ECO 2305 TTU- Exam 1

8. You decide to take a vacation and the trip costs you $2000. While you are on vacation, you do not go to work where you could have earned $750. In terms of dollars, the opportunity cost of the vacation is

$2750

18. The most anyone is willing to pay for another purse is $30. Currently the price of a purse is $40, and the cost of producing another purse is $50. What is the marginal benefit?

$30 (willing to pay)

20. Same table; the allocatively efficient quantity of pizza is _ pizzas per day

40

11. Moving PPF to 10 more tons of food

5 fewer tons of clothing

22. Same figure; what shows the impact of scientists developing a more powerful fertilizer

A

35. Many southern farmers face a choice between planting peanuts or cotton. In 2014, farmers anticipated higher prices for cotton. In the market for peanuts in 2014, there would be __ in the supply of peanuts, which leads to __ in the price of peanuts and __ in the quantity of peanuts

B. a decrease; an increase; a decrease

24. GRAPH Suppose the economy is at a. an increase in the price of a soda results in movement such as

D up along the graph

21. Which figure shows the impact of a decrease I the population available to work?

D, moved leftward

6. Which of the following is not an investment in human capital?

a student purchases a laptop computer

32. When the price of a good is

above equilibrium price, quantity supplied exceeds demanded and price falls

4. Which of the following are considered factors of production used to produce goods and services? LAND, Labor, Capital, Entrepreneurship

all of the above

33. In 2006, the base price of a hummer was about $30,000. By 2008 gas prices increases

demand curve for hummers shifted left and hummer prices decreased

34. Peanut butter and jelly are compliments for consumers. IN 2015, the price of peanut butter increased. As a result, the __ which lead to _- in the price of jelly and __ in the quantity of jelly

demand for jelly; a decrease; a decrease

5. The income earned by the people who sell the services of the factor of production __ is called __

entrepreneurship; profit

23. The price of a DVD rental is $1.50 and the price of a downloaded movie is $1.00. if the price of a DVD rental increases by $.50, the relative price of a downloaded movie__

falls

19. If __ pizzas are produced, the quantity of soda that people are willing to give up to get an additional pizza than the quantity of soda that they must five up to get the additional pizza

fewer than 40 (40 is the allocative efficiency)

3. The fact that people with higher incomes get to consume more goods and services addresses the __ part of one of the two big economic questions

for whom

28. Which of the following increases the quantity supplied of good X but does NOT increase the supply of good X

increase in the price of X (not shifting the whole curve)

12. Moving from one point on the production possibilities frontier to another

involves tradeoff but does incur an opportunity cost

29. An increase in the price of the cheese used to produce pizza shifts the supply curve of pizza __ and shifts the demand curve for pizza__

leftward; not at all

1. Economics is best defined as the study of how people, businesses, governments, and societies

make choices to cope with scarcity

9. Jed will complete the assignment if he values

marginal benefit is higher than marginal cost

27. When people's incomes increase, the demand for a good increases. The good is called

normal good

30. If the quantity of textbooks supplied is 10000 per year and the quantity demanded is 12,000 per year, there is a __ in the market and the price will __

shortage; rise

13. While producing on the PPF, if additional units of a good could be produced at a constant opportunity cost, the PPF is a

straight line

26. If income decreases or the price of a complement rises

the demand curve for a normal good shift leftward

10. Laura is a manager for HP. When Laura must decide whether to produce a few additional printers, she is choosing at the margin when she compares

the extra revenue from selling a few additional printers to the extra costs of producing the printers

7. The opportunity cost of any action is

the highest-valued alternative given up

2. Scarcity is a situation in which

we are unable to satisfy all our wants