Macro

What is the total amount that Kendra is willing to pay for 1 ice cream cone?

$3.50

What is Ivan's marginal benefit

20

In 2012, Smileytown consumed 50,000 tubes of toothpaste. In 2013, toothpaste consumption rose to 62,000 tubes. Calculate the percentage change in toothpaste consumption.

24%

What is Ivan's marginal cost

25

The Stogie Shop, a cigar store in the mall, sells hand-‐‑rolled cigars for $10.00 and machine-‐‑made cigars for $2.50 each. What is the opportunity cost of buying a hand-‐‑rolled cigar?

4 machine-made cigars

Using marginal analysis, determine how many hours

5 hours

If the market price is $2.50, what is the consumer surplus on the third ice cream cone?

A) $0

If the market price is $3.00, what is the consumer surplus on the second ice cream cone?

A) $0

If the market price is $3.50, what is the consumer surplus on the first ice cream cone?

A) $0

If the market price is $2.50, what is the consumer surplus on the second ice cream cone?

A) $0.50

If the market price is $3.00, what is the consumer surplus on the first ice cream cone?

A) $0.50

Juanita goes to the Hardware Emporium to buy a new circular saw. She is willing to pay $120 for a new saw, but buys one on sale for $85. Juanita's consumer surplus from the purchase is

A) $35.

If the market price is $4.00, what is the maximum number of ice cream cones that Kendra will buy?

A) 0

If the market price is $3.50, what is the maximum number of ice cream cones that Kendra will buy?

A) 1

What is Betty's opportunity cost of making a statue?

A) 1/2 bench

What is the opportunity cost of producing 1 ton of coconuts in Guatemala?

A) 1/2 of a ton of pineapples

What is Wilma's opportunity cost of making a statue stick?

A) 1/3 bench

Using the information in the figure above, calculate the percentage change in sales of alcoholic beverages between 2008 and 2010.

A) 23.8%

If a minimum wage of $10.00 an hour is mandated, what is the quantity of labor supplied?

A) 390,000

. If a minimum wage of $10.50 an hour is mandated, what is the quantity of labor supplied?

A) 400,000

Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the area representing consumer surplus after the imposition of the price floor?

A) A

What area represents consumer surplus at P2?

A) A

What is the area that represents consumer surplus after the imposition of the ceiling?

A) A + B+ D

An increase in the price of the product would be represented by a movement from

A) A to B.

What area represents producer surplus at a price of P1?

A) C

The health care system in ________ is referred to as a single-payer health care system, and is a system in which the government provides national health insurance to all residents.

A) Canada

) Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What happens in the market for sushi if the Surgeon General announces that a majority of the raw fish that is imported to make sushi contains high levels of toxic mercury?

A) D decreases, S no change, P and Q decrease

Marginal private benefit is represented by which curve?

A) D1

Which of the following statements about economic resources is false?

A) Economic resources include financial capital and money.

Carlos Vanya grows tomatoes and strawberries on his land. His land is equally suited for growing either fruit. Which of the graphs in Figure 2-3 represents his production possibilities frontier?

A) Graph A

The figure above shows the supply and demand curves for two markets: the market for original Michelangelo sculptures and the market for Ray Ban sunglasses. Which graph most likely represents which market?

A) Graph B represents the market for original Michelangelo sculptures and Graph A represents the market for Ray Ban sunglasses.

Which country has a comparative advantage in the production of coconuts?

A) Guatemala

2) Suppose there are two cities that have rent controlled apartments. In one city (Albany) all apartments are subject to rent control; in the other city (Halftrack) one-half of the apartments are rent controlled. Which of the following is most likely to be true?

A) It will be difficult to find a rent-controlled apartment in Albany or Halftrack; rents for the Halftrack apartments not subject to controls will be higher than they would be without rent control

At the price P2, consumers are willing to buy the Q2 pounds of granola. Is this an economically efficient quantity?

A) No, the marginal benefit of the last unit (Q2) exceeds the marginal cost of that last unit.

Assume that the graphs in this figure represent the demand and supply curves for laptop computers. Which panel best describes what happens in this market when the price of computer hard drives falls?

A) Panel (a)

Which of the following statements about positive economic analysis is true ?

A) Positive analysis uses an economic model to estimate the costs and benefits of different course

Which of the following statements is true about revenue?

A) Revenue is the total amount received for selling a good or service.

exists because unlimited wants exceed the limited resources available to fulfill those wants.

A) Scarcity

Which of the following is a normative economic statement?

A) The price of milk is too high.

Which of the following statements is true?

A) The slope of the tangent at E is positive and the slope of the tangent at F is negative.

Suppose an excise tax of $0.75 is imposed on every pack of cigarettes sold and sellers are responsible for paying this tax. How would the imposition of the tax be illustrated in a graph?

A) The supply curve for cigarettes would shift to the left by $0.75.

Suppose that the quantity of labor demanded increases by 40,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?

A) W = $10.00; Q = 390,000

What is the equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*)?

A) W* = $9.00; Q* = 370,000

Which of the following is a macroeconomics question?

A) What determines the minimum wage?

Which of the following is a macroeconomics question?

A) What determines the unemployment rate?

As a result of the tax, is there a loss in producer surplus?

A) Yes, because producers are not selling as many units now.

When every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it, ________ occurs.

A) allocative efficiency

Assume Dina's Diner only produces sliders and hot wings. A combination of 60 sliders and 25 hot wings would appear

A) along Dina's production possibilities frontier.

Assume Dina's Diner only produces sliders and hot wings. A combination of 40 sliders and 50 hot wings would appear

A) along Dina's production possibilities frontier.

Holding everything else constant, an increase in the price of raisins will result in

A) an decrease in the quantity of raisins demanded.

Which of the following is part of an economic model?

A) assumptions

Adverse selection will occur in a market as a result of

A) asymmetric information.

20) Voluntary exchange increases economic efficiency

A) because neither the buyer nor the seller would agree to a trade unless they both benefit.

1) Tax incidence is the actual division of the

A) burden of the tax between buyers and sellers in a market.

In the market for insurance,

A) buyers often have more information than sellers.

The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. If the price of Kona coffee rises from $4 to $5, the market quantity demanded would

A) decrease by 35 lb.

At the efficient equilibrium

A) economic surplus is maximized.

The individual mandate provision of the ACA requires

A) every U.S. resident to have health insurance.

If a vineyard wants to raise funds to purchase a new bottling machine, it does so in the

A) factor market.

Health insurance plans which typically reimburse doctors and hospitals with payment for each service they provide are known as

A) fee-for-service plans.

Compared to the United States, health care spending per person in other high-income countries has been

A) growing at a slower rate.

What is George's opportunity cost of mowing a lawn?

A) half a garden cultivated

Who receives the goods and services produced in the United States depends largely on

A) how income is distributed.

Competition forces firms to produce and sell products as long as the ________ to consumers exceeds the ________ of production

A) marginal benefit; marginal cost

Typically, the lower the level of income per person in a country, the lower the level of spending per person on health care. This relationship between income and spending indicates that health care is a

A) normal good.

Two-dimensional graphs have a horizontal and a vertical axis and are used in economics to

A) relationships between two economic variables.

If in the market for bananas the supply curve has shifted to the right, then

A) the supply of bananas increased.

Each point on a demand curve shows

A) the willingness of consumers to purchase a product at different prices.

If the price is $25,

A) there would be a surplus of 300 units.

The resource income earned by those who supply labor services is called

A) wages and salaries.

If the market price is $2.50, what is the consumer surplus on the first ice cream cone?

B) $1.00

Kendra's marginal benefit from consuming the third ice cream cone is

B) $2.50

What is the size of the unit tax?

B) $5

The efficient equilibrium price is

B) $50.

The price buyers pay after the tax is

B) $8.

What is Betty's opportunity cost of making a bench?

B) 2 statues

What is Wilma's opportunity cost of making a bench?

B) 3 statues

If a minimum wage of $9.50 an hour is mandated, what is the quantity of labor supplied?

B) 380,000

The market equilibrium quantity is ________ thousand vaccinations.

B) 400

At a price of $25, how many units will be sold?

B) 500

What area represents consumer surplus at the equilibrium price of P1?

B) A + B + C

Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the area representing the portion of consumer surplus transferred to producers as a result of the price floor?

B) B

What area represents producer surplus at P2?

B) B + D

Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the area representing producer surplus after the imposition of the price floor?

B) B + D + F

Which of the following statements is true?

B) Betty has an absolute advantage in making both products.

Marginal social benefit is represented by which curve?

B) D2

What is the area that represents the producer surplus after the imposition of the ceiling?

B) F

Which of the following is a positive economic statement?

B) If the price of gasoline rises, a smaller quantity of it will be bought.

The health care system in ________ is referred to as a universal health insurance system, under which every resident is required to enroll in either a private or the government-provided health insurance program.

B) Japan

Assume that the graphs in this figure represent the demand and supply curves for tuna. Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen?

B) Panel (b)

Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the quantity of apartments demanded at the new price?

B) Q1

With rent control, the quantity supplied is Q1. Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get. What is the highest rent they can get?

B) R1

Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What happens in the market for solar panels if the government offers tax breaks to encourage manufacturers to produce more solar panels?

B) S increases, D no change, P decreases, Q increases

In July, market analysts predict that the price of gold will rise in August. What happens in the gold market in July, holding everything else constant?

B) The supply curve shifts to the left.

A movement from ________ could occur because of an influx of immigrant labor

B) X to Y

When ________ in a market, the total net benefit to society is maximized.

B) a competitive equilibrium is achieved

If, in response to an increase in the price of pineapples, the quantity demanded of pineapples decreases, economists would describe this as

B) a decrease in quantity demanded.

If you can produce more of something than others with the same resources, you have

B) an absolute advantage.

When the marginal benefit equals the marginal cost of the last unit sold in a competitive market

B) an economically efficient level of output is produced.

If, in response to a decrease in the price of coffee, the quantity demanded of coffee increases, economists would describe this as

B) an increase in quantity demanded.

Economic models

B) are simplified versions of reality.

What is the term that describes a situation in which one party to an economic transaction has less information than the other party?

B) asymmetric information

Which of the following is part of an economic model?

B) data

Because of asymmetric information, most used cars that are offered for sale will be sold for prices that are greater than their true value. Because of this fact, the used car market falls victim to

B) deadweight loss and economic inefficiency.

Economists who support market-based reforms for health care believe that increased competition among providers of health care would

B) decrease costs and increase economic efficiency.

Which of the following statements about an entrepreneur is true?

B) develops the vision for the firm and funds the producing unit

Allocative efficiency is achieved when

B) firms produce the goods and services that consumers value most.

An ________ is represented by a rightward shift of the demand curve while an ________ is represented by a movement along a given demand curve.

B) increase in demand; increase in quantity demanded

in the United States since 1900, life expectancy at birth has ________ and the death rate has

B) increased; decreased

The market for smartphones has become very competitive. The increase in competition in this market is an example of how the market responds to

B) increases in income.

The law of demand implies, holding everything else constant, that as the price of yogurt

B) increases, the quantity of yogurt demanded will decrease.

Assume Dina's Diner only produces sliders and hot wings. A combination of 20 sliders and 60 hot wings would appear

B) inside Dina's production possibilities frontier.

Assume Dina's Diner only produces sliders and hot wings. A combination of 40 sliders and 25 hot wings would appear

B) inside Dina's production possibilities frontier.

is to give patients an incentive to pay more attention to the prices of medical services. This would tend to increase economic efficiency by decreasing the costs of medical services

B) market-based reforms of the health care system

The branch of economics which studies how households and firms make choices, interact in markets and how government attempts to influence their choices is called

B) microeconomics.

If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of both pineapples and coconuts?

B) neither country

When you purchase a new surfboard you do so in the

B) product market.

When goods and services are produced at the lowest possible cost, ________ occurs.

B) productive efficiency

Households

B) purchase final goods and services in the product market.

At market equilibrium,

B) quantity demanded equals quantity supplied.

Comparative advantage means

B) the ability to produce a good or service at a lower opportunity cost than any other producer.

A demand curve shows the relationship between

B) the amount of a product sellers are willing to sell at a particular price and the amount consumers are willing to buy at that price.

Which of the following did not contributed to the overall decline in death rates in the United States since 1981?

B) the decline in the population

If you are considering buying either an Apple iPhone or a Samsung Galaxy, and you choose the Samsung only because the price is lower, then you consider

B) the iPhone and the Galaxy to be substitutes.

A consumer is willing to purchase a product up to the point where

B) the marginal benefit is equal to the price of the product.

The production possibilities frontier shows

B) the maximum attainable combinations of two products that may be produced in a particular time period with available resources.

If a hospital knows that an insurance company will pay for most of a patient's bill, the hospital has more of an incentive to require additional medical procedures and tests, even if the patient may not require them. This is an example of

B) the principle-agent problem.

The circular flow model demonstrates

B) the roles played by households and firms in the market system.

In the United States, the bulk of health care spending is paid by health insurance companies. Such a system is also called ________ where consumers of health care pay a nominal fee and the rest are paid by the health insurance provider.

B) third-party payer system

The Patient Protection and Affordable Care Act (ACA) is scheduled ________, at which point more than 30 million additional individuals are expected to have health care coverage.

B) to be fully implemented by 2019

What is George's opportunity cost of cultivating a garden?

B) two lawns mowed

Buyers will bear the entire burden of a unit tax if the demand curve for a product is

B) vertical.

Which of the following is not part of the "taxes" provision of the Patient Protection and Affordable Care Act (ACA)?

Beginning in 2018, all taxes on employer-provided health insurance plans will be reduced or eliminated.

If the market price is $2.50, what is Kendra's consumer surplus?

C) $1.50

Kendra's marginal benefit from consuming the second ice cream cone is

C) $3.00

Calculate the area of the triangle A

C) $3.15 million

Kendra's marginal benefit from consuming the first ice cream cone is

C) $3.50

The market equilibrium price is

C) $40.

What is the total amount that Kendra is willing to pay for 3 ice cream cones?

C) $9.00

What is the opportunity cost of producing 1 ton of pineapples in Costa Rica?

C) 1 1/2 tons of coconuts

What is the opportunity cost of producing 1 ton of pineapples in Guatemala?

C) 2 tons of coconuts

If the market price is $2.50, what is the maximum number of ice cream cones that Kendra will buy?

C) 3

If a minimum wage of $10.50 an hour is mandated, what is the quantity of labor demanded?

C) 340,000

If a minimum wage of $10.00 an hour is mandated, what is the quantity of labor demanded?

C) 350,000

If a minimum wage of $9.50 an hour is mandated, what is the quantity of labor demanded?

C) 360,000

At a price of $20, how many units will be sold?

C) 600

At a price of $20, how many units will be supplied?

C) 600

The efficient equilibrium quantity is ________ thousand vaccinations

C) 600

The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. At a price of $6, the quantity demanded in the market would be

C) 89 lb.

What area represents the decrease in producer surplus when the market price falls from P2 to P1?

C) A + B

Which of the following statements is true?

C) A curved line has slope values that change at every point.

What area represents the deadweight loss at P2?

C) C + E

Which country has a comparative advantage in the production of pineapples?

C) Costa Rica

What is the area that represents the portion of producer surplus transferred to consumers as a result of the rent ceiling?

C) D

Carlos Vanya grows tomatoes and strawberries on his land. A portion of his land is more suitable for growing tomatoes and the other portion is better suited for strawberry cultivation. Which of the graphs in Figure 2-3 represent his production possibilities frontier?

C) Graph C

Which of the following is a microeconomics question?

C) How does Fiat decide on the price of the 500 Pop model?

11) What is the "reverse causality" problem in determining cause and effect?

C) It is a problem that occurs when one concludes that a change in variable X caused a change in

Assume that the graphs in this figure represent the demand and supply curves for blu-ray discs. Which panel best describes what happens in this market if there is a substantial increase in the price of blu-ray players?

C) Panel (c)

Assume that the graphs in this figure represent the demand and supply curves for coffee. What happens in this market if buyers expect the price of coffee to rise?

C) Panel (c)

Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt when the price of ice cream, a substitute product, increases?

C) Panel (c)

Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements. What panel describes what happens in this market when the price of bratwurst falls?

C) Panel (c)

A decrease in the price of inputs would be represented by a movement from

C) S1 to S2.

A decrease in the price of substitutes in production would be represented by a movement from

C) S1 to S2.

A technological advancement would be represented by a movement from

C) S1 to S2.

Suppose the market is initially in equilibrium at price P1 and then the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax?

C) The consumer will bear a greater share of the tax burden if the demand curve is D2.

How are the fundamental economic decisions determined in Cuba?

C) The government decides because Cuba is a centrally planned economy.

Which of the following is a positive economic statement?

C) The minimum wage law causes unemployment.

Suppose that the quantity of labor supplied decreases by 40,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?

C) W = $10.00; Q = 350,000

Fast food restaurants produce a range of menu items such as hamburgers, chicken sandwiches, salads, and french fries. What fundamental economic question are they addressing by offering this range of items?

C) What to produce?

At the equilibrium price of P1, consumers are willing to buy the Q1 pounds of granola. Is this an economically efficient quantity?

C) Yes, because P1 is the price where marginal benefit equals marginal cost.

If the current market price is $25, the market will achieve equilibrium by

C) a price decrease, decreasing the quantity supplied and increasing the quantity demanded.

Hurricane Katrina damaged a large portion of refining and pipeline capacity when it swept through the Gulf coast states in August 2005. As a result of this, many gasoline distributors were not able to maintain normal deliveries. At the pre-hurricane equilibrium price (i.e., at the initial equilibrium price), we would expect to see

C) a shortage of gasoline.

On average, people in low-income countries ________ than people in high-income countries. A) have a longer life expectancy

C) are shorter

Pricing insurance policies is made difficult because buyers have more information than sellers. This difficulty is an example of

C) asymmetric information.

Productive efficiency is achieved when firms produce goods and services

C) at the lowest cost.

Which of the movements listed above represents advancements in technology with respect to both plastic production and food production?

C) b only

In a market economy, who decides what goods and services will be produced?

C) consumers and producers

The Pre-Existing Condition Insurance Plan is a federally administered part of the Affordable Care Act, and is designed for people with pre-existing medical conditions to obtain insurance. By offering health insurance to all U.S. citizens with pre-existing medical conditions, the Pre-Existing Condition Insurance Plan

C) eliminates asymmetric information for both the insurer and the insured.

The difference between the ________ for a good and the ________ is called consumer surplus.

C) highest price a consumer is willing to pay; price the consumer actually pays

In a market economy, ________ interact in markets to decide the answers to the fundamental economic questions

C) households and firms

The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. If the price of Kona coffee falls from $6 to $4, the market quantity demanded would

C) increase by 61 lb.

6) The additional benefit to a consumer from consuming one more unit of a good or service

C) is equal to marginal benefit.

The branch of economics which studies the behavior of entire economies and policies that affect the economy as a whole is called

C) macroeconomics.

If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8, the slope of this line i

C) negative one half.

Assume Dina's Diner only produces sliders and hot wings. A combination of 50 sliders and 50 hot wings would appear

C) outside Dina's production possibilities frontier.

Assume Dina's Diner only produces sliders and hot wings. A combination of 60 sliders and 50 hot wings would appear

C) outside Dina's production possibilities frontier.

Some economists and policymakers who are in favor of government-provided health care believe that providing health care will

C) reduce asymmetric information.

Firms

C) sell goods in the product market.

Health problems prevent people from working harder, which can lower a country's total income. This indicates that in effect, health problems

C) shift country's production possibilities frontier inward.

The health care system in ________ is referred to as socialized medicine, under which the government owns most of the hospitals and employs most of the doctors.

C) the United Kingdom

Most doctors are employed by the government and most hospitals are owned by the government in

C) the United Kingdom.

Human capital refers to

C) the accumulated skills and training workers have.

Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen. One can conclude that

C) the demand for personal trainers has increased.

Which of the following is a factor of production?

C) the janitor at the local elementary school

At the market equilibrium,

C) the marginal cost is less than the marginal benefit.

One would speak of a movement along a supply curve for a good, rather than a change in supply, if

C) the price of the good changes.

By drawing a demand curve with price on the vertical axis and quantity on the horizontal axis, economists assume that the most important determinant of the demand for a good is

C) the price of the good.

If in the market for apples the supply has decreased then

C) the supply curve for apples has shifted to the left.

In the United States in 2012, a majority of people received health care through

C) their employers.

What is Jack's opportunity cost of mowing a lawn?

C) two-thirds of a garden cultivated

The maximum price that a buyer is willing to pay for a good measures his

C) willingness to pay.

Economics is the study of the ___ people make to attain their goals, given their ___ resources

Choices; scarce

Economics promotes which of the following as the way to make the best decision

Continue an enjoyable activity up to the point where its marginal benefit

If the market price is $3.50, what is Kendra's consumer surplus?

D) $0

If the market price is $3.00, what is Kendra's consumer surplus?

D) $0.50

How much of the tax is paid by producers?

D) $2

. At the market equilibrium, the deadweight loss is equal to

D) $2,000,000.

How much of the tax is paid by buyers?

D) $3

For each unit sold, the price sellers receive after the tax (net of tax) is

D) $3.

What is the total amount that Kendra is willing to pay for 2 ice cream cones?

D) $6.50

The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. At a price of $4, the quantity demanded in the market would be

D) 150 lb.

At a price of $25, how many units will be supplied?

D) 800

Which of the following statements is true?

D) Betty has a comparative advantage in making benches and Fred in making statues.

Suppose that instead of a price ceiling, the government imposed a price floor of R1. What area represents the deadweight loss after the imposition of the price floor?

D) C + E

What area represents the deadweight loss after the imposition of the ceiling?

D) C + E

Which of the following is correct about the economic decisions consumers, firms, and the government have to make?

D) Each faces the problem of scarcity which necessitates trade-offs in making economic decisions.

occurs when economic benefits are distributed fairly.

D) Equity

Which of the following is a microeconomics question?

D) How will Apple decide on a selling price for the iPad?

Which of the following statements is true?

D) Jack has a comparative advantage in garden cultivating and George in lawn mowing.

Which of the following is not part of the "regulation of health insurance" provision of the Patient Protection and Affordable Care Act (ACA)?

D) Limits on the size of deductibles and on waiting periods before coverage takes effect will be eliminated.

Assume that the graphs in this figure represent the demand and supply curves for ramen noodles, an inferior good. Which panel describes what happens in this market as a result of an increase in income?

D) Panel (d)

A decrease in the number of firms in the market would be represented by a movement from

D) S2 to S1.

An increase in the expected future price of the product would be represented by a movement from

D) S2 to S1.

shows that if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.

D) The production possibilities frontier model

What area represents the deadweight loss at the equilibrium price of P1?

D) There is no deadweight loss at the price of P1.

Suppose that the quantity of labor demanded decreases by 40,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?

D) W = $8.00; Q = 350,000

Suppose that the quantity of labor supplied increases by 40,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?

D) W = $8.00; Q = 390,000

A movement from ________ is the result of advancements in plastic production technology

D) Y to Z

The phrase "demand has increased" means that

D) a demand curve has shifted to the right.

Health insurance plans which typically reimburse doctors mainly by paying ________ are known as health maintenance organizations

D) a flat fee per patient

An "omitted variable" is

D) a variable that affects other variables and its omission from economic analysis can lead to false

Electric car manufacturers want to sell more electric cars at a higher price. Which of the following events would have this effect?

D) an increase in the price of gasoline.

At a product's equilibrium price

D) any buyer who is willing and able to pay the price will find a seller for the product.

In the United States from 1981 to 2011, deaths from ________ increased largely due to the effects of increasing obesity.

D) diabetes

In a competitive market equilibrium the ________ equals the ________ of the last unit sold.

D) marginal benefit; marginal cost

What is Jack's opportunity cost of cultivating a garden?

D) one and a half lawns mowed

If a straight line passes through the point x = 8 and y = 4 and also through the point x = 12 and y

D) one half.

) The provision of the Patient Protection and Affordable Care Act (ACA) Insurance companies are required to participate in a high-risk pool that will insure individuals with pre-existing medical conditions who have been unable to buy health insurance for at least six months is the ________ provision.

D) regulation of health insurance

If a minimum wage of $9.50 is mandated there will be a

D) surplus of 20,000 units of labor.

If a minimum wage of $10.00 is mandated there will be a

D) surplus of 40,000 units of labor.

If a minimum wage of $10.50 is mandated there will be a

D) surplus of 60,000 units of labor.

health care spending per person based on income per person is significantly higher than the average for most other countries.

D) the United States

If the price is $20,

D) the market is in equilibrium.

Which of the events listed above could cause a movement from Z to X ?

E) c only

Who, in a modern mixed economy, decides what goods and services will be produced with the scarce resources available in that economy?

E) the government, consumers and producers

Which of the following is a normative economic statement?

Fashion designers should be allowed to copyright designs to promote innovation.

Which of the following statements is true?

George has an absolute advantage in both tasks

The basic economic problem of scarcity

Has always existed and will continue to exist

What is an economic model?

It is a simplified version of some aspect of economic life used to analyze an economic issue.

Which of the following is motivated by an equity concern?

Some U.S. colleges have cut back on merit scholarships since these programs siphon money from need-based programs, thus harming lower-income students with greater financial need.

Which of the following is an example of adverse selection?

Someone who did not install fire alarms and a sprinkler system in a building he owns buys insurance for the building

Which of the following statements is false?

Trade‑offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale

Trade-offs force society to make choices when answering what three fundamental questions?

What goods and services to produce; how will

Which of the above statements demonstrates that economic agents respond to incentives

a and b

The term market in economics refers to

a group of buyers and sellers of a product and the arrangement by which they come together to trade

What does the term marginal mean in economics

an additional or extra

Ted quits his $60,000-‐‑a-‐‑year job to be a stay-‐‑at-‐‑home dad. What is the opportunity cost of his decision?

at least $60,000

The ________ production points on a production possibility curve are the points along and inside the production possibility frontier.

attainable

Adverse selection in the market for health insurance arises because

buyers of insurance know more than insurance companies about the likelihood of an illness for which buyers want insurance.

How can the influence of a third variable be shown on a two-dimensional graph?

by allowing the position of the relationship line or curve to shift on the graph

The principal-agent problem is a problem

caused by agents pursuing their own interests rather than the interests of the principals who hired them.

Dina faces ________ opportunity costs in the production of sliders and hot wings

constant

Marginal cost is the __ associated with undertaking an activity

extra cost

A supply curve

is a curve that shows the relationship between the price of a product and the quantity of the product supplied.

Involves undertaking an activity until its marginal benefits equal marginal cots.

marginal analysis

An office supply store sells a ream of printer paper

marginal revenue

When Dr. Goldfinger decides on the companies in which he will invest, a ________ issue is being addressed.

microeconomic

The principle of ________ is that the economic cost of using a factor of production is the alternative use of that factor that is given up.

opportunity cost

Economists assume that

optimal decisions are made at the margin

Every society faces economic trade-offs. This means

producing more of one good mean less of another good can be produced

Economists assume that rational people

respond to economic incentives

The processes used to produce goods and services describes

technology.

Opportunity cost is defined as

the highest valued alternative that must be given up to engage in an activity

Which of the following is counted as "capital" in economics?

the machines workers have to work with

Scarcity refers to the situation in which

unlimited wants exceed limited resources

Which of the following is an example of an economic trade-‐‑off that a firm has to make

whether it is cheaper to produce with more machines or with more worker

What area represents producer surplus at the equilibrium price of P1?

B) D + E

The Study of economics arises due to

Scarcity

Replacing employment-based health care with a government-run system could reduce employers payments for their workers insurance, but the amount that they would have to pay in overall compensation

would remain essentially unchanged.