macro exam one actual

An increase in the price of MP3 players will result in

a larger quantity of MP3 players supplied.

The decision about what goods and services will be produced in a market economy is made by

consumers and firms choosing which goods and services to buy or produce.

There is often a trade-off between

economic efficiency and economic equity.

A worker is hired in a

factor market.

The ________ effect of a price change refers to the impact of a change in the price of a good on a consumer's purchasing power.

income

The branch of economics which studies the behavior of entire economies and policies that affect the economy as a whole is called

macroeconomics.

The additional cost to a firm of producing one more unit of a good or service is the

marginal cost.

To affect the market outcome, a price floor

must be set above the equilibrium price.

If the production possibilities frontier is linear, then

opportunity costs are constant as more of one good is produced.

Suppose the U.S. government encouraged new teachers to take jobs in underperforming schools by paying the new teachers a $20,000 bonus. These teachers would be exemplifying the economic idea that

people respond to economic incentives.

When every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it, ________ occurs.

allocative efficiency

An increase in the demand for peanuts due to changes in consumer tastes, accompanied by an increase in the supply of peanuts as a result of favorable growing conditions, will result in

an increase in the equilibrium quantity of peanuts; the equilibrium price may increase or decrease.

Which of the following would cause the equilibrium price of ketchup to increase and the equilibrium quantity of ketchup to decrease?

an increase in the price of tomatoes

If a decrease in income leads to an increase in the demand for macaroni, then macaroni is

an inferior good.

By drawing a demand curve with price on the vertical axis and quantity on the horizontal axis, economists assume that the most important determinant of the demand for a good is

the price of the good.

If, in a competitive market, marginal benefit is greater than marginal cost

the quantity sold is less than the equilibrium quantity.

Published in 1776, ________ was written by Adam Smith.

"An Inquiry into the Nature and Causes of the Wealth of Nations"

Which of the following statements is true?

A curved line has slope values that change at every point.

Refer to Figure below.

How much of the tax is paid by buyers? ;;$3

Refer to Figure below.

If the current market price is $25, the market will achieve equilibrium by ;;a price decrease, decreasing the quantity supplied and increasing the quantity demanded.

Refer to Figure below. What is the value of producer surplus after the imposition of the price floor?

$3,000;; $4,500

________ a nation's production possibilities frontier represents economic growth.

An outward shift of

Which of the following is a result of government price controls?

Some people win and some people lose.

Comparative advantage means

the ability to produce a good or service at a lower opportunity cost than any other producer.

Human capital refers to

the accumulated skills and training workers have.

If the price of smartphones was to increase, then

the demand for smartphone apps would decrease.

Opportunity cost is defined as

the highest valued alternative that must be given up to engage in an activity.

A consumer is willing to purchase a product up to the point where

the marginal benefit is equal to the price of the product.

The production possibilities frontier shows

the maximum attainable combinations of two products that may be produced in a particular time period with available resources.

Scarcity refers to the situation in which

unlimited wants exceed limited resources.

Buyers will bear the entire burden of a unit tax if the demand curve for a product is

vertical.