ECON 202 Final (Test 1)

Capital refers to:

1. Any manufactured aid in production 2. Machinery and equipment (Only B and C are correct was the answer on the test)

The equilibrium price in a market is the price at which

1. The quantity supplied equals the quantity demanded. 2. Sellers' and buyers' desires are both satisfied. 3. The greatest amount of the product will be exchanged. (All of the above on test)

Amy's opportunity cost of an oil change is rotating ______ tire(s).

1/2

Matt's opportunity cost of a tire rotation is _______ oil change(s).

1/3

In Figure 1, it is possible for this country to produce

40 notepads and 20 lamps.

In Figure 1, if this economy devotes ALL of its resources to the production of notepads, then it will produce

70 notepads and 40 lamps.

Which of the following will cause a decrease in equilibrium price and an increase in equilibrium quantity?

A decrease in supply.

Which of the following would NOT increase the demand for Coke?

A decrease in the price of Coke.

Suppose the following represents the production possibilities of goods X and Y for countries Alpha and Beta. If Alpha and Beta could specialize and trade, which good would each country choose to produce and why?

Alpha would specialize in Y because it has the lowest opportunity cost, and Beta would specialize in X because it has the lowest opportunity cost.

The comparative advantage for oil changes belongs to _______ and the comparative advantage for rotating tires belongs to _______.

Amy/Matt

Which of the following is likely to increase to supply of Mikimoto pearls?

An improvement in Pearl-finding technology.

In the simple circular flow model:

Businesses are the sellers of final products.

If hotdogs and hot dogs buns are complementary goods, then a increase in the price of hot dog buns would

Decrease demand for hot dogs.

A movement upward and to the left along a demand curve is called a(n)

Decrease in quantity demanded.

Which of the following events must result in a higher price in the market for Snickers?

Demand for Snickers increases and supply of Snickers decreases.

Economists are particularly adept at understanding that people respond to

Incentives.

Other things held equal, an increase in taxes will:

Increase its equilibrium price.

The total market demand curve

Is derived from the horizontal summation of all the individual demands at a given quantities.

Suppose the following represents the production possibilities of goods X and Y for countries Alpha and Beta. What is the opportunity cost of one Y in country Beta?

Opportunity cost is .375 in Beta for Y.

Suppose the following represents the production possibilities of goods X and Y for countries Alpha and Beta. What is the opportunity cost of one X in country Alpha?

Opportunity cost is 3 in Alpha for X.

As Ms. Jackson's income decreases, she increases her purchases of peanut butter. We conclude that for Ms. Jackson's

Peanut butter is an inferior good.

What will happen to the equilibrium price and quantity of traditional camera film if tradition cameras become more expensive, digital cameras become cheaper, the cost of the resource needed to manufacture traditional film falls, and more firms decide to manufacture traditional film?

Price is indeterminate and quantity will fall.

All of the following are held constant along a demand curve EXCEPT

Price of the good in question.

The law of supply says that _______ and _______ are ________ related, ceteris paribus.

Price; Quantity supplied; Directly.

Which of the following is NOT held constant along a demand curve?

The price of a good in question.

Economic models

Were once thought of as useful, but that is no longer true.

In Figure 1, efficient production is represented by which point(s)?

Y, Z

Each of the following is a determinate if demand EXCEPT

Production technology.