micro exam 1

if the supply curve shifts rightward and if demanded grows relatively less than supply then

price will fall and quantity will rise.

when society produces the mix of goods an services that are most desired and produces them at the lowers cost possibe

production and allocative efficiency are achieved

_____ occurs when goods / services are produced at their lowest resources cost, while _____ occurs when the mix of goods and services produced is the most desired by society.

production efficiency ; allocative efficiency

the ____ shows the combo of two goods that are possible for a society to produce at full employment

production possibilities frontier

every point on the frontier of the productions possibilities frontier represents

productive efficiency

the supply curve

shows a positive relationship between price and quantity supplied

If a country has few resources

It will still have a comparative advantage in something

when the supply curve shifts out to the right and the demand curve shifts out to the right the equilibrium will:

increase

All else equal, a decrease in the number of business selling pizza will cause

An increase in the equilibrium price of pizza

What is the difference between a change in quantity supplied and a change in supply

A change in the market price affects the quantity supplied, but not the supply

Which of the following will cause an increase in the quantity demanded for iphones?

A decrease in the price of iphones

Which of the following would cause a decrease in the demand for coffee

A decrease in the price of tea (a sub for coffee)

Which of the following will cause a movement down along a demand curve?

A decrease in the product price

All of the following will decrease the supply of commercial air travel except:

A technology change that makes aircrafts more fuel efficient

Paolo can walk three dogs or mow two lawns in two hours. Ashanti can walk six dogs or mow three lawns in two hours, You can conclude that.

Ahsanti has absolute advantage in dog walking, and paolo has comparative advantage in lawn mowing

The production of too many matchbox cars and not enough barbie dolls is an example of

Allocative inefficiency

Butter is a substitute for margarine. If the price of margarine drops, we would expect to see

Both the price of butter and the quantity of butter traded fall

Which of the following is not a determinant of demand?

History of the product

which is an example of a normative question

How should a society achieve full employment?

A law of supply states that:

If price falls producers will offer fewer products to the market

Suppose the united states must give up the production of 1 gallon of paint to produce 1 pair of shoes. Mexico must give up 2 gallons of paint to produce 1 pair of shoes. According to the principle of comparative advantage

Mexico should specialize in producing paint, the united states in producing shoes

A change from an inefficient mix to an efficient mix output would best be represented with a production possibilities frontier PPF as a

Movement from inside the PPF onto the PPF

Increasing opp cost occur along the PPF because

Not all resources are equally well suited to produce all goods

The _________ shows the combo of two goods that are possible for a society to produce at full employment

Production possibilities frontier

Other things equal, the effect of a decrease in income on a normal good is to:

Shift the demand curve to the left, reducing both equilibrium price and output

Which of the following questions is not an example involving marginal analysis

Should k mart convert all of its stores to sears stores

There are two sellers in the dvd market, Wen and Ahmed. If the market price were 5$ per DVD , Wen would be willing to sell 10 DVDs and Ahmed would want to sell 15 DVDs, If the market price were to rise to 7$ then.

We can confidently say that market quantity supplied is at least 25 DVDs

what is the difference between a change in quantity supplied and a change in supply?

a change in the market price affects the quantity supplied; but not the supply

which of the following will cause a movement down along a demand curve?

a decrease in product price.

which of the following will not cause an increase in demand

a decrease in the product's price.

comparative advantage exists when one country can produce:

a good at a lower opportunity cost than another country.

which is an example of capital in the production process of an amusement park

a roller coaster

when quantity demanded is greater than quantity supplied

a shortage occurs and prices are big up towards equilibrium.

_____ exists when one country can produce more more of a good than another country

absolute advantage

economic capital refers to

actual manufactured products used in the production process.

supposed mike has three hours of time to spend and sets the following activities in order of priority (1) seeing a movie. (2) attend a baseball game (3) study economics. assume that each activity takes three hours. what is mikes opportunity cost of seeing a movie?

attending a ball game

Butter is a substitute for margarine. If the price of margarine drops, we would expect to see:

both the price of butter and quantity of butter traded fall.

suppose that the government could stimulate spending in one of the following categories would the spending increase contribute

capital goods

When the supply of surfboards increases and the demand for surfboards falls simultaneously, the price of surfboards will:

fall

the law of supply states that

if the price falls, producers will offer fewer products to the market.

The fundamental reason why supply curves slope upward is:

increasing costs

the fundamental reason why supply curves slope upward is

increasing costs

natural resources in the production process are called __________ and their payment is called ________

land, rent

what would be a possible opportunity cost of you going to a doctor for a check up?

lost income due to not being at work for those hours.

the field of economics that is concerned about the broader issues in the economy such as inflation, unemployment, and national output of goods

macroeconomics

the key to computing comparative advantage is

measurement to opportunity cost

There is an ______ relationship between price and quantity demanded.

negative

if an increase in income leads to an increase in the demand for opera tickets, then opera concert are a(n)

normal good

if the demand for iphones rises as incomes increase, then iphones are

normal good

Employers give full time employees that have been on the job for more than three years stock options, this is an example of what?

people following incentives

the state of florida is experiencing a drought that has caused the price of water used by farmers to grow oranges to rise. this will cause a decrease in the:

supply of oranges.

Willingnes to pay

the highest value that a consumer believes a good or service is worth.

choosing to work an extra hour of overtime is an example of

thinking at the margin

scarcity is BEST described as

when unlimited wants exceeds quantity demanded