ECON exam 1

The price of salsa rises. How does the increase in the price of salsa affect the supply of salsa?

There is no change to the supply of salsa, but the quantity of salsa supplied increases.

A change in the demand for apples could result from any of the following EXCEPT

a change in the price of an apple

It is expected that the price of a bushel of wheat will increase in one month. This belief will result in

a decrease in the current supply of wheat.

Which of the following shifts the supply curve of popcorn leftward?

a decrease in the number of popcorn suppliers

Which of the following increases the supply of gasoline?

a decrease in the price of a resource used to produce gasoline, such as crude oil

In a production possibilities frontier graph, the cost of producing more units of a good is measured by the

amount of the other good or service that must be forgone.

An increase in both the equilibrium price and quantity can be the result of

an increase in demand.

If macaroni and cheese is an inferior good, then a decrease in income results in

an increase in the demand for macaroni and cheese

Which of the following results in a movement upward along the demand curve for movies?

an increase in the price of movie tickets

Which of the following results in a movement upward along the supply curve for movies in theaters?

an increase in the price of movie tickets

. Which of the following lowers the equilibrium price of a canoe?

an increase in the supply of canoes

. An increase in the number of pineapple growers results in

an increase in the supply of pineapples and a rightward shift in the supply curve of pineapples.

A change in the price of a good ________ its supply curve and ________ a movement along its supply curve.

does not shift; causes

When all of the available factors of production are being efficiently employed and the best technology is used, the

economy is producing at a point on its PPF.

At the equilibrium price, the quantity of the good that buyers are willing and able to buy

exactly equals the quantity that sellers are willing and able to sell.

The bowed out (concave) shape of the production possibilities curve implies that as production of one good

increases, society must forgo increasing amounts of another good.

Scarcity requires that we

make choices about what goods and services to produce.

From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are too long, they have concluded that the

marginal cost of waiting is greater than the marginal benefit of being served.

In the circular flow model, which of the following is on the selling side in the product market?

only firms

In the production possibilities frontier model, an unattainable point lies

only outside the production possibilities frontier

Suppose that tattoos gained immense popularity with retired people as well as college students. This gain in popularity best reflects which of the following influences on buying plans?

preferences

When the demand curve shifts rightward and the market moves to a new equilibrium, then the

quantity supplied increases.

The simple circular flow model shows that workers and capital-owners offer their services to firms through the

resource markets

Assume a competitive market is in equilibrium. There is an increase in demand, but no change in supply. As a result the equilibrium price ________, and the equilibrium quantity ________.

rises; increases

. What effect will a $5 per unit subsidy to glass bottle sellers have on the market for glass bottles?

shift the supply curve down to the right

Two brands of water, Natural Water and Mountain Water, are close substitutes. If the price of Mountain Water decreases, the fall in price

shifts the demand curve for Natural Water leftward.

If the demand for used cars decreases after the price of a new car falls, used cars and new cars are

substitute goods

Suppose the equilibrium price of oranges is $2.00 per pound. If the actual price is above the equilibrium price, a

surplus exists and the price falls to restore equilibrium.

What is the "quantity demanded"?

the amount of a good people are able and willing to buy during a specific time period and at a given price

Hot dogs and hot dog buns are complements. If the price of a hot dog falls, then

the demand for hot dog buns will increase.

. The price of cotton clothing falls. As a result,

the quantity demanded of cotton clothing increases.

When the price of oranges increases,

the quantity of oranges supplied increases

The table above shows the situation in the gasoline market in Tulsa, Oklahoma. If the price of a gallon of gasoline is $2.20, then

there is a shortage of gasoline in Tulsa.

The United States can use all its resources to produce 250 DVDs or 500 shoes. China can use all of its resources to produce 30 DVDs or 300 shoes. The opportunity cost of producing a DVD in the United States is

2 shoes.

You collect fine porcelain vases. If the price per vase is $400, how many vases would you purchase? Fine Porcelain Vases Marginal Benefit (MB) ($) 1,600 2,500 3,350 4,150 5,10

2

Which of the following indicates that the law of supply applies to makers of soda?

An increase in the price of a soda leads to an increase in the quantity of soda supplied.

If the demand for a good decreased, what would be the effect on the equilibrium price and quantity?

Price would decrease, and quantity would decrease

Scott and Cindy both produce only pizza and tacos. In one hour, Scott can produce 20 pizzas or 40 tacos. In one hour, Cindy can produce 30 pizzas or 40 tacos. Based on these data,

Scott has a comparative advantage at producing tacos

Which of the following is a microeconomic issue?

The quantity of wheat grown in the United States increases this year.

If the costs of producing pizza increase, which will occur?

The supply of pizza will decrease.

If the demand for digital cameras increases when consumers' incomes rise, then digital cameras are

a normal good.

To be part of the supply for a good, a producer must

both able and willing to supply the good.

Advances in productivity increase supply because they might

decrease the cost of production.

If the government removes a binding price floor from a market, then the price paid by buyers will

decrease, and the quantity exchanged will increase

The law of diminishing marginal benefit explains why

demand curves slope downward.

Scarcity means that

wants are greater than what we can produce with our resources.

Which of the following statements best describes the study of economics? Economics studies how

we make choices in the face of scarcity.

​Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

​a smaller quantity of the good is exchanged

​A price ceiling is binding when it is set

​below the equilibrium price, causing a shortage

If the government removes a binding price ceiling from a market, then the price paid by buyers will

​increase, and the quantity exchanged will increase.