midterm 1 (cont)

A decrease in demand for cameras would likely be caused by A) an increase in the price of a complementary good. B) an increase in the price of a substitute good. C) a decrease in the price of cameras. D) an increase in the price of cameras.

A but i really think its D

Refer to Figure 3.17. At a price of $30, there is an excess A) demand of 450 sunglasses. B) demand of 300 sunglasses. C) demand of 750 sunglasses. D) supply of 300 sunglasses.

A: demand of 450 sunglasses

In input or factor markets, A) households supply resources. B) firms supply goods. C) households demand goods. D) consumers purchase products.

A: household supply resources

Scarcity in economics means: A) not having sufficient resources to produce all the goods and services we want. B) the wants of people are limited. C) there must be poor people in rich countries. D) shortages exist in nearly all markets.

A: not having sufficient resources to produce all the goods and services we want

If the minimum wage is a binding price floor, then: A) the number of workers who want to work will be greater than the number of jobs available. B) the equilibrium wage will increase. C) there will be a job for everyone who is willing to work. D) business owners will hire more workers.

A: the number of workers who want to work will be greater than the number of jobs available

Recently, the government considered adding an excise tax on CDs that can be used to record music and CD players that can record discs. If this tax was enacted, we would expect: A) that consumers would pay a higher price and producers would sell fewer of these CDs and CD players than before the tax. B) there to be no effect on consumption or the prices paid by consumers of these CDs and CD players. C) that consumers would pay a lower price and producers would receive a higher price for these CDs and CD players than before the tax. D) there to be an increase in economic activity due to the tax.

A

The study of economics A) is a way of analyzing decision-making processes caused by scarcity. B) is a very narrow endeavor. C) focuses on how a business should function. D) is concerned with proving that capitalism is better than socialism.

A: the study of economics is a way of analyzing decision-making processes caused by scarcity

If the market price of coffee is $3.00 per pound but the government will not allow coffee growers to charge more than $2.00 per pound of coffee, which of the following will happen? A) There will be a shortage of coffee. B) Supply must eventually increase so that the market will come into equilibrium at a price of $2.50. C) The market will be in equilibrium at a price of $2.00. D) Demand must eventually decrease so that the market will come into equilibrium at a price of $2.50.

A: there will be a shortage of coffee

Which of the following will NOT cause a shift in the demand curve for compact discs? A) a change in income B) a change in the price of downloadable online music C) a change in the price of compact discs D) a change in wealth

C: a change in the price of compact discs

Refer to Figure 4.3. If the government will not allow the retailers to charge more than $0.40 for a pencil, which of the following will happen? A) The market will be in equilibrium at a price of $0.40. B) Demand must eventually decrease so that the market will come into equilibrium at a price of $0.40. C) A nonprice rationing system such as queuing must be used to ration the available supply of pencils. D) Supply must eventually increase so that the market will come into equilibrium at a price of $0.40.

C: a nonprice rationing system such as queuing must be used in order to ration the available pencils

Refer to Figure 3.19. When the economy moves from Point A to Point B, there has been A) an increase in quantity demanded and an increase in supply. B) an increase in quantity demanded and an increase in quantity supplied. C) an increase in demand and an increase in quantity supplied. D) an increase in demand and an increase in supply.

C: an increase in demand and quantity supplied

Country A would have an absolute advantage compared to Country B in the production of corn if A) corn sells for a higher price in Country A than in Country B. B) corn can be produced at lower cost in terms of other goods than it could be in Country B. C) Country A uses fewer resources to produce corn than Country B does. D) the demand for corn is higher in Country A than in Country B.

C: country A uses fewer resources to produce corn than country B does

Refer to Figure 3.3. As your income increased, the demand for X shifted from D1 to D2. Good X is A) a normal good. B) an income-neutral good. C) an inferior good. D) a luxury good.

C: good X is inferior because it caused the line to move in a negative direction

The branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units is A) normative economics. B) macroeconomics. C) microeconomics. D) positive economics.

C: microeconomics looks as the smaller scale economics

If the unemployment rate increases from 10% to 14%, the economy will A) remain on the ppf. B) remain on the origin. C) move away from the ppf toward the origin. D) move closer to a point on the ppf.

C: move away from the ppf toward the origin

If the price floor is set above the equilibrium price, A) quantity demanded will equal quantity supplied. B) the floor will be ineffective. C) there will be a surplus. D) there will be a shortage.

C: there will be a surplus

Macroeconomics deals with: A) bits and pieces of the economy. B) the question of how a business unit should operate profitably. C) the working of the entire economy or large sectors of it. D) how individuals make decisions.

C: working with the entire economy or large sectors of it

An example of an ineffective price ceiling would be the government setting the price of wheat at ________ per bushel when the market price is at $5.00 per bushel. A) $2.25 B) $3.00 C) $4.75 D) $6.00

D: $6

Refer to Figure 2.6. Which of the following will NOT cause the production possibility frontier to shift from ppf1 to ppf2? A) an improvement in technology B) an increase in the stock of capital C) the discovery of previously unknown oil fields D) a decrease in the unemployment rate

D: a decrease in unemployment rate

Florida schools offered cash bonuses to students who scored high on the state's standardized exams. The cash bonuses are an example of which of the following basic economic principles? A) Resources are scarce. B) The real cost of something is what you must give up to get it. C) There are gains from trade. D) People respond to incentives (people usually take advantage of opportunities to make themselves better off).

D: people respond to incentives if it is going to better them personally

Refer to Figure 3.14. A decrease in quantity supplied is represented by a movement from A) S2 to S1. B) S2 to S3. C) Point B to Point A along supply curve S2. D) Point B to Point C along supply curve S2.

D: point B to point C

If someone has a comparative advantage in growing pineapples, A) they also have an absolute advantage in growing pineapples. B) pineapples are the only product they can grow. C) they can grow more pineapples using the same resources than other pineapple growers. D) they can grow pineapples at a lower opportunity cost than other pineapple growers.

D: they can grow pineapples at a lower opportunity cost than other pineapple growers

Refer to Table 2.1. To maximize total production, A) Krystal and Mark should both split their time between writing poems and writing TV commercials. B) Krystal should write poems and write TV commercials, but Mark should only write poems. C) Krystal should specialize in writing TV commercials, and Mark should specialize in writing poems. D) Mark should specialize in writing TV commercials, and Krystal should specialize in writing poems.

D: to maximize production, mark should specialize in writing TV commercials and crystal should specialize in writing poems

Which of the following is NOT an opportunity cost of attending college? A) the income you could have earned if you didn't attend college B) the tuition you pay C) the alternative uses of the time you spend studying D) the cost of the food that you consume while you are attending college

D: you would not be giving up the cost of food that you will consume

what is normative economics?

normative economics gives prescriptions about how the economy *should* work

Refer to Table 19.1. In Mexico, the opportunity cost of 1 bushel of bananas is A) 1/2 bushel of oranges. B) 1 bushels of oranges. C) 2 bushel of oranges. D) 5 bushels of oranges.

B: 1 bushel of oranges

Refer to Table 2.1. For Mark, the opportunity cost of writing six TV commercials is ________ poems made. A) 2 B) 18 C) 24 D) an indeterminate number of

B: 18

The government should extend the duration of unemployment benefits to those workers who lost their jobs due to outsourcing. This statement is best described as A) an example of marginalism. B) a normative statement. C) an example of the fallacy of composition. D) a positive statement.

B: a normative statement

One of the ways rent control is inefficient is that it leads to: A) higher-quality apartments. B) high opportunity costs associated with wasted time. C) markets that maximize total surplus. D) the construction of more apartments.

B: higher opportunity costs associated with wasted time

The concept of trade-offs would become irrelevant if A) poverty were eliminated. B) scarcity were eliminated. C) we were dealing with a very simple, one-person economy. D) capital were eliminated.

B: trade-offs would become irrelevant if scarcity was eliminated

Related to the Economics in Practice on p. 55: The Amazon Kindle and the electronic textbooks available for the Kindle are complementary goods. Electronic textbooks and traditional, hard copy textbooks are substitute products. If the price of electronic textbooks for the Kindle decreases, A) demand for the Kindle decreases, the quantity of electronic textbooks demanded increases, and demand for traditional, hard copy textbooks decreases. B) demand for the Kindle increases, demand for electronic textbooks increases, and demand for traditional, hard copy textbooks decreases. C) demand for the Kindle increases, the quantity of electronic textbooks demanded increases, and demand for traditional, hard copy textbooks decreases. D) the quantity of Kindles demanded increases, demand for electronic textbooks increases, and the quantity of traditional, hard copy textbooks demanded decreases.

C

what is the difference between quantity demanded and demand?

a change in quantity demanded represents a movement across the current demand curve, while a change in demand causes a shift of the entire curve

what is positive economics?

economic analysis that describes the way the economy actually works