Micro Midterm

According to the text, the core sphere contributes about what percent of economic activity in the United States?

32%

Which of the following factors can shift a supply curve?

A change in the technology of production

Which one of the following is not an institutional requirement for markets to operate smoothly?

An equal balance of economic power among buyers and sellers

Which of the following would not shift the supply curve for tomatoes to the right?

An increase in the expected price of tomatoes in the future

Which of the following are characteristics of public-purpose institutions?

Their primary focus is the provision of goods and services itself and not the financial benefits of these activities.

Which one of the following would not be included in the public purpose sphere?

a corner drugstore

Which of the following statements about economic models is false?

a model captures all the details of reality

Which of the following would not shift the supply curve for roasted coffee beans to the left?

a shift in tastes from coffee to tea

The textbook mentions the "Three Basic Economic Questions." Which one of the following is not included in these questions?

at what price does supply equal demand?

Which of the following pairs of goods is most likely to represent complementary goods?

beer and chicken wings

Which of the following will not cause a good's entire demand curve to shift?

change in the current price of the good

Which one of the following is not a nonprice determinant of supply?

consumers' income

Which of the following is least likely to involve an external cost (negative externality)?

eating bread at home

an auction market...

ebay

If an economy is on its production possibility frontier, then..

economy cannot produce one good without producing less of some other good

Ignoring other changes, when the price of shoes rises, the result is ...

fall in the quantity of shoes demanded

Which of the following is not one of the four essential economic activities?

firms' profit maximization

Which one of the following is an example of the economic activity of consumption?

hector enjoys watching a sunset

The term ceteris paribus means...

holding all else constant

Consider the market for cups of coffee. An increase in the number of coffee shops would likely ...

increase the supply of coffee.

If an increase in one variable is associated with a decrease in another variable, they are said to have ...

inverse relationship

Which one of the following is not necessary for something to be considered money?

it must be backed by precious metals

An analytical tool that highlights some aspects of reality while ignoring others is referred to as ...

model

The conversion of resources into usable products is referred to as ...

production

Tradeoffs between possible production levels for two goods are illustrated by the economic concept of ...

production possibilites frontier

The four essential economic activities are ...

production, consumption, distribution, and resource maintenance

A commodity market is a market for ...

raw materials

A market in which goods and services are sold in small quantities to consumers is a(n) ...

retail market

Which one of the following statements best describes a positive externality?

robin plants flowers, which her neighbor enjoys seeing

As a general rule, technological progress ...

shifts the PPF outwards

The law of demand states that, other things remaining the same, the higher the price of a good, the

smaller is the quantity of the good demanded.

Which one of the following economic actors would be classified into the core sphere?

your family

What are the two distinguishing characteristics of a public good?

It is freely available to anyone; use by one person does not diminish the ability of another person to use it.