Microeconomics Midterm

अब Quizwiz के साथ अपने होमवर्क और परीक्षाओं को एस करें!

(Ref 2-1 Table: Production Possibilities Schedule I) Use Table: Production Possibilities Schedule I. If the economy produces 24 units of capital goods per period, it also can produce, at MOST, _____ units of consumer goods per period. Answers:a. 2b. 4c. 3d. 5

a. 2

(Ref 2-9 Figure: Production Possibility Frontier) Use Figure: Production Possibility Frontier. If the economy is operating at point B, producing 16 cars and 12 computers per period, a decision to move to point E and produce 18 computers: Answers:a. entails a loss of 8 cars per period.b. indicates that you can have more computers and more cars simultaneously.c. entails a loss of 4 cars per period.d. makes it clear that this economy has decreasing opportunity costs.

a. entails a loss of 8 cars per period

A production possibility frontier that is a line sloping straight down from left to right suggests that: Answers:a. the opportunity costs of the products are constant.b. the two products must have the same price.c. there are no opportunity costs.d. more of both goods could be produced moving along the frontier.

a. the opportunity costs of the products are constant.

An economic model is a simplified version of reality that is used to analyze real-world economic situations. Answers:a. Trueb. False

true

The _____ illustrates the trade-offs facing an economy that produces only two goods. Answers:a. income distributionb. all else equal assumptionc. circular-flow diagramd. production possibility frontier

Because models make simplifying assumptions, they are of very little use in the real world. Answers:a. Trueb. False

false

An increase in demand for good X can be caused by a decrease in the price of X. Answers:a. Falseb. True

(Ref 2-6 Figure: Omar's Production Possibilities) Use Figure: Omar's Production Possibilities. The opportunity cost for Omar to move from point A on the curve to point B is: Answers:a. 10 fish.b. 5 coconuts.c. 10 coconuts.d. 5 fish.

5 coconuts

(Ref 2-2 Figure: Guns and Butter) Use Figure: Guns and Butter. Suppose the economy produced 8 guns and 12 pounds of butter per period. Given that, which statement is true? Answers:a. This combination invalidates the notion of increasing opportunity cost.b. This is a possible choice, but it is inefficient.c. Something must be done to reduce the amount of employment.d. The economy is still efficient but does not buy as much as it could.

If farmer Sam MacDonald can produce 200 pounds of cabbages and no potatoes or no cabbages and 100 pounds of potatoes and if he faces a linear production possibility frontier, the opportunity cost of producing an additional pound of cabbage is _____ pound(s) of potatoes. Answers:a. 2b. 0.5c. 100d. 200b

The _____ illustrates the trade-offs facing an economy that produces only two goods. Answers:a. circular-flow diagramb. production possibility frontierc. income distributiond. all else equal assumption

(Ref 1A-1 Figure: Cold Drinks Sold and Temperature) Use Figure: Cold Drinks Sold and Temperature. If we move from point C to point D in the figure, the outside temperature has _____ degrees and the number of cold drinks sold has _____. Selected Answer:a. increased by 20; increased by 20Answers:a. increased by 20; increased by 20b. decreased by 30; decreased by 30c. increased by 40; increased by 40d. increased by 30; increased by 30

(Ref 1A-14 Table: Price, Quantity Demanded, and Quantity Supplied) Use Table: Price, Quantity Demanded, and Quantity Supplied. The slope of the line representing the relation between price on the vertical axis and quantity supplied on the horizontal axis is: Selected Answer:a. equal to 1/2.Answers:a. equal to 1/2.b. equal to 1.c. different at different points on the line.d. equal to 2.

(Ref 1A-16 Figure: Seasonally Adjusted Unemployment Rate) Use Figure: Seasonally Adjusted Unemployment Rate. The distance between each labeled point on the horizontal axis is one year, and the distance between each labeled point on the vertical axis is one percentage point of unemployment. Unemployment was _____ between 1/2001 and 1/2002 and _____ between 1/1999 and 1/2000. Selected Answer:a. increasing; decreasingAnswers:a. increasing; decreasingb. decreasing; decreasingc. increasing; increasingd. decreasing; increasing

(Ref 1A-16 Figure: Seasonally Adjusted Unemployment Rate) Use Figure: Seasonally Adjusted Unemployment Rate. The distance between each labeled point on the horizontal axis is one year, and the distance between each labeled point on the vertical axis is one percentage point of unemployment. What is the approximate slope of the graph between 1/2001 and 1/2003 (using percentage point and years as the units on the vertical and horizontal axes, respectively)? Selected Answer:a. 1Answers:a. 1b. 2c. -1d. -2

(Ref 1A-16 Figure: Seasonally Adjusted Unemployment Rate) Use Figure: Seasonally Adjusted Unemployment Rate. The distance between each labeled point on the horizontal axis is one year, and the distance between each labeled point on the vertical axis is one percentage point of unemployment. What is the approximate slope of the graph between 1/2004 and 1/2006 (using percentage point and years as the units on the vertical and horizontal axes, respectively)? Selected Answer:a. -1/2Answers:a. -1/2b. 1/2c. 1d. -2

(Ref 1A-18 Figure: Unemployment Rate over Time) Use Figure: Unemployment Rate over Time. In the time-series graph, as we move from 1991 to 1993, we see that the unemployment rate has _____ from approximately _____% to approximately _____%. Selected Answer:a. increased; 5.5; 7Answers:a. increased; 5.5; 7b. decreased; 7.8; 5c. decreased; 5; 4d. increased; 4; 6.3

(Ref 1A-2 Figure: Hot Drinks Sold and Temperature) Use Figure: Hot Drinks Sold and Temperature. If we move from point L to point M in the figure, the outside temperature has _____ degrees and the number of hot drinks sold has _____. Selected Answer:a. increased by 30; decreased by 30Answers:a. increased by 30; decreased by 30b. increased by 40; decreased by 40c. increased by 20; decreased by 20d. decreased by 30; increased by 30

(Ref 1A-3 Figure: Good X and Good Y) Use Figure: Good X and Good Y. If we move from point B to point C in the figure, the x-variable has _____ units and the y-variable has _____ units. Selected Answer:a. increased by 2; decreased by 15Answers:a. increased by 2; decreased by 15b. increased by 15; decreased by 2c. decreased by 15; increased by 2d. decreased by 2; increased by 15

(Ref 1A-3 Figure: Good X and Good Y) Use Figure: Good X and Good Y. If we move from point C to point B in the figure, the x-variable has _____ units and the y-variable has _____ units. Selected Answer:a. decreased by 2; increased by 15Answers:a. decreased by 2; increased by 15b. increased by 2; decreased by 15c. increased by 15; decreased by 2d. decreased by 15; increased by 2

(Ref 1A-5 Figure: Demand and Supply of Shirts) Use Figure: Demand and Supply of Shirts. In the graph, if the line labeled D shows how many shirts per week will be demanded at various prices, then it is clear that, as the price of shirts falls: Selected Answer:a. more shirts will be demanded.Answers:a. more shirts will be demanded.b. it is unclear what will happen to the quantity of shirts demanded.c. fewer shirts will be demanded.d. the same quantity of shirts will be demanded.

(Ref 1A-7 Figure: Illustrating Slope) Use Figure: Illustrating Slope. In the graph, line 3 depicts X and Y to be: Selected Answer:a. positively related.Answers:a. positively related.b. unrelated.c. both fixed in value.d. negatively related.

(Ref 2-1 Table: Production Possibilities Schedule I) Use Table: Production Possibilities Schedule I. If the economy produces 4 units of consumer goods per period, it also can produce, at MOST, _____ units of capital goods per period. Answers:a. 10b. 28c. 18d. 30

(Ref 2-10 Table: Production Possibilities Schedule II) Use Table: Production Possibilities Schedule II. The production of 8 units of consumer goods and 2 units of capital goods per period would result in: Answers:a. some unused or inefficiently used resources.b. full employment.c. no unused resources.d. increased economic growth.

(Ref 2-14 Figure: Strawberries and Submarines II) Use Figure: Strawberries and Submarines II. Suppose the economy is operating at point A. The first submarine, which is achieved at point B, would have an opportunity cost of _____ million tons of strawberries. Answers:a. 50b. 950c. 400d. 150

(Ref 2-4 Figure: Strawberries and Submarines) Use Figure: Strawberries and Submarines. Suppose the economy is operating at point G. This implies that: Answers:a. the economy has unemployment and/or inefficiently allocates resources.b. the economy can move to a point such as C only if it improves its technology.c. people in this economy don't really like strawberries or submarines.d. the economy lacks the resources to achieve a combination such as C.

(Ref 2-5 Figure: Production Possibility Frontier for Tealand) Use Figure: Production Possibility Frontier for Tealand. If Tealand is producing 10 million scones and 10 million cups of tea (point A), we know that the economy: Answers:a. is using its resources inefficiently.b. has found new resources.c. is fully employing its resources.d. is using its resources efficiently.

(Ref 2-5 Figure: Production Possibility Frontier for Tealand) Use Figure: Production Possibility Frontier for Tealand. Tealand is producing at point C on its production possibility frontier. What is the opportunity cost of increasing the production of tea from 20 million cups to 30 million cups? Answers:a. 5 million sconesb. 10 million cups of teac. The answer is impossible to determine from the information given.d. 10 million scones

(Ref 2-6 Figure: Omar's Production Possibilities) Use Figure: Omar's Production Possibilities. The opportunity cost for Omar to move from point B on the curve to point A is: Answers:a. 10 fish.b. 10 coconuts.c. 5 coconuts.d. 5 fish.

(Ref 2-7 Table: Trade-off of Study Time and Leisure Time) Use Table: Trade-off of Study Time and Leisure Time. Suppose a student sleeps 8 hours per day and divides the remaining time between study time and leisure time. The table shows the combinations of study and leisure time that can be produced in the 16 waking hours of each day. If a student decides to consume one additional hour of leisure time, how many hours of study time must she give up? Answers:a. 1b. 0.25c. 4d. 16

(Ref 2-8 Figure: Wine and Wheat) Use Figure: Wine and Wheat. If this economy is producing at point A and wants to produce at point B, it must: Answers:a. use its existing resources efficiently.b. decrease production.c. increase its resources.d. trade with another country.

(Ref 5-2 Table: The Demand for Chocolate-Covered Peanuts) Use Table: The Demand for Chocolate-Covered Peanuts. Barbara demands 20 bags of chocolate-covered peanuts per month when the price of each bag is: Answers:a. $0.70.b. $0.90.c. $0.60.d. $0.80.

(Ref 6-1 Figure: Supply of Coconuts) Use Figure: Supply of Coconuts. If the prices of inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts increased, it could be represented in the figure as a movement from: Selected Answer:a. C to A.Answers:a. C to A.b. E to B.c. A to B.d. B to A.

(Ref 6-2 Figure: The Supply of Online Movie Rentals) Use Figure: The Supply of Online Movie Rentals. A decrease in the price of online movies sold by movie producers to rental outlets like Amazon and Apple would result in a change illustrated by the move from: Answers:a. n to o in panel A.b. p to q in panel B.c. s to t in panel C.d. u to v in panel D.

(Ref 6-2 Figure: The Supply of Online Movie Rentals) Use Figure: The Supply of Online Movie Rentals. A decrease in the price of online movies sold by movie producers to rental outlets like Amazon and Apple would result in a change illustrated by the move from: Selected Answer:a. n to o in panel A.Answers:a. n to o in panel A.b. p to q in panel B.c. u to v in panel D.d. s to t in panel C.

(Ref 6-3 Table: Supply of Lemonade) Use Table: Supply of Lemonade. When the price of lemonade is $1 per cup, the quantity of lemonade supplied by Eli will be _____ cups per day. Selected Answer:a. 40Answers:a. 40b. 25c. 90d. 10

(Ref 6-4 Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.50, there is a: Selected Answer:a. shortage of 70 bags per month.Answers:a. shortage of 70 bags per month.b. surplus of 70 bags per month.c. surplus of 35 bags per month.d. shortage of 35 bags per month.

(Ref 6-5 Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of Wheat. If a price of $10 temporarily exists in this market, a _____ of _____ bushels per period will result. Answers:a. surplus; 8,000b. shortage; 8,000c. surplus; 4,000d. shortage; 10,000

(Ref 6-5 Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of Wheat. If there is an increase in demand of 2,000 bushels per period at each price, the equilibrium price and quantity will be _____ and _____ bushels per period, respectively. Selected Answer:a. $7; 7,000Answers:a. $7; 7,000b. $6; 7,000c. $8; 8,000d. $5; 5,000

(Ref 6-5 Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of Wheat. What is the equilibrium quantity in this wheat market each period? Selected Answer:a. 6,000 bushelsAnswers:a. 6,000 bushelsb. 2,000 bushelsc. 12,000 bushelsd. 10,000 bushels

(Ref 6-7 Figure: The Blu-ray Disc Rental Market) Use Figure: The Blu-ray Disc Rental Market. At a rental price of $3, there will be: Selected Answer:a. an excess demand of 40 Blu-ray disc rentals.Answers:a. an excess demand of 40 Blu-ray disc rentals.b. equilibrium in the rental market for Blu-ray discs.c. an increase in demand.d. an excess supply of 40 Blu-ray disc rentals.

(Ref 6-8 Figure: Supply, Demand, and Equilibrium) Use Figure: Supply, Demand, and Equilibrium. In the figure, there will be an excess supply of the good at a price of P1. Selected Answer:a. FalseAnswers:a. Falseb. True

(Ref 6-8 Figure: Supply, Demand, and Equilibrium) Use Figure: Supply, Demand, and Equilibrium. In the figure, there will be excess demand for the good at a price of P 3. Answers:a. Falseb. True

(Ref 7-2 Figure: Four Markets for Online Movie Rentals) Use Figure: Four Markets for Online Movie Rentals. If D 1 or S 1 is the original curve and D 2 or S2 is the new curve, which of the graphs shows a change that results in a decrease in the quantity of online movie rentals supplied? Selected Answer:a. CAnswers:a. Cb. Dc. Ad. B

(Ref 7-2 Figure: Four Markets for Online Movie Rentals) Use Figure: Four Markets for Online Movie Rentals. Which of the graphs shows what may happen if D 1 or S 1 is the original curve and D 2 or S 2 is the new curve and if some of the online stores that rent online movie rentals close? Selected Answer:a. BAnswers:a. Bb. Dc. Ad. C

(Ref 7-3 Figure: Shifts in Demand and Supply) Use Figure: Shifts in Demand and Supply. The figure shows how supply and demand might shift in response to specific events. Suppose a fall frost destroys one-third of the nation's orange crop. Which panel BEST describes how this will affect the market for vitamin C tablets, which are a substitute in consumption for oranges? Selected Answer:a. Panel CAnswers:a. Panel Cb. Panel Dc. Panel Ad. Panel B

A decrease in supply of good X means: Selected Answer:a. a shift to the left of the entire supply curve for good X.Answers:a. a shift to the left of the entire supply curve for good X.b. that less of good X will be demanded at every price.c. that more of good X will be supplied at every price.d. a movement down the supply curve as prices of good X go down.

A decrease in supply of good X means: Selected Answer:a. a shift to the left of the entire supply curve for good X.Answers:a. a shift to the left of the entire supply curve for good X.b. that more of good X will be supplied at every price.c. a movement down the supply curve as prices of good X go down.d. that less of good X will be demanded at every price.

A decrease in the price of a good will result in: Selected Answer:a. an increase in the quantity demanded.Answers:a. an increase in the quantity demanded.b. more being supplied.c. an increase in supply.d. an increase in demand.

A farmer finds that when he produces more corn, he also has more cornstalks that he can sell as decorations. To the farmer, corn and cornstalks are: Selected Answer:a. complements in production.Answers:a. complements in production.b. unrelated goods.c. inferior goods.d. substitutes in production.

A linear curve has the same slope between every pair of points. Selected Answer:a. TrueAnswers:a. Trueb. False

A negative relationship between quantity demanded and price is called the law of: Selected Answer:a. demand.Answers:a. demand.b. market clearing.c. increasing returns.d. supply.

A new wonder diet that results in a dramatic weight loss sweeps through the United States. The key to the diet is to eat large amounts of red meat (beef) but no poultry or carbohydrate-rich foods. As millions of Americans switch to the new diet, we can expect a(n) _____ in the _____ beef, leading to a shift to the _____ in the _____ curve for beef and _____ beef prices. Selected Answer:a. increase; demand for; right; demand; higherAnswers:a. increase; demand for; right; demand; higherb. decrease; demand for; left; demand; higherc. increase; demand for; right; demand; lowerd. decrease; supply of; left; supply; higher

A pie chart is used to depict information about: Selected Answer:a. the relative shares of categories of data.Answers:a. the relative shares of categories of data.b. the changes of a particular variable over time and positive relationships.c. positive, not negative, relationships among variables.d. the changes of a particular variable over time.

A pie chart is used to depict information about: Selected Answer:a. the relative shares of categories of data.Answers:a. the relative shares of categories of data.b. the changes of a particular variable over time.c. positive, not negative, relationships among variables.d. the changes of a particular variable over time and positive relationships.

A recent news story reported that the Organization of Petroleum Exporting Countries is expected to decrease the supply of oil next summer. Summer is traditionally a time of increased demand for oil because of vacation travel. What would be the combined effect of these two events on the summer market for gasoline? Selected Answer:a. an increase in the price and an unpredictable change in the quantityAnswers:a. an increase in the price and an unpredictable change in the quantityb. an increase in the price and the quantityc. an unpredictable change in both the price and the quantityd. an unpredictable change in the price and a decrease in the quantity

After graduation from college, you might have an increase in your income from a new job. If as a result you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger is a(n) _____ good. Answers:a. inferiorb. normalc. complementaryd. substitute

All points outside the production possibility frontier are: Answers:a. infeasible.b. efficient.c. regions of economic growth.d. inefficient.

An increase in income will always shift the demand curve to the right. Answers:a. Falseb. True

An increase in the demand for gasoline today caused by concerns that gasoline prices will be higher tomorrow is most likely attributable to a change in: Selected Answer:a. consumer expectations.Answers:a. consumer expectations.b. consumer preferences.c. income.d. prices of other goods.

An increase in the price of sugar (an ingredient for soft drinks) and an increased concern about tooth decay caused by the consumption of soft drinks will have which result in in the soft drink market? Selected Answer:a. Equilibrium quantity will decrease, but equilibrium price may decrease, increase, or stay the same.Answers:a. Equilibrium quantity will decrease, but equilibrium price may decrease, increase, or stay the same.b. There will be an increase in both the equilibrium price and quantity.c. Equilibrium quantity will increase, but equilibrium price may decrease, increase, or stay the same.d. There will be a decrease in both equilibrium price and quantity.

Consider two competing motorcycle manufacturers, Harley-Davidson and Honda. If Harley-Davidson raises the price of its motorcycles, we can expect: Selected Answer:a. a shift to the right in the demand curve for Hondas and higher prices for Hondas.Answers:a. a shift to the right in the demand curve for Hondas and higher prices for Hondas.b. a shift to the left in the demand curve for Hondas and lower prices for Hondas.c. a shift to the right in the supply curve of Hondas and lower prices for Hondas.d. a shift to the left in the supply curve of Hondas and higher prices for Hondas

For consumers, pizza and hamburgers are substitutes. A rise in the price of a pizza causes a _____ in the equilibrium price of a hamburger and a(n) _____ in the equilibrium quantity of hamburgers. Selected Answer:a. rise; increaseAnswers:a. rise; increaseb. fall; increasec. rise; decreased. fall; decrease

For most goods, purchases tend to rise with increases in buyers' incomes and to fall with decreases in buyers' incomes. Such goods are known as: Selected Answer:a. normal.Answers:a. normal.b. direct.c. indirect.d. inferior.

French fries and hamburgers are complements in consumption. Suppose the cost of the ingredients used to make hamburgers rises, so that the price of a hamburger rises. Then the equilibrium price of french fries _____ and the equilibrium quantity _____. Selected Answer:a. falls; decreasesAnswers:a. falls; decreasesb. rises; increasesc. rises; decreasesd. falls; increases

Gasoline, a derivative of oil, is a large part of transportation costs for many producers. If the price of oil increases at the same time that incomes fall for many consumers, one would expect the equilibrium price of many normal goods to _____, while their equilibrium quantities would _____. Selected Answer:a. fall, rise, or stay the same; decreaseAnswers:a. fall, rise, or stay the same; decreaseb. decrease; fall, rise, or stay the samec. fall; falld. fall; rise

Holding all other things constant, and assuming that ramen noodles are an inferior good for Vanessa, then as her income increases, her demand curve for ramen noodles: Answers:a. will shift left.b. will shift right.c. may shift left or right, but we're not sure by how much.d. will not shift at all.

If Benjamin considers sushi to be a normal good and if his income increases by 20%, his purchases of sushi will: Answers:a. increase.b. decrease.c. decrease by 20%.d. not change.

If Benjamin considers sushi to be a normal good and if his income increases by 20%, his purchases of sushi will: Selected Answer:a. increase.Answers:a. increase.b. decrease.c. not change.d. decrease by 20%.

If an economy has to sacrifice increasing amounts of good X for each additional unit of good Y produced, then its production possibility frontier is: Answers:a. bowed out.b. bowed in.c. a vertical line.d. a straight line.

If the input costs associated with supplying gasoline increases in Wisconsin, the supply of gasoline in Wisconsin will decrease. Selected Answer:a. TrueAnswers:a. Trueb. False

If the price of corn rises, we generally expect the: Answers:a. quantity of corn supplied to rise.b. demand for corn to shift inward.c. supply of corn to shift outward.d. quantity of corn demanded to rise.

If the production possibility frontier is a straight line: Answers:a. opportunity costs are constant.b. firms face decreasing costs.c. there is no trade-off between the two goods represented.d. firms face increasing costs.

If there is an excess supply of a good, the problem of scarcity does not apply to that good. Selected Answer:a. FalseAnswers:a. Falseb. True

If tortilla chips are a normal good, when there is an increase in income, equilibrium price _____ and equilibrium quantity _____. Selected Answer:a. increases; increasesAnswers:a. increases; increasesb. decreases; decreasesc. increases; decreasesd. decreases; increases

If two variables are positively related then: Selected Answer:a. as one goes up in value, the other must go up in value, too.Answers:a. as one goes up in value, the other must go up in value, too.b. there is no relationship between the two.c. as one goes up in value, the other must go down in value.d. one variable is always the reciprocal of the other.

In a time-series graph, large changes can be made to appear insignificant by: Selected Answer:a. changing the scale of the axes.Answers:a. changing the scale of the axes.b. labeling more intervals.c. defining the dependent variable.d. defining the independent variable.

In building models, economists often assume that opportunity costs don't matter. Answers:a. Falseb. True

In much of the country, homeowners choose to heat their houses with either natural gas or heating oil, both of which are normal goods. Which factor would cause an increase in the demand for natural gas? Answers:a. an increase in consumer incomesb. a decrease in the price of natural gasc. a decrease in the price of heating oild. an increase in the price of natural gas

In the market for tacos, a normal good, you observe that the equilibrium price and quantity have increased. This can be caused only by: Selected Answer:a. an increase in the incomes of people who eat tacos.Answers:a. an increase in the incomes of people who eat tacos.b. an increase in the price of beef.c. an increase in the wages of taco shop workers.d. fewer taco shops.

In the market for wheat, if the price of ethanol (which is made from corn, a substitute in the production process) increased dramatically, the _____ wheat would _____. Selected Answer:a. supply of; decreaseAnswers:a. supply of; decreaseb. supply of; increasec. demand for; decreased. demand for; increase

It is certain that the equilibrium price will rise when the supply curve shifts to the _____ and the demand curve shifts to the _____. Selected Answer:a. left; rightAnswers:a. left; rightb. right; leftc. left; leftd. right; right

Largetown CANNOT produce _____ shirts and _____ pairs of socks. Answers:a. 40; 40b. 10; 20c. 0; 40d. 20; 0

Many public utilities burn oil to generate electricity. If the price of oil increases, we expect a shift to the _____ in the _____ curve for _____ and a _____ price for electricity. Selected Answer:a. left; supply; electricity; higherAnswers:a. left; supply; electricity; higherb. left; demand; oil; lowerc. right; demand; oil; higherd. right; supply; electricity; lower

Ref 7-3 Figure: Shifts in Demand and Supply) Use Figure: Shifts in Demand and Supply. The graph shows how supply and demand might shift in response to specific events. Suppose a new machine allows restaurants and fast-food outlets to produce french fries at a lower cost. Which panel BEST describes how this will affect the market for french fries? Selected Answer:a. Panel AAnswers:a. Panel Ab. Panel Bc. Panel Cd. Panel D

Ref 7-6 Figure: Shifts in Demand and Supply IV) Use Figure: Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose half of the people in San Diego move to Colorado Springs. Which panel BEST describes how this will affect the market for houses in Colorado Springs? Selected Answer:a. Panel BAnswers:a. Panel Bb. Panel Cc. Panel Dd. Panel A

Researchers find a new strain of genetically modified seeds that result in a higher yield for corn producers. Holding all other things constant, this research will: Selected Answer:a. shift the supply curve for corn to the right.Answers:a. shift the supply curve for corn to the right.b. increase the quantity supplied of corn.c. decrease the quantity supplied of corn.d. shift the supply curve for corn left.

Suppose Indiana produces only steel and corn, with fixed amounts of land, labor, and capital resources. Which scenario best sets the stage for economic growth? Answers:a. The percentage of Indiana residents with a college degree rises from 25% to 30%.b. The unemployment rate in Indiana rises from 5% to 6%.c. The United States imports more and more low-cost steel from Asian countries.d. The Midwest has a devastating drought.

Suppose that more police and security workers become aware that wearing bulletproof vests can protect them from injury and decide to start wearing bulletproof vests. At the same time, the price of ceramics used to produce the vests falls. The equilibrium price of bulletproof vests _____ and the equilibrium quantity produced _____. Selected Answer:a. probably changes, but in an ambiguous direction; increasesAnswers:a. probably changes, but in an ambiguous direction; increasesb. increases; increasesc. decreases; decreasesd. probably changes, but in an ambiguous direction; probably changes, but in an ambiguous direction

Suppose the local real estate market is in equilibrium. A recession causes local household incomes to decline. At the same time, construction of a large subdivision of new homes has just been completed. Given these two changes and assuming that real estate is a normal good, we can predict that the price of real estate will _____ and the quantity of real estate bought and sold will _____. Answers:a. fall; rise or fallb. fall; fallc. fall; rised. rise; fall or rise

Suppose there is an excess demand for water in Florida. This means that we can expect the price of water to increase in Florida over time. Selected Answer:a. TrueAnswers:a. Trueb. False

Suppose there is an excess supply of chemical engineers in India. Over time, the salaries for chemical engineers will fall in India. Selected Answer:a. TrueAnswers:a. Trueb. False

Taylor sees a bar graph showing the average weight of adult males over the past 200 years and concludes that men get more obese over time. Taylor's conclusion may be wrong since she did not consider: Selected Answer:a. omitted variables.Answers:a. omitted variables.b. reverse causality.c. tangent lines.d. the features of construction.

The cost of sensors used in making digital cameras falls, while a successful ad campaign makes digital cameras more fashionable. As a result, the equilibrium price of digital cameras _____ and the equilibrium quantity _____. Selected Answer:a. may increase, decrease, or stay the same; increasesAnswers:a. may increase, decrease, or stay the same; increasesb. increases; increasesc. decreases; increasesd. increases; may increase, decrease, or stay the same

The cost of sensors used in making digital cameras falls, while a successful ad campaign makes digital cameras more fashionable. As a result, the equilibrium price of digital cameras _____ and the equilibrium quantity _____. Selected Answer:a. may increase, decrease, or stay the same; increasesAnswers:a. may increase, decrease, or stay the same; increasesb. increases; may increase, decrease, or stay the samec. decreases; increasesd. increases; increases

The demand curve for monthly subscriptions to HBO has shifted to the right. What could have caused it? Selected Answer:a. an increase in the incomes of buyersAnswers:a. an increase in the incomes of buyersb. an increase in the price of HBO subscriptionsc. a fall in the price of HBO subscriptionsd. an increase in the supply of HBO subscriptions

The fact that a society's production possibility frontier is bowed out, or concave to the origin of a graph, demonstrates the law of _____ opportunity cost. Answers:a. increasingb. decreasingc. constantd. concave

The law of demand is illustrated by a demand curve that is: Answers:a. downward sloping.b. upward sloping.c. horizontal.d. vertical.

The law of demand states that, other things equal, as the price: Selected Answer:a. increases, the quantity demanded will decrease.Answers:a. increases, the quantity demanded will decrease.b. increases, demand will decrease.c. increases, the quantity demanded will increase.d. decreases, the demand curve will shift to the right.

The market for good Y, a perfectly competitive good, is made up of 15 producers who each produce the same amount of good Y. If the price of good Y is $100 and the total quantity supplied is 150, how many units of good Y is each producer supplying? Selected Answer:a. 10Answers:a. 10b. 15c. 100d. 150

The market for milk is initially in equilibrium. Milk producers successfully advertise to encourage milk drinking. At the same time, more milk producers enter the market. Standard demand and supply analysis tells us that the: Selected Answer:a. equilibrium quantity of milk will rise, but we can't determine how the equilibrium price will be affected.Answers:a. equilibrium quantity of milk will rise, but we can't determine how the equilibrium price will be affected.b. equilibrium price of milk will rise, but we can't determine how the equilibrium quantity will be affected.c. equilibrium price and quantity of milk will rise.d. equilibrium price and quantity of milk will fall.

The models that economists construct: Answers:a. usually make simplifying assumptions.b. attempt to precisely replicate the real world.c. often rely on physical constructs, such as those used by architects.d. rarely use mathematical equations or graphs.

The primary difference between a change in supply and a change in the quantity supplied is that: Selected Answer:a. a change in quantity supplied is a movement along the supply curve, while a change in supply is a shift in the supply curve.Answers:a. a change in quantity supplied is a movement along the supply curve, while a change in supply is a shift in the supply curve.b. a change in supply is a movement along the supply curve, while a change in quantity supplied is a shift in the supply curve.c.a change in supply is related to the supply curve, while a change in quantity supplied is related to shifts in the demand curve that shift the supply curve.d. both a change in quantity supplied and a change in supply are movements along the supply curve, only in different directions.

The ratio of the change in the variable on the vertical axis to the change in the variable on the horizontal axis, measured between two points on the curve, is the: Selected Answer:a. slope.Answers:a. slope.b. axis.c. independent variable.d. dependent variable.

The scaling of the axes of a time-series graph: Selected Answer:a. may change the visual interpretation of the data.Answers:a. may change the visual interpretation of the data.b. generally puts values of a variable, such as the unemployment rate, on the vertical axis.c. is not a critical element in presenting the intended information.d. generally places the time period on the vertical axis.

Use Table: Production of Good Z and Good X in Urbanville. This table shows the production possibility frontier for Urbanville. Suppose Urbanville is producing 5 of Z and 50 of X; this combination is: Answers:a. feasible but inefficient.b. not feasible but efficient.c. neither feasible nor efficient.d. feasible and efficient.

When the economy suffers a downturn and the incomes of many people decrease, vacationers are more likely to take car trips than to fly. Which statement provides one possible explanation for this phenomenon? Answers:a. Air travel is a normal good and travel by car is an inferior good.b. Air travel is an inferior good and travel by car is a normal good.c. Air travel and travel by car are complementary goods.d. Air travel and travel by car are both normal goods.

When the price of desks increases, the: Selected Answer:a. quantity supplied increases.Answers:a. quantity supplied increases.b. quantity supplied decreases.c. supply increases.d. supply decreases.

When the price of desks increases, the: Selected Answer:a. quantity supplied increases.Answers:a. quantity supplied increases.b. supply increases.c. supply decreases.d. quantity supplied decreases.

Which factor is not a determinant of supply? Selected Answer:a. consumer tastesAnswers:a. consumer tastesb. the cost of productionc. the technology of productiond. expectations regarding future prices

Which factor will not cause an increase in the supply of cornflakes? Selected Answer:a. an increase in the price of cornflakesAnswers:a. an increase in the price of cornflakesb. a cost-saving improvement in the technology of corn productionc. the expectation by producers that the price of cornflakes will fall in the futured. a reduction in the price of corn

Which factor would cause a decrease in the supply of a good? Selected Answer:a. an increase in the price of goods that are used in productionAnswers:a. an increase in the price of goods that are used in productionb. an increase in the number of producersc. an advancement in the technology for producing the goodd. suppliers' expectations of lower prices in the future

Which factor would cause an increase in the supply of a good? Answers:a. an increase in the number of sellersb. expectations of future price increasesc. a fall in the price of the goodd. input prices rising

Which factor would cause an increase in the supply of a good? Selected Answer:a. a decrease in the price of resources used in productionAnswers:a. a decrease in the price of resources used in productionb. an increase in the price of the goodc. suppliers' expectations of higher prices in the futured. an increase in input prices

Which factor would cause an increase in the supply of a good? Selected Answer:a. an advancement in the technology for producing the goodAnswers:a. an advancement in the technology for producing the goodb. suppliers' expectations of higher prices in the futurec. a decrease in the number of sellers in the marketd. an increase in input prices

Which factor would cause an increase in the supply of a good? Selected Answer:a. an increase in the number of sellersAnswers:a. an increase in the number of sellersb. input prices risingc. expectations of future price increasesd. a fall in the price of the good

Which factor would not result in an increase in the supply of a good? Selected Answer:a. an increase in input pricesAnswers:a. an increase in input pricesb. a decrease in input pricesc. a beneficial technological changed. an increase in the number of suppliers

Which factor would shift the demand curve for new textbooks to the right? Selected Answer:a. an increase in college enrollmentAnswers:a. an increase in college enrollmentb. a fall in the price of new textbooksc. a decrease in the price of paperd. a fall in the price of used textbooks

Which statement illustrates the law of demand? Answers:a. Consumers buy more personal computers because prices have fallen.b. Oil companies drill for new sources because prices are higher.c. Fewer people play golf because incomes are lower.d. An increase in tuition encourages more students to enroll in college because the quality of education has risen.

Which two goods are most likely substitutes in consumption? Selected Answer:a. loaves of bread and hamburger bunsAnswers:a. loaves of bread and hamburger bunsb. loaves of bread and toastersc. loaves of bread and gasolined. loaves of bread and sticks of butter

(Ref 1A-12 Figure: Demand and Supply) Use Figure: Demand and Supply. The slope of the curve labeled D is: Selected Answer:b. -1.Answers:a. 1.b. -1.c. 3.d. 0.

(Ref 1A-13 Figure: Slope) Use Figure: Slope. In the graph, the slope of the line between points A and B is: Selected Answer:b. -2.Answers:a. -8.b. -2.c. +8.d. +2.

(Ref 1A-14 Table: Price, Quantity Demanded, and Quantity Supplied) Use Table: Price, Quantity Demanded, and Quantity Supplied. The slope of the line representing the relation between price on the vertical axis and quantity supplied on the horizontal axis is: Selected Answer:b. equal to 1/2.Answers:a. equal to 1.b. equal to 1/2.c. different at different points on the line.d. equal to 2.

(Ref 1A-3 Figure: Good X and Good Y) Use Figure: Good X and Good Y. If we move from point B to point C in the figure, the x-variable has _____ units and the y-variable has _____ units. Selected Answer:b. increased by 2; decreased by 15Answers:a. decreased by 15; increased by 2b. increased by 2; decreased by 15c. decreased by 2; increased by 15d. increased by 15; decreased by 2

(Ref 2-13 Figure: Sugar and Freight Trains) Use Figure: Sugar and Freight Trains. Suppose the economy is operating at point C. The opportunity cost of producing the fourth freight train would be: Answers:a. 19 tons of sugar.b. 80 tons of sugar.c. 45 tons of sugar.d. 3 freight trains.

(Ref 2-14 Figure: Strawberries and Submarines II) Use Figure: Strawberries and Submarines II. Assume that the economy is operating at point A. The opportunity cost of moving to point C is equal to _____ million tons of strawberries. Answers:a. 800b. 200c. 2d. 50

(Ref 2-14 Figure: Strawberries and Submarines II) Use Figure: Strawberries and Submarines II. Suppose the economy is operating at point B. Achieving production at point F would require that the economy: Answers:a. reduce its production of submarines.b. improve its technology or increase its resources.c. achieve full employment and an efficient allocation of resources.d. reduce its production of strawberries.

(Ref 2-2 Figure: Guns and Butter) Use Figure: Guns and Butter. Suppose the economy produced 8 guns and 12 pounds of butter per period. Given that, which statement is true? Answers:a. Something must be done to reduce the amount of employment.b. This is a possible choice, but it is inefficient.c. This combination invalidates the notion of increasing opportunity cost.d. The economy is still efficient but does not buy as much as it could.

(Ref 2-2 Figure: Guns and Butter) Use Figure: Guns and Butter. Suppose the economy produced 8 guns and 12 pounds of butter per period. Given that, which statement is true? Answers:a. This combination invalidates the notion of increasing opportunity cost.b. This is a possible choice, but it is inefficient.c. The economy is still efficient but does not buy as much as it could.d. Something must be done to reduce the amount of employment.

(Ref 2-3 Table: Production Possibilities Schedule II) Use Table: Production Possibilities Schedule II. If an economy is producing at alternative W, the opportunity cost of producing at X is _____ unit(s) of consumer goods per period. Answers:a. 18b. 4c. 0d. 1

(Ref 2-3 Table: Production Possibilities Schedule II) Use Table: Production Possibilities Schedule II. The production of 14 units of consumer goods and 1 unit of capital goods per period would result in: Answers:a. an increase in economic growth.b. some unused or inefficiently used resources.c. full employment.d. no unused resources.

(Ref 2-6 Figure: Omar's Production Possibilities) Use Figure: Omar's Production Possibilities. Which point or points represent(s) a combination of coconuts and fish that is efficient in production? Answers:a. A onlyb. A and Bc. B and Cd. D only

(Ref 2-7 Table: Trade-off of Study Time and Leisure Time) Use Table: Trade-off of Study Time and Leisure Time. Suppose a student sleeps 8 hours per day and divides the remaining time between study time and leisure time. The table shows the combinations of study and leisure time that can be produced in the 16 waking hours of each day. Suppose the student completes a speed-reading course that allows him to do the same amount of studying in half as many hours. His opportunity cost: Answers:a. of leisure has decreased.b. of leisure has increased.c. has not changed.d. of studying has increased.

(Ref 2-8 Figure: Wine and Wheat) Use Figure: Wine and Wheat. If this economy is producing at point A, we know the economy is: Answers:a. using its resources efficiently.b. using its resources inefficiently.c. producing at an unattainable point.d. trading with another country.

(Ref 6-1 Figure: Supply of Coconuts) Use Figure: Supply of Coconuts. An improvement in the technology used to harvest coconuts (e.g., a faster, less expensive coconut picker) would be represented in the figure as a movement from: Selected Answer:b. A to C.Answers:a. B to A.b. A to C.c. C to A.d. B to E.

(Ref 6-2 Figure: The Supply of Online Movie Rentals) Use Figure: The Supply of Online Movie Rentals. A decrease in the price of online movie rentals would result in a change illustrated by the move from: Answers:a. n to o in panel A.b. u to v in panel D.c. s to t in panel C.d. p to q in panel B.

(Ref 6-2 Figure: The Supply of Online Movie Rentals) Use Figure: The Supply of Online Movie Rentals. A decrease in the price of online movies sold by movie producers to rental outlets like Amazon and Apple would result in a change illustrated by the move from: Selected Answer:b. n to o in panel A.Answers:a. p to q in panel B.b. n to o in panel A.c. u to v in panel D.d. s to t in panel C.

(Ref 6-4 Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for Chocolate-Covered Peanuts. A shortage of 210 bags of chocolate-covered peanuts per month exists if the price is _____ per bag. Selected Answer:b. $0.30Answers:a. $0.80b. $0.30c. $0.40d. $0.60

(Ref 6-4 Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.60, the price will: Selected Answer:b. not change.Answers:a. fall to $0.50.b. not change.c. rise to $0.70.d. fall to $0.30.

(Ref 6-4 Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for Chocolate-Covered Peanuts. The equilibrium quantity and the equilibrium price are _____ bags per month and _____. Selected Answer:b. 175; $0.60Answers:a. 140; $0.40b. 175; $0.60c. 175; $0.80d. 210; $0.50

(Ref 6-7 Figure: The Blu-ray Disc Rental Market) Use Figure: The Blu-ray Disc Rental Market. At a rental price of $3, there will be: Selected Answer:b. an excess demand of 40 Blu-ray disc rentals.Answers:a. an increase in demand.b. an excess demand of 40 Blu-ray disc rentals.c. an excess supply of 40 Blu-ray disc rentals.d. equilibrium in the rental market for Blu-ray discs.

(Ref 7-1 Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline. Given the initial equilibrium of S 1 and D, any price lower than _____ will exert pressure for the price to _____. Selected Answer:b. $2.50; riseAnswers:a. $2.50; fallb. $2.50; risec. $2.00; falld. $3.00; rise

(Ref 7-1 Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline. The initial equilibrium price and quantity (at intersection of S1 and D) of gasoline are: Selected Answer:b. $2.50 and 300 gallons.Answers:a. $2.00 and 200 gallons.b. $2.50 and 300 gallons.c. $1.50 and 400 gallons.d. $2.00 and 450 gallons.

(Ref 7-2 Figure: Four Markets for Online Movie Rentals) Use Figure: Four Markets for Online Movie Rentals. Which of the graphs shows what may happen in the market for online movie rentals if D 1 or S 1 is the original curve and D 2 or S 2 is the new curve and if the cost of buying content for online movie distributors like Apple (i.e., the price that Apple pays for the online content to sell to consumers) decreases? Answers:a. Cb. Dc. Ad. B

(Ref 7-4 Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II. The graph shows how supply and demand might shift in response to specific events. Suppose a drought destroys one-third of the nation's peanut crop. Which panel best describes how this will affect the market for peanuts? Selected Answer:b. Panel CAnswers:a. Panel Db. Panel Cc. Panel Bd. Panel A

(Ref 7-4 Figure: Shifts in Demand and Supply III) Use Figure: Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose a wet and sunny year increases the nation's corn crop by 20%. Which panel BEST describes how this will affect the market for corn? Answers:a. Panel Cb. Panel Bc. Panel Ad. Panel D

(Ref 7-5 Figure: Shifts in Demand and Supply III) Use Figure: Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose the technology for producing snowboards improves. Which panel BEST describes how this will affect the market for winter parkas, a complement in consumption of snowboards? Selected Answer:b. Panel AAnswers:a. Panel Db. Panel Ac. Panel Bd. Panel C

(Ref 7-6 Figure: Shifts in Demand and Supply IV) Use Figure: Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose half of the people in San Diego pack up and move to Colorado Springs. Which panel BEST describes how this will affect the supply of houses in San Diego? Answers:a. Panel Ab. Panel Cc. Panel Bd. Panel D

(Ref 7-7 Figure: Supply and Demand in the Orange Juice Market) Use Figure: Supply and Demand in the Orange Juice Market. The market is in equilibrium at point C. A reputable scientist asserts in a major scientific publication that drinking orange juice will increase your life span. What will be the MOST likely new equilibrium point in the orange juice market? Selected Answer:b. BAnswers:a. Db. Bc. Ed. A

A decrease in the price of eggs will result in a(n): Selected Answer:b. movement along the demand curve for eggs.Answers:a. increase in the demand for eggs.b. movement along the demand curve for eggs.c. shift in the supply curve for eggs.d. increase in the supply of eggs.

A major input into vanilla ice cream is cream. An increase in the price of cream will reduce the quantity of vanilla ice cream supplied, but it will not reduce the supply of vanilla ice cream. Selected Answer:b. FalseAnswers:a. Trueb. False

A production possibility frontier that is a line sloping straight down from left to right suggests that: Answers:a. the two products must have the same price.b. the opportunity costs of the products are constant.c. more of both goods could be produced moving along the frontier.d. there are no opportunity costs.

After graduation from college, you might have an increase in your income from a new job. If as a result you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger is a(n) _____ good. Selected Answer:b. inferiorAnswers:a. normalb. inferiorc. complementaryd. substitute

After graduation many students' demand for used cars decreases. This may be because used cars are considered a normal good to college graduates. Selected Answer:b. FalseAnswers:a. Trueb. False

Alice goes to the local supermarket to purchase one package of kale. She often pays $1.50 for a package, but she finds they are on sale for $1 each. According to the law of demand, one can expect shoppers like Alice to: Selected Answer:b. purchase more kale than they normally would.Answers:a. purchase an alternative good.b. purchase more kale than they normally would.c. buy the same amount of kale as they always do, on average.d. decide not to purchase kale.

An economic model: Answers:a. allows nothing to change in the economic situation that is being described.b. is a simplified version of reality used to understand real-world economic conditions.c. is useful for explaining past economic conditions but not for predicting future outcomes.d. often leads to faulty conclusions because of the ceteris paribus assumption.

An increase in the price of contact lenses will increase the supply of contact lenses. Selected Answer:b. FalseAnswers:a. Trueb. False

Assume an economy is operating on its production possibility frontier, which shows the production of military and civilian goods. If the output of military goods is increased, the output of civilian goods: Answers:a. will not change.b. must decrease.c. will increase, too.d. may increase or decrease.

If Largetown's labor resource decreases by 40 hours, the opportunity cost of producing shirts: Answers:a. decreases.b. does not change.c. may or may not change depending upon the number of pairs of socks it wishes to produce.d. increases.

If an economy is producing a level of output that is on its production possibility frontier, the economy has: Answers:a. no idle resources but is using resources inefficiently.b. no idle resources and is using resources efficiently.c. idle resources but is using resources efficiently.d. idle resources.

If an economy is producing at a point on its production possibilities frontier, it is: Answers:a. efficient in production and allocation.b. efficient in production but not necessarily in allocation.c. efficient in allocation but not necessarily in production.d. not necessarily efficient in production or allocation.

If suppliers expect prices for their product to rise next year, then one would expect a: Selected Answer:b. shift to the left in the supply curve for the product this year.Answers:a. decrease in the quantity demanded this year.b. shift to the left in the supply curve for the product this year.c. shift in the demand curve for the product this year.d. shift to the right in the supply curve for the product this year.

If supply is upward sloping, a decrease in demand with no change in supply will lead to a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price. Selected Answer:b. decrease; decreaseAnswers:a. increase; increaseb. decrease; decreasec. increase; decreased. decrease; increase

If supply is upward sloping, an increase in demand with no change in supply will lead to a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price. Answers:a. decrease; increaseb. increase; increasec. decrease; decreased. increase; decrease

If the demand for tires goes down when the price of gas goes up, then tires and gas are: Answers:a. both expensive.b. complements.c. substitutes.d. both inexpensive.

If the price of mozzarella cheese (an ingredient in pizza) declines, there will be: Selected Answer:b. an increase in the supply of pizza.Answers:a. a decrease in the supply of pizza.b. an increase in the supply of pizza.c. no change in the supply of pizza.d. a decrease in the quantity of pizza supplied.

The demand curve for season tickets for the Miami Dolphins is the graphical representation of the number of season tickets consumers want to buy at any given price. Selected Answer:b. TrueAnswers:a. Falseb. True

If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price: Selected Answer:b. is above the market equilibrium price.Answers:a. is below the market equilibrium price.b. is above the market equilibrium price.c. will rise to clear the market.d. will either rise or remain unchanged.

If the supply and demand curves intersect at a price of $47, then any price above that would result in: Selected Answer:b. a surplus.Answers:a. equilibrium.b. a surplus.c. a shortage.d. an increase in demand.

In terms of the production possibility frontier, the inefficient use of available resources is shown by: Answers:a. a movement from one point to another along the production possibility frontier.b. production at a point inside the production possibility frontier.c. an inward shift of the production possibility frontier due to the lack of opportunity.d. an increase in the labor force growth rate.

In the graph of a curve, the vertical intercept is the: Selected Answer:b. value of the y-variable when the value of the x-variable is equal to zero.Answers:a. change in the y-variable between two points divided by the change in the x-variable between those same two points.b. value of the y-variable when the value of the x-variable is equal to zero.c. value of the y-variable when the value of the slope is equal to zero.d. value of the x-variable when the value of the y-variable is equal to zero.

Increases in resources or improvements in technology will tend to cause a society's production possibility frontier to: Answers:a. become vertical.b. shift outward.c. remain unchanged.d. shift inward.

It is almost certain that the equilibrium quantity will fall when: Answers:a. the supply curve shifts to the left and demand shifts to the right.b. supply shifts to the left and demand stays the same.c. the supply curve and the demand curve both shift to the right.d. the supply curve shifts to the right and the demand curve shifts to the left.

It is certain that the equilibrium quantity will rise when: Selected Answer:b. the supply curve and the demand curve both shift to the right.Answers:a. the supply curve shifts to the right and the demand curve shifts to the left.b. the supply curve and the demand curve both shift to the right.c. supply shifts to the left and demand stays the same.d. supply and demand both shift to the left.

It is impossible for economists to use computers to simulate how the economy works. Answers:a. Trueb. False

Over the past few years, the technology associated with producing flat-panel televisions has improved. This has led to a(n) _____ in the _____ flat-panel televisions. Selected Answer:b. increase; supply ofAnswers:a. decrease; quantity supplied ofb. increase; supply ofc. decrease; supply ofd. decrease; demand for

Over the past few years, the technology associated with producing flat-panel televisions has improved. This has led to a(n) _____ in the _____ flat-panel televisions. Selected Answer:b. increase; supply ofAnswers:a. decrease; supply ofb. increase; supply ofc. decrease; quantity supplied ofd. decrease; demand for

Ref 5-1 Figure: Demand for Coconuts) Use Figure: Demand for Coconuts. If coconuts are a normal good and consumers believe that the price of coconuts will rise significantly in the near future, it will be represented in the figure as a: Answers:a. movement from point B to point E.b. shift from D1 to D2.c. shift from D1 to D3.d. movement from point B to point A.

Ref 6-10 Figure: The Market for Candy) Use Figure: The Market for Candy. A surplus of the good will exist at a price of: Selected Answer:b. P1.Answers:a. P3.b. P1.c. There are no surpluses in this market.d. P2.

Ref 7-3 Figure: Shifts in Demand and Supply) Use Figure: Shifts in Demand and Supply. The figure shows how supply and demand might shift in response to specific events. Suppose the population increases. Which panel BEST describes how this will affect the market for apples? Selected Answer:b. Panel CAnswers:a. Panel Ab. Panel Cc. Panel Bd. Panel D

Smallville has a linear production possibility frontier in the production of good X and good Y. It can produce 6 of X per hour or 8 of Y per hour. Suppose it has 240 hours of labor and divides labor hours equally between production of good X and good Y. What is the maximum number of good Y it can produce in the time it has allocated to Y production? Answers:a. 720b. 960c. 30d. 6

Suppose oranges and clementines are substitutes. Holding everything else constant, if the price of oranges increases, then the demand for _____ will _____. Answers:a. clementines; decreaseb. clementines; increasec. oranges; increased. oranges; decrease

Suppose that supply increases and demand decreases. What is the most likely effect on price and quantity? Selected Answer:b. The price will decrease, but quantity may increase, decrease, or stay the same.Answers:a. The price will increase and quantity will increase.b. The price will decrease, but quantity may increase, decrease, or stay the same.c. The price will decrease and quantity will decrease.d. The price will increase, but quantity may increase, decrease, or stay the same.

Suppose the input costs associated with manufacturing hair replacement treatments decrease over time. This would lead to a(n): Selected Answer:b. increase in the supply of such treatments, lower prices, and an increase in the equilibrium quantity.Answers:a. decrease in quantity supplied and lower prices.b. increase in the supply of such treatments, lower prices, and an increase in the equilibrium quantity.c. decrease in the supply of such treatments, higher prices, and a decrease in the equilibrium quantity.d. increase in demand and higher prices.

Technological improvements will: Answers:a. shift the production possibility frontier inward.b. shift the production possibility frontier outward.c. leave the production possibility frontier unchanged.d. necessarily lead to increased unemployment.

The cost of sensors used in making digital cameras falls, while a successful ad campaign makes digital cameras more fashionable. As a result, the equilibrium price of digital cameras _____ and the equilibrium quantity _____. Selected Answer:b. may increase, decrease, or stay the same; increasesAnswers:a. increases; may increase, decrease, or stay the sameb. may increase, decrease, or stay the same; increasesc. decreases; increasesd. increases; increases

The economy's factors of production are not equally suitable for producing different types of goods. This principle generates: Answers:a. technical efficiency.b. the law of increasing opportunity cost.c. economic growth.d. underuse of resources.

The effect of a natural disaster can be shown by a(n) _____ the production possibility frontier. Answers:a. outward shift ofb. inward shift ofc. point inside ofd. movement from one point to another along

The law of demand states that, other things equal, as the price: .Answers:a. increases, the quantity demanded will increase.b. increases, the quantity demanded will decrease.c. decreases, the demand curve will shift to the right.d. increases, demand will decrease.

The market equilibrium is found at the: Selected Answer:b. price where quantity demanded equals quantity supplied.Answers:a. price where quantity supplied exceeds quantity demanded.b. price where quantity demanded equals quantity supplied.c. highest price possible in the market.d. price where quantity demanded exceeds quantity supplied.

The market for milk is initially in equilibrium. Milk producers successfully advertise to encourage milk drinking. At the same time, more milk producers enter the market. Standard demand and supply analysis tells us that the: Selected Answer:b. equilibrium quantity of milk will rise, but we can't determine how the equilibrium price will be affected.Answers:a. equilibrium price of milk will rise, but we can't determine how the equilibrium quantity will be affected.b. equilibrium quantity of milk will rise, but we can't determine how the equilibrium price will be affected.c. equilibrium price and quantity of milk will rise.d. equilibrium price and quantity of milk will fall.

The opportunity cost of production: Answers:a. is what you gain by producing the good.b. is what you give up to produce the good.c. is the price of a good.d. decreases as production increases.

The owner of the Dismal Philosopher, one of five bookstores on College Road, asks you to make a graph showing each College Road bookstore's share of all five stores' book purchases. The BEST way to show this information is with a(n): Selected Answer:b. pie chart.Answers:a. scatter diagram.b. pie chart.c. independent graph.d. time-series graph.

The price of microchips used to produce computers falls. As a result, the equilibrium price of computers _____ and the equilibrium quantity _____. Selected Answer:b. falls; increasesAnswers:a. rises; increasesb. falls; increasesc. falls; decreasesd. rises; decreases

The production possibility frontier is bowed out because: Answers:a. resources are inefficiently used.b. resources are not equally suited for the production of both goods.c. economic growth leads to inefficiency.d. resources are scarce.

The relation between two variables that move in opposite directions is said to be: Selected Answer:b. negative.Answers:a. independent.b. negative.c. direct.d. positive.

The supply curve for apartments in Oregon reflects how many apartments landlords are willing and able to offer for rent at various prices. Selected Answer:b. TrueAnswers:a. Falseb. True

When a market is in equilibrium, the quantity: Selected Answer:b. demanded is equal to quantity supplied.Answers:a. demanded is equal to zero.b. demanded is equal to quantity supplied.c. supplied is zero.d. demanded is greater than quantity supplied

When a nation's economy grows: Answers:a. it has been able to reach full employment.b. Truec. it has moved to a more consumer-oriented position on its production possibility frontier.d. False

Which factor would cause a decrease in the supply of a good? Selected Answer:b. an increase in the price of goods that are used in productionAnswers:a. an advancement in the technology for producing the goodb. an increase in the price of goods that are used in productionc. suppliers' expectations of lower prices in the futured. an increase in the number of producers

Which factor would cause a leftward shift in the supply curve for a good? Selected Answer:b. an increase in the cost of an inputAnswers:a. an increase in the number of sellersb. an increase in the cost of an inputc. a technological improvement in productiond. an increase in the number of buyers

Which factor would cause a leftward shift in the supply curve for a good? Selected Answer:b. an increase in the cost of an inputAnswers:a. an increase in the number of sellersb. an increase in the cost of an inputc. an increase in the number of buyersd. a technological improvement in production

Which factor would cause an increase in the supply of a good? Selected Answer:b. an increase in the number of sellersAnswers:a. input prices risingb. an increase in the number of sellersc. a fall in the price of the goodd. expectations of future price increases

Which factor would result solely in a movement along the demand curve for a particular good? Selected Answer:b. a change in the price of that goodAnswers:a. both a change in the price of that good and a change in the size of the populationb. a change in the price of that goodc. a change in the prices of related goodsd. a change in the size of the population

Which statement best exemplifies the law of demand? Selected Answer:b. As the price of a car rental rises, fewer cars are rented.Answers:a. As the price of corn rises, more acres of corn are planted.b. As the price of a car rental rises, fewer cars are rented.c. As the population rises, more electricity is consumed.d. As income taxes rise, fewer new cars are purchased.

(Ref 1A-9 Figure: Slope) Use Figure: Slope. This graph depicts _____ relationship between the X and Y variables . Selected Answer:c. a negativeAnswers:a. a positiveb. noc. a negatived. an independent

Which statement is correct? Selected Answer:b. A change in quantity demanded is a movement along the demand curve, and a change in demand is a shift of the demand curve.Answers:a. A change in demand is a movement along the demand curve, and a change in quantity demanded is a shift of the demand curve.b. A change in quantity demanded is a movement along the demand curve, and a change in demand is a shift of the demand curve.c. Both a change in quantity demanded and a change in demand are shifts of the demand curve, only in different directions.d. Both a change in quantity demanded and a change in demand are movements along the demand curve, only in different directions.

n the market for tacos, the factor that does not shift the supply curve to the left is: Selected Answer:b. a decrease in the price of tacos.Answers:a. an increase in the wages of taco shop workers.b. a decrease in the price of tacos.c. fewer taco shops.d. an increase in the price of beef.

"All other relevant factors remain unchanged" is another way of saying: Answers:a. no variables change. b. all other things equal. c. allow all variables to change and attempt to understand how the variables interact with each other. d. allow several variables to change to understand how those variables affect one variable held constant.

b. all other things equal.

Technological improvements will: Answers:a. leave the production possibility frontier unchanged.b. shift the production possibility frontier outward.c. necessarily lead to increased unemployment.d. shift the production possibility frontier inward.

b. shift the production possibility frontier

(Ref 1A-1 Figure: Cold Drinks Sold and Temperature) Use Figure: Cold Drinks Sold and Temperature. If we move from point C to point D in the figure, the outside temperature has _____ degrees and the number of cold drinks sold has _____. Selected Answer:c. increased by 20; increased by 20Answers:a. increased by 40; increased by 40b. decreased by 30; decreased by 30c. increased by 20; increased by 20d. increased by 30; increased by 30

(Ref 1A-14 Table: Price, Quantity Demanded, and Quantity Supplied) Use Table: Price, Quantity Demanded, and Quantity Supplied. The slope of the line representing the relationship between price on the vertical axis and quantity demanded on the horizontal axis is: Selected Answer:c. positive and getting steeper.Answers:a. negative and getting steeper.b. positive and constant.c. positive and getting steeper.d. positive and getting flatter.

(Ref 1A-16 Figure: Seasonally Adjusted Unemployment Rate) Use Figure: Seasonally Adjusted Unemployment Rate. The distance between each labeled point on the horizontal axis is one year, and the distance between each labeled point on the vertical axis is one percentage point of unemployment. Unemployment was _____ between 1/2001 and 1/2003 and _____ between 1/2007 and 1/2008. Selected Answer:c. increasing; increasingAnswers:a. decreasing; decreasingb. decreasing; increasingc. increasing; increasingd. increasing; decreasing

(Ref 1A-16 Figure: Seasonally Adjusted Unemployment Rate) Use Figure: Seasonally Adjusted Unemployment Rate. The distance between each labeled point on the horizontal axis is one year, and the distance between each labeled point on the vertical axis is one percentage point of unemployment. Using this graph, the unemployment rate was at its lowest point (in the time window) shown in _____ and at its highest point (in the time window shown) in _____. Selected Answer:c. 2000; 2003Answers:a. 2007; 2001b. 2003; 2000c. 2000; 2003d. 2003; 1999

(Ref 1A-18 Figure: Unemployment Rate over Time) Use Figure: Unemployment Rate over Time. In the time-series graph, as we move from 1993 to 1995, we see that the unemployment rate has _____ from approximately _____% to approximately _____%. Selected Answer:c. decreased; 7; 5.5Answers:a. increased; 4; 6.3b. increased; 5.3; 7.3c. decreased; 7; 5.5d. decreased; 5; 4

(Ref 1A-5 Figure: Demand and Supply of Shirts) Use Figure: Demand and Supply of Shirts. In the graph, if the line labeled D shows how many shirts per week will be demanded at various prices, then it is clear that, as the price of shirts falls: Selected Answer:c. more shirts will be demanded.Answers:a. fewer shirts will be demanded.b. the same quantity of shirts will be demanded.c. more shirts will be demanded.d. it is unclear what will happen to the quantity of shirts demanded.

(Ref 1A-7 Figure: Illustrating Slope) Use Figure: Illustrating Slope. In the graph, line 1 depicts X and Y to be: Selected Answer:c. negatively related.Answers:a. unrelated.b. nonlinearly related.c. negatively related.d. positively related.

(Ref 2-1 Table: Production Possibilities Schedule I) Use Table: Production Possibilities Schedule I. The opportunity cost of producing the third unit of consumer goods is _____ units of capital goods. Answers:a. 8b. 4c. 6d. 2

(Ref 2-2 Figure: Guns and Butter) Use Figure: Guns and Butter. This production possibility frontier is: Answers:a. linear because of constant costs.b. bowed in because of constant costs of guns and butter.c. bowed out because of increasing opportunity costs.d. bowed in because of increasing opportunity costs.

(Ref 2-4 Figure: Consumer and Capital Goods) Use Figure: Consumer and Capital Goods. The movement from curve 1 to curve 2 indicates: Answers:a. a decrease in the level of technology.b. instability.c. economic growth.d. a change from unemployment to full employment.

(Ref 2-5 Figure: Production Possibility Frontier for Tealand) Use Figure: Production Possibility Frontier for Tealand. Tealand is producing at point C on its production possibility frontier. What is the opportunity cost of increasing the production of tea from 20 million cups to 30 million cups? Answers:a. The answer is impossible to determine from the information given.b. 10 million sconesc. 5 million sconesd. 10 million cups of tea

(Ref 2-6 Figure: Omar's Production Possibilities) Use Figure: Omar's Production Possibilities. Which point or points represent(s) a feasible combination of coconuts and fish? Answers:a. A onlyb. A and Bc. A, B, and Cd. D only

(Ref 2-9 Figure: Production Possibility Frontier) Use Figure: Production Possibility Frontier. Which rate of production per period is not efficient? Answers:a. 16 cars and 12 computersb. 8 cars and 18 computersc. no cars and 18 computersd. 18 cars and no computers

(Ref 5-1 Figure: Demand for Coconuts) Use Figure: Demand for Coconuts. If there is an increase in preference for coconuts, it will be represented in the figure as a: Answers:a. movement from point B to point E.b. movement from point A to point B.c. shift from D1 to D2.d. shift from D1 to D3.

(Ref 7-1 Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline. Given the initial equilibrium of S 1 and D, any price lower than _____ will exert pressure for the price to _____. Selected Answer:c. $2.50; riseAnswers:a. $3.00; riseb. $2.00; fallc. $2.50; rised. $2.50; fall

(Ref 7-1 Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline. What might cause the supply curve to shift from S 2 back to the initial supply curve S 1? Selected Answer:c. The Organization of Petroleum Exporting Countries (OPEC) restricts the production of crude oil.Answers:a. Technology in the refinement of gasoline greatly improves.b. OPEC increases the production of crude oil.c. The Organization of Petroleum Exporting Countries (OPEC) restricts the production of crude oil.d. U.S. citizens want to buy more gas.

(Ref 7-3 Figure: Shifts in Demand and Supply) Use Figure: Shifts in Demand and Supply. The figure shows how supply and demand might shift in response to specific events. Suppose scientists discover that eating a tomato a day prevents aging. Which panel BEST describes how this will affect the market for tomatoes? Selected Answer:c. Panel CAnswers:a. Panel Db. Panel Ac. Panel Cd. Panel B

(Ref 7-4 Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II. The figure shows how supply and demand might shift in response to specific events. Suppose the technology for producing ethanol fuel improves. Which panel BEST describes how this will affect the market for ethanol? Selected Answer:c. Panel DAnswers:a. Panel Ab. Panel Bc. Panel Dd. Panel C

(Ref 7-4 Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II. The figure shows how supply and demand might shift in response to specific events. Suppose vast new oilfields are discovered offshore of California and gasoline prices fall. Which panel BEST describes how this will affect the market for sport utility vehicles, a complement in consumption to gasoline? Selected Answer:c. Panel AAnswers:a. Panel Cb. Panel Dc. Panel Ad. Panel B

A decrease in the price of eggs will result in an increase in the: Selected Answer:c. quantity of eggs demanded.Answers:a. quantity of eggs supplied.b. supply of eggs.c. quantity of eggs demanded.d. demand for eggs.

A new wonder diet that results in a dramatic weight loss sweeps through the United States. The key to the diet is to eat large amounts of red meat (beef) but no poultry or carbohydrate-rich foods. As millions of Americans switch to the new diet, we can expect a(n) _____ in the _____ beef, leading to a shift to the _____ in the _____ curve for beef and _____ beef prices. Selected Answer:c. increase; demand for; right; demand; higherAnswers:a. increase; demand for; right; demand; lowerb. decrease; supply of; left; supply; higherc. increase; demand for; right; demand; higherd. decrease; demand for; left; demand; higher

A production possibility frontier that is a line sloping straight down from left to right suggests that: Answers:a. there are no opportunity costs.b. the two products must have the same price.c. the opportunity costs of the products are constant.d. more of both goods could be produced moving along the frontier.

All points inside the production possibility frontier represent: Answers:a. efficient production points.b. infeasible production points.c. inefficient production points.d. regions of economic growth.

An ambiguous change in price and a decrease in quantity are most likely caused by: Selected Answer:c. a shift to the left in supply and a shift to the left in demand.Answers:a. a shift to the left in supply and a shift to the right in demand.b. no shift in supply and a shift to the left in demand.c. a shift to the left in supply and a shift to the left in demand.d. a shift to the right in supply and a shift to the left in demand.

Assume that corn is an input in the production of beef but not in the production of pork. Further, beef and pork are substitutes in consumption. A decrease in the price of corn will _____ the supply of beef and _____ the demand for pork. Selected Answer:c. increase; decreaseAnswers:a. decrease; decreaseb. decrease; increasec. increase; decreased. increase; increase

Consider the supply curve for cotton shirts. An increase in the price of cotton will: Selected Answer:c. decrease the supply of cotton shirts.Answers:a. increase the quantity supplied of cotton shirts.b. decrease the demand for cotton shirts.c. decrease the supply of cotton shirts.d. increase the supply of cotton shirts.

Customers used to pay inside before pumping gas. When gas stations introduced paying at the pump, thus decreasing production costs, there was a shift to the _____ in the _____ curve and gas prices _____. Selected Answer:c. right; supply; decreasedAnswers:a. right; demand; increasedb. left; supply; increasedc. right; supply; decreasedd. left; demand; decreased

Frances has a linear production possibility frontier when she produces tomatoes and green beans. If she uses all of her resources, she can produce 400 bushels of tomatoes or 800 bushels of green beans. Frances is not producing efficiently if she produces _____ bushels of tomatoes and _____ bushels of green beans. Answers:a. 200; 400b. 400; 0c. 200; 200d. 0; 800

Good X and good Y are related goods. Holding everything else constant, if the price of good X decreases and the demand for good Y increases, good X and good Y are probably: Selected Answer:c. complements.Answers:a. substitutes.b. inferior.c. complements.d. normal.

If goods A and B are substitutes, a decrease in the price of good B will: Selected Answer:c. decrease the demand for good A.Answers:a. increase the demand for good A.b. increase the demand for good B.c. decrease the demand for good A.d. increase the demand for good B and decrease the demand for good A.

If supply is upward sloping, a shift of a demand curve to the right, all other things unchanged, will: Selected Answer:c. increase equilibrium price and quantity.Answers:a. decrease equilibrium quantity and increase equilibrium price.b. increase equilibrium quantity and decrease equilibrium price.c. increase equilibrium price and quantity.d. decrease equilibrium price and quantity.

If supply is upward sloping, an increase in demand, all other things unchanged, will result in a(n) _____ in equilibrium price and a(n) _____ in equilibrium quantity. Selected Answer:c. increase; increaseAnswers:a. increase; decreaseb. decrease; increasec. increase; increased. decrease; decrease

If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price: Selected Answer:c. is above the market equilibrium price.Answers:a. is below the market equilibrium price.b. will rise to clear the market.c. is above the market equilibrium price.d. will either rise or remain unchanged.

If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price: Selected Answer:c. is above the market equilibrium price.Answers:a. will either rise or remain unchanged.b. is below the market equilibrium price.c. is above the market equilibrium price.d. will rise to clear the market.

If the supply and demand curves intersect at a price of $14, then any price below that would result in: Selected Answer:c. a shortage.Answers:a. an increase in demand.b. equilibrium.c. a shortage.d. a surplus.

In Kessy's old kitchen, he could bake 10 cookies or mix 15 glasses of lemonade in one day. Now Kessy has a larger oven and refrigerator. How does this affect his production possibility frontier? Answers:a. He will not be able to produce as much as before.b. He will be less efficient.c. It shifts his production possibility frontier out.d. It shifts his production possibility frontier in.

It is almost certain that the equilibrium quantity will fall when: Answers:a. the supply curve shifts to the right and the demand curve shifts to the left.b. the supply curve and the demand curve both shift to the right.c. supply shifts to the left and demand stays the same.d. the supply curve shifts to the left and demand shifts to the right.

Markets that are characterized by many buyers and many sellers are: Answers:a. inefficient.b. monopolies.c. competitive.d. foreign.

Pizza is a normal good. If students' incomes at your college increase, the effect on pizza will be: Selected Answer:c. an increase in the demand.Answers:a. a decrease in the demand.b. no change in the demand.c. an increase in the demand.d. an increase in the quantity demanded.

Professor Macro wants to use a numerical graph to show the percentage of government spending accounted for by its various components. Which graph is most suitable for this purpose? Selected Answer:c. a pie chartAnswers:a. a scatter diagramb. a time-series graphc. a pie chartd. a bar graph

Recent research suggests that certain plastic containers may have cancer-causing particles in them. As a result of this research being made public, one would expect: .Answers:a. no effect.b. the price of the containers to change because of a movement along the demand curve.c. the demand for such containers to decrease.d. the quantity demanded for such containers to increase.

Suppose Poland is producing on its production possibilities frontier, and it decides to increase the production of steel and decrease the production of vodka. The bowed-out production possibility frontier suggests that there will be a(n) _____ opportunity cost of producing more steel. Answers:a. unchangedb. decreasingc. increasingd. nonexistent

Suppose the equilibrium price of good X is $25 and the equilibrium quantity is 124 units. If the price of good X is $2: Selected Answer:c. there will be excess demand for good X.Answers:a. the market will clear.b. the quantity demanded of good X will be less than 124 units.c. there will be excess demand for good X.d. there will be an excess supply of good X.

Suppose the input costs associated with manufacturing hair replacement treatments decrease over time. This would lead to a(n): Selected Answer:c. increase in the supply of such treatments, lower prices, and an increase in the equilibrium quantity.Answers:a. decrease in the supply of such treatments, higher prices, and a decrease in the equilibrium quantity.b. increase in demand and higher prices.c. increase in the supply of such treatments, lower prices, and an increase in the equilibrium quantity.d. decrease in quantity supplied and lower prices.

Suppose the market for gasoline is in equilibrium. You have heard that the price of crude oil is falling because of new oil discoveries. You are also aware that the number of car and truck drivers is steadily rising. Knowing this, you predict that the price of gasoline will _____ and the quantity of gasoline bought and sold will _____. Selected Answer:c. rise or fall; riseAnswers:a. rise; riseb. rise or fall; fallc. rise or fall; rised. rise; fall

The demand curve for monthly subscriptions to HBO has shifted to the right. What could have caused it? Answers:a. an increase in the supply of HBO subscriptionsb. an increase in the price of HBO subscriptionsc. an increase in the incomes of buyersd. a fall in the price of HBO subscriptions

The market price of airline flights increased recently. Some economists suggest that the price increased because several airlines went out of business. They believe that, in the market for flights: Selected Answer:c. supply decreased.Answers:a. demand increased.b. demand decreased.c. supply decreased.d. supply increased.

The process observed when an economy's production possibility frontier shifts outward is: Answers:a. specialization.b. comparative advantage.c. economic growth.d. full employment.

The production possibility frontier illustrates that: Answers:a. the economy will automatically end up at full employment.b. an economy's productive capacity increases one-for-one with its population.c. if all resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced.d. economic production possibilities have no limit.

The production possibility frontier will not shift outward due to an: Answers:a. increase in the labor force.b. improvement in technology.c. increase in the unemployment rate.d. increase in worker productivity.

Two points on a nonlinear curve have coordinates given by (5, 15) and (17, 13). The average slope of the curve between these points is: Selected Answer:c. -1/6.Answers:a. -6.b. 1/4.c. -1/6.d. 2.5.

Two points on a nonlinear curve have coordinates given by (5, 15) and (17, 13). The average slope of the curve between these points is: Selected Answer:c. -1/6.Answers:a. 1/4.b. 2.5.c. -1/6.d. -6.

When an increase in the price of wheat, an important ingredient in the production of bread, happens at the same time as an increase in the number of people consuming bread: Selected Answer:c. equilibrium price will increase, but equilibrium quantity may decrease, increase, or stay the same.Answers:a. equilibrium quantity will decrease, but equilibrium price may decrease, increase, or stay the same.b. both the equilibrium price and quantity will decrease.c. equilibrium price will increase, but equilibrium quantity may decrease, increase, or stay the same.d. both the equilibrium price and quantity will increase.

When building a model, economists: Answers:a. are careful to avoid the scientific method.b. ignore the facts and instead try to determine what the facts should be.c. simplify reality to highlight what really matters.d. attempt to duplicate reality in all of its complexity.

When the price of a good increases and the quantity demanded decreases, this demonstrates: Answers:a. the production possibilities frontierb. efficiencyc. the law of demandd. the supply schedule

When the price of lamps increases, the: Selected Answer:c. quantity supplied increases.Answers:a. quantity supplied decreases.b. supply increases.c. quantity supplied increases.d. supply decreases.

Which factor is most likely to shift the supply of milk to the right? Selected Answer:c. a decrease in the price of feed given to dairy cowsAnswers:a. the bankruptcy of many small dairy farmsb. a tax on each gallon of milk producedc. a decrease in the price of feed given to dairy cowsd. an increase in household income, milk being a normal good

Which factor would cause a decrease in the supply of a good? Selected Answer:c. suppliers' expectations of higher prices in the futureAnswers:a. a decrease in input pricesb. an increase in the number of sellers in the marketc. suppliers' expectations of higher prices in the futured. an advancement in the technology for producing the good

Which factor would cause a decrease in the supply of a good? Selected Answer:c. suppliers' expectations of higher prices in the futureAnswers:a. an advancement in the technology for producing the goodb. an increase in the number of sellers in the marketc. suppliers' expectations of higher prices in the futured. a decrease in input prices

Which factor would cause a leftward shift in the supply curve for a good? Selected Answer:c. an increase in the cost of an inputAnswers:a. a technological improvement in productionb. an increase in the number of buyersc. an increase in the cost of an inputd. an increase in the number of sellers

Which factor would cause an increase in the supply of a good? Answers:a. an increase in the price of the goodb. suppliers' expectations of higher prices in the futurec. a decrease in the price of resources used in productiond. an increase in input prices

Which statement is correct? Answers:a. A change in demand is a movement along the demand curve, and a change in quantity demanded is a shift of the demand curve.b. Both a change in quantity demanded and a change in demand are shifts of the demand curve, only in different directions.c. A change in quantity demanded is a movement along the demand curve, and a change in demand is a shift of the demand curve.d. Both a change in quantity demanded and a change in demand are movements along the demand curve, only in different directions.

Which two goods are most likely substitutes in consumption? Answers:a. loaves of bread and sticks of butterb. loaves of bread and gasolinec. loaves of bread and hamburger bunsd. loaves of bread and toasters

You notice that the price of Blu-ray players falls and the quantity of Blu-ray players sold increases. This set of observations can be the result of the _____ Blu-ray players shifting to the _____. Selected Answer:c. supply of; rightAnswers:a. demand for; leftb. demand for; rightc. supply of; rightd. supply of; left

_____ illustrates a positive relationship between price and quantity. Selected Answer:c. A supply curveAnswers:a. A demand curveb. A production possibility frontierc. A supply curved. Equilibrium

_____ illustrates a positive relationship between price and quantity. Selected Answer:c. A supply curveAnswers:a. A production possibility frontierb. Equilibriumc. A supply curved. A demand curve

n the market for canned pinto beans, _____ will increase if income increases and if pinto beans are a(n) _____ good. Selected Answer:c. demand; normalAnswers:a. supply; inferiorb. demand; inferiorc. demand; normald. supply; normal

Use Table: Production of Good Z and Good X in Urbanville. This table shows the production possibility frontier for Urbanville. Suppose Urbanville is producing 15 of Z and 45 of X; this combination is: Answers:a. neither productively nor allocatively efficient.b. both allocatively and productively efficient.c. productively efficient.d. allocatively efficient.

c. productively efficient.

"All other relevant factors remain unchanged" is another way of saying: Answers:a. allow several variables to change to understand how those variables affect one variable held constant.b. allow all variables to change and attempt to understand how the variables interact with each other.c. no variables change.d. all other things equal.

(Ref 1A-14 Table: Price, Quantity Demanded, and Quantity Supplied) Use Table: Price, Quantity Demanded, and Quantity Supplied. The data in the figure suggest a nonlinear relation between: Selected Answer:d. price and quantity demanded.Answers:a. price and quantity supplied.b. price and quantity demanded, as well as price and quantity supplied.c. The table does not show a nonlinear relation.d. price and quantity demanded.

(Ref 1A-14 Table: Price, Quantity Demanded, and Quantity Supplied) Use Table: Price, Quantity Demanded, and Quantity Supplied. The slope of the line representing the relationship between price on the vertical axis and quantity demanded on the horizontal axis is: Selected Answer:d. positive and getting steeper.Answers:a. positive and constant.b. positive and getting flatter.c. negative and getting steeper.d. positive and getting steeper.

(Ref 1A-5 Figure: Demand and Supply of Shirts) Use Figure Demand and Supply of Shirts. If the line labeled S shows how many shirts per week will be offered for sale at various prices, then it is clear that, for supply, quantity and price are: Selected Answer:d. nonlinear.Answers:a. coordinated.b. linear.c. negatively sloped.d. nonlinear.

(Ref 1A-7 Figure: Illustrating Slope) Use Figure: Illustrating Slope. In the graph, line 1 depicts X and Y to be: Selected Answer:d. negatively related.Answers:a. positively related.b. nonlinearly related.c. unrelated.d. negatively related.

(Ref 2-13 Figure: Sugar and Freight Trains) Use Figure: Sugar and Freight Trains. Suppose the economy is operating at point C. The opportunity cost of producing the fourth freight train would be: Answers:a. 3 freight trains.b. 45 tons of sugar.c. 19 tons of sugar.d. 80 tons of sugar.

(Ref 2-4 Figure: Consumer and Capital Goods) Use Figure: Consumer and Capital Goods. Assume the economy's current production possibilities frontier is given by curve 1. Point Z: Answers:a. is attainable if the economy is able to reach full employment.b. will be attained as soon as the economy becomes efficient and moves to curve 2.c. is attainable if the quantity and/or quality of factors decreases.d. is unattainable, all other things unchanged.

(Ref 2-5 Figure: Production Possibility Frontier for Tealand) Use Figure: Production Possibility Frontier for Tealand. Tealand can produce at point E only if: Answers:a. the government eliminates unemployment.b. it increases the cost of production by decreasing the use of technology.c. the government raises taxes.d. the country experiences economic growth.

(Ref 2-5 Figure: Production Possibility Frontier for Tealand) Use Figure: Production Possibility Frontier for Tealand. Tealand can produce at point E only if: Answers:a. the government raises taxes.b. it increases the cost of production by decreasing the use of technology.c. the government eliminates unemployment.d. the country experiences economic growth.

(Ref 2-6 Figure: Omar's Production Possibilities) Use Figure: Omar's Production Possibilities. The opportunity cost for Omar to move from point C on the curve to point A is: Answers:a. 30 fish.b. 10 coconuts.c. 5 coconuts.d. There is no opportunity cost.

(Ref 2-8 Figure: Wine and Wheat) Use Figure: Wine and Wheat. The opportunity cost of moving from producing only wheat to producing only wine is _____ tons of wheat. Answers:a. 6b. 3c. 9d. 15

(Ref 2-9 Figure: Production Possibility Frontier) Use Figure: Production Possibility Frontier. This production possibility frontier is: Answers:a. linear because of constant costs.b. bowed in because of increasing opportunity costs.c. bowed out because of constant cost of cars and computers.d. bowed out because of increasing opportunity costs.

(Ref 5-1 Figure: Demand for Coconuts) Use Figure: Demand for Coconuts. If fish is a substitute good for coconuts and the price of fish increases, it will be represented in the figure as a: Selected Answer:d. shift from D1 to D2.Answers:a. movement from point B to point E.b. movement from point A to point B.c. shift from D1 to D3.d. shift from D1 to D2.

(Ref 5-2 Figure: Demand for Online Movie Rentals) Use Figure: Demand for Online Movie Rentals. A decrease in the price of Google Chromecast adapters (a complement good) would result in a change illustrated by the move from: Selected Answer:d. h to i in Panel B.Answers:a. j to k in Panel C.b. l to m in Panel D.c. f to g in Panel A.d. h to i in Panel B.

(Ref 6-1 Figure: Supply of Coconuts) Use Figure: Supply of Coconuts. If the price of coconuts decreased, it would be represented in the figure as a movement from: Selected Answer:d. A to B.Answers:a. E to B.b. B to A.c. C to A.d. A to B.

(Ref 6-10 Figure: The Market for Candy) Use Figure: The Market for Candy. Equilibrium occurs at a price of _____, and the equilibrium quantity is equal to _____. Selected Answer:d. P2; Q3Answers:a. P3; Q2b. P1; Q3c. P1; Q5d. P2; Q3

(Ref 6-4 Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.50, there is a: Selected Answer:d. shortage of 70 bags per month.Answers:a. surplus of 35 bags per month.b. shortage of 35 bags per month.c. surplus of 70 bags per month.d. shortage of 70 bags per month.

(Ref 6-4 Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.80, there is a monthly: Selected Answer:d. surplus of 140 bags per month.Answers:a. shortage of 70 bags per month.b. surplus of 70 bags per month.c. shortage of 140 bags per month.d. surplus of 140 bags per month.

(Ref 6-4 Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for Chocolate-Covered Peanuts. The equilibrium quantity and the equilibrium price are _____ bags per month and _____. Selected Answer:d. 175; $0.60Answers:a. 140; $0.40b. 210; $0.50c. 175; $0.80d. 175; $0.60

(Ref 6-5 Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of Wheat. What is the equilibrium quantity in this wheat market each period? Selected Answer:d. 6,000 bushelsAnswers:a. 2,000 bushelsb. 10,000 bushelsc. 12,000 bushelsd. 6,000 bushels

(Ref 6-7 Figure: The Blu-ray Disc Rental Market) Use Figure: The Blu-ray Disc Rental Market. At a rental price of $3, there will be: Selected Answer:d. an excess demand of 40 Blu-ray disc rentals.Answers:a. an excess supply of 40 Blu-ray disc rentals.b. an increase in demand.c. equilibrium in the rental market for Blu-ray discs.d. an excess demand of 40 Blu-ray disc rentals.

(Ref 6-7 Figure: The Blu-ray Disc Rental Market) Use Figure: The Blu-ray Disc Rental Market. If the rental price of Blu-ray discs rises from $5 to $7: Selected Answer:d. the quantity demanded will decrease from 50 to 30 rentals per weekend.Answers:a. supply will increase from 50 to 70 rentals per weekend.b. demand will decrease from 50 to 30 rentals per weekend.c. the quantity supplied will increase from 50 to 60 rentals per weekend.d. the quantity demanded will decrease from 50 to 30 rentals per weekend.

If supply is upward sloping, an increase in demand, all other things unchanged, will result in a(n) _____ in equilibrium price and a(n) _____ in equilibrium quantity. Selected Answer:d. increase; increaseAnswers:a. increase; decreaseb. decrease; decreasec. decrease; increased. increase; increase

(Ref 7-4 Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II. The figure shows how supply and demand might shift in response to specific events. Suppose the birthrate decreases. Which panel best describes how this will affect the market for diapers? Selected Answer:d. Panel BAnswers:a. Panel Cb. Panel Ac. Panel Dd. Panel B

(Ref 7-4 Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II. The graph shows how supply and demand might shift in response to specific events. Suppose a drought destroys one-third of the nation's peanut crop. Which panel best describes how this will affect the market for peanuts? Selected Answer:d. Panel CAnswers:a. Panel Bb. Panel Ac. Panel Dd. Panel C

(Ref 7-4 Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II. The graph shows how supply and demand might shift in response to specific events. Suppose scientists discover that eating pomegranates causes aging. Which panel best describes how this will affect the market for pomegranates? Selected Answer:d. Panel BAnswers:a. Panel Ab. Panel Cc. Panel Dd. Panel B

(Ref 7-4 Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II. The graph shows how supply and demand might shift in response to specific events. Suppose scientists discover that eating pomegranates causes aging. Which panel best describes how this will affect the market for pomegranates? Selected Answer:d. Panel BAnswers:a. Panel Db. Panel Ac. Panel Cd. Panel B

(Ref 7-4 Figure: Shifts in Demand and Supply III) Use Figure: Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose scientists discover that eating asparagus slows the aging process. Which panel BEST describes how this will affect the market for asparagus? Selected Answer:d. Panel AAnswers:a. Panel Db. Panel Cc. Panel Bd. Panel A

A _____ graph shows how the value of one or more variables has changed over some period. Selected Answer:d. time-seriesAnswers:a. periodic tableb. linearc. nonlineard. time-series

A beneficial technological change is developed in the production of cranberries. At the same time, scientists discover that cranberries have significant health benefits. This will result in: Selected Answer:d. an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of cranberries.Answers:a. an increase in both the equilibrium price and quantity in the cranberry market.b. a decrease in both the equilibrium price and quantity in the cranberry market.c. a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of cranberries.d. an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of cranberries.

A simplified version of reality that is used to clarify economic situations is called a(n): Answers:a. current event.b. scarce resource.c. economic fact.d. model.

An increase in the price and an ambiguous change in quantity is most likely caused by: Selected Answer:d. a shift to the left in supply and a shift to the right in demand.Answers:a. a shift to the right in supply and a shift to the left in demand.b. a shift to the left in supply and no shift in demand.c. a shift to the left in demand and no shift in supply.d. a shift to the left in supply and a shift to the right in demand.

An increase in the price of hamburger would probably result in _____ in the demand for hamburger buns. Answers:a. random fluctuationsb. no changec. an increased. a decrease

An inward shift in the U.S. economy's production possibility frontier could represent: Answers:a. workers moving from New Jersey to Massachusetts.b. U.S. economic growth.c. a movement from labor-intensive to capital-intensive industries in some states.d. U.S. workers moving to Canada.

Consider the supply curve for cotton shirts. An increase in the price of cotton will: Selected Answer:d. decrease the supply of cotton shirts.Answers:a. increase the supply of cotton shirts.b. increase the quantity supplied of cotton shirts.c. decrease the demand for cotton shirts.d. decrease the supply of cotton shirts.

Economic models often: Answers:a. are correct.b. provide similar answers.c. fail to explain any of the real-life scenarios they are supposed to help solve.d. vary greatly in assumptions and simplifications.

Economists use models to explain real-life situations because: Answers:a. real-life situations are not relevant to the building of models.b. such models tend to be exactly what is occurring in each situation.c. assumptions found in such models tend to make analyzing the situation more difficult.d. simplifications and assumptions often yield results that can help to explain the more difficult real-life situations.

French fries and hamburgers are complements in consumption. Suppose the cost of the ingredients used to make hamburgers rises, so that the price of a hamburger rises. Then the equilibrium price of french fries _____ and the equilibrium quantity _____. Selected Answer:d. falls; decreasesAnswers:a. falls; increasesb. rises; increasesc. rises; decreasesd. falls; decreases

High-fructose corn syrup, which is derived from corn, is an important ingredient in the production of many soft drinks. If the price of corn increases, one would expect the: Selected Answer:d. supply curve for soft drinks to shift left.Answers:a. demand for soft drinks to increase.b. supply curve for soft drinks to shift right.c. quantity supplied of soft drinks to increase.d. supply curve for soft drinks to shift left.

If Largetown's labor resource decreases by 40 hours, the opportunity cost of producing shirts: Answers:a. increases.b. decreases.c. may or may not change depending upon the number of pairs of socks it wishes to produce.d. does not change.

If chicken and beef are substitutes, then a fall in the price of chicken will bring about: Selected Answer:d. a decrease in the demand for beef.Answers:a. an increase in the demand for beef.b. no change in the demand for beef.c. an increase in the quantity demanded of beef.d. a decrease in the demand for beef.

If the market for buffalo meat is in equilibrium, the price of buffalo meat will probably _____ in the near future. Selected Answer:d. not changeAnswers:a. increase considerablyb. increasec. decreased. not change

If the price of mozzarella cheese (an ingredient in pizza) declines, there will be: Selected Answer:d. an increase in the supply of pizza.Answers:a. no change in the supply of pizza.b. a decrease in the quantity of pizza supplied.c. a decrease in the supply of pizza.d. an increase in the supply of pizza.

If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price: Selected Answer:d. is above the market equilibrium price.Answers:a. will rise to clear the market.b. will either rise or remain unchanged.c. is below the market equilibrium price.d. is above the market equilibrium price.

If two points on a graph are (0, 8) and (12, 15): Selected Answer:d. X and Y have a positive relation.Answers:a. the slope of a line connecting two points is negative.b. X is 0 when Y is 12.c. the horizontal intercept is given by the point (0,8).d. X and Y have a positive relation.

If two variables are negatively related then: Selected Answer:d. as one goes up in value, the other must go down in value.Answers:a. one variable is always the reciprocal of the other.b. there is no relationship between the two.c. as one goes up in value, the other must go up in value, too.d. as one goes up in value, the other must go down in value.

If two variables are negatively related, they will always be represented by a: Selected Answer:d. line or curve that slopes downward.Answers:a. straight line.b. line or curve that slopes upward.c. horizontal line.d. line or curve that slopes downward.

In a time-series graph, large changes can be made to appear insignificant by: Selected Answer:d. changing the scale of the axes.Answers:a. labeling more intervals.b. defining the independent variable.c. defining the dependent variable.d. changing the scale of the axes.

In looking at a chart of the positive relationship between police officers and crime, the mayor remarks that more police officers cause more crime. The mayor may be wrong because she did not consider: Selected Answer:d. reverse causality.Answers:a. the features of construction.b. tangent lines.c. omitted variables.d. reverse causality.

In the market for corn tortilla chips, what would cause a price increase? Selected Answer:d. A fungus kills much of the corn crop in Nebraska.Answers:a. The price of salsa triples.b. Doctors tell their patients that tortilla chips are unhealthy.c. There is a technological advance in tortilla chip production.d. A fungus kills much of the corn crop in Nebraska.

It is certain that the equilibrium price will rise when the supply curve shifts to the _____ and the demand curve shifts to the _____. Selected Answer:d. left; rightAnswers:a. right; rightb. right; leftc. left; leftd. left; right

Market equilibrium occurs when: .Answers:a. there is no incentive for prices to change in the market.b. quantity demanded equals quantity supplied.c. the market clears.d. there is no incentive for prices to change in the market, quantity demanded equals quantity supplied, and the market clears.

Raclette is a popular wintertime dish in Switzerland. It is essentially melted Raclette cheese over boiled new potatoes. If the price of Raclette cheese decreased, we would expect to see: .Answers:a. an increase in demand for both Raclette cheese and new potatoes.b. an increase in demand for Raclette cheese.c.no effect on the demand for either of the Raclette ingredients since this is a traditional dish and its consumption does not depend on the prices of the ingredients.d. an increase in demand for new potatoes.

Ref 2-2 Figure: Guns and Butter) Use Figure: Guns and Butter. On this figure, points A, B, E, and F: Answers:a. indicate increasing opportunity costs for guns but decreasing opportunity costs for butter.b. indicate constant opportunity costs for guns and increasing costs for butter.c. indicate that society wants butter more than it wants guns.d. indicate combinations of guns and butter that society can produce using all of its factors efficiently.

Ref 2-9 Figure: Production Possibility Frontier) Use Figure: Production Possibility Frontier. Points A, B, E, and F: Answers:a. indicate that society wants computers more than cars.b.show that the opportunity cost of cars increases as more cars are produced but that of more computers decreases as more computers are produced.c. indicate constant opportunity costs for cars and increasing opportunity costs for computers.d. indicate combinations of cars and computers that society can produce using all of its resources efficiently.

Researchers find a new strain of genetically modified seeds that result in a higher yield for corn producers. Holding all other things constant, this research will: Selected Answer:d. shift the supply curve for corn to the right.Answers:a. decrease the quantity supplied of corn.b. increase the quantity supplied of corn.c. shift the supply curve for corn left.d. shift the supply curve for corn to the right.

Suppose Oklahoma decides to produce only two goods, oil and football helmets. If Oklahoma is producing on its production possibility frontier, as oil production increases, the production of football helmets will: Answers:a. decrease at a necessarily decreasing rate.b. increase.c. not change.d. decrease at some rate.

Suppose the equilibrium price of good X is $25 and the equilibrium quantity is 124 units. If the price of good X is $2: Selected Answer:d. there will be excess demand for good X.Answers:a. there will be an excess supply of good X.b. the market will clear.c. the quantity demanded of good X will be less than 124 units.d. there will be excess demand for good X.

Taylor sees a bar graph showing the average weight of adult males over the past 200 years and concludes that men get more obese over time. Taylor's conclusion may be wrong since she did not consider: Selected Answer:d. omitted variables.Answers:a. reverse causality.b. the features of construction.c. tangent lines.d. omitted variables.

Technological improvements will: Answers:a. leave the production possibility frontier unchanged.b. necessarily lead to increased unemployment.c. shift the production possibility frontier inward.d. shift the production possibility frontier outward.

The demand for a good will increase if: .Answers:a. there is a decrease in the price of the good.b. the price of a complementary good increases.c. the price of inputs needed in the production of the good decrease.d. there is an increase in the number of consumers in this market.

The effect of a natural disaster can be shown by a(n) _____ the production possibility frontier. Answers:a. outward shift ofb. movement from one point to another alongc. point inside ofd. inward shift of

The fact that a society's production possibility frontier is bowed out, or concave to the origin of a graph, demonstrates the law of _____ opportunity cost. Answers:a. concaveb. decreasingc. constantd. increasing

The market equilibrium is found at the: Selected Answer:d. price where quantity demanded equals quantity supplied.Answers:a. highest price possible in the market.b. price where quantity supplied exceeds quantity demanded.c. price where quantity demanded exceeds quantity supplied.d. price where quantity demanded equals quantity supplied.

The market for corn is in equilibrium. Which factor is most likely to increase the equilibrium price of corn? Selected Answer:d. increasing production of corn-based ethanolAnswers:a. a bountiful harvestb. a decrease in the price of wheat, a substitute in consumptionc. decreasing household incomes, with corn being a normal goodd. increasing production of corn-based ethanol

The market price of airline flights increased recently. Some economists suggest that the price increased because of an increase in the number of business travelers. They believe that, in the market for flights: Selected Answer:d. demand increased.Answers:a. supply increased.b. supply decreased.c. demand decreased.d. demand increased.

The production possibility frontier illustrates that: Answers:a. the economy will automatically end up at full employment.b. an economy's productive capacity increases one-for-one with its population.c. economic production possibilities have no limit.d. if all resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced.

The production possibility frontier illustrates: Answers:a. the inverse relation between price and quantity of a particular good.b. that, when markets don't achieve efficiency, government intervention can improve society's welfare.c. that people usually exploit opportunities to make themselves better off.d. the maximum quantity of one good that can be produced given the quantity of the other good produced.

What is the maximum number of pairs of socks Largetown can produce? Answers:a. 2b. 4c. 20d. 40

When an increase in the price of wheat, an important ingredient in the production of bread, happens at the same time as an increase in the number of people consuming bread: Selected Answer:d. equilibrium price will increase, but equilibrium quantity may decrease, increase, or stay the same.Answers:a. both the equilibrium price and quantity will decrease.b. both the equilibrium price and quantity will increase.c. equilibrium quantity will decrease, but equilibrium price may decrease, increase, or stay the same.d. equilibrium price will increase, but equilibrium quantity may decrease, increase, or stay the same.

Which factor is most likely to shift the supply of milk to the right? Selected Answer:d. a decrease in the price of feed given to dairy cowsAnswers:a. an increase in household income, milk being a normal goodb. the bankruptcy of many small dairy farmsc. a tax on each gallon of milk producedd. a decrease in the price of feed given to dairy cows

Which factor is not a determinant of supply? Selected Answer:d. consumer tastesAnswers:a. expectations regarding future pricesb. the cost of productionc. the technology of productiond. consumer tastes

Which factor will not cause an increase in the supply of good X? Selected Answer:d. an increase in the price of inputs used to produce good XAnswers:a. a decrease in the price of labor used to produce good Xb. an improvement in the technology used to produce good Xc. an increase in the number of firms that sell good Xd. an increase in the price of inputs used to produce good X

Which factor will not cause an increase in the supply of good X? Selected Answer:d. an increase in the price of inputs used to produce good XAnswers:a. an improvement in the technology used to produce good Xb. a decrease in the price of labor used to produce good Xc. an increase in the number of firms that sell good Xd. an increase in the price of inputs used to produce good X

Which factor would cause an increase in the supply of a good? Selected Answer:d. a decrease in the price of resources used in productionAnswers:a. an increase in the price of the goodb. suppliers' expectations of higher prices in the futurec. an increase in input pricesd. a decrease in the price of resources used in production

Which factor would not cause the supply curve to shift? Selected Answer:d. a change in the price of the goodAnswers:a. a change in suppliers' expectations of future pricesb. a change in the technology of productionc. a change in factor costsd. a change in the price of the good

Which statement best exemplifies the law of demand? Answers:a. As the population rises, more electricity is consumed.b. As income taxes rise, fewer new cars are purchased.c. As the price of corn rises, more acres of corn are planted.d. As the price of a car rental rises, fewer cars are rented.

Microeconomics Midterm

संबंधित स्टडी सेट्स

Chem 121 Chapter 1&2

ICP Nclex Questions

Finance 4B

ACCT 2110 Exam 4

eco

biology - recitation 4 - taste - quiz 2

US History Chapter 28

Course 2

Chapter Eight Sapling

AP Computer Science Unit 6

Principles of Mgmt. - Chapter 4

CMSC 471

7th grade SS Chapter 34 The Scientific Revolution

APUSH16: The Gilded Age

Political Partisipation Khan Academy

Voting and Elections

Unit 2-Principles of Imaging Part 2: CT, MRI; Intro to Fractures

Module 6

Sociology Unit 10 & 11 Quiz Questions and Answers

Macroeconomics Chapter 1