Economics Quizzes

An implication of scarcity is that:

people must make trade-offs

Based on last month's data, Ralph's opportunity cost of selling a truck is selling:

1/4 of a car.

Frank owns an apple farm and plans to spend 4 hours today picking apples. The number of apples he can pick per hour depends on the total number of hours he spends working in either the east orchard or the west orchard in the manner shown in the accompanying table below. What is the opportunity cost to Frank of spending an additional hour picking apples in the East orchard?

10 apples

Refer to the accompanying figure. Moving from point B to point A, the opportunity cost of 25 more salads is:

10 pizzas.

Dean should play golf instead of preparing for tomorrow's exam in economics if:

the economic surplus from playing golf is greater than the economic surplus from studying.

When the supply curve shifts to the left and there is no change in demand:

the equilibrium price will rise.

Earth Movers & Shakers operates 3 iron ore mines. The accompanying table shows each mine's total daily production and the current number of miners at each mine. All miners work for the same wage, and each miner in any given mine produces the same number of tons per day as every other miner in that mine. Suppose Earth Movers & Shakers needs to fill an order for 100 tons of ore in a single day. If it has no other orders to fill that day, and it's not possible to transfer miners from one mine to another, it should:

take 75 tons from Middle Drift and 25 tons from Mother Lode.

The accompanying table below shows the relationship between the number of times you get your car washed each month and your total monthly benefit from car washes. Each car wash costs $15. What is the marginal benefit of the 3rd car wash each month?

$12

Refer to the accompanying figure. The equilibrium price is ______, and the equilibrium quantity is ______.

$35; 20

The Chair of the Economics Department at State U says that fundraising employees should be hired as long as their marginal benefit exceeds their marginal cost. If the University follows this advice, then ______ employee(s) will hired, and the net benefit (total donations minus total labor costs) will be ______.

2; $25,426

Refer to the accompanying figure. For Pat, the opportunity cost of removing one bag of trash is planting:

5 bulbs.

Suppose Bianca buys a used a textbook from Sebastian for $55. If Bianca's surplus from this transaction was $10, we can infer that:

Bianca's reservation price was $65.

Buyers and sellers of a particular good make up the:

market for the good.

According to the textbook, NAFTA was expected to help which country exploit its comparative advantage in the production of goods made by unskilled labor?

Mexico

Refer to the accompanying figure. At a price of $9, there will be:

an excess supply of 5 units.

Suppose that the equilibrium price of apples decreases and the equilibrium quantity of apples increases. This is best explained by:

an increase in the supply of apples.

An economic naturalist is someone who:

applies economic insights to understand everyday life.

An individual has an absolute advantage in producing pizzas if that individual:

can produce more pizzas in a given amount of time than anyone else.

If a nation has the lowest opportunity cost of producing a good, that nation has a(n) ______ in the production of that good.

comparative advantage

Avery's PPC would shift outward if she:

devotes more time to knitting each week.

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts. Point Y is ______, and point V is ______.

efficient; efficient

When the demand curve shifts to the right and supply doesn't change:

equilibrium quantity will rise.

As soon as you see the other island's PPC, you realize there are:

gains from trade because your island has a comparative advantage in coconuts.

Tony notes that an electronics store is offering a flat $20 off all prices in the store. Tony reasons that if he wants to buy something with a price of $50, then it is a good offer, but if he wants to buy something with a price of $500, then it is not a good offer. This is an example of:

inconsistent reasoning; saving $20 is saving $20.

Refer to the accompanying figure. Moving from demand curve D1 to demand curve D2 illustrates a(n):

increase in demand.

The Cost-Benefit Principle indicates that an action should be taken if:

its extra benefit is greater than or equal to its extra cost.

If supply increases and demand decreases, the new equilibrium price will be ______ and the new equilibrium quantity will be ______.

lower; uncertain

Refer to the accompanying figure. For the nation whose PPC is shown, it must be true that:

some of the nation's productive resources are better-suited to making milk, and some are better-suited to making movies.

A market equilibrium might not maximize total economic surplus because:

sometimes goods entail costs and benefits that do not fall on buyers and sellers.

Microeconomics differs from macroeconomics in that microeconomics focuses on:

the choices made by individuals and the implications of those choices.

When a nation reduces the barriers to international trade:

the total value of all goods and serviced produced by the nation rises.

Jen spends her afternoon at the beach, paying $1 to rent a beach umbrella and $11 for food and drinks rather than spending an equal amount of money to go to a movie. Her opportunity cost of going to the beach is:

the value she places on seeing the movie.

The accompanying table below shows the relationship between the number of times you get your car washed each month and your total monthly benefit from car washes. Each car wash costs $15.

$14

You save $10 on gas every week because you take the bus to school. You have class 5 days a week. What is your average benefit per day of taking the bus to school?

$2

Refer to the accompanying table below. The marginal cost of the 3rd unit of this activity is:

$20

Assume point A on a linear production possibilities curve represents the combination of 12 coffees and 3 cappuccinos, and point B represents 3 coffees and 6 cappuccinos. Suppose coffees are on the vertical axis and cappuccinos are on the horizontal axis. The absolute value of the slope of the production possibilities curve between points A and B equals:

3

An outcome is socially optimal if it:

maximizes total economic surplus.

A market equilibrium:

might not maximize total economic surplus.

Assume point A on a linear production possibilities curve represents the combination of 12 coffees and 3 cappuccinos, and point B represents 3 coffees and 6 cappuccinos. Suppose coffees are on the vertical axis and cappuccinos are on the horizontal axis. The absolute value of the slope of the production possibilities curve between points A and B equals: Relative to point X, at point Y:

more skirts and fewer dresses are produced.

Positive economic principles are those that:

predict how people will behave.

Matt has decided to purchase his textbooks for the semester. His options are to purchase the books online with next day delivery at a cost of $175, or to drive to campus tomorrow to buy the books at the university bookstore at a cost of $170. Last week he drove to campus to buy a concert ticket because they offered 25 percent off the regular price of $16. Assume the minimum that Matt would be willing to accept to drive to campus is equal to the $4 he saved on the concert ticket. What would his economic surplus be if he bought his textbooks at the university bookstore rather than online?

$1

A firm pays Pam $40 per hour to assemble personal computers. Each day, Pam can assemble 4 computers if she works 1 hour, 7 computers if she works 2 hours, 9 computers if she works 3 hours, and 10 computers if she works 4 hours. Pam cannot work more than 4 hours day. Each computer consists of a motherboard, a hard drive, a case, a monitor, a keyboard, and a mouse. The total cost of these parts is $600 per computer. What is the marginal cost of producing the computers that Pam can assemble during her 2nd hour of work?

$1,840

Amy is thinking about going to the movies tonight. A movie ticket costs $15, and she'll have to cancel a $20 dog-sitting job that she would have been willing to do for free. The opportunity to Amy cost of going to the movies is:

$35.

Refer to the figure below. There would be an excess supply of 25 at a price of ______.

$50

Refer to the accompanying table below. The average cost of 5 units of activity is:

$6

Refer to the accompanying table below. The marginal cost of the 4th unit of activity is:

$8

The opportunity cost of making a calculator for Smith is ______ and for Jones it is ______.

0.10 computers; 0.05 computers

What's the minimum number of fish you would be willing to accept in exchange for a coconut?

3

Which of the following factors will lead to a decrease in the current supply of a good?

A belief that the price of a good or service will go up in the future

Refer to the accompanying figure, which shows the market for cups of coffee. What might cause a shift from the original demand curve to the new demand curve?

An increase in consumers' tastes for coffee.

Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. Which of the following statements is correct?

Dan should specialize in sandwiches, and Tracy should specialize in smoothies.

Refer to the given table. Relative to column A, column B represents:

a decrease in supply.

Suppose that the equilibrium price of T-shirts increases and the equilibrium quantity of T-shirts decreases. This is best explained by:

a decrease in the supply of T-shirts.

Suppose you observe a decrease in the equilibrium price and quantity of corn. Of the options listed below, this is best explained by:

a fall in consumer income assuming corn is a normal good.

Refer to the accompanying figure. It is efficient for this farmer to:

grow 500 bushels of wheat and 250 bushels of corn.

Economics is best defined as the study of:

how people make choices in the face of scarcity and the implications of those choices for society as a whole.

The benefits of specialization can be used to explain why:

individuals and nations benefit from trade.

Refer to the accompanying figure. If demand shifts from D1 to D2, and at the same time, supply shifts from S1 to S2, then according to the figure:

the equilibrium quantity will increase and the equilibrium price will increase.

Refer to the accompanying figure. If the current market price were $20:

there would be an excess demand of 25 units.

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts.

unattainable