Test 1

The additional cost to a firm of producing one more unit of a good or service is (minimum cost, total cost, opportunity cost, marginal cost)

Marginal cost

Which of the following is a result of government price controls? (Some people win and some people lose, Price controls benefit poor consumers but harm producers and wealthy consumers, Price controls increase economic efficiency)

Some people win and some people lose

If, in a competitive market, marginal benefit is greater than marginal cost (the government must force producers to lower price in order to achieve economic efficiency, the quantity sold is less than the equilibrium quantity)

The quantity sold is less than the equilibrium quantity

Scarcity refers to the situation in which (unlimited wants exceed limited resources, unlimited resources exceed limited wants, a country's population is larger than is resource base)

Unlimited wants exceed limited resources

Buyers will bear the entire burden of a unit tax if the demand curve for a product is (horizontal, vertical, downward sloping, upward sloping)

Vertical

Which of the following statements is true? (An inverse relationship has a positive slope value, a direct relationship has a negative slope value, a curved line has slope values that change at every point, a straight line has a slope of one)

A curved line has slope values that change at every point

Published in 1776 "------" was written by Adam Smith (The General Theory of Employment, Interest, and Money; The Communist Manifesto;The Declaration; An Inquire into the Nature and Causes of the Wealth of Nations"

An Inquire into the Nature and Causes of the Wealth of Nations

An increase in the demand for peanuts due to changes in consumer tastes, accompanied by an increase int eh supply of peanuts as a result of favorable growing conditions, will result in (an increase in the equilibrium price of peanuts; the equilibrium quantity may increase or decrease, or an increase in the equilibrium quantity of peanuts; the equilibrium price may increase or decrease)

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

Which of the following would cause the equilibrium price of ketchup to increase and the equilibrium quantity of ketchup to decrease? (A decrease in the price of tomatoes, an increase in the price of tomatoes, an increase in the price of mustard, a substitute for ketchup)

An increase in the price of tomatoes

An increase in the price of MP3 players will result in (a smaller quantity of MP3 players supplied, a larger quantity of MP3 players supplied, a decrease in the demand for MP3 players, an increase in the supply of MP3 players)

An increase in the supply of MP3 players

------ a nation's PPF represents economic growth. (An outward shift of, A inward shift of, Moving up along, Moving down along)

An outward shift of

If the PPF is linear, then opportunity costs are (decreasing as more of one good is produce, increasing as more of one good is produced, constant as more of one good is produced)

Constant as more of one good is produced

The decision about what goods and services will be produced in a market economy is made by (lawmakers in the government voting on what will be produced, workers deciding to produce only what the boss says must be produced, producers deciding what society wants most, consumers and firms choosing which goods and services to buy or produce)

Consumers and firms choosing which goods and services to buy or produce

A worker is hired in a (goods and services market, product market, government market, factor market)

Factor market

The branch of economics which studies the behavior of entire economies and policies that affect the economy as a whole is called (public economics, microeconomics, macroeconomics, normative economics)

Macroeconomics

To affect the market outcome, a price floor must be (set above the black market price, set above the legal price, set above the price ceiling, above the equilibrium price)

Above the equilibrium price.

When every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it, ------ occurs. (allocative efficiency, productive efficiency, equity)

Allocative efficiency

There is often a trade-off between (productive efficiency and allocative efficiency, limited and unlimited resources, voluntary and involuntary exchange, economic efficiency and economic equity)

Economic efficiency and economic equity

The ---- effect of a price change refers to the impact of a change in the price of a good on a consumer's purchasing power. (income, substitution, demographics, ceteris paribus)

Income

If a decrease in income leads to an increase in the demand for macaroni, then macaroni is a/an (inferior good, neutral good, necessity, normal good.)

Inferior good

Suppose the US government encouraged new teachers to take jobs in under performing schools by paying the new teachers a $20,000 bonus. These teachers would be exemplifying the economic idea that (people are rational, people respond to economic incentives, optimal decisions are made at the margin)

People respond to economic incentives

Comparative advantage means (the ability to produce more of a product with the same amount of resources than any other producer, the ability to produce a good or service at a lower opportunity cost than any other producer, the ability to produce a good or service at a higher opportunity cost than any other producer)

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

Human capital refers to (the money people have, the machine workers have to work with, the accumulated skills and training workers have, the wealth people have)

The accumulated skills and training workers have

If the price of smartphones was to increase, then (the demand for smartphone apps would decrease, the demand for smartphone apps would increase, the quantity of smartphone apps demand would increase, the quantity of smartphone apps demanded would decrease)

The demand for smartphone apps would decrease

Opportunity cost is defined as (the benefit of an activity, the monetary expense associated with an activity, the highest valued alternative that must be given up to engage in an activity)

The highest value alternative that must be given up to engage in an activity

A consumer is willing to purchase a product up to the point where (he spends all of his income, the marginal benefit is equal to the price of the product, the quantity demanded is equal to the quantity supplied)

The marginal benefit is equal to the price of the product

The PPF shows (the various products that can be produced now and in the future, the maximum attainable combination of tow products that may be produced in a particular time period with available resources, what an equitable distribution of products among citizens would be)

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

By drawing a demand curve with price on the vertical axis and quantity on the horizontal axis, economists assume that the most important determinant o the demand fora good is (consumer income, consumer tastes and preferences, the price of the good, the quality of the good)

The price of the good