Economics 202 TEST 1

Wages

All of the following are factors of production except: A. Capital B. Labor C. Wages D. Land E. Entrepreneurial Ability

we observe: the price of bacon increase and the demand for eggs decrease

All of the following are substitutes except: A. We observe: the price of bacon increase and the demand for eggs decrease B. We observe: the price of automobiles decrease and the demand for public transit decrease C. We observe: the price of tennis racquets decrease and the demand for golf clubs decrease D. We observe: the price of coffee increase and the demand for tea increase

an upward movement along the supply curve

An increase in quantity supplied would be indicated by

decrease supply

An increase in the price of a rival good will

Peanut butter is an inferior good

As Ms. Jackson's income deacreases, she increases her purchase of peanut butter. We conclude that for Ms. Jackson's: A. peanut butter is a normal good B. Her situation is an exception to the law of demand C. Peanut butter is not very scarce D. Peanut butter is an inferior good

demand decreases and supply increases

If equilibrium price falls and equilibrium quantity is indeterminate then

decrease demand now; Increase supply now

If future prices are expected to decrease, this will

Pe= $12.50

If the supply equation is represented by: Qs = 325+ 7P and the demand equation by Qd: 450- 3P then, A. Pe=$150 B. Qe=450 C. Pe= $-46.43 D. Pe= $12.50 E. Information not given

1.any manufactured aid in production 2. machinery an equipment

In economics, capital refers to:

households are the sellers of the final products

In the simple circular flow model:

absolute advantage

One person or country has a/an ______ over another if they take fewer resources to perform the task than the other person or country

Increase its equilibrium price

Other things held equal, an increase in taxes will:

a decrease in the price of beef

Pork and beef are considered to be substitute goods. Which of the following will cause a decrease in the demand for pork? A. an increase in the price of pork B. a decrease in the price of beef C. a decrease in the price of pork D. an increase in the price of beef

D. all the above

The equilibrium price in a market is the price at which A. the quantity supplied equals the quantity demanded B. sellers' and buyers' desires are both satisfied C. the greatest amount of product will be exchanged D. all of the above

a change in future prices

The following determinate of demand and supply will simultaneously shift both the demand and supply curves;

price; quantity demanded; inversely

The law of demand says the ____ and ___ are ____ related, ceteris paribus

price; quantity supplied; directly

The law of supply says that _____ and ____ are ____ related, ceteris paribus

all the money spent on construction

The opportunity cost of a new football stadium at a college is: A. shown by the increase in tuition for all students B. shown by the increase in taxes C. all the money spent on its construction D. the highest valued good and services that could have been produced by the resources used to build it

a decrease in supply

What will cause an increase in equilibrium price and a decrease in equilibrium quantity?

an increase in demand

What will cause an increase in market equilibrium price and in equilibrium quantity?

price will fall and quantity will be indeterminate

What will happen to equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resource needed to manufacture traditional film falls, and more firms decide to manufacture traditional film?

a decrease in income if the good is inferior

What will increase the demand of the good in question?

Price of the good in question decreases

What will increase the quantity demand of the good in question?

made a normative statement

When an economist suggest that taxes should be cut to help the poor, he or she has

an improvement in pearl-finding technology

Which of the following is likely to increase the supply of Mikimoto pearls? A. a increase in the wages of gemologist B. An increase in the price of Mikimoto peals C. A decrease in the price of Mikimoto pearls D. A decrease in consumer incomes E. An improvement in pearl-finding technology

A. the price of a resource that us used to produce the good

Which of the following is not a determinate of demand? A. the price of a resource is used to produce the good B. The price of a complementary good C. the price of the good next month D. the price of a substitute good

D. a decrease in the price of Coke

Which of the following would NOT increase the demand for Coke? A. an increase in the price of Pepsi B. credible research shows that Coke lessens the risk of cancer C. a decrease in the price of rum (which goes well with Coke) D. a decrease in the price of Coke E. All the above would increase the demand for Coke

total market demand curve

is derived from the horizontal summation of all the individual demands at a given price

rational choice

is one that allows individuals to reach their goals

A change in demand

movement of the entire demand curve (left or right) from its original position

comparative advantage

occurs when a person or country has the lowest opportunity cost of producing the product

if Tom decreases his consumption as his income increases while Ellen increases her consumption as her income increases

A good may be inferior good for Tom, but a normal good for Ellen if A. if Tom increases his consumption as his income increases while Ellen decreases her consumption as her income increases B. if Tome decreases his consumption as his income increases while Ellen increases her consumption as her income increases C. only if the price of the good is lower for Tom D. only either Tom or Ellen misperceives the true quality of the good E. under no circumstances can this happen

C

Solve for equilibrium price (Pe), equilibrium quantity (Qe), with the given demand and supply equations: Qd = 2550-30P Qs= 1200+ 20P A. Pe =$10 Qe= 1350 B. Pe = $50 Qe = 3750 C. Pe = $27 Qe =1740 D. Pe = $50 Qe =1350 E. None of the above are correct

for soup falls when income rises

Soup is an inferior good if the demand A. for soup falls when the price of a substitute for soup rises B. for soup rises when the price of soup falls C. curve for soup slopes upward D. for soup falls when income rises

an increase in supply for pickles with no change in demand

Suppose that the equilibrium, price for pickles falls while the equilibrium quantity rises. The most consistent explanation for these observations are: