Econ Quiz 1

Which of the following do we subtract from GDP to obtain national income ?

Depreciation

The Personal Income of the US is equal to

the value of the total income received by all households in the US

Trade offs force society to make choices, particularly when answering the following three fundamental questions:

1. what goods and services will be produced? 2. how will the goods and services be produced? 3. who will receive the goods and services produced?

XYZ firm, the leading producer of leather goods... Which of the following if true would support marks point of view ?

India had high import tariffs

What do economists mean by market equilibrium ?

A market outcome where quantity supplied is equal to quantity demanded.

According to Dan Sichel... Which of the following statements is correct?

Song development time produces songs, similar to investment in a factory produces physical goods

During the current year, the gov in the country of Brungaria had adopted a fiscal stimulus package to boost economic growth. Which of the following if true would undermine the claim of the economic advisory committee?

Brungaria's exports have fallen significantly in the current year.

Two neighbors, countries A and B, produce books and blankets... Which of the following, if true, would weaken Maya's conclusion?

Country A employs more capital per unit of labor

What is Costco's CEO referring to ?

Efficiency wages

In a market system, what determines how goods and services will be produced ?

Firms determine how goods and services will be produced

National Income

GDP - depreciation

How is the GDP deflator calculated ?

GDP Deflator= nominal gdp/real gdp x 100

Which of the following is considered to be a problem in using GDP as a measure of national well being ?

GDP doesn't include the value of leisure time

which of the following is not a shortcoming of GDP as a measure of well being? If Americans still worked 60-hr weeks, as they did in 1890

GDP only counts final goods and services and not intermediate goods GDP would be much higher than it is, but the well being of the typical person would not necessarily be higher

When a significant fraction of domestic production takes place in foreign-owned facilities, a country's diff b/t GDP and GNP is as follows:

GDP will be much larger than GNP

which one of the following is not measured of the price level?

Gov Price Index

All of the following are correct except.. Which component of gross domestic income is the largest ?

Gross domestic income doesn't include health insurance... wages

If the US bureau of economic analysis added up the values of every good and service sold during the year, would the total be larger or smaller than measured GDP?

Larger: the value of all goods and services sold would include intermediate goods

Suppose a house is built and sold in 2006. If house is resold in 2015, is the value of the house included in GDP fro 2015? Would the services of a real estate agent who helped sell the house be included in GDP for 2015?

No. Gdp for 2015 includes only production that occurs during 2015 yes. GDP for 2015 includes the market value of final goods and services. this includes real estate services

In an economy with rising prices, compared to the base year

Nominal gdp larger... after the base year

Th textile industry in Indonesia had traditionally.... Which of the following if true would best explain this outcome ?

Other major Indonesian industries reported greater increases...

An article in Wall Street Journal... What does the article mean by mature market? Sales of iphones would likely be slower in mature markets than in countries such as india b/c Would it be easier to forecast smartphone sales in mature markets or in countries such as India?

Products have reached mainstream... India's market for smartphones ... Easier in mature markets since the rate of change is more stable

Suppose the amount of fed gov collects in personal income taxes decrease while GDP stay the same. national income will personal income will disposable personal income will

Same same increase

With an annual production of 100,000 metric tons, SteelWorld Inc,. is one of the major producers of steel in its country. Which of the following if true would explain this phenomenon ?

SteelWorld implemented new technology that ...

During a certain year, aggregate disposable income of country Q increased considerably. Which of the following if true would weaken julia's argument ?

The population in country q increased.

What is the difference b/t the value of a firm's final product and the value added by the firm to the final product ?

The value of a firms final product is the sale price; value added is the difference b/t the sale price and the price of intermediate goods

Evaluate: Adam smith analysis is based on a fundamental flaw:

This statement is based on the misconception that following your self interest and being selfish are the same thing

The unemployment rate is calculated as follows: Which of the following is not one of the conditions someone needs to meet to be counted as unemployed ?

UR= number of employed/labor force x 100 they had worked only one hr per week during the previous four weeks

The type of inflation that is a greater problem to society is

Unanticipated inflation, since it causes greater redistribution of income between those making payments and those awaiting payments in the future

Is specialization and trade b/t individuals and countries... Individually, if you go from a situation of not trading with others to a situation of trading with others, do you still have a job ? Does your standard of living increase? Likewise, if a country goes from not trading with other countries to trading with other countries, does it still have a job ? Does its standard of living increase?

While specialization and trade facilitate the attainment... Yes you do... Economic theory says yes:... Certainly, b/c trade expands total production Economic theory says yes:...

Which equation represents the relationship between GDP and 4 major expenditure components? What are the 4 major components of expenditures in GDP ?

Y=C+I+G+NX Consumption, investment, gov purchases, net exports

Suppose that inflation rate turns out to be much higher than most people expected.

a borrower will gain from the situation while the lender will loose

Which of the following is the textbook's definition of a supply schedule? Which of the following is the textbook's definition of a supply curve?

a table that shows the relationship... a curve that shows the relationship...

What is absolute advantage? What is comparative advantage ? Is it possible for a country to have a ....

ability to produce more of a good or service than competitors using the same amount of resources ability to produce a good or service at a lower opportunity cost than other products will have a comparative advantage if it has a lower opportunity cost of producing that good

An efficiency wage is

an above market wage paid by a firm to maximize worker productivity

why are models based on assumptions ?

because models have to be simplified to be useful

Relative to a market economy, a centrally- planned economy would be expected to be

better at neither productive efficiency nor allocative efficiency

An underground economy involves all of the following except.. Some countries have larger underground economies than do other countries b/c..

buying and selling of goods and services by obtaining... of government policies that are retarding economic growth

Which of the following is true about the consumption component of US GDP in 2012? Which of the following is true about the government purchases component of US GDP in 2012?

consumer spending on services was greater than the sum of spending on durable and nondurable goods purchases by state and local governments was greater than purchases by the federal gov

When there is a shortage of a good...

consumers compete against one another by bidding the price upward

Purchase a new ford escape hybrid from a ford dealer purchase a 2011 (preowned) ford escape hybrid from a friend ford purchases door handles for the escape from an auto parts manufacturer in indiana ford produces 1000 escapes in a factory in missouri and ships them to a car dealer in china ford produces new machine tools to use in its missouri escape factory the state of missouri builds a new highway to help improve access to the ford escape plant

consumption expenditure not included in GDP calculation not included in GDP calculation net export expenditure investment expenditure Gov expenditure

The country of Alaine produces 1,000 tons of corn during a year. ... The lobbyist's claim is based on the assumption taht

corn is not used in the production of other goods

from the list below, select the variable that will cause the supply curve to shift:

cost of raw materials

Suppose the price of a complement to LCD televisions rises. The equilibrium price of LCD TVs will

decrease and the equilibrium quantity will decrease

Which of the following events would shift the supply of smartphones to the right ?

decrease in the price of inputs used to produce smartphones

if you were attempting to forecast the level of consumer spending by households, which measure of total production or total income might be most helpful in making your forecast ?

disposable personal income

The Real interest rate

equal to the nominal interest rate minus the inflation rate

In a circular flow of expenditure and income, why must the total value of production in an economy equal the total value of income ?

every penny spent on a good or service must end up as someones income

What do economists mean by the word "marginal" ? Economists believe that an activity should be continued up to the point where

extra or additional the marginal benefit from the activity is equal to the marginal cost

In economic terminology, the inputs used to make goods and services are referred to as

factors of production

all of the following are problems caused by deflation except

firms make higher profits as consumers buy more goods and services

Inventories are part of the investment and therefore included in GDP b/c

firms produce goods, however sometimes the goods may be unsold st the time GDP is computed

3 types of unemployment the types of unemployment most likely to result in hardship for the people who are unemployed is

frictional, structural, cyclical structural b/c this type of unemployment requires retraining to acquire new job skills

Suppose John Q Worker "in-between jobs"

frictionally unemployed

Assuming that inflation has occurred over time, what is the relationship b/t nominal GDP and the real GDP in each of the following situations? In years after the base year, nomianl GDP ___ real GDP In the base year, nominal GDP ___ real GDP In years prior to the base year, nominal GDP ___ real GDP

greater than equal to less than

The minimum wage law The effect of labor unions on overall unemployment is ___ since only a ___ % of the labor force... An efficiency wage

has only a small effect on the unemployment rate since only a small part of the labor force earns the minimum wage small;small increases the unemployment rate since firms pay a higher than market wage ...

GDP is an imperfect measure of economic well being b/c it fails to measure what types of production? Even if GDP included these types of production, why would it still be an imperfect measure of economic well being ?

household production and the underground economy all of the above

Microeconomics is the study of

how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices

Scarcity implies that every society and every individual face trade offs because scarcity means that

human wants are greater than what available resources can produce

which of the following is an example of cyclical unemployment ?

in an economic downturn, a manufacturing plant reduces production...

Gov unemployment insurance tends to ... The payment of gov unemployment insurance reduces the severity of recessions by ...

increase the unemployment rate by lowering the opportunity cost of job search preventing a huge drop in income and spending for the unemployed

Increases in the minimum wage will... The unemployment rate in the US is usually ___ than the unemployment rates in most other high income countries, partly b/c the US has ___ requirements for the unemployed to receive gov payments

increase unemployment among teenagers lower; more stringent

Which of the following is a problem of anticipated inflation?

increases in taxes paid by investors/ costs to firms of changing prices

Coffee beans purchased by a coffee shop one share of google stock a new pick up truck purchased by consumer a new home purchased by family

intermediate neither final final

When there is a "glut", the quantity demanded of steel is relatively.. Steel prices would slump if there is a glut in the steel market because... In the face of a glut in the market, how likely is it that steel companies would succeed in maintaining steel prices?

low compared to the quantity supplied so there is a lot of steel available the high level of supply relative to demand will lower the price not likely b/c the market forces are pushing prices down

Which of the following is not a step economists follow when developing an economic model ?

make value judgments to be proven or disproven

Disposable personal income

personal income - personal tax payments

Primary difference between macroeconomics and microeconomics is

microeconomics examines individual markets while macroeconomics examines the economy as a whole

Which of the following statements about microeconomics and macroeconomics is correct ? Which of the following statements about microeconomics and macroeconomics is correct?

microeconomics involves the study of how households and firms make choices. macroeconomics is the study of the economy as a whole.

According to the US Bureau of Labor Statistics... An economic explanation for this trend could be that as women

more employment opportunities, their opportunity cost of doing housework, relative to men's, has risen

Personal Income

national income minus retained corporate earnings plus gov transfer payments and interest on gov bonds

One major component that can be negative is

net exports

Difference b/t a nominal variable and a real variable is that

nominal variables are calculated in current year prices and real variable measured in dollars of the base year for price index to correct the effects of inflation

Tires from Bridgestone tire company by an automobile manufacturer New fleet of police cars by the local gov French wine by a US consumer New machine tool by the Ford Motor Company

not the purchase of final good Purchase of final good purchase of final good purchase of final good

Consider the demand for smaller homes illustrated in the figure to the right. What demographic change would likely result in the demand.... shifting to the right? The demand curve for smaller homes would likely shift to the right if ...

portion of the population that is elderly increases.

Which of the following statements about positive analysis is correct ? Which of the following statements about normative analysis is correct ?

positive analysis is concerned with what is normative analysis is concerned with what ought to be

If the GDP deflator on 2012 has a value of 98 then ,

prices have decreased 2 % b/t the base year and 2012

Which of the following would be included in the GDP of the US?

production from a US firm that operates in mexico

According to an article in the Economists, the russian economy ... These two percentages are referring to changes in

real GDP

Prepping for a next day exam over the course of an evening...

the longer you choose to study will result in....

The total value of commodity A produced in country X increased from 500,000 in 2011 to 700000 in 2012. which of the following if true would strengthen laura's argument ?

the average price level in the economy remained stable over the 2 years

What is the circular- flow diagram and what does it illustrate ?

the circular- flow diagram shows how households and firms are linked through product and factor markets

The market for corn in country A is highly competitive.. If the new equilibrium price turns out to be below $10/ bushel, which of the following inferences can be drawn ?

the demand curve for corn must be flatter in country a than b

The council of economic advisors to the president of a country reported gross investment expenditure at 400,000$... which of the following if true would support mark's argument ?

the firm purchased new machinery worth 50,000 for its production facility during that year

GDP is best defined as What happens if we measure GDP by adding up the value of every good and service produced in the economy ?

the market value of all final goods and services produced in a country during a period of time GDP is overestimated because of double counting

Which of the following is included in the economists definition of investment ? In calculating GDP, which levels of gov spending are included in government purchases ?

the purchase of new machines, factories, or houses spending by federal, state, and local govs

What is the diff b/t the value of a firm's final product and the value added by a firm to the final product?

the value of a firm's final product is the sale price; value added is the diff b/t the sale price and the price of intermediate goods

The GNP of the US is equal to If a large amount of production...... Then its likely that the country's GDP will be __

the value of final goods and services produced by US factors of production larger than

Real GDP is Over time, prices may change relative to eachother. To take this change .... Bureau of Economic Analysis calculates

the value of goods and services evaluates at base year prices real GDP using chain weights

Economists use models Economic data is used

to answer questions and analyze issues to test models

The circular flow diagram shows that __ should equal ____ The circular flow diagram shows that all sources of income are owned by

total expenditure; total income households

What is typical of the length of unemployment in the modern US economy?

unemployment lasts less than 6 months

How would it affect the unemployment rate if the Bureau of Labor Statistics counted as unemployed both discourage workers and people who work part-time but would prefer to work full time ?

unemployment rate would increase

Imagine that the next time the Indianapolis Colts play the New England Patriots...Both you and andrew are making an error in judgment by assuming that specialization should be based upon ___ You shouldn't necessarily do what you are better than anyone else at doing

unless your advantage in that activity is greater than advantages you possess in other activities

in 2012, the largest component of GDI was

wages

What are the 4 categories of income ?

wages, interest, rent, profit

Nominal incomes generally increase with inflation b/c Since nominal incomes increase w/ inflation

when inflation is anticipated, average nominal incomes also increase by the same expected inflation does not affect the purchasing power of the average consumer

Why does inflation make nominal GDP a poor measure of the increase in total production from one year to the next ? How does real GDP deal with the problem inflation causes with nominal GDP ?

when nominal GDP increases from year to year... all of the above

What is the relationship b/t the unemployment rate and enacting or increasing a minimum wage? When a minimum wage is enacted or increased across a country, the employment rate

will increase some but the impacts will be much larger for some groups of workers

The farmers well being After the civil war US GDP

would have been higher as a result of working theses additional hrs because GDP is not adjusted for value of social justice could have been higher if the farmers didn't reduce their work hrs

One of the basic facts life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls

scarcity

A production possibilities frontier: We can show economic efficiency: We can show economic inefficiency: The ppf will shift outward:

shows that maximum attainable combinations of 2 goods that may be produced with available resources with points on the ppf with points inside the ppf if technological advances occur

Economic models are:

simplified versions of reality designed to analyze what is to explain human decision making in any context

The principle of increasing marginal opportunity cost states that the more resources devoted to any activity, the ___ the payoff to devoting additional resources to that activity.

smaller

The people of a previously quiet and peaceful country... considering their resource limitations, the extent to which security is enhanced will most likely be determined by

society's willingness to forego other goods and services, both public and private

The distinction between substitutes and complements is

substitute goods are used for the same purposes while complementary goods are used together

The demand for pears is highest during summer and lowest during winter. What must be happening to the supply of pears,from winter to summer, for the equilibrium price to fall ?

supply increases more than the demand increases

Are smartphones a closer substitute for tablet computers, such as the ipad, or for ereaders.... Smartphones are a closer substitute for

tablet computers than for e-readers b/c of the size of smartphones

Lawrence Summers served as secretary... It would be more moral to reduce pollution...

taking the cost into account because money spent on population reduction is not available for other worthy activities

One of the great benefits of trade is

that it makes it possible for society to become better off by increasing both its production and its consumption

macroeconomics examines

the economy as a whole, such as how rapidly the economy grows

What is the basis for trade ? How can a country gain from specialization and trade ?

comparative advantage A country can specialize in producing that for which it has comparative advantage and then trade for other needed goods and services

From the list below, select the variable that will cause the demand curve to shift:

consumer income

How do market economies ultimately determine what goods and services are produced, how the goods and services will be produced, and who will receive the goods and services produced ?

consumers determine what goods and services are produced, firms determine how to produce them, and markets determine who will receive them

In a market system, how does society decide what goods and services will be produced ?

consumers, firms, and the government determine what goods and services will be produced by the choices they make

After WW2 in 1945, the US experienced a baby boom as birthrates rose and remained high through the early 1960s. As the first baby boomers become older than 65,

demand curve for doctors will shift to the right

The price of Burger King's Whopper hamburger increases. / declines McDonalds distributes 1$ off coupons./ eliminates The price of fries decreases due to a potato surplus. The US economy enters a period of rapid growth in incomes./ decline

demand for McDonald's Big Mac hamburgers to increase / decrease a movement along the demand curve for McDonalds Big Mac burgers increase the demand for mcdonalds big mac hamburgers demand for mcdonalds big mac hamburgers to shift to the left if they are inferior goods / shift to the right

In the circular flow diagram showing how a market system works,

income flows to firms through product markets

What is the outcome of enforcing contracts and property rights in a market system ? If a market system functions well, which of the following is necessary for the enforcement of contracts and property rights ?

increased economic activity an independent court system

Harry Fletcher is a market analyst at an automobile firm. Which of the following if true can explain this outcome?

interest rates increased substantially during this period

Whether carried out by an individual or a country, production beyond the production possibilities frontier With respect to consumption, individuals and countries

is not physically possible can, through trade, consume beyond their production possibilities frontiers

Goods X and Y are perfect substitutes. The conclusion is flawed because .../ To arrive at the conclusion, the industry analysts are assuming that ...

it assumes that firm F is the only producer of good X the new buyers of good x will, on average, consume one unit each

The British historian Thomas Macualy once remarked that copyrights are "a tax on readers" Copyrights are a tax on readers in the sense that? If copyrights are a "tax" on readers, governments provide a legal framework to enforce them because ?

Copyrights limit the supply .. Copyrights provide needed protection...

consider the following statement: "The problem with economics is that is assumes.... What is the most correct response to this statement ?

Economics assumes that consumers and firms are rational, not that they always make the right decisions

Choco Fantasy is a firm... Which of the following if true would suggest that the firm is operating on its ppf? ... At a point inside its ppf?

Even though the demand for both liquor and dark chocolates has increased.... the firm believes in maintaining a certain amount...

In the 1950s, the economist Bela Balassa... In these circumstances, would there have been any gain to the US from importing any of these products from Britain?

Even with an absolute advantage, the US would have benefited from importing those products for which Britain had a comparative advantage

In a speech at the NYCU...What is so important about the idea of the invisible hand?

Firms will provide consumers what they want without the gov

According to Adam Smith, which of the following is necessary for the proper functioning of the market system ? ... which of the following is the instrument the invisible hand uses to direct economic activity ?

For markets to work, people must be free to pursue their self interest prices

What does increasing marginal opportunity costs mean ? What are the implications of this idea for the shape of the production possibilities frontier?

Increasing the production of a good requires larger and larger decreases in the production of another good the production possibilities frontier will be bowed outward

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when

Marginal benefit equals marginal cost

A primary difference between macroeconomics and microeconomics is

Microeconomics examines individual markets while macroeconomics examines the economy as a whole

According to an article in the Wall Street Journal ... It is necessary for all of the managers in all of these firms to know how all of the components ...? Is it necessary for the CEO of blackberry to know this info ?

Of course not. Any given manager need... Generic knowledge about the product is certainly...

___ is used to describe how changes in price affect a consumer's purchasing power, and __ is used to describe how a change in price affects the quantity demanded of a good by making it more or less expensive that substitute goods

The income effect, the substitution effect

a production possibilities frontier (ppf) is

a curve showing the maximum attainable combinations of 2 products that may be available resources and current technology

Which of the following events would shift the supply of smartphones to the right?

a decrease in the price of inputs used to produce smartphones

An unexpected frost in the orange groves of California would cause

a decrease in the supply of orange juice, increasing the equilibrium price

What is a free market? In what ways does a free market economy differ from a centrally planned economy?

a free market is one where the government does not control the production of goods and services centrally planned economies have extensive government controls

The primary diff b/t absolute and comparative advantage

absolute refers to ability to produce more of a good or service using the same amount of resources and comparative refers to the ability to produce a good or service at a lower opportunity cost

Economics assumes people and firms:

are rational, respond to incentives, and make decisions by comparing marginal benefits with marginal costs

Consider: An increase in supply decreases the equilibrium price. The decrease in price increases demand.

false; decreases in price ...

What are the 2 main categories of participants in markets? Which participants are of greatest importance in determining what goods and services are produced?

firms and households households

To develop a model that will answer economic questions, economists typically:

first make simplifying assumptions, then formulate a hypothesis, test the hypothesis, and finally revise the model if necessary

Consider the supply of crude oil on the world market. The oil supply curve would shift to the right if...

future oil prices were expected to be lower

If country ABC can produce a unit of good 1 with fewer resources than can country XYZ, it is correct to say that country ABC

has an absolute advantage in producing good 1

Suppose an increasing number of school districts across the country find themselves....A market- based remedy for this emerging mismatch b/t the availability ...

higher compensation to elicit both a larger...

Some private colleges said that applications actually increased when they bolstered prices... For the colleges.. does this indicate that these colleges have upward sloping demand curves?

no, more applications indicate that demand increased and shifted the demand curve to the right

Some economists have been puzzled that although entrepreneurs... The term "psychic rewards" refers to Psychic rewards that an entrepreneur might receive include:

non monetary forms of remuneration that are psychologically uplifting status within community, the pride of self accomplishment, being one's own boss

Suppose that the federal gov is deciding which of 2 cancer treatment therapies... What factors should the federal government take into account in making its decision of which therapy it will allow medicare funds to be used to pay for?

number of months the average lifespan is prolonged

what is an entrepreneur? why do entrepreneurs play a key role in a market system?

operate businesses that produce goods and services they bring together factors of production

When economists develop models designed to explain the choices people make, they generally assume that

people are rational

In economics, the term capital refers to

physical capital, such as machinery, that is used to produce other goods

According to an article on CNNMoney,... It is important for Tesla Motors to address the issue of long-distance travel because If Tesla Motors expends resources to expand its supercharger network, then...

ppl are less likely to buy a car that doesn't allow them... fewer resources that could be devoted to a car production

The Scottish philosopher Adam smith argued in 1776

prices...guilds

Absolute advantage is the ability of an individual, firm, or country to.. If a country has a comparative advantage in the production of a good, then that country...

produce more of a good or service than competitors using the same amount of resources has a lower opportunity cost in the production of that good

The primary difference b/t product markets and factor markets is that..

product markets are markets for goods, while factor markets are markets for factors of production

When does productive efficiency occur ? when does allocative efficiency occur?

productive efficiency occurs when a good or service is produced at the lowest possible cost allocative efficiency occurs when production is in accordance with consumer preferences

If demand and supply both increase, which will definitely occur ? If demand decreases and supply increases, which of the following will definitely occur?

the equilibrium quantity will increase the equilibrium price will decrease

Opportunity cost is

the highest valued alternative that must be give up to engage in an activity

A freelance singer-songwriter is planning the restoration... the theory of comparative advantage implies

the income lost while away from music will likely exceed the savings realized by doing the work himself...

suppose the equilibrium price and equilibrium quantity of gold both decrease. Which of the following would produce such a change ?

the market demand curve for gold could have decreased

suppose we can divide all the goods produced by an economy into 2 types: Is it likely that the production possibilities frontier in this situation would be a straight line:

the ppf would likely be bowed out b/c not all resources are equally well suited to produce both consumption and capital goods

The law of demand is the assertion that.. An increase in the price of a product cause a decrease.... More specifically,

the quantity demanded of a product is inversely related to its price the substitution effect is the decrease in quantity demanded b/c the product is more expensive relative to other goods and the income effect is the decrease in quantity demanded owing to the decline in consumers' purchasing power

Suppose the president is attempting to decide... What is the opportunity cost of spending more money to find a cure for heart disease ? How should policy makers determine the amount of money that should be allocated for research curing heart disease ?

the reduction in funding for research to cure other diseases whether the last dollar devoted to research on heart disease...

What are private property rights? What role do they play in the working of a market system ? Private property rights Why are independent courts imporatnt for a well-functioning economy? Independence is necessary for courts:

the rights individuals and firms have to the exclusive use of tangible, physical property and intellectual property encourage a significant number, encourage firms to spend all the above

Property rights

the rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it

A number of political leaders have expressed concern about the nation's... These individuals would see their position weakened most by the knowledge that

the substitution of domestic steel for foreign steel absorbs resources that would otherwise produce goods of greater value

Recent medical research revealed that the presence of gluten... Which of the following if true would explain this outcome ? ... would cast the most doubt on the prediction of the industry analysts?

the supply of oats came down drastically... other recent studies have linked oat consumption with cholesterol reduction

Which of the following best describes scarcity ? Scarcity is central to the study of economics because it implies that

unlimited wants exceed the limited resources available every choice involves an opportunity cost

a free market exists

when the gov places a few restrictions on how a good or a service ...

a free market exists

when the government places a few restrictions on how a good or a service can be produced or sold or how a factor of production can be employed

According to law of demand, there i an inverse relationship b/t price and quantity demanded. Why ?

when the price of a good increases, consumers' purchasing power falls, and they cant buy as much of the good....