unit 1 test review

"we should redistribute wealth from the rich to the poor" this statement is a. normative economist b. about ceteris paribus c. a positive economic statement d. about opportunity cost

a

a decrease in wage rate of pizza makers will cause a movement from point B on supply curve 1 a. supply shift right b. supply shift left c. supply shift along the line down d. supply shift along the line up

a

as the economy moves from point A to D, the opportunity cost of cars, measured in terms of trucks, (PPC moves right. x-cars; y-trucks) a. increase b. decrease

a

assume that popcorn and movie attendance are complements and that corn suitable for popping. Corn will most likely sell a greater quantity of popping corn at a higher price if which of the following occurs? a. the release of three summer movies sets records for movie attendance b. the wages of farm workers and movie theater employees increase c. a technological improvement results in less expensive and more efficient harvesting of corn d. the introduction of new fat-free potato chips provides new competition in the snack-food market e. new government regulations force movie theaters to hire more security guards at each theater.

a

if resources are combined efficiently in production (productive efficiency), then the society a. is producing at a point on the production possibility frontier but not necessarily at the most-desirable point b. is producing at a point outside the production possibility frontier c. is producing at the most desirable point on the production possibility frontier d. is experiencing economic growth

a

the market for tires is unregulated and is presently characterized by excess supply, you can accurately predict that price will a. decrease, the quantity demanded will rise, and the quantity supplied will fall b. increase, the quantity demanded will fall, and the quantity supplied will rise c. increase, the quantity demanded will rise, and the quantity supplied will fall d. decrease, the quantity demanded will fall, and the quantity supplied will rise

a

which of the following will occur when there is a simultaneous decrease in demand and a decrease in supply a. a decrease in equilibrium quantity b. an increase in equilibrium price c. a decrease in equilibrium price d. an increase in equilibrium quantity

a

a decrease in quantity supplied is represented the movement a. move along the line up b. move along the line down c. shift supply curve to the right d. shift supply curve to the left

b

as more of a good, such as television sets, is produced, the opportunity costs of production it increases. This most likely occurs because: a. as more of a good is produced the inputs used to produce that good will increase in price b. resources are not equally well suited to producing all goods and as more of a good is produced it is necessary to use resources less well suited to the production of that good c. consumers would be willing to pay higher prices for the good as more of the good is produced d. as more of a good is produced the quality of that good declines and therefore the costs of production increase

b

which of the following will NOT cause a shift in the demand curve for combat discs? a. a change in income b. a change in the price of compact discs c. a change in wealth d. a change in the price of pre-recorded cassette tapes (substitute)

b

if cost of producing automobiles increases, the price, equilibrium quantity and consumer surplus will most likely change in which of the following ways. a. price increase, quantity increase, consumer surplus increase b. price increase, quantity increase, consumer surplus decrease c. price increase, quantity decrease, consumer surplus decrease d. price decrease, quantity increase, consumer surplus decrease e. price decrease, quantity decrease, consumer surplus decrease

c

if pizza and soda are complementary goods, a decrease in the price of soda will cause movement from D1 on demand curve to a. shift along the line up b. shift along the line down c. shift demand curve right d. shift demand curve left

c

scarcity in economics means: a. the wants of people are limited b. there must be poor people in rich countries c. not having sufficient resources to produce all the goods and services we want d. shortages exist in nearly all markets

c

the opportunity cost of owning a business is equal to which of the following I. the economic profits earned in the business II the accounting profits earned in the business III. the profits that could be earned in another business using the same amounts of resources a. I only b. II only c. III only d. I and III only

c

which is the best illustration for the law of demand? a. as real incomes of US cities have decreased over the past year, the demand for housing has also decreased b. recent decreases in the price of imported wine have led to an increase in the consumption of domestic wine c. in the past several months, as the price of MP3 players sold has decreased, the quantity of MP3 players sold has increased d. the increase in the price of quality health foods has increased the revenues of firms producing these goods e. as the demand for computers has increased, the number of workers in the computer industry has increased.

c

(apple and caramel are complements) the floods that destroyed part of the apples crop would have caused a. increase the demand for caramel b. increase in quantity demanded of caramel c. a decrease in the demand for caramel d. a decrease in the quantity demanded of caramel

d

A country can consume beyond its present production possibilities curve when it a. reduces unemployment, thus increasing output b. experiences decreasing opportunity costs c. face an upward-sloping production possibilities curve d. trades with other countries, thus taking advantage of different opportunity costs e. faces a downward-sloping production possibilities curve

d

according to the theory of comparative advantage, specialization and free trade will benefit a. only that trading party that has a higher opportunity cost for one good b. only that trading party that has a comparative advantage in the production of goods c. only that trading party that has an absolute advantage in the proaction of all goods d. all trading parties, even when some are absolutely more efficient producers than others

d

at the same time that part of apples crop was destroyed, consumer income also decreased. Ceteris paribus, in the market for apples this would have caused a. both equilibrium price and quantity to decrease b. the equilibrium price to increase and the equilibrium quantity to decrease c. the equilibrium price to decrease, the equilibrium quantity could have increased, decreased, or remained the same d. the equilibrium price to either increase, decrease, or remain the same and the equilibrium quantity to decrease

d

excess quantity demanded or _______ occurs at a price _____ the equilibrium price a. surplus; below b. surplus; above c. shortage; above d. shortage; below

d

suppose you manage a corner grocery store. if peanut butter is an inferior good, what do you suppose would happen to the price and quantity of peanut butter as incomes fall during an economic recession a. the price would increase and the quantity would decrease b. the price and quantity would both decrease c. the price would decrease and the quantity would increase d. the price and quantity would both increase

d

the government wants to protect consumers from rising food prices. therefore, price restrictions are imposed on apples growers prohibiting them from raising the price of apple. this will cause: a. increase demand for apples b. decrease in the supply of apples c. excess supply of apples d. an excess demand for apples

d

the diagram shows an economy's current production possibilities curve for capital goods and consumer goods. if society chooses point B over A, society is choosing a. more current capital goods in exchange for less future consumption b. more future and current consumption c. less future consumption in exchange for more current consumption d. less current capital goods in exchange for greater future consumption e. more future consumption in exchange for less current consumption

e