Economics quiz 1
If consumers believe the price of tablet computers will increase in the future this will cause the demand for tablet computers To decrease now
F
If price of peaches which is a substitute for plums increases in the demand for plums will decrease
F
If the price of the product is expected to increase in the future the supply today will increase
F
In response to a shortage the market price of a goodwill rise. As the price rises the demand will increase in supply will increase until equilibrium is reached
F
Peanut butter and jelly or compliments. If the price of peanut butter increases the demand for jelly will increase
F
Producer surplus is the difference between the highest price of firm is willing to accept for product and the price it actually received for the product
F
Producer surplus is the difference between the highest price someone is willing to pay and the price he actually pays
F
The additional cost to a firm of producing one more unit of good or service is equal to producer surplus
F
The difference between consumer surplus and producer surplus in a market is equal to the deadweight loss
F
The income affect explains why there is usually a direct relationship between the price of the product and the quality of the product Amanda
F
The income effect of a price change refers to the change in the quantity demanded of a good the results from a change in the price of a substitute products
F
There is a shortage of every good that is scarce
F
Substitution effect explains why there is an inverse relationship between the price of the product and the quantity of the product demanded
T
The additional benefit to a consumer from consuming one more unit of a good or service is the marginal benefit
T
The division of the burden of tax between buyers and sellers in a market is called tax incidence
T
The total amount of consumer surplus in a market is equal to the area below the market demand curve and above the market price
T
The total amount of producer surplus in a market is equal to the area above the market supply curve and below the market price
T
There will be no deadweight loss if the marginal benefit to consumers is equal to the marginal cost of production and the sum of consumer surplus and producer surplus is maximized
T
equilibrium in a competitive market results in the greatest amount of economic surplus from the production of a good or service
T
it is not possible to have a comparative advantage in producing a good or service without having an absolute advantage.
f
one example of human capital is the amount of savings you have
f
physical capital refers to stocks and bonds
f
the basis for trade is absolute advantage, not comparative advantage
f
the sales revenue a seller receives form the sale of an additional unit of goods is called the marginal cost.
f
the term "market" refers only to trading arrangements that have been approved by the government
f
to increase gas mileage, automobile manufacturers make cars small and light.,. large cars absorb more of the impact of an accident than small cars but yield lower gas mileage. These facts suggest that a positive relationship exists between safety and gas mileage.
f
when voluntary exchange takes place, neither party usually gains from the exchange
f
In the market for factors of production, households earn income by supplying factors of production to firms
t
a decrease in the labor force shifts the ppf inwards over time
t
a decrease in the unemployment rate may be represented as a movement from a point inside the ppf to a point on the frontier
t
all economic questions arise from the fact that resources are scarce
t
an increase in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point inside the frontier
t
any output combination inside a production possibilities frontier is associated with unused or underutilized resources.
t
consider a country that produces only two goods: bird feeders and binoculars. Suppose it is possible for this country to increase is production of bird feeders without producing fewer binoculars. in this case, its current output combo is inefficient
t
consider a country that produces only two goods: pineapples and tractors. suppose it is possible for this country to increase its production of pineapples without producing fewer tractors. In this case, its current output combination is inefficient.
t
if a country is producing efficiently and is on the ppf, producing more of one good would result in a movement along the frontier.
t
if additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be linear
t
in a centrally planned economy,, the government decides how economic resources will be allocated
t
in a two-good, two country world, if one country has an absolute advantage in the production of both goods, it can still benefit by trading with the other country
t
on a ppf, opportunity cost is represented by the slope of the ppf
t
in market economies, income distribution is always going to be completely equitable.
f
Buyers are required to pay the federal excise tax on gasoline directly to the government, the demand curve for gasoline would shift up
F
Deadweight loss refers to a Lassen Avenue resulting from producers having to reduce are selling price to remain competitive
F
For most goods and services, the burden of tax is on the sellers
F
If a tax is imposed on a product, the buyer will always there the entire burden of the tax
F
A decrease in supply is caused by a decrease in the price of the product
F
A decrease in the number of firms in a market will cause supply to increase
F
A positive technological change will cause the quantity of a good supply to increase
F
All renters benefit from my control and all landlords lose
F
An increase in the quantity supplied is represented by a rightward shift in the supply curve
F
And inferior good is it good for which the quantity demanded increases as the price decreases holding everything else constant
F
If marginal benefit is less than marginal cost output is inefficiently high
T
If the market prices equilibrium the deadweight loss is zero
T
In the market for gasoline, an increase in the federal excise tax on gasoline would shift the supply curve up
T
A change in quantity supplied is represented by a movement along the supply curve
T
A decrease in the price of inputs will cause supply curve for a product to shift to the right
T
A normal Good is a good through which the demand decreases as income increases holding everything else constant
T
A surplus is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded
T
All else equal, is the price of a product falls, the quantity supply decreases
T
An increase in population result in an increase in demand
T
Attacks as efficient if it impose a small access burden relative to the tax revenue it raises
T
If consumers believe the price of hybrid vehicles will decrease in the future this will cause the demand for hybrid vehicles to decrease now
T
a university must decide if it should stop offering foreign language classes. this decision involves answering the economic question of " how to produce"
f
an increase in population shifts the production possibilities frontier inwards over time
f
any output combination along a ppf is associated with overused or unattainable resources
f
as population declines, scarcity eventually disappears
f
consumers make all economic decisions in a mixed economy
f
human capital refers to stocks and bonds
f
if a country is producing efficiently and is on the production possibilities frontier, the only way to produce more of one good is with an advance in technology
f
if the opportunity cost of producing more of one good increases as more of that good is produced, then the production method is ineffiecent
f