Econ

Which of the following statements best describes the concept of consumer surplus?

"I was going to pay $200 for new sunglasses that I had seen at the Oakley store but I ended up paying only $140 for the same sunglasses."

Paul goes to Dick's Sporting Goods 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

$75

Pierre can produce either a combination of 20 bow ties and 30 neckties or a combination of 35 bow ties and 15 neckties. If he now produces 35 bow ties and 15 neckties, what is the opportunity cost of producing an additional 15 neckties?

15 bow ties

If the price of milk was $2.50 a gallon and it is now $3.25 a gallon, what is the percentage change in price?

30%

In 2017, Smileytown consumed 12,000 gallons of mouthwash. In 2018, mouthwash consumption rose to 17,000 gallons. Calculate the percentage change in mouthwash consumption.

41.7%

Which of the following statements about competition in a market is true?

Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production.

Which of the following is correct about the economic decisions consumers, firms, and the government have to make?

Each faces the problem of scarcity which necessitates trade-offs in making economic decisions.

Which of the following statements about economic resources is true?

Economic resources are also called factors of production.

Which of the following statements about economic resources is false?

Economic resources include financial capital and money.

Your roommate, Serafina, a psychology major, said, "The problem with economics is that it assumes that consumers and firms always make the correct decision. But we know that everyone's human, and we all make mistakes." Do you agree with her comment?

I disagree with her. Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave rationally, meaning they make the best decisions given their knowledge of the costs and benefits.

DeShawn's Detailing is a service that details cars at the customers' homes or places of work. DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service. For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package. Should DeShawn continue to offer the engine detailing service?

No, his marginal benefit is less than his marginal cost.

Let D= demand, S = supply, P = equilibrium price, and Q= equilibrium quantity. What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged?

S decreases, D no change, P increases, Q decreases.

Which of the following is a microeconomic question?

What factors determine the price of carrots?

Which of the following is a macroeconomic question?

What determines the inflation rate?

A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in

a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease.

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 trade-off

The area ________ the market supply curve and ________ the market price is equal to the total amount of producer surplus in a market.

above; below

Marginal benefit is equal to the ________ benefit a consumer receives from consuming one more unit of a good or service.

additional

What does the term "marginal" mean in economics?

an additional or extra

Assume that cotton is a normal good. Which of the following would cause both the equilibrium price and equilibrium quantity of cotton to increase?

an increase in consumer income

Assume that potatoes are an inferior good. Which of the following would cause both the equilibrium price and equilibrium quantity of potatoes to decrease?

an increase in consumer income

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

an increase in the equilibrium price of lobster; the equilibrium quantity may increase or decrease.

Trinh quits his $80,000-a-year job to become a full-time volunteer at a museum. What is the opportunity cost of his decision?

at least $80,000

The difference between the highest price a consumer is willing to pay for a good and the price the consumer actually pays is called

consumer surplus

In recent years, the consumption of orange juice in the United States has fallen but the price of orange juice has risen. This is because the supply of orange juice has ________ and the demand for orange juice has ________.

decreased; also decreased

Each point on a ________ curve shows the willingness of consumers to purchase a product at different prices.

demand

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.

economists

________ occurs when economic benefits are distributed fairly.

equity

T/F If additional units of a good could be produced at an increasing opportunity cost, the production possibilities frontier would be linear.

false

T/F If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase.

false

Productive efficiency is achieved when

firms produce goods and services at the lowest cost.

The production possibilities frontier model shows that

if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.

In a production possibilities frontier, a point ________ the frontier is productively inefficient.

inside

In a perfectly competitive market, there are ________ buyers and ________ sellers.

many; many

In economics, the term ________ refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

market

The production possibilities frontier shows the ________ combinations of two products that can be produced in a particular time period with available resources.

maximum attainable

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10, the slope of this line is

negative seven-tenths.

All of the following are part of an economic model except

opinions (what is included is assumptions, data, hypothesis)

One reason some manufacturing companies have moved production from overseas locations back to the United States is rising foreign labor costs. Assuming that managers at these companies used all available information, including the rising cost of foreign labor, when making the decision to move production back to the United States exemplifies which key economic idea?

people are rational

In a modern mixed economy, who decides what goods and services will be produced?

producers, consumers, and government

________ is a situation in which a good or service is produced at the lowest possible cost.

productive effeciency

Households ________ factors of production and ________ goods and services.

supply; demand

Allocative efficiency is achieved when firms produce goods and services

that consumers value most.

Marginal cost is

the additional cost to a firm of producing one more unit of a good or service.

A change in all of the following variables will change the market demand for a product except

the price of the product. (includes population demographics, tastes, income)

Assume that the price for swimming pool maintenance services has risen and sales of these services have fallen. One can conclude that

the supply of swimming pool maintenance services has decreased.

T/F A competitive market equilibrium is a market equilibrium with many buyers and sellers.

true

T/F A decrease in the price of inputs will cause the supply curve for a product to shift to the right.

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 surplus occurs when the actual selling price is above the market equilibrium price.

true

T/F All else equal, as the price of a product falls, the quantity supplied decreases.

true

T/F If a country is producing efficiently and is on the production possibilities frontier, the only way to produce more of one good is to produce less of the other.

true

T/F Market equilibrium occurs where the quantity supplied is equal to the quantity demanded.

true

T/F On a production possibilities frontier, opportunity cost is represented by the slope of the production possibilities frontier.

true