Econ study

24) Suppose a country operates on its production possibility frontier when it produces 1000 books and 1000 tables. The combination of ________ reflects ________. A) 500 books and 1000 tables; an inefficient but attainable point. B) 1000 books and 1500 tables; a free lunch. C) 1000 books and 1000 tables; a free lunch. D) 500 books and 500 tables; an attainable and efficient point. E) 1000 books and 500 tables; an efficient point.

A) 500 books and 1000 tables; an inefficient but attainable point.

12) Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular telephone are A) 60,000 and $50. B) 50,000 and $100. C) 100,000 and $20. D) 40,000 and $20. E) 80,000 and $80.

A) 60,000 and $50.

17) Suppose that the price of bread rises. This rise could be the result of A) a decrease in the supply of bread. B) an increase in the supply of bread. C) a decrease in the demand for bread. D) Both answers A and C are correct. E) Both answers B and C are correct.

A) a decrease in the supply of bread.

9) Which of the following increases the quantity supplied of compact discs but does NOT increase the supply of compact discs? A) an increase in the price of a compact disc B) new technology that lowers the cost of producing compact discs C) a decrease in the price of a compact disc D) a decrease in the number of suppliers of compact discs E) an increase in the price of the resources used to produce compact discs

A) an increase in the price of a compact disc

15) If the price of tangerines increases, the price of oranges also rises because A) consumers consider the two goods substitutes, and demand for oranges increases. B) buyers must have expected a higher price for oranges and thus increased their demand for oranges. C) consumers consider the two goods complements, and so sellers decreased the supply of oranges. D) if the supply of tangerines decreased, then the supply of oranges also must decrease. E) buyers' incomes must have decreased, and oranges are an inferior good.

A) consumers consider the two goods substitutes, and demand for oranges increases.

5) A change in the demand for apples could result from any of the following EXCEPT A) increased preferences for fresh fruit consumption for health reasons. B) a change in the price of an apple. C) a change in income. D) a change in the number of buyers. E) a change in the price of a banana.

B) a change in the price of an apple.

1) Gasoline prices increase by 50 percent and other things remain the same. As a result, there is A) no change in the quantity of gasoline demanded. B) a decrease in the quantity of gasoline demanded. C) a decrease in the demand for gasoline. D) an increase in the demand for gasoline. E) More information is needed to determine if the demand for gasoline increases or decreases.

B) a decrease in the quantity of gasoline demanded.

10) A decrease in the price of a complement in production leads to A) no change in the supply of the good in question. B) a decrease in the supply of the good in question. C) an increase in the supply of the good in question. D) a decrease in the quantity supplied of the good in question. E) an increase in the supply of the good in question and a decrease in the quantity supplied of the good in question.

B) a decrease in the supply of the good in question.

2) An increase in the quantity demanded is shown as A) a rightward shift of the demand curve. B) a movement along the demand curve. C) a movement toward the demand curve. D) a leftward shift of the demand curve. E) both a movement along the demand curve and a shift of the demand curve.

B) a movement along the demand curve.

6) Which of the following increases the demand for a good or service? A) a fall in the price of the good or service B) a rise in the price of a substitute good or service C) a rise in the price of a complement D) a smaller number of consumers wanting to buy the good or service E) a rise in the price of the good or service

B) a rise in the price of a substitute good or service

25) A country has a comparative advantage in the production of a good if it can A) produce the good on and remain on its production possibilities frontier. B) produce the good at the lowest opportunity cost. C) produce more of the good than another country. D) trade off producing the good for another good. E) produce more of the good most efficiently.

B) produce the good at the lowest opportunity cost.

8) The law of supply reflects the fact that A) higher prices are more attractive to consumers because they signal a higher quality product. B) suppliers have an incentive to use their resources in the way that brings the biggest return. C) the demand curve is downward sloping. D) people buy more of a good when its price falls. E) businesses can sell more goods at lower prices.

B) suppliers have an incentive to use their resources in the way that brings the biggest return.

7) Consumers eat salsa with taco chips. The price of salsa rises. How does the increase in the price of salsa affect the demand for taco chips? A) It has no effect on the demand for taco chips. B) It will decrease the demand for taco chips only if taco chips are a normal good. C) It decreases the demand for taco chips. D) It increases the demand for taco chips. E) It could increase, decrease, or have no effect on the demand for taco chips, but more information is needed to determine the impact.

C) It decreases the demand for taco chips.

22) Production efficiency is represented by ________ a production possibilities frontier. A) all points inside B) only one point on C) all points on D) a movement along

C) all points on

20) A bowed out production possibility frontier shows that the A) opportunity cost of a good decreases as more of the good is produced. B) opportunity cost of a good is constant as more of the good is produced. C) opportunity cost of a good increases as more of the good is produced. D) opportunity cost of producing another good is negative. E) opportunity cost relationship is linear.

C) opportunity cost of a good increases as more of the good is produced.

4) The phrase "a change in demand" most directly implies a A) movement along the price curve. B) movement along the quantity curve. C) shift of the demand curve. D) movement along a demand curve. E) change in the quantity demanded of a good.

C) shift of the demand curve.

11) Plywood is used in the construction of houses. If the price of plywood rises, what happens to the supply of houses? A) The quantity supplied decreases but there is no shift in the supply curve. B) The quantity supplied increases but there is no shift in the supply curve. C) The quantity supplied decreases and the supply curve shifts leftward. D) The supply decreases so that the supply curve shifts leftward. E) The supply increases so that the supply curve shifts rightward.

D) The supply decreases so that the supply curve shifts leftward.

13) In the figure above, a price of $35 per dozen roses results in A) a shortage. B) equilibrium. C) upward pressure on the price of roses. D) a surplus. E) an eventual rightward shift of the demand curve and/or leftward shift of the supply curve.

D) a surplus.

16) If good weather conditions result in a larger than normal crop of peaches, then the A) increase in the supply of peaches induces a greater demand for peaches, so that the equilibrium price rises and the equilibrium quantity increases. B) equilibrium price of peaches falls, and the equilibrium quantity of peaches decreases. C) demand curve for peaches shifts leftward. D) equilibrium price of peaches falls, and the equilibrium quantity of peaches increases. E) equilibrium price of peaches rises, and the equilibrium quantity of peaches increases.

D) equilibrium price of peaches falls, and the equilibrium quantity of peaches increases.

14) When the demand curve shifts rightward and the market moves to a new equilibrium, then the A) supply decreases. B) supply increases. C) quantity supplied decreases. D) quantity supplied increases. E) price falls to restore the equilibrium.

D) quantity supplied increases.

19) Assume that an association of young workers has lobbied Congress to require that all workers retire once they reach the age of fifty. What impact would this law have on the nation's production possibilities frontier? A) no impact at all B) The level of unemployment would decrease so the production possibilities frontier would shift outward. C) The number of young workers would increase so the production possibilities frontier would shift outward. D) The nation would move to a new position on its production possibilities frontier but the frontier itself would not shift. E) The production possibilities frontier would shift inward.

E) The production possibilities frontier would shift inward.

3) The market demand curve A) is the vertical sum of individual demand curves. B) cannot show a change in demand for a good. C) is upward sloping. D) cannot show how quantity demanded changes in response to a change in price. E) is the horizontal sum of individual demand curves.

E) is the horizontal sum of individual demand curves.