Econ QZ_2 (chp.2,3)

The general pattern that consumption of the first few units of any good tends to bring a higher level of _______ to a person than consumption of later units is a common pattern. D. sunk costs B. marginal benefit C. opportunity cost A. utility

A

If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that: D. Goods X and Y are complement goods. A. the price of Good Y will increase. C. Goods X and Y are substitute goods. B. Goods X and Y are normal goods.

D

Which of the following will definitely occur when there is a simultaneous decrease in demand and decrease in supply? A. a decrease in equilibrium price B.an increase in equilibrium quantity C. an increase in equilibrium price D.decrease in equilibrium quantity

D

An effective price floor is when the price is set _______ the equilibrium price. A. above B.at C. below

A

If the demand for coffee decreases as income decreases, coffee is a(n) A. normal good. D. complementary good. B. inferior good. C. substitute good.

A

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________. C. law of demand A. income gap D. price model B. market equilibrium

C

After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is: B. a shift of the demand curve for beef to the left. A. no change; only the supply curve for beef is likely to be affected. C. a movement down along the demand curve for beef to the right. D. a shift of the demand curve for beef to the right.

B

Any given demand or supply curve is based on the ceteris paribus assumption that ___________________. A. everything is variable. C. no one knows which variables will change and which will remain constant. B. all else is held equal. D. what is true for the individual is not necessarily true for the whole.

B

The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options. D. budget constraints B. sunk costs A. marginal utility C. marginal analysis

B

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the __________________ . C. supply curve to the right D. demand curve to the left B. supply curve to the left A. demand curve to the right

C

An effective price ceiling is when the price is set _______ the equilibrium price. A. above B.at C.below

C

As a person receives more of a good, the _______________ from each additional unit of the good declines. C. marginal utility D. budget constraint A. utility B. sunk costs

C

The slope of the _________________ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good. B. utility level C. budget constraint D. opportunity set A. personal preference

C

When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right. C. costs of production fall D. there is a population increase B. equilibrium is achieved A. prices rise

C