Micro

An economy is efficient if it is:

not possible to produce more of one good without producing less of another good

Economic models are:

often useful in forming economic polciy

In equilibrium there will be no further opportunities for gains from trade. T/F?

true

Specialization in production was the starting point for what book in economics that many regard as the beginning of economics?

The Wealth of Nations, by Adam Smith

when substitutes are affected what does it do to the shifts in demand and supply

There is two things of supply and one demand with one over two

Two points on a nonlinear curve have coordinates given by (5, 15) and (17, 13). The average slope of the curve between these points is: a. -1/6. b. 2.5. c. 1/4. d. -6.

a. -1/6.

In the market for tacos, you observe that the equilibrium price and quantity have increased. This can be caused only by: a. an increase in the incomes of people who eat tacos. b. an increase in the price of beef. c. fewer taco shops. d. an increase in the wages of taco shop workers.

a. an increase in the incomes of people who eat tacos.

Over the past few years, the technology associated with producing flat-panel televisions has improved. This has led to ________ in ________ flat-panel televisions. a. an increase; the supply of b. a decrease; the quantity supplied of c. a decrease; the supply of d. an increase; the demand for

a. an increase; the supply of

The current rate of unemployment is 9%. This statement: a. is positive. b. involves a value judgment. c. is a personal reflection and has no value in economics. d. is normative.

a. is positive.

he two flows represented in the circular-flow diagram are: a. the flow of money and the flow of goods and services. b. the flow of goods and services and the flow of factors. c. the flow of households and firms. d. the flow of factors and the flow of money.

a. the flow of money and the flow of goods and services.

Mark and Julie are going to sell brownies and cookies for their third annual fundraiser bake sale. In one day, Mark can make 40 brownies or 20 cookies, and Julie can make 15 brownies or 15 cookies. With specialization, how many brownies and cookies will be made in one day for the bake sale? a. 15 brownies and 20 cookies b. 40 brownies and 15 cookies c. 55 brownies and 35 cookies d. 40 brownies and 20 cookies

b. 40 brownies and 15 cookies

In a single day, Sarah can produce 10 hamburgers while Abe can produce 5 hamburgers. We then know that: a. Abe has a comparative advantage in making hamburgers. b. Sarah has an absolute advantage in making hamburgers. c. Abe has an absolute advantage in making hamburgers.

b. Sarah has an absolute advantage in making hamburgers.

Which of the following two statements is a positive statement? Which is a normative statement?X. The federal minimum wage is increasing to $7.50 an hour.Y. The minimum wage should be high enough that families will not live in poverty. a. X is normative; Y is positive. b. X is positive; Y is normative. c. X is normative; Y is normative d. X is positive; Y is positive.

b. X is positive; Y is normative.

If the price of hamburger decreased, it would probably result in ________ in the demand for hamburger buns. a. a decrease b. an increase c. no change d. random fluctuations

b. an increase

Suppose a local community decided to give all of its citizens over age 60 a parking pass that would enable them to park in the very front of parking lots. For people over 60, this policy is: A. neither equitable nor efficient B. equitable but not efficient, since it applies to all citizens over 60 C. equitable and efficient, since it applies to all citizens over 60 D. efficient but no equitable, since it applies to all citizens over 60

b. equitable but not efficient, since it applies to all citizens over 60

You are planning to study eight hours this week for your economics final and are considering studying a ninth hour. You should: a. compare the benefits of one more hour of study with the cost of one less hour of work at your part-time job. b. make your decision based on the cost of the next best alternative use of your time compared to the benefit of one more hour of study. c. compare the benefits of one more hour of study with the cost of one less hour of sleep. d. compare the benefits of one more hour of study with the cost of one less hour of studying calculus. Hide Feedback

b. make your decision based on the cost of the next best alternative use of your time compared to the benefit of one more hour of study.

The relation between two variables that move in the same direction is said to be: a. neutral. b. positive. c. indirect. d. independent.

b. positive.

Which of the following is an example of marginal analysis? a. How do tax cuts change the growth rate of median income? b. When a large corporation lays off workers, how do profits change if sales remain constant? c. What additional output does a family business produce when it hires one more worker? d. Should a commuter take the bus to work rather than driving.

c. What additional output does a family business produce when it hires one more worker?

A good is inferior if which of the following is true? a. When income increases, the demand remains unchanged. b. Income and the demand are unrelated. c. When income increases, the demand increases. d. When income increases, the demand decreases.

d. When income increases, the demand decreases.

The circular-flow diagram illustrates how households ________ goods and services and ________ factors of production. a. own; sell b. own; buy c. buy; buy d. buy; sell

d. buy; sell

Which of the following can best be considered the resources used in the production of computers? a. money from investors b. taxes paid on the profits from the sale of the computers c. wages of the engineers d. computer engineers

d. computer engineers

The fact that two variables always move together over time: a. proves that one of the variables is dependent on the other. b. proves that changes in one variable cause changes in the other. c. is often illustrated or depicted using either a pie chart or a bar chart. d. does not prove that one of the variables is dependent on the other.

d. does not prove that one of the variables is dependent on the other.

If the market for buffalo meat is in equilibrium, the price of buffalo meat will probably ________ in the near future. a. decrease b. increase c. increase considerably d. not change

d. not change

The slope of a straight line is the ratio of the: a. run over the rise. b. horizontal change to the vertical change. c. vertical change to the horizontal change, and it must be positive. d. vertical change to the horizontal change.

d. vertical change to the horizontal change.

Which of the following influences does not shift the supply curve? a. a rise in the wages paid to workers b. people deciding that they want to buy more of the product c. a decrease in the price firms expect to receive in the future d. the development of a new production technology

people deciding that they want to buy more of the product

The cost of leaving a championship soccer match before it ends is ________, while the cost of staying for the entire match is ________.

the opportunity cost of not seeing the winning goal with two minutes to go; the opportunity cost of what else you could have done during that time

A new fast-food restaurant offered a free meal (valued at $5) a week for a year to its first 100 customers. Ramona camped out for 48 hours before the opening to be one of the first 100 customers. The cost of the free meal a week for a year for Ramona was:

whatever she would have done with those 48 hours.