the increase in output. B) the increase in total cost divided by the increase in labor, given the amount of capital. C) total cost divided by output. D) total cost minus total fixed cost. .

A) the increase in total cost divided by the increase in output.

The short run is a period of time in which A) the quantity used of at least one resource is fixed. B) resource prices are fixed. C) the quantities used of all resource are fixed. D) output prices are fixed.

A) the quantity used of at least one resource is fixed.

5) During the last decade, the price of a computer fell every year and the quantity sold increased every year. This experience suggests that A) the supply curve shifted rightward. B) the law of supply was definitely contradicted. C) the demand curve shifted rightward. D) the law of demand was definitely contradicted.

A) the supply curve shifted rightward

9) If a 20 percent increase in the price of a used car results in a 10 percent decrease in the quantity of used cars demanded, then the price elasticity of demand equals A)1.0. B) 0.5. C) 10.0. D) 2.0.

B) 0.5

To meet increased demand for its good, a firm decides to hire a few high-skilled workers rather than hire many low-skilled workers. The firm is answering the ________ question. A) "when" B) "how" C) "scarcity" D) "what"

B) How

As income increases, families have less children A) Because children are an inferior good B) Only if the mother's income increase, indicating children are not an inferior good C) Only if father's income increase, indicating children are an inferior good D) And spend less on children and more on other living expenses

B) Only if the mother's income increase, indicating children are not an inferior good

All societies must answer basic questions. Which of the questions is not one of the basic questions? A) What to produce? B) When to produce? C) Who gets the goods?D) How to produce it?

B) When to produce?

The marginal product of labor is the A) output level above which the rate of total product per unit of labor falls. B) change in output resulting from a one-unit increase in labor. C) maximum output attainable with fixed factors when labor is the only variable factor. D) output level above which the slope of the total product curve falls.

B) change in output resulting from a one-unit increase in labor.

Which is not a market structure A) Perfect competition B) conglomerates C) monopoly D) all are market structures

B) conglomerates

The decrease in consumer surplus and producer surplus that results from an inefficient level of production is called the A) external benefit. B) deadweight loss. C) big tradeoff. D) external cost.

B) deadweight loss.

Economic rentA) all answers are correct B) is payments in excess of opportunity cost C) is payments less than the opportunity cost D ) is payments made to land factors or production

B) is payments in excess of opportunity cost

Consumer choice in factor markets includes amounts of A) food to buy B) labor services to sell C)Agricultures goods to sell D)All of the above

B) labor services to sell

Economic rent isA) Payments for the use of real estate B) payments above opportunity costs C) compensation for capital servicesC) compensation for natural resources

B) payments above opportunity costs

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium price of beef willA) rise.B) perhaps rise, fall, or stay the same, but more information is needed to determine which it does.C) stay the same.D) fall.

B) perhaps rise, fall, or stay the same, but more information is needed to determine which it does.

If the cross elasticity of demand between goods A and B is negative, A) A and B are substitutes. B) the demands for A and B are both price inelastic. C) the demands for A and B are both price elastic. D) A and B are complements. .

B) the demands for A and B are both price inelastic.

2) The law of diminishing marginal utility predicts A) Utility will decrease as more of a good are consumed B) the increase in utility will decrease as more of a good are consumed C) People will use all their income for goods, services and financial asset purchases.D) all answers are correct

B) the increase in utility will decrease as more of a good are consumed

Heidi quit her job as a chef making $60,000 per year to start her own restaurant. The first year, Heidi's restaurant earned $160,000 in revenue. Heidi pays $80,000 per year in wages to the waitresses and hostess, $60,000 per year to buy food, etc. What is Heidi's economic profit for the year? A) $20,000 B) -$10,000 C) -$40,000 D) $80,000

C) -$40,000

If the elasticity of supply is 5, a 10 percent increase in the price of a good leads to a A) 5 percent decrease in the quantity demanded.B) .5 percent increase in the quantity supplied.C) 50 percent increase in the quantity of supply.D) 2.5 percent decrease in the quantity demanded.

C) 50 percent increase in the quantity of supply.

One observes that the equilibrium price of T-shirt increases and the equilibrium quantity falls. Which of the following best fits the observed data? A) An decrease in supply with demand constant B) An increase in demand with supply constant C) A decrease in demand with supply constant D) An increase in demand coupled with an increase in supply

C) A decrease in demand with supply constant

16). Markets may not be efficient because _________, which provides a reason for the government to be involved in the economy. A)All answers are correct B) Public goods C) Externalities D) Lack of competition

C) Externalities

Economics is best defined as the study of how peopleA) choose abundance over scarcity. B) use their infinite resources.C) make choices to cope with scarcity. D) attain wealth.

C) make choices to cope with scarcity.

Deadweight loss from a tax increase is the A) Reduction in consumer surplusB) reduction in producer surplusC) reduction is the sum of producer and consumer surplusD) increase in tax revenues equal to the reduction in consumer surplus

C) reduction is the sum of producer and consumer surplus

If the price is above the equilibrium price, then there is aA) shortage, and market forces will operate to lower price.B) shortage, and market forces will operate to raise price.C) surplus, and market forces will operate to lower price.D) surplus, and market forces will operate to raise price.

C) surplus, and market forces will operate to lower price.

The opportunity cost of any action is A) the time required but not the monetary cost. B) the monetary cost but not the time required. C) the highest-valued alternative forgone. D) all the possible alternatives forgone.

C) the highest-valued alternative forgone.

Opportunity cost is best defined asA) how much money and time it takes to consume something.B) the total of all other alternatives that are given up in making a choice.C) the value of the next best alternative that is given up in making a choice.D) how much money is paid for something.

C) the value of the next best alternative that is given up in making a choice

The _____ and the________ are among many examples of minority groups who have risen economically, despite being the targets of bias and discrimination.

Chinese in Malaysia , Jews in Eastern Europe

Joe is willing to pay $10 for 1 scoop of ice cream, $6 for a 2nd scoop, $3 for a 3rd scoop and $1 for the 4rdscoop. If he pays $3 for ice cream, his consumer surplus equals A) $7 B) $3 C) $0 D) $10

D) $10

Methods all societies can use to expand consumption of all goods includesA) Move to efficient production B) Increase factors of production C) Specialize and trade D) All of the above

D) All of the above

13) Which of the following goods would have the smallest elasticity of demand? A) A bottle of Bayer Aspirin sold to someone without a headache. B) Mobil premium gasoline C) An education at Harvard Law School sold to recent college graduates. D) Insulin sold to diabetics.

D) Insulin sold to diabetics.

10) Bobby consumes only chocolate and vanilla ice cream and he is spending all of his income. His marginal utility of chocolate is 300 and his marginal utility of vanilla is 200, and the price of chocolate is $2.00 per scoop and the price of vanilla is $1.00 per scoop. To maximize his utility, Bobby should A) buy more chocolate and less vanilla. B) buy only chocolateC) not change his purchases between chocolate and vanilla. D) buy more vanilla and less chocolate.

D) buy more vanilla and less chocolate.

When long-run average costs decrease as output increases, there are A) diseconomies of scale. B) constant returns to scale. C) constant marginal costs. D) economies of scale.

D) economies of scale.

Increasing opportunity cost occurs along a production possibilities frontier becauseA) increasing wants need to be satisfied.B) in order to produce more of one good decreasing amounts of another good must be sacrificed.C) production takes time.D) resources are not equally productive in all activities.

D) resources are not equally productive in all activities.

In New York City, raising the minimum wage to $15 an hour pushed the restaurant industry into a recession. To stay afloat, ___ of owners reduced employee hours. a. 75% b. half c. 25% d. a few

a. 75%

) A $5 per ticket tax is imposed on airline tickets to help pay for improvements in the nation's air traffic control system. Which of the following is most likely to happen to the equilibrium price (including tax)?a. The equilibrium price will rise by $5. b. The equilibrium price will rise by less than $5. c. The equilibrium price will rise by more than $5. d. There is no way to tell without knowing the exact elasticities.

b. The equilibrium price will rise by less than $5.

No one knows whether these basic measures will be enough to rescue Brazil economically. Truthfully, the damage has been so extensive, it may take decades for the country to recover. But if we do, it won't be _______ that saves us. a. free markets b. socialism c. the World Bank d. more economic freedom

b. socialism

Venezuela, once the richest country in South America, is the most recent example of ___ driving a prosperous country into an economic ditch] a. greed b. socialism c. private businsses d. unregulated markets

b. socialism

In the early 2000s, Brazil's economy was __________. a. experiencing high inflation and high unemployment b. controled by corrupt officials c. growing rapidly d. the highest income in South America

c. growing rapidly

In books like Race and Culture, Sowell has demonstrated racial preferences are:

counterproductive

If there is an increase in demand for the product of a perfectly competitive industry in long run equilibrium, which of the following applies? a. Firms already in the industry will, for a time, earn pure economic profits. b. New firms will be attracted to the industry. c. Price will rise more in the short run than in the long run, assuming the change in demand to be permanent d. All of the above will occur.

d. All of the above will occur.

Mandating minimum wage laws might be a winner for _____ and ivory tower economists a. union workers b. college students c. NGO employees d. progressive politicians

d. progressive politicians

The progressive idea is that you should be able to make a "fair wage". But if you have ___________..., how is that fair? a. high rent payments b. to work longer hours c. no job d. pay more for goods

c. no job

There are ___ in Western Europe. a. many free market countries b. no capitalist countries c. no socialist countries d. no communist countries

c. no socialist countries

Think of the money that you've earned as a certificate of performance. It's proof that ___. a. can be trusted b. are able to trade fairly c. you've served your fellow man d. have wealth

c. you've served your fellow man

Many attempts at redistributing wealth," he later wrote, "have ended up_______ ."

redistributing poverty

Liberal politicians propose expensive policy solutions and never ask the only questions that really matter:

what are the long-term costs and consequences

12) A consumer maximizes total utility when all available income is spent and A) the marginal utility for the last unit of each good purchased is equal for all goods. B) the marginal utility per dollar for the last unit of each good purchased is equal for all goods. C) total utility from all goods purchased is equal. D) the dollars spent on the last unit of each good purchased is equal for all goods.

B) the marginal utility per dollar for the last unit of each good purchased is equal for all goods.

Producers' total revenue will decrease if A) the price rises and demand is inelastic. B) the price rises and demand is elastic. C) income falls and the good is an inferior good. D) income increases and the good is a normal good.

B) the price rises and demand is elastic.

And Sowell matters because he's that rarest of species:

a brave and honest intellectual

I wasn't making much, per hour—that's true—but in my business, the magic is in tips. On a typical night, I would make on average_________ an hour. a. $25 to $50 b. $10 c. less than $10 d. more the $50

a. $25 to $50

In economics, a firm that faces no competitors is referred to as _________________. a. a monopoly b. an oligopolizor c. an oligopoly d. a perfect competitor

a. a monopoly

___________ will punish a corporation that does not satisfy customers or fails to use resources efficiently. a. free market capitalism b. consumer choices c. Goverment regulations d. labor unions and buying cooperative

a. free market capitalism

The free market is not only economically superior, it is ___ a. morally superior b. more fair c. superior promoting social justice d. more equitable

a. morally superior

The more capitalism, ____ you need. Look at America since 2017. a. the less socialism b. the less government spending c. the more educated voter d. the more government regulation

a. the less socialism

The media, academic elite and celebrities assured Brazilians that by transferring the money from the rich to the poor, a. the poor would get richer b. promote social justice c. increase economic growth d. provide higher standards of living

a. the poor would get richer

A flu vaccination is an example of a good a. with a positive consumption externality b. that is a public good c. that is available only to middle and high income consumers d. with a price exceeding its marginal cost

a. with a positive consumption externality

How is a perfectly competitive firm's short-run supply curve best described? a. By its marginal cost curve b. By the upward-sloping portion of its marginal cost curve c. By the upward-sloping part of its marginal cost curve lying above average variable cost d. By the upward-sloping part of its marginal cost curve lying above average total cost

b. By the upward-sloping portion of its marginal cost curve

The socialists increased ______. a. social justice b. government spending, deficts and debt c. minimum wages d. taxes on the rich

b. government spending, deficts and debt

Like the fair-minded Progressive that I was, I thought a $15 minimum wage was an absolute good. Then, I had a head-on collision with ______. a. Econ 101 b. reality c. a fair wage protest d. the cost of living wages

b. reality

That's how the free market works. It encourages people to improve their lives by __. a. consuming as much as they can. b. satisfying the needs of others. c. providing labor for payment of wages d. encouraging others to give them some of their income

b. satisfying the needs of others.

A tax of 10 percent on television sets imported from Japan is a. An import quota b. A voluntary trade restraint c. A tariff d. A pollution offset

c. A tariff

Capitalism leads to ____. Socialism leads to ___. a. unequal distribution of wealth; higher standards of living. b. economic injustics; increase in diversity c. economic democracy; the economic dictatorship of the elite d. free choice; free goods

c. economic democracy; the economic dictatorship of the elite

________________________ arises where many firms are competing in a market to sell similar but differentiated products. a. Perfect competition b. Monogopolised competition c. Oligopolistic competition d. Monopolistic competition

d. Monopolistic competition

In a free market, if I want something from you, I have to: a. convince you to trade. b. pay you. c. offer a bargain to you d. do something for you

d. do something for you

A firm's ___________ consist of expenditures that must be made before production starts that typically, over the short run, _______________ regardless of the level of production. a. variable costs; do not change, b. variable costs; are constantly changing, c. fixed costs; are consistently changing, d. fixed costs; do not change,

d. fixed costs; do not change,

This crisis prompted the new government to ___________, a. provide higher payments to the poor b. introduce universal health care c. reduce capital gains taxes d. freeze federal spending

d. freeze federal spending

Ironically, it's the government, not the free market, that creates _____ in our economy. a. a basic level of income for everyone b. equal opportunity c. social justice d. zero sum games

d. zero sum games