Econ
(t/f) the term ¨market¨ refers only to trading arrangements that have been approved by the government
False
monique buys a new television for $795. she recieves consumer surplus of $355 from the purchase. how much does monique value her television?
$1150
Brett buys a new cell phone for $100. he recieves consumer surplus of $80 from the purchase. how much does Brett value his cell phone?
$180
What is the size of the per-unit tax
$5
At price of $6, the quantitiy demanded in the market would be
103lbs
in 2017, smiley town consumed 50,000 tubes of toothpaste. in 2018,toothpaste conusmption rose to 62,000 tubes. caluculate the percentage change in toothpaste consumption
24%
what is Japans opportunity cost of producing one wristwatch
25 pounds of rice
using marginal analysis, how many hours should Eva extend her bakerys hours of operations?
4 hours
The stogie shop, a cigar shop in the mall, sells hand rolled cigars for $10.00 and machine made cigars for $2.50 each. what is the opportunity cost of buying a hand rolled cigar?
4 machine made cigars
if the price of milk was $1.25 a gallon and it is now $2.25 a gallon, what is the percentage change in the price?
80 %
At the price of $6, the quantity demanded in the market would be
89lbs
(T/F) marginal benefit is the benefit that your activity provides to someone else
False
An increase in the price of the product would be represented by a movement from
B to A
(T/F) optimal decisions are made at the point where marginal benefit is maximized
False
(t/f) As population declines , scarcity eventually disappers
False
which of the following countries does NOT come close tot he free market benchmark?
Cuba
what happens in the market for suchi if the surgeion general announces that a majority of the raw fish that is imported to make sushi contains high levels of toxic mercury
D decreases, S no change, P and Q decrease
An increase in the price of a complement would be represented by a movement from.......
D2 to D1
which of the following statements about an entrepreneur is TRUE?
Develops the vision for the firm and funds the producing unit
(T/F) in market economies, income distribution is always going to be completely equitable
False
A decrease in the number of firms in a market will cause supply to increase
False
T/F The payment received by suppliers of entrepreneurial skills is called rent
False
T/F a redwood forest is not an example of a factor of production but the harvested and processed redwood is a factor of production
False
T/F any output combination along a production possibility fronteir is associated with overused or unattainable resources
False
T/F examining the conditions that could lead to inflation is an economy is an example of a microeconomics topic
False
T/F for most goods and services, the burden of a tax is on the sellers
False
T/F if consumers believe the price of tablet computers will increase in the future,this will cause the demand for tablet computers to decrease now
False
T/F if the prices of peaches, a substitute for plums, increases the demand for plums will decrease
False
T/F in a free market there are virtually no restrictions, or at best a few restrictions on how a good or service can be produces or sold
False
T/F in economics, the term ¨free market¨ refers to a market where no sales tax is imposed on products sold.
False
T/F it is not possible to have a comparative advantage in producing a good or service without having an absolute advantage
False
T/F producer surplus if the difference between the highest price someone is willing to pay and the price he actually pays
False
T/F the additional cost to a firm of producing one more unit of a good or service is equal to producer surplus
False
T/F the income effect explains why there is usually a direct relationship between the price of product and the quantitiy of the product demanded
False
T/F very few businesses and virtually no nonprofit organizations,hire economist
False
as the number of firms in a market increases, the supply curve will shift to the left and the equilibrium price will rise
False
if the demand curve for a product shifts to the right and the supply curve for the product shifts to the left, equilibrium price and equilibrium quantity will both increase.
False
T/F the differnce between consumer surplus and producer surplus in a market is equal to the deadweight loss
Fasle
which of the following statements is TRUE?
George has an absolute advantage in both tasks
Housework has........, because the cost of these specialist is ......
Increased;lower
Which of the following statements is true?
Jack as a comparative advantage in garden cultivating and George in lawn mowing
In a competitive market equilibrium the ...... equals the ......... of the last unit sold
Marnigal bneift;marginal cost
Which of the following statements is true?
Minnie has an absolute advantage in making umbrellas and mickey in making hats
FIGURE- which panel best decribes what happens in this market when there is a decrease in the productovoty of commercial fishermen
Panel B
A technological advancement would be represented by a movement from....
S1 to S2
an increase in the expected future price of the product would be represented by a movement from
S2 to S1
The study of economics arises due to
Scarcity
does either Japan or Thailand have an absolute advantage and if so, in what product?
Thailand has an absolute advantage in both products
which of the following generation catgeories has the smallest population in the United States in 2017
The baby boomers
It would seem that commerce bank would have a strong incentive to install ¨bandit barriers¨ to detur robberies. why wouldnt they do it?
The banks must have weighed the cost of installing bandit barriers against the benefits and decided that they have ¨no interest in ever putting in the barriers.¨
A change in quantitiy supplied is represented by a movement along the supply curve
True
All else equal, as the price of a product falls, the quantity suppliued decreases
True
T/F More chief executive officers of fortune 500 companies majored in economics than in any other subject
True
T/F a decrease in the unemployment rate may be represented as a movement from a point inside the production possibilities frontier to a point on the frontier
True
T/F a normal good is a good for which the demanded decreases as income decreases, holding everything else constant
True
T/F a surplus is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded
True
T/F a tax is efficent if it imposes a small excess burden relative to the tax revenue it raises
True
T/F a welding machine is an example of a factor of production if it is being used to produce automobiles
True
T/F an increase in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point inside the frontier.
True
T/F any output combination inside a production possibilities frontier is associated with unused or underutilized resources
True
T/F examining the conditions that could lead to economic growth is an example of a macroeconomic topic
True
T/F human capital refers to an accumulated skills and training that workers possess
True
T/F if Abigail can make more candles in one day than pierre, then Abigail has an absolute advantage in making candles.
True
T/F if the demand for a product increases and the supply of the same product decreases, the equilibrium price will increase
True
T/F if the market price is at equilibrium, the deadweight loss is zero
True
T/F in a two-good, two country world, if one country has an absolute advantage in the production of both goods, it can still benefit by trading with the other country
True
T/F in the market for gasoline, an increase in the federal excise tax on gasoline would shift the supply curve up
True
T/F market equilibrium occurs where the quanitty supplied is equal to the quantitty demanded
True
T/F the decisions General Motors makes in determinng production levels for its chevy volt is an example of a microeconomic topic
True
T/F the payment received by suppliers of entrepreneurial skills is called profit
True
T/F the total amount of consumer surplus in a market is equal to the area below the market demand curve and above the market price
True
T/F there will be no deadweight loss if the marginal benefit to consumers is equal to the marginal cost of production and the sum of consumer surplus and producer surplus is maximized
True
Scarcity refers to the situation in which
Unlimited wants exceed limited resources
what is the equilibrium hourly wage (W*) and the equilibrium quantity of labor is (Q*)
W*=$9.00;Q*=380,000
when...... in a market, the total net benefits to society is maximized
a competitive equilibrium is achieved
which of the following would cause a decrease in the equilibrium price and decrease in the equilibrium quantity of papayas
a decrease in demand
which of the following would cause an increase int he equilibrium price and decrease int he equilibrium quantity of watermelon
a decrease in supply
which of the following would shift the supply curve for energy drinks to the left
a decrease in the number of firms that produce energy drinks
which of the following would cause the equilibrium price of apple juice to decrease and the equilibrium quantity of apple juice to increase
a decrease in the price of apples
farmers can plant either corn or soybeans in their fields. which of the following would cause the supply of soybeans to increase?
a decrease in the price of corn
the term ¨market¨ in economics refers to
a group of buyers and sellers of a product and the arrangement by which they come together to trade
the cost incurred from the production of an additional unit of product
a marginal cost to the firm
if an increase in income leads to an increase in the demand for sushi, then sushi is
a normal good
the recession of 2007-2009 would most likely be represented in a production possibilities frontier graph by
a point inside the fronteir
which term refers to a legally established maximum price that firms may charge
a price ceiling
economist............. that price controls are desirable
a reluctant to state
an efficient tax is
a tax that imposes a small excess burden relative to the tax revenue that is raises
marginal cost is the .............. associated with a particular increase in an activity
additional cost
which of the following can use economic principles to improve how they make important decisions?
all of the above
Assume dinas diner only produces sliders not hot wings. a combination of 40 sliders and 50 hot wings would appear
along Dinas production possibilities frontier
If you can produce more of something than others with the same resources, you have.....
an absolute advantage
which of the following is a factor of production
an acre of forested land
what does the term ¨marginal¨ mean in economics
an additional or extra
if in response to a decrease in the price of coffee, the quantity of coffee demanded increases, then economists would describe this as.....
an increase in quantitiy demanded
an outward shift of a nations production possibilities frontier can occur due to
an increase in the labor force
electric car manufacterers want to sell more electric cars at a higher price.which of the following events would have this effect.
an increase in the price of gasoline
farmers can either raise goats or ostriches on their land. which of the following would cause the supply of goats to decrease
an increase in the price ostriches
an increase in the demand for peanuts due to changes in consumer tastes, accompanied by an increase int he supply of peanuts as a result of favorable growing conditions,will result in
an increase int he equilibrium quantitiy of peannuts;the equilibrium price may increase or decrease.
which of the following would cause a decrease in the supply of peanut butter
an increase the price of peanuts
a successful market economy requires well defined property rights and ....
an independent court system to adjudicate disputes based on the law
if an increase in income leads to a decrease in the demand for salami, then salami is .........
an inferior good
a guild is
an organization of producers that limits the amount of a good produced
economic models
are simplified versions of reality
if the marginal cost of producing a television is constant at $200, then a firm should produce this item.....
as long as the marginal benefit it recieves is just as equal to or greater than $200.
which of the following is part of an economic model
assumptions
A black market is a market where buying and selling take place
at prices that violate government price regualtions
tax incidence is the actual division of the
burden of the tax between buyers and sellers in a market
all........... economies have been political dictatorships
centrally planned
the market for smart water is becoming more competitive. the increase in competition in this market is an example of how the market responds to.....
changes in consumer taste
in a market economy, who decides what goods and services will be produced?
consumers and producers
economics promote which of the following as the way to make the best decision
continue an enjoyable activity up to the point where its marginal benefit equals its marginal cost
If the price of one bottle is $24.....
curly will recieve $26 of consumer surplus from buying one bottle
which of the follwing is part of an economic model?
data
the government proposes a tax on halogen light bulbs. sellers will bear the entire burden of the tax if the ...........
demand curve for halogen bulbs is horizontal
all of the following are considered intellectual property except
shares of stocks
what would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of surgery?
demand will decrease, but this will not shift the supply curve.
in a competitive market the ..... curve shows the marginal benefit recieved by consumers and the .......... curve shows the marginal cost to producers
demand;supply
A primary role of .......... is to describe how choices are made, analyze the results of those choices, and advise on how better decisions can be made
economist
the primary purpose of patents and copyrights is to
encourage the expenditure of funds on research and development to create new products
a change in which of variable will change the market demand for a product
expected future prices
if a vineyard wants to raise funds to purchase a new bottling machine, it does so in the....
factor market
(T/F) an economic model is a complex version of relatity used to analyze real-world economic situations
false
T/F an inferior good is a good for which the quantitity demmanded increases as the price decreases, holding everything else constant
false
T/F the additional benefit to a consumer from consuming one more unit of a good or service is the marginal benefit
false
Allocative efficiency is achieved when
firms produce the goods and services that consumers value most
in economics, tangible merchandise is referred to as
goods
suppose that when the price of hamburgers increases, the Ruiz family increases their purchases of hot dogs. to the ruiz family........
hamburgers and hot dogs are substitutes
The basic economic problem of scarcity
has always existed and will continue to exist
who recieves the goods and services produced in the United States depends largely on
how income is distributed
which of the following is a positive economic statement
if the price of gasoline rises, a smaller quantity of it will be bought.
which of the following describes the difference between ¨scarcity¨ and ¨shortage¨
in the economic sense, almost everything is scarce. A shortage of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price
the..........effect of a price change refers to the impact of a change in the price of a good on a consumers purchasing power
income
A........... is represented by the rightward shift of the demand curve while an........... is represented by a movement along a given demand curve
increase in demand;increase in quintitty demanded
the law of demand implies,holding everything else constant, that as the price of yogurt
increases, the quantity of yogurt demanded will decrease
In econimics, the practical application of an invention is known as
innovation
when a celebrity has the desire to have his image protected following his death, this is best described as an example of the protection of...
intellectual property
FIGURE- at a price of $15, the quantity sold....
is 2 units
A supply curve
is a curve that shows the relationship between the price of a product and the quantity of the product supplied
The revenue received from the sale of an additional unit of a product
is a marginal benefit to the firm
The area above the market supply curve and below the market price
is equal to the amount of producer surplus in a market
What is an economic model
it is a simplified version of some aspect of economic life used to analyze an economic issue
The additional cost to a firm of producing one more unit of a good or service is the
marginal cost
which of the following contributes to the efficiency of markets?
markets promote competition and voluntary exchange
in order to be binding , a price floor
must lie above the free-market equilibrium price
an inward shift of the production possibilities fronteir represents
negative economic growth
if a straight line passes though the point x=8 and y=4 and also through the point x=12 and y=6, the slope of this line is
one half
The ability to exercise control over ones own resources within the confines of the law refers to...
ones propery rights
the concept of ....... is that the economic cost of using a factor of production is the alternative use of that factor that is given up
opportunity cost
Economist assume that
optimal decisions are made at the margin
FIGURE- which pannel best described what happens in this market if there is a substantial increase in the price of blu-ray players
panel D
suppose the US government encouraged new teachers to take jobs in underperforming schools by paying the new teachers a $20,000 bonus. these teachers would be exemplifying the economic idea that................
people respond to economic incentives
the difference between the lowest price a firm would have been willing to accept and the price it actually receives from the sale of a product called
producer surplus
When the marginal benefit equals the marginal cost of the last unit sold in a competitive market
producer surplus is equal to consumer surplus
Every society faces faces economic trade-offs. this means
producing more of one good means less of another good can be produced
when you purchase a new surfboard you do so in the
product market
which of the following is a problem inherent in centrally planned economies
production managers are more concerned with satisfying governemnts orders that with satisfying consumer wants
when goods and services are produced at the lowest possible cost,........ occurs
productive efficiency
in economics, the difference between a firms revenues and its costs is referres to as .....
profit
households
purchase final goods and services in the product market
At market equilibrium
quantity demanded equals quantity supplied
Economist assume that rational people
respond to economic incentives
which of the following statements is TRUE about revenue
revenue is the total amount received for selling a good or service
Firms
sell goods in the product market
in economics, activities done for others,such as providing house cleaning or dental work, are reffered to as.....
services
which of the following is motivated by an equity concern
some US colleges have cut back on merit scholarships since these programs siphon money from need-based programs, thus harming lower-income students with greater financial need.
which of the following is a consequence of minimum wage laws?
some employers will be reluctant to hire many workers as they would without minimum wage
increasing opportunity cost along a bowed-out production possibilities frontier occurs because
some factors of production are not equally suited to producing both goods or services
in the circular flow model, households.....
spend earnings from resource sales on goods and services in the factor market
which of the following is an example of an activity undertaken by an entrepreneur
starting a snow cone business
When the price of a good rises, consumers buy a smaller quantitiy because of the ........ effect and the .......... effect
supply;demand
the processes used to produce goods and services describes ...
technology
human capital refers to
the accumulated skills and training that workers have
technological advancements have led to lower prices and an increase in the sale of color laser printers. how does this affect the market for traditional inkjet printers?
the demand curve for inkjet printers shifts to the left
in Janurary, buyers of gold expect that the price of gold will fall in Feburary. what happens in the gold market in Janurary, holding everything else constant
the demand curve shifts to the left
if the price of propane-fueled gas grills was to decrease, then ...
the demand for propane would increase
FIGURE- if the price of motorcycle engines increases, and the wages of motorcycle workers increase,how will the equilibrium point change?
the equilibrium point will move from A to B
if a firm expects that the price of its produce will be lower int he future than it is today.....
the firm has an incentive to increase supply now and decrease supply in the future
which of the following is NOT a flow int he circular flow model
the flow of profit and the flow of revenue
Consider the following agents:a. the government B: consumers C:producers...... who in the modern mixed economy,decides what goods and services will be produced with the scarce resources available in that economy?
the government,consumers, and producers
opportunity cost is defined as
the highest valued alternative that must be given up to engage in an activity.
which of the following is a factor of production
the janitor at the local elementary school
a conusmer is willing to purchase a product up to the point where
the marginal benefit is equal tot he price of the product
the figure above represents the market for iced tea. assume that this is a competitive market. At an output of 10,000 units
the marginal benefit of iced tea is greater than the marginal cost;therefore output is inefficiently low
consumer surplus in a market for a product would be equal to the area under the demand curve if
the market price was zero
how does a market system prevent people from getting as many goods and services to those who are able to pay for those products and therefore income is a limiting factor.
the market system allocates goods and services to those who are able to pay for those products and therefore income is a limiting factor
the production possibilities frontier shows
the maximum attainable combinations of two products that may be produced in a particular time period with available resources
a tax is imposed on employers and workers that are used to fund social security and medicare. this tax is sometimes referred to as ........
the payroll tax
the attainable points in a production possibilities frontier are
the points outside the production possibilities frontier
one would speak of a movement along a supply curve for a good,rather than a change in supply, if......
the price of a good changes
a demand curve shows the relationship between....
the price of a product and the quantity of the product demanded
Suppliers will be willing to supply a product in all of the following situations except when
the price recieved is less than the additional cost of producing the product
for demand curve D1
the producer bears a smaller share of the tax burden if the supply curve is S1
if in a competitive market, the marginal benefit is greater than marginal cost
the quantity sold is less than the equilibrium quantitiy
deadweight loss refers to
the reduction in economic surplus resulting from not being in competitive equilibrium
the circular flow model demonstrates
the roles played by households and firms in the market systems
the substitution effect of a price change refers to
the shift in the demand curve due to a change in purchasing power bought about by the price change
if in the market for apples the supply has decreased,then ...
the supply curve for apples has shifted to the left
each point on the demand curve shows
the willingness of consumers to purchase a product at different prices
which of he following is an example of spending on factors of production in the circular flow model?
the ¨Lucky Ducky¨ casino buys a new craps table for the casino floor
which of the following describes a characteristic of a perfectly competitve market?
there are many buyers and sellers
How is the market for pest control affected by this?
there is a decrease in the supply of pest control services
FIGURE- at a price of $5.....
there is a shortage of 4 units
FIGURE-if there is a surplus of motorcycles how will the equilibrium point change?
there will be no change in the equilibrium point
Which of the following best describes an assumption economist make about human behavior
they assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time
without technological advancement, how can a nation achieve economic growth
through an increase in supplies of factors of production
T/F the substitution effect explains why there is an inverse relationship between the price of a product and the quantity of the product demanded
true
if the population increases and input prices increase, the equilibrium price of a product will indefinitely increase.
true
what is Jacks opportunity cost of mowing a lawn
two-thirds of a a garden cultivated
which of the following is a positive economic statement
unemployment insurance payments increase when the unemployment rate rises
the resource income earned by those who supply labor services is called
wages and salaries
