econ 300

The typical production possibility curve shows _______ opportunity costs, meaning that if a nation produces more of one good, it will require giving up an ________ amount of production of another good.

increasing, increasing

Which of the following would NOT affect the supply of smartphones? A An increase in the price of smartphones B An improvement in the technology of producing smartphones C A decrease in the number of smartphone producers D An increase in the productivity of smartphone workers

A An increase in the price of smartphones

Suppose that the demand for good X is price inelastic, then a 10 percent increase in the price of good X will result in A a less than 10 percent decrease in the quantity demanded. B a less than 10 percent increase in the quantity demanded. C a more than 10 percent increase in the quantity demanded. D a more than 10 percent decrease in the quantity demanded.

A a less than 10 percent decrease in the quantity demanded.

Ceteris paribus means A all other things unchanged. B as in the real world. C making value judgments. D allowing all other things to change.

A all other things unchanged.

Economics models are A built using relevant observations, assumptions, and abstractions. B based mostly on value judgments. C useful only if they are based on normative economic statements. D only useful if they correctly describe the real world and its complexities.

A built using relevant observations, assumptions, and abstractions.

Deadweight loss is A the loss of producer and consumer surplus at an inefficient production level. B the sum of producer and consumer surplus when a market is at equilibrium. C the sum of producer and consumer surplus at an inefficient production level. D the loss of producer and consumer surplus when a market is at equilibrium.

A the loss of producer and consumer surplus at an inefficient production level.

The economic way of thinking deals with A. making choices by comparing marginal costs and marginal benefits B. analyzing benefits but not costs C. analyzing costs but not benefits D. making choices by comparing total costs and total benefits

A. Making choices by comparing marginal costs and marginal benefits

Which of the following is NOT held constant when constructing a supply curve for good A? A Price of inputs for producing good A B Price of good A C Number of firms producing good A D Technology for producing good A

B Price of good A

Price elasticity of demand measures A a buyer's responsiveness to a change in income. B a buyer's responsiveness to a change in price. C how much supply changes for a change in demand. D how much demand changes for a change in supply.

B a buyer's responsiveness to a change in price.

All of the following cause a shift of the demand curve for a good EXCEPT A a change in the price of a related good. B a change in the price of that good. C a change in consumer tastes. D a change in consumer income.

B a change in the price of that good.

When a good is produced or consumed, the spillover effects on the people who are not directly involved in the market are called A transaction costs. B external costs or benefits. C public goods. D free riders.

B external costs or benefits.

Most public goods face a A adverse selection problem. B free-rider problem. C principal agent problem. D asymmetric information problem.

B free-rider problem.

Suppose demand is unit elastic, A the percentage change in quantity demanded is greater than the percentage change in price. B the percentage change in quantity demanded is equal to the percentage change in price. C the percentage change in quantity demanded is not related to the percentage change in price. D the percentage change in quantity demanded is less than the percentage change in price.

B the percentage change in quantity demanded is equal to the percentage change in price.

All other things equal, if the price of apples increases A the quantity supplied of apples will decrease. B the quantity supplied of apples will increase. C the supply of apples will increase. D the supply of apples will decrease.

B the quantity supplied of apples will increase.

If an economy produces only smartphones and laptops, then the opportunity cost of producing more smartphones is A the value of laptop production minus the value of smartphone production. B the value of forgone laptop production. C the total value of smartphone and laptop production. D the value of more laptop production.

B the value of forgone laptop production.

Microeconomics deals with A. employment, growth, and inflation B. individual units in the economy C. the working of the entire economy or large sectors of it D. normative economics for the most part

B. individual units of the economy

Steven has two hours to complete an assignment in economics or to watch a movie. For Steven, the opportunity cost of spending the two hours watching a movie A. is nonexistent because the economic assignment B. is a lower score in the economics assignment C. depends on how much he enjoys the movie D. is a higher score in the economics assignment

B. is a lower score in the economics assignment

A simplified representation of a particular problem is a A. constant B. model C. hypothesis D. law

B. model

production possibility for movies and laptops combination lap movies A 0 5 B 15 4 C 26 3 D 33 2 E 36 1 F 37 0 Based on the information in the above table, the opportunity cost of producing the fourth movie is A 15 laptops. B 11 laptops. C nonexistent. D 26 laptops.

B.11 laptops

The model that shows the goods and services the economy is capable of producing is A ceteris paribus. B the fallacy of composition. C a production possibilities curve. D utility.

C a production possibilities curve.

An increase in demand is graphically illustrated by A a shift of the demand curve to the left. B a downward movement along the demand curve. C a shift of the demand curve to the right. D an upward movement along the demand curve.

C a shift of the demand curve to the right.

In the absence of market failures, market competition results in A neither efficiency nor income equality. B equitable income distribution. C efficiency. D both efficiency and income equality.

C efficiency.

Suppose you observe that the sun rises every morning at the six o'clock business report. If you conclude that the six o'clock business report makes the sun rise, you are committing the fallacy of A composition. B division. C false cause. D science.

C false cause.

Good A has a high price elasticity of demand; it is most likely that A good A is not related to any other goods. B good A has many complements. C good A has many substitutes. D good A has many producers.

C good A has many substitutes.

Suppose Ramen noodles are inferior goods. Ramen noodles' income elasticity of demand is A equal to infinity. B equal to 0. C less than 0. D greater than 1.

C less than 0.

If the absolute size of the price elasticity of demand for hotdogs is greater than 1, then an increase in the price of hotdogs will A either raise or lower total revenue, depending on the starting price. B not change total revenue. C lower total revenue. D raise total revenue.

C lower total revenue.

The sum of producer surplus and consumer surplus is maximized when A producers produce at the point where marginal cost is equal to zero. B the difference between marginal benefit and marginal cost is at its maximum. C marginal benefit and marginal cost are equal. D consumers buy to the point that marginal benefit is equal to zero.

C marginal benefit and marginal cost are equal.

When looking at the supply side, we expect that A price and supply are positively related. B the higher the price, the smaller the quantity that will be sold. C price and quantity supplied are positively related. D price and quantity supplied are inversely related.

C price and quantity supplied are positively related.

A given change in gasoline supply will result in a larger change in the equilibrium price of gasoline if the A income elasticity for gasoline is lower. B income elasticity for gasoline is higher. C price elasticity of demand for gasoline is lower. D price elasticity of demand for gasoline is higher.

C price elasticity of demand for gasoline is lower.

The term quantity demanded refers to A the quantity buyers are willing and able to buy at different prices during a particular period. B the entire demand curve. C the quantity buyers are willing and able to buy at a particular price during a particular period. D the quantity buyers are willing and able to buy at a particular price but at different periods.

C the quantity buyers are willing and able to buy at a particular price during a particular period.

Scarcity is a situation in which A. People face a shortage in a particular market B. an item is very expensive C. the available resources are not enough to satisfy the wants of the people D. people do not have enough money to pay for a good or service

C. The available resources are not enough to satisfy the wants of the people

Macroeconomics deals with A. bits and pieces of the economy B. the question of how a business unit should operate profitably C. the analysis of the aggregate(combination of several) values in the economy D. markets that are large parts of the economy

C. the analysis of the aggregate values in the economy

If the quantity supplied increases by 2 percent when price increases by 10 percent, then the price elasticity of supply is A 2 percent. B 5 percent. C 5. D 0.2

D 0.2

Movement down in ppc. x-axis sedans y-axis SUV Refer to the above graph. A movement from Point A to Point B indicates A a loss in both sedans and SUVs. B a gain in both sedans and SUVs. C a gain in SUVs and a loss in sedans. D a gain in sedans and a loss in SUVs.

D a gain in sedans and a loss in SUVs.

In economics, the term supply refers to A a particular quantity supplied at a specific price. B the amount that producers are willing but not able to produce at each price. C the line that relates consumer spending to different output levels. D a set of combinations of price per unit and quantity supplied per period, all other things equal.

D a set of combinations of price per unit and quantity supplied per period, all other things equal.

When a market is at equilibrium, A sellers are willing to sell less than consumers are willing to buy. B neither consumers nor producers are satisfied with the quantity traded. C sellers are willing to sell more than consumers are willing to buy. D both producers and consumers are satisfied with the quantity traded.

D both producers and consumers are satisfied with the quantity traded.

A competitive market is efficient under the following conditions EXCEPT A the marginal benefit of the last item consumed is equal to the marginal cost for the last item produced. B the sum of producer surplus and consumer surplus is maximized. C property rights are transferable. D income is distributed inequitably across households.

D income is distributed inequitably across households.

A product with an inelastic supply means that A consumers are relatively sensitive to a change in the price of the product. B producers are relatively sensitive to a change in the price of the product. C consumers are relatively insensitive to a change in the price of the product. D producers are relatively insensitive to a change in the price of the product.

D producers are relatively insensitive to a change in the price of the product.

According to the law of demand, consumers buy more of a good as A consumer income increases. B that good's price increases. C consumer income decreases. D that good's price decreases.

D that good's price decreases.

Christy has a comparative advantage over Joel in making pizzas relative to making hotdogs. This means that A Christy makes more hotdogs in an hour than Joel does. B the opportunity cost of making pizzas is higher for Christy than for Joel. C Christy makes more pizzas in an hour than Joel does. D the opportunity cost of making pizzas is lower for Christy than for Joel.

D the opportunity cost of making pizzas is lower for Christy than for Joel.

The price elasticity of supply is a measure of how sensitive producers are to a change in A technology. B market supply. C input prices. D the price of a good or service.

D the price of a good or service.

If the price of each pound of apples increases, A the demand for apples will increase. B the quantity demanded of apples will increases. C the demand for apples will decrease. D the quantity demanded of apples will decrease.

D the quantity demanded of apples will decrease.

Factors of production are A the knowledge that can be applied to the production of goods and services. B generally unlimited in modern economies. C always employed in modern economies. D the resources the economy has available to produce goods and services.

D the resources the economy has available to produce goods and services.

When a competitive market is at equilibrium, A consumer surplus is greater than producer surplus. B the sum of consumer surplus and producer surplus equals zero. C consumer surplus equals producer surplus. D the sum of consumer surplus and producer surplus is maximized.

D the sum of consumer surplus and producer surplus is maximized.

Gains from trade occurs as a result of A more efficient use of resources only in countries that produce certain goods B less scarcity. C more equality among people. D more goods and services can be obtained at lower opportunity costs.

D. more goods and services can be obtained at lower opportunity costs.

Which of the following is an element of a competitive equilibrium model? (Check all correct answers) Government controls market prices Firms maximize profits Consumers maximize utility The "invisible hand" coordinates the market

Firms maximize profits Consumers maximize utility The "invisible hand" coordinates the market

economics is a A. natural science that deals with creating more resources that are scarce B. humanities course that is mainly concerned with limited wants versus unlimited resources C. social science that deals with making choices among alternatives D. science that deals mainly with fair allocation of limited resources among people

Social science that deals with making choices among alternatives

Suppose that Jake and Jill have the ability to pick either apples or strawberries. The following table shows how much they can pick in one hour. Quantity picked in one hour pounds of apples,strawberries jake 8 4 kill 10 10 Between apples and strawberries, Jake has a comparative advantage for picking _____, and Jill has a comparative advantage for picking ______. According to the principle of comparative advantage, ______ should specialize in picking apples, and _______ should specialize in picking strawberries.

apple strawberries jake jill

draw production possibilities curve

draw production possibilities curve