econ test 1 review part2

suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas. The opportunity cost of Joe producing one sandwich is

1/2 pizza

which of the following is NOT a factor of production?

175 shares of Microsoft stock

an economy produces only food and shelter. There are 2 individuals in the economy: Bill and Mary. Mary's opportunity cost of producing 1 unit of shelter is 2 units of food. Bills opportunity cost of producing 1 unit of shelter is 4 units of food.

Mary has comparative advantage over Bill in the production of shelter

Which of the following shifts the demand curve for oranges?

a decrease in the price of a pound of bananas, a substitute in consumption for oranges

A changes in which of the following shifts the demand curve for hamburgers?

a fall in the price of french fries, a complement for hamburgers

Kelly graduates and her income increases by $25,000 a year. Other things remaining the same, she increases the quantity of clothes she buys. For Kelly, clothes are ________.

a normal good

When people's incomes increase, the demand for a good increases. The good is called

a normal good.

Which of the following leads to a movement along the demand curve for spinach but does not shift the demand curve for spinach?

a rise in the price of spinach

Which of the following decreases the demand for an inferior good?

an increase in income

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

an increase in the demand for macaroni and cheese

Oatmeal is a normal good and cold cereal is a substitute for oatmeal. Raisins are a complement for oatmeal. Which of the following increases the demand for oatmeal?

an increase in the price of cold cereal

When economists speak of preferences as influencing demand, they are referring to

an individual's attitudes toward goods and services.

Economic growth can be represented by

an outward shift of the prod. possibilities frontier (ppf)

The law of demand implies that, other things remaining the same

as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will decrease.

If consumers' incomes increase and the demand for bus rides decreases

bus rides are an inferior good.

a person has a comparative advantage in producing a particular good if that person

can produce it at lower opportunity cost than anyone else can

an economic system in which the gov. decides what, how, and for whom to produce, directs workers to jobs, and owns all the land and capital is

centrally planned socialism

Suppose people buy more of good 1 when the price of good 2 falls. These goods are

complements

Ham and eggs are complements. If the price of ham rises, the demand for eggs will

decrease and the demand curve for eggs will shift leftward.

The demand curve for a normal good shifts leftward if income ________ or the expected future price ________.

decreases; falls

An unusually warm winter shifts the

demand curve for gloves leftward.

If consumers but not producers expect that the price of soda will rise in November, the

demand for soda in October will increase.

A change in the price of a good

does not shift the good's demand curve but does cause a movement along it

When China builds a dam using few machines and a great deal of labor, it is answering the ________ part of one of the two big economic questions

how

Which of the following is a macroeconomic issue?

how federal government budget deficits affect interest rates

When an economist talks of scarcity, the economist is referring to the

inability of society to satisfy all human wants because of limited resources

An increase the expected future price of a good

increases its demand.

which of the following best defines capital as a factor of production

instruments, machines, and buildings used in production

The quantity supplied of a good or service is the quantity that a producer ________ at a particular price during a given time period.

is willing to sell

factors of production include

land, labor, capital and entrpreneurship

keeping in mind economists' definition of factors of production, which of the following is NOT a factor of production

money

In march, a factory used new technology to produce its output. Then in August a fire destroys half the factory. The new technology shifted the factory's PPF _____________ and the fire shifted it _______________.

outward; inward

Technological progress makes the production possibilities frontier

shift outward from the origin

An increase in the number of consumers

shifts the demand curve rightward.

Capital accumulation definitely

shifts the production possibilities frontier outward

The law of demand implies that demand curves

slope down

People buy more of good 1 when the price of good 2 rises. These goods are

substitutes

The price of a tomato increases and people buy more lettuce. You infer that lettuce and tomatoes are ________.

substitutes

A substitute is a good

that can be used in place of another good.

The quantity demanded is

the amount of a good that consumers plan to purchase at a particular price.

The quantity supplied of a good is

the amount that the producers are planning to sell at a particular price during a given time period.

which of the following is CORRECT? factors of production are

the inputs used to produce goods and services

The "law of demand" states that, other thing remaining the same, the higher

the price of a good, the smaller is the quantity demanded.

Which of the following is NOT held constant while moving along a supply curve?

the price of the good itself

A supply curve shows the relation between the quantity of a good supplied and

the price of the good. Usually a supply curve has positive slope.

The "law of demand" refers to the fact that, all other things remaining the same, when the price of a good rises

there is a movement up along the demand curve to a smaller quantity demanded.

The "law of supply" refers to the fact that, all other things remaining the same, when the price of a good rises

there is a movement up along the supply curve to a larger quantity supplied.

Consumers expect that the price of a gallon of gasoline will rise next week. As a result

today's demand for gasoline increases.

A complement is a good

used in conjunction with another good

If Taco Bell decides to produce more tacos and fewer burritos, Taco Bell is answering the ________ part of one of the two big economic questions

what