Econ 1051 Final
QUIZ 4: If the market price is $1.00, what is the consumer surplus on the third burrito? A) $0.50 B) $1.00 C) $1.50 D) $7.50
$0.50
QUIZ 8: Refer to table 19-8. Nominal GDP for Tyrovia in 2011 equals ____. A) $1,140. B) $880. C) $690. D) $560.
$1,140
QUIZ 6: Table 11-3. Quantity of Lanterns = 75, 80, 90, 100, 115, 117, 120. Fixed cost (dollars) = 200, 200, 200, 200, 200, 200, 200. Variable cost (dollars) = 170, 230, __, 810, __, 1264, 1480. Total cost (dollars) = 370, 430, __, __, __, __, 1464, __. Average total cost (dollars) = 4.93, 5.36, 7.67, __, 11.8, 12.5, __. What is the variable cost of production when the firm produces 115 lanterns? A) $1,556 B) $1,157 C) $956 D) $10.05
$1,157
QUIZ 6: Refer to Table 11-3. What is the average total cost of production when the firm produces 120 lanterns? A) $1,680 B) $72 C) $14 D) $12.3
$14
QUIZ 6: When a firm produces 50,000 units of output, its total cost equals $6.5 million. When it increases its production to 70,000 units of output, its total cost increases to $9.4 million. Within this range, the marginal cost of an additional unit of output is _____. A) $41.43. B) $134.29. C) $135. D) $145.
$145
QUIZ 6: If the total cost of producing 20 units of output is $1,000 and the average variable cost is $35, what is the firm's average fixed cost at that level of output? A) $65 B) $50 C) $15 D) It is impossible to determine without additional information.
$15
QUIZ 4: Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month. Refer to Figure 4-5. What is the value of consumer surplus after the imposition of the ceiling? A) $120,000 B) $230,000 C) $270,000 D) $430,000
$230,000
QUIZ 6: Refer to Table 11-3. What is the marginal cost per unit of production when the firm produces 100 lanterns? A) $420 B) $32 C) $11.1 D) $8.1
$32
QUIZ 4: 4) Refer to Figure 4-5. What is the value of producer surplus after the imposition of the ceiling? A) $40,000 B) $100,000 C) $300,000 D) $430,000
$40,000
QUIZ 4: What is the value of the portion of producer surplus transferred to consumers as a result of the rent ceiling? A) $40,000 B) $100,000 C) $125,000 D) $140,000
$40,000
QUIZ 6: Refer to Table 11-3. What is the average variable cost per unit of production when the firm produces 90 lanterns? A) $490 B) $33.67 C) $7.67 D) $5.44
$5.44
QUIZ 4: What is the value of the deadweight loss after the imposition of the ceiling? A) $50,000 B) $125,000 C) $175,000 D) $260,000
$50,000
QUIZ 4: If the market price is $1.00, what is Arnold's consumer surplus? A) $1.00 B) $2.00 C) $6.00 D) $7.00
$6.00
QUIZ 7: Refer to Table 12-1. The firm will earn negative profit if the output price falls below ____. A) $6.53 B) $4. C) $3.20. D) $2.80.
$6.53
QUIZ 8: Table 19-8: 2005 --> 80 guns produced --> price of guns $5 --> butter produced 40 --> price of butter $4 2011 --> 90 guns produced --> $6 price of guns --> 40 butter produced --> $10 price of butter. Real GDP for Tyrovia for 2011 using 2005 as the base year equals _____. A) $1,140. B) $880. C) $690. D) $560.
$690
QUIZ 4: Paul goes to Sportsmart to buy a new tennis racquet. He is willing to pay $200 for a new racquet, but buys one on sale for $125. Paul's consumer surplus from the purchase is ____. A) $325 B) $200 C) $125 D) $75
$75
QUIZ 5: If a corporate bond with face value of $1,000 has an interest rate of eight percent paid once a year for a term of 30 years, what is the size of the coupon payment? A) $1,000 B) $300 C) $80 D) $8
$80
QUIZ 6: Refer to Table 11-1. What is the average product of labor when the farm hires 5 workers? A) 4 pounds B) 10.8 bushels C) 38.2 pounds D) 54 pounds
10.8 bushels
QUIZ 8: 2010 --> nom GDP 14,078 --> Real GDP 13,254 2011 --> nom GDP 14,441 --> Real GDP 13,312 Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2011 equals _____. A) 92.2. B) 102.6. C) 108.5. D) 109.1.
108.5
QUIZ 2: Loose leaf tea price per Lb. (dollars) = 8, 6, 5, 4, 3 Sunil's Quantity Demanded = 4, 7, 9, 12, 15 Mia's Quantity demanded = 0, 2, 3, 5, 8 Rest of market quantity demanded = 30, 40, 51, 64, 90 Refer to Table 3-1. The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia) and the rest of the market. At a price of $5, the quantity demanded by Sunil and Mia is ____. A) 51 lbs. B) 12 lbs. C) 9 lbs D) 3 lbs.
12 lbs.
QUIZ 3: At a price of $10, how many units will be sold? A) 200 B) 400 C) 600 D) 800
200
QUIZ 1: Figure 2-2 shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. Suppose currently Mendonca produces 90 pounds of meat and 40 pounds of vegetables. Refer to Figure 2-2. What is opportunity cost of 30 more pounds of meat? A) 30 pounds of vegetables B) 120 pounds of meat C) 40 pounds of vegetables D) nothing. It's zero
40 pounds of vegetables
QUIZ 7: Quantity: 0, 100, 200, 300, 400, 500, 600. Total cost (dollars): $1,000, 1,360, 1,560, 1,960, 2,760, 4,000, 5,800. Variable cost (dollars): $0, 360, 560, 960, 1,760, 3,000, 4,800. Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units. Refer to Table 12-1. If the market price of each camera case is $8, what is the profit-maximizing quantity? A) 300 units B) 400 units C) 500 units D) 600 units
400 units
QUIZ 6: Table 11-1: Numbers of workers: 1, 2, 3, 4, 5, 6. Mushrooms per day (pounds): 12, 30, 45, 50, 54, 56. Table 11-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May 2011. Refer to Table 11-1. What is the marginal product of the 4th worker? A) 137 pounds B) 50 pounds C) 12.5 pounds D) 5 pounds
5 pounds
QUIZ 8: If an industry is made up of five identical firms, the four-firm concentration ratio is ____. A) 5%. B) 20%. C) 80%. D) 100%.
80%
QUIZ 4: What area represents the increase in producer surplus when the market price rises from P1 to P2? A) C + E B) A + B C) B + D D) A + C + E
A + B
QUIZ 4: What area represents producer surplus at a price of P2? A) A + B + C + D + E B) A + B + C C) B + D D) A + B
A + B + C
QUIZ 5: What do economists call the situation where a hired manager does not have the same interests as the owners of the business? A) a principal-agent problem B) conquest and control C) a financial intermediary problem D) a financial problem
A principal-agent problem
QUIZ 5: A bond is a financial security that represents _____. A) the interest rate paid on a share of stock. B) ownership in a corporation. C) the portion of profits paid to shareholders. D) a promise to repay a fixed amount of funds.
A promise to repay a fixed amount of funds.
QUIZ 7: Which of the following is a disadvantage of trademarking a firm's product? A) A trademark conveys information about the product to the public. B) A trademark may become so widely used to denote a particular type of product that the trademark may no longer be a legally protected brand name. C) A trademark differentiates a firm's product. D) A trademark does not affect demand for the firm's product.
A trademark may become so widely used to denote a particular type of product that the trademark may no longer be a legally protected brand name.
QUIZ 2: "An Inquiry into the Nature and Causes of the Wealth of Nations" published in 1776 was written by ____. A) Karl Marx. B) Alfred Marshall. C) John Maynard Keynes. D) Adam Smith.
Adam Smith
QUIZ 8: Alistair Luggage and Baine Baggage are the only firms selling luggage in the upscale town of Montecito. Each firm must decide on whether to increase its advertising spending to compete for customers. If one firm increases its advertising budget but the other does not, then the firm with the higher advertising budget will increase its profit. Table 14-1 shows the payoff matrix for this advertising game. Refer to Table 14-1. If Alistair assumes that Baine would increase its advertising budget, what should it do? A) Alistair should keep its own budget the same and allow Baine to incur the higher cost. B) Being a duopolist, Alistair is not affected by Baine's choices because it has a secure 50 percent market share. C) Alistair should also increase its advertising spending. D) Alistair should reduce its advertising spending.
Alistair should also increase its advertising spending.
QUIZ 8: What is the Nash equilibrium in this game? A) Both Alistair and Baine increase their advertising budgets. B) Baine increases its advertising budget, but Alistair does not. C) There is no Nash equilibrium. D) Alistair increases its advertising budget, but Baine does not
Both Alistair and Baine increase their advertising budgets
QUIZ 3: In recent years the cost of producing organic produce in the U.S. has decreased largely due technological advancement. At the same time, more and more Americans prefer organic produce over conventional produce. Which of the following best explains the effect of these events in the organic produce market? A) The supply curve has shifted to the left and the demand curve has shifted to the right. As a result there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. B) The supply curve has shifted to the left and the demand curve has shifted to the right. As a result, there has been an increase in the equilibrium price and an uncertain effect on the equilibrium quantity. C) Both the supply and demand curves have shifted to the right. As a result, there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. D) Both the supply and demand curves have shifted to the right. As a result, there has been an increase in both the equilibrium price and the equilibrium quantity.
Both the supply and demand curves have shifted to the right. As a result, there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price.
QUIZ 1: Which of the following statements is true? A) Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale. B) Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited. C) Every individual, no matter how rich or poor, is faced with making trade-offs. D) Anytime you have to decide which action to take you are experiencing economic equity.
Every individual, no matter how rich or poor, is faced with making trade-offs.
QUIZ 1: Which of the following is a positive economic statement? A) If the price of iPhones falls, a larger quantity of iPhones will be purchased. B) The standard of living in the United States should be higher. C) The U.S. government should not have bailed out U.S. auto manufacturers. D) The government should revamp the health care system.
If the price of iPhones falls, a larger quantity of iPhones will be purchased.
QUIZ 2: If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of cotton? A) They have the same advantage. B) Indonesia C) Pakistan D) cannot be determined
Indonesia
QUIZ 5: Which of the following takes place in the direct finance market? A) Firms borrow funds from banks. B) Ownership in corporations is sold in the form of stock. C) Deposits from savers are accumulated and loans made to borrowers. D) Banks offer savings accounts to customers.
Ownership in corporations is sold in the form of stock
QUIZ 2: Figure 2-7 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. Refer to Figure 2-7. Which country has a comparative advantage in the production of cashews? A) Indonesia B) Pakistan C) They have equal productive abilities. D) neither country
Pakistan
QUIZ 3: Assume that the graphs in this figure represent the demand and supply curves for almonds. Which panel best describes what happens in this market when there is an increase in the productivity of almond harvesters? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
Panel (a)
QUIZ 3: Assume that the graphs in this figure represent the demand and supply curves for bicycle helmets. Which panel best describes what happens in this market if there is a substantial increase in the price of bicycles? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
Panel (d)
QUIZ 3: Assume that the graphs in this figure represent the demand and supply curves for potatoes and that steak and potatoes are complements. What panel describes what happens in this market when the price of steak rises? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
Panel (d)
QUIZ 1: Which of the following is a normative economic statement? A) The state of Texas is considering increasing funds for light-rail development to promote the use of public transportation. B) Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable. C) With rising mortgage rates and rising unemployment rates, the number of unsold homes has increased. D) Rising global demand for coal has led to increases in the price of coal.
Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable.
QUIZ 2: By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis, economists assume that the most important determinant of the demand for a good is the ________ of the good. A) quantity; price; price B) price; quantity; quantity C) price; quantity; price D) quantity; price; quantity
Price; quantity; price
QUIZ 1: Macroeconomics is the study of ____. A) how firms make choices. B) how households and firms make choices. C) how households make choices. D) the economy as a whole.
The economy as a whole
QUIZ 3: The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If the price of oranges, a substitute for apples, decreases and the wages of apple workers increase, how will the equilibrium point change? A) The equilibrium point will move from A to C. B) The equilibrium will first move from A to B, then return to A. C) The equilibrium point will move from A to B. D) The equilibrium point will move from A to E.
The equilibrium point will move from A to E.
QUIZ 7: Suppose the equilibrium price in a perfectly competitive industry is $15 and a firm in the industry charges $21. Which of the following will happen? A) The firm will not sell any output. B) The firm's profits will increase. C) The firm's revenue will increase. D) The firm will sell more output than its competitors.
The firm will not sell any output
QUIZ 5: What does limited liability mean? A) The personal assets of the owners cannot be claimed if the business is bankrupt. B) The owners of the business are personally responsible for paying expenses incurred by the business. C) Anybody with a liability against a firm can claim only what their liability refers to. D) Only employees can have a claim on the assets of the business.
The personal assets of the owners cannot be claimed if the business is bankrupt.
QUIZ 1: The attainable production points on a production possibility curve are ___. A) the points outside the area enclosed by the production possibilities frontier. B) the points along the production possibilities frontier. C) the points along and inside the production possibility frontier. D) the horizontal and vertical intercepts.
The points along and inside the production possibility frontier.
QUIZ 7: Which of the following is not a characteristic of a perfectly competitive market structure? A) All firms sell identical products. B) There are a very large number of firms that are small compared to the market. C) There are no restrictions to entry by new firms. D) There are restrictions on exit of firms
There are restrictions on exit of firms
QUIZ 7: Which of the following is a characteristic of a monopoly? A) The product is not unique. B) There is only one seller in the market. C) It is easy for new firms to enter the market. D) The firm has no control over price.
There is only one seller in the market
QUIZ 1: Which of the following is a macroeconomics question? A) What determines the inflation rate? B) What determines the wage of auto workers? C) What determines the production of DVDs? D) What factors determine the price of carrots?
What determines the inflation rate?
QUIZ 1: The three fundamental questions that any economy must address are ____. A) Who gets jobs; what wages do workers earn; and who owns what property? B) What will be the prices of goods and services; how will these goods and services be produced; and who will receive them? C) How much will be saved; what will be produced; and how can these goods and services be fairly distributed? D) What goods and services to produce; how will these goods and services be produced; and who receives them?
What goods and services to produce; how will these goods and services be produced; and who receives them?
QUIZ 1: The distribution of income primarily determines which of the fundamental economic questions? A) How the goods and services are to be produced? B) How to plan the economy? C) What goods and services are to be produced? D) Who will receive the goods and services produced?
Who will receive the goods and services produced?
QUIZ 7: A perfectly competitive firm produces 3,000 units of a good at a total cost of $36,000. The fixed cost of production is $20,000. The price of each good is $10. Should the firm continue to produce in the short run? A) Yes, it should continue to produce because it is minimizing its loss. B) No, it should shut down because it is making a loss. C) Yes, it should continue to produce because its price exceeds its average fixed cost. D) There is insufficient information to answer the question.
Yes, it should continue to produce because it is minimizing its loss.
QUIZ 6: Which of the following is the best example of a short run adjustment? A) Smith University completed negotiations to acquire a large piece of land to build its new library. B) A local bakery purchases another commercial oven as part of its capacity expansion. C) Toyota builds a new assembly plant in Texas. D) Your local Wal-Mart hires two more associates.
Your local Wal-Mart hires two more associates.
QUIZ 8: Which of the following goods is directly counted in GDP? A) the lettuce that Subway purchases for its sandwiches B) the plastic bags that Subway purchases to wrap its sandwiches C) the bread that Subway purchases for its sandwiches D) a 12-inch Subway sandwich purchased by a student
a 12-inch Subway sandwich purchased by a student
QUIZ 3: Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase? A) an increase in the price of rye bread, a substitute for white bread B) a decrease in the price of flour C) an increase in the price of butter, a complement for white bread D) an increase in the price of flour
a decrease in the price of flour
QUIZ 8: What is a prisoner's dilemma? A) a game in which prisoners are stumped because they cannot communicate with each other B) a game in which players collude to outfox authorities C) a game in which players act in rational, self-interested ways that leave everyone worse off D) a game that involves no dominant strategies
a game in which players act in rational, self-interested ways that leave everyone worse off
QUIZ 5: What is a primary market? A) a market where you can sell any stocks you own as a private investor B) a market where you can sell any bonds you own as a private investor C) a market where primary inputs like steel are sold D) a market where a newly issued claims are sold to initial buyers by the borrowing firm
a market where a newly issued claims are sold to initial buyers by the borrowing firm
QUIZ 4: Rent control is an example of _____. A) a black market. B) a subsidy for low-skilled workers. C) a price floor. D) a price ceiling.
a price ceiling
QUIZ 4: Which term refers to a legally established minimum price that firms may charge? A) a price ceiling B) a tariff C) a subsidy D) a price floor
a price floor
QUIZ 6: Marginal cost is the ____. A) change in average cost when an additional unit of output is produced. B) additional cost of producing an additional unit of output. C) the additional output when total cost is increased by one dollar. D) change in the price of inputs if a firm buys more inputs to produce an additional unit of output.
additional cost of producing an additional unit of output
QUIZ 3: Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good) to increase? A) a decrease in consumer income B) unusually good weather that results in a bumper crop of cotton C) an increase in consumer income D) a drought that sharply reduces cotton output
an increase in consumer income
QUIZ 3: Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon? A) an increase in supply and an increase in demand greater than the increase in supply B) a decrease in demand and a decrease in supply C) a decrease in demand and an increase in supply D) an increase in supply
an increase in supply
QUIZ 3: An increase in the demand for lobster due to changes in consumer tastes, accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster, will result in _____. A) a decrease in the equilibrium quantity of lobster; the equilibrium price may increase or decrease. B) an increase in the equilibrium price of lobster; the equilibrium quantity may increase or decrease. C) an increase in the equilibrium price of lobster and no change in the equilibrium quantity. D) a decrease in the equilibrium quantity of lobster and no change in the equilibrium price.
an increase in the equilibrium price of lobster; the equilibrium quantity may increase or decrease.
QUIZ 2: Which of the following would cause a decrease in the supply of milk? A) an increase in the number of firms that produce milk B) an increase the price of a product that producers sell instead of milk C) an increase in the price of cookies (assuming that milk and cookies are complements in consumption) D) an increase in the price of milk
an increase in the price of a product that producers sell instead of milk
QUIZ 2: Elvira decreased her consumption of bananas when the price of peanut butter increased. For Elvira, peanut butter and bananas are ____. A) complements in consumption. B) substitutes in consumption. C) both inferior goods. D) both luxury goods.
complements in consumption
QUIZ 7: When a credit card company offers different services with its card, like travel insurance for air travel tickets purchased with the credit card or product insurance for items purchased with the card, the credit card company is trying to ____. A) convince customers that its card has greater value than those offered by rival firms. B) create a barrier to entry for competing firms. C) shift the demand curve for competing firms to the right. D) create a perfectly competitive market in which to sell its credit card.
convince customers that its card has greater value than those offered by rival firms.
QUIZ 5: What takes place in the indirect finance market? A) Government purchases of buildings and equipment are sold to the highest bidder. B) Corporate and government bonds are sold to savers. C) Deposits of savers are accepted and loans made to borrowers. D) Part ownership of corporations is sold in the form of stocks.
deposits of savers are accepted and loans made to borrowers
QUIZ 7: Which of the following is not a characteristic of a monopolistically competitive market structure? A) There are low barriers to entry of new firms. B) All sellers sell products that are differentiated. C) There is a large number of independently acting small sellers. D) Each firm must react to actions of other firms.
each firm must react to actions of other firms
QUIZ 7: A monopolistically competitive industry that earns economic profits in the short run will ____. A) experience a rise in demand in the long run. B) experience the entry of new rival firms into the industry in the long run. C) experience the exit of existing firms out of the industry in the long run. D) continue to earn economic profits in the long run.
experience the entry of new rival firms into the industry in the long run.
QUIZ 6: 11) Average fixed costs of production ______. A) remain constant. B) graph as a U-shaped curve. C) fall as long as output is increased. D) will rise at a fixed rate as more is produced.
fall as long as output is increased
QUIZ 8: Nominal GDP will increase _____. A) only if the price level rises. B) only if the price level falls. C) if either the price level or the quantity of goods and services produced rises. D) only if the quantity of final goods and services produced rises.
if either the price level or the quantity of goods and services produced rises.
QUIZ 5: If Southwest Airlines borrows $20 million from a bank to finance the renovation of their corporate offices, this is an example of ____. A) direct finance. B) a stock market transaction. C) a bond market transaction. D) indirect finance.
indirect finance
QUIZ 5: Generally with bond ratings, the higher the rating, the ________ the interest rate an investor will receive and the ________ the the risk that the issuer of the bond will default. A) higher; higher B) lower; higher C) lower; lower D) higher; lower
lower; lower
QUIZ 5: Who operates and controls a corporation in its day-to-day activities? A) stockholders B) management C) employees D) the board of directors
managment
QUIZ 7: The price of a seller's product in perfect competition is determined by ____. A) the individual demander. B) market demand and market supply. C) a few of the sellers. D) the individual seller.
market demand and market supply
QUIZ 1: The production possibilities frontier shows the ________ combinations of two products that may be produced in a particular time period with available resources. A) equitable B) maximum attainable C) minimum attainable D) only
maximum attainable
QUIZ 4: To affect the market outcome, a price ceiling A) must be set below the black market price. B) must be set below the price floor. C) must be set below the equilibrium price. D) must be set below the legal price.
must be set below the equilibrium price
QUIZ 8: The purchase by a foreign government of an airplane produced in the United States is included in U.S. A) consumption expenditures. B) net exports. C) investment expenditures. D) government purchases.
net exports
QUIZ 8: Oligopolies exist and do not attract new rivals because ____. A) of barriers to entry. B) the firms keep profits and prices so low that no rivals are attracted. C) it's illegal to be an oligopolist. D) of competition.
of barriers to entry
QUIZ 8: In an oligopoly market ____. A) advertising of one firm has no effect on all other firms. B) one firm's pricing decision affects all the other firms. C) the pricing decisions of all other firms have no effect on an individual firm. D) individual firms pay no attention to the behavior of other firms
one firm's pricing decision affects all the other firms.
QUIZ 7: Refer to Table 12-1. If the market price of each camera case is $8 and the firm maximizes profit, what is the amount of the firm's profit or loss? A) $0 (it breaks even) B) loss of $1,000 C) profit of $440 D) loss of $440
profit of $440
QUIZ 3: The supply curve for watches ______. A) is downward sloping. B) shows the relationship between the price of watches and the quantity of watches supplied. C) shows the supply of watches consumers are willing and able to buy at any given price. D) shows the relationship between the quantity of watches firms are willing and able to supply and the quantity of watches consumers are willing and able to purchase.
shows the relationship between the price of watches and the quantity of watches supplied.
QUIZ 5: 1) A corporation is owned by its _____. A) board of directors. B) CEO. C) employees. D) stockholders.
stockholders
QUIZ 2: When the price of a good falls, consumers buy a larger quantity because of the ________ effect and the ________ effect. A) supply; demand B) normal; inferior C) substitute; complement D) substitution; income
substitution; income
QUIZ 6: The law of diminishing marginal returns states ____. A) that at some point, adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline. B) average total costs of production initially fall and after some point starts to rise at a decreasing rate as output increases. C) that at some point, adding more of a fixed input to a given amount of variable inputs will cause the marginal product of the variable input to decline. D) that in the presence of a fixed factor, at some point average product of labor starts to fall as more and more variable inputs are added.
that at some point, adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline.
QUIZ 2: If a firm expects that the price of its product will be higher in the future than it is today A) the firm has an incentive to increase quantity supplied now and decrease quantity supplied in the future. B) the firm will go out of business. C) the firm has an incentive to decrease supply now and increase supply in the future. D) the firm has an incentive to increase supply now and decrease supply in the future.
the firm has an incentive to decrease supply now and increase supply in the future
QUIZ 2: The income effect of a price change refers to the impact of a change in ____. A) the quantity demanded when income changes. B) income on the price of a good. C) demand when income changes. D) the price of a good on a consumer's purchasing power.
the price of a good on a consumer's purchasing power
QUIZ 2: Adam Smith's invisible hand refers to _____. A) property ownership laws and the rule of the court system. B) the laws of nature that influence economics decisions. C) the government's unobtrusive role in ensuring that the economy functions efficiently. D) the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole.
the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole.
QUIZ 3: If the price is $10 _____. A) there would be a surplus of 600 units. B) there would be a surplus of 200 units. C) there would be a shortage of 600 units. D) there would be a shortage of 200 units.
there would be a shortage of 600 units
QUIZ 1: The idea that because of scarcity, producing more of one good or service means producing less of another good or service refers to the economic concept of ____. A) efficiency. B) trade-off. C) equity. D) optimization.
trade-off
QUIZ 1: The points outside the production possibilities frontier are ____. A) unattainable B) efficient C) inefficient D) attainable
unattainable
QUIZ 5: When groups of mortgages are bundled together by financial institutions and sold to investors, these institutions are said to be ________ mortgage loans. A) harvesting B) securitizing C) liquidating D) underwriting
underwritting
QUIZ 2: Adam Smith's behavioral assumption about humans was that people ____. A) are consistently greedy. B) usually act in a rational, self-interested way. C) typically act irrationally. D) typically act randomly
usually act in a rational, self-interested way
