Econ Test 2 Study Guide

By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis, economists assume that the most important determinant of the demand for a good is the ________ of the good. A.) price; quantity; price B.) quantity; price; price C.) price; quantity; quantity D.) quantity; price; quantity

A

From the list below, select the variable that will cause the demand curve to shift A.) Consumer income B.) Technology and productivity C.) The number of firms in the market D.) The cost of raw materials

A

If the price of chocolate increases, then there will be.. A.) a decrease in the quantity of chocolate demanded B.) an increase in consumers' taste for chocolate C.) a decrease in demand for chocolate D.) a change in consumer income

A

The price of Burger King's Whopper increases. This will cause A.) demand for McDonald's Big Mac hamburgers to increase B.) demand for McDonald's Big Mac hamburgers to decrease C.) a movement along the demand curve for McDonald's Big Mac Hamburgers

A

The price of fries increases due to a potato shortage. This will A.) decrease the demand for McDonald's Big Mac hamburgers B.) increase the demand for McDonald's Big Mac hamburgers C.) Cause a movement along the demand curve for McDonald's Big Mac Hamburgers

A

Jiffy peanut butter and Smucker's Strawberry jam are considered to be complementary goods Show how an increase in the price of jiffy peanut butter affects the demand for Smucker's Strawberry jam. When the price of a related good changes, this will result in ______ A.) a shift in the demand curve B.) a movement along the demand curve In particular, when the price of Jiffy peanut butter increases, the demand curve for Smucker's Strawberry jam will shift to the _____ A.) left B.) Right

A; A

Assume that potatoes are an inferior good. Which of the following would cause both the equilibrium price and equilibrium quantity of potatoes to decrease? A.) a decrease in consumer income B.) an increase in consumer income C.) a freeze that sharply reduces potato output D.) a technological advancement that results in a bumper crop of potatoes

B

Assume that potatoes are an inferior good. which of the following would cause both the equilibrium price and equilibrium quantity of potatoes to decrease? A.) a freeze that sharply reduces potato output B.) an increase in consumer income C.) a technological advancement that results in a bumper crop of potatoes D.) a decrease in consumer income

B

By drawing a demand curve with ____ on the vertical axis and ____ on the horizontal axis, economists assume that the most important determinant of demand for a good is the ____ of the good A.) quantity; price; quantity B.) price; quantity; price C.) price; quantity; quantity D.) quantity; price; price

B

Households _____ final goods and services in the ______ market A.) sell; product B.) purchase; product C.) purchase; factor D.) sell; factor

B

If a Demand curve shifts to the left, then A.) quantity demanded has increased B.) demand has decreased C.) quantity demanded has decreased D.) demand has increased

B

The U.S. economy enters a period of rapid growth in incomes. This will cause A.) demand for McDonald's Big Mac hamburgers to shift to the right if they are inferior goods B.) demand for McDonald's Big Mac hamburgers to shift to the left if they are inferior goods C.) a movement along the demand curve for McDonald's Big Mac Hamburgers if they are normal goods

B

When you purchase a new pair of jeans you do so in the A.) input market B.) product market C.) factor market D.) resource

B

Steamed rice is considered to be an inferior good Show how an increase in consumer income affects the demand for steamed rice A change in consumer income will result in _____ A.) a movement along the demand curve B.) a shift in the demand curve In particular, if consumer income increases, then the demand for steamed rice will shift to the _____ A.) right B.) left

B; B

From the list below, select the variable that will cause the supply curve to shift A.) consumer income B.) population and demographics C.) the cost of raw materials D.) prices of related goods

C

In economics the term capital refers to A.) funds, including cash, used by businesses to hire resources B.) the difference between a firm's assets and its liabilities C.) goods used to produce other goods D.) the process of raising funds from venture capitalists

C

McDonald's distributes $1.00 off coupons. This will cause A.) demand for McDonald's Big Mac hamburgers to shift to the right B.) Demand for McDonald's Big Mac hamburgers to shift to the left C.) a movement along the demand curve for McDonald's Big Mac Hamburgers

C

The difference between a change in supply and a change in the quantity supplied is that the latter is A.) shown as a shift in the supply curve while the former is displayed graphically as a movement along a supply curve B.) determined by the willingness of producers to sell while the former is set by the ability of firms to produce C.) produced by a change in the product's own price while the former is caused by a variety of variables other than the product's price D.) Conditional upon a change in the former, but not vice versa

C

The law of demand implies, holding everything else constant, that as the price of bagels increases A.) the quantity of bagels demanded will increase B.) the demand of bagels will increase C.) the demand for bagels will decrease D.) the quantity of bagels demanded will decrease

D

When economists speak of a shortage, they mean a situation in which A.) some consumers are unable to make a purchase at the current price B.) the quantity demanded exceeds quantity supplied C.) the market price is below the equilibrium price D.) all of the above E.) A and B only

D

Which of the following is not a factor of production? A.) the manager of the local tire shop B.) an acre of farmland C.) a drill press in a machine shop D.) $1,000 in cash

D

George sells land he owns to McDonald's so it can build a new restaurant This takes place in the ____ market The household ___ the factor of production and the firm ____ the factor of production

factor; supply, demand

George works 20 hours per week at McDonald's This takes place in the _____ market The household _____ the labor and the firm _____ the labor

factor; supply, demand

Tesla increases the employment at its Fremont plant This takes place in the _____ market The households _____ the labor and the firm _____ the labor

factor; supply, demand

George buys a Tesla Model S This takes place in the _____ market The household _______ the good and the firm _____ the good

product; demand, supply