All Of Economics

Mark has been given an invite by friends to attend the opening night of a movie but has also received tickets to the upcoming football game on the same night, creating a dilemma as to which event to attend. From this scenario, distinguish what is the scarcity most likely creating the dilemma Mark is currently facing? A. The choices B. Location C. Time D. Number of friend

C: Scarcity is a limited resource that creates the need to make a choice. In this case, Time would be the most likely resource that would create the dilemma. Mark is unable to be at both places at the same time.

When is equilibrium reached? a.When supply is greater than demand b.When demand equals supply c.When supply is less than demand d.When demand and supply both change

When demand equals supply In economics, equilibrium is reached when quantity demanded equals the quantity supplied at a specific price.

A new Walmart is opening in your community. Which of the following would be an example of a positive externality associated with this event? A. Traffic becomes worse in the community B. The local hardware store is forced to close C. Walmart offers scholarships to local high school students D. Target decides not to open a store in your community

C - Answer choice is the only positive listed here. The other answer choices would all be negative externalities associated with the new Walmart opening.

The federal government approves setting a limit on industrial emissions. Which of the following would be a potential negative externality for the local environment? A. An decrease in air pollution B. Industry Job layoffs C. Lower rates of childhood asthma D. Decrease in Acid rain

C - Measure of Value - Money is used to describe the worth of an item.

The graph shows supply and demand for a popular brand of coffee. A gas crisis affects shipping costs. What would a coffee company do in anticipation of a rise in shipping costs, and how would that effect the equilibrium price? A. Add D3 to the left of D2, showing decrease in equilibrium supply and equilibrium price. B. Add D3 to the right of D2, showing increase in equilibrium supply and equilibrium price. C. Add S2 to the left of S, showing decrease in supply and increase in equilibrium price. D. Add S2 to the right of S, showing increase in supply and equilibrium price.

C: As the price of gas increases, supply would decrease (left is less and right is more). Thus the supply curve would shift to the left. Once supply moves to the left, equilibrium price would decrease.

Which of these is a negative externality that might be caused by a Canadian company carrying out large-scale strip mining, which is environmentally destructive, in Brazil? A. Decline in the quality of Brazilian roadways B. Increased competition among North American businesses C. Decreased trust in North American businesses D. Funding for education in Brazilian schools

A. Demand drops, so the entire demand curve would shift to the left. As demand lessens, the price will also drop.

Which of the following best describes the concept of "equilibrium price"? A. Sellers are happy with the price, but buyers are unhappy with the quantity. B. Sellers are unhappy with the price, but buyers are happy with the quantity. C. Both sellers and buyers are happy with the price and quantity. D. Both sellers and buyers are unhappy with the price and quantity

C: Equilibrium is where demand and supply intersect. It is the perfect price and quantity so that there is not a surplus or a shortage. Buyers and sellers are both happiest at this price.

Kalli has increased the sales of her jewelry business since setting up an online website for people to shop from. With Valentine's Day coming up, Kalli has decided to introduce a new line heart shaped necklaces and charms. Within weeks her profits have increased by 20%. In analyzing the scenario, what type of graph would best display Kalli's choice to introduce a new line of product? A. Demand B. Supply C . Marginal Cost and Revenue D. PPC

A: With Valentine's Day approaching the tastes and preferences of the consumer has changed. By adding a new line of jewelry specifically for this change, Kalli has increased the Demand of her line, making the demand graph the best to display this scenario.

Silver Springs has had an increase growth of algae due to toxic runoff of the nearby farms. Which of the following circumstances would be a positive externality? A. The algae has been shown to increase the vegetation in the lakes thereby increasing the fish population and improving the animal life. B. Cows are growing bigger due to the waters effects and eating more food. C. Fish are dying as are the other animals in the areas. D. People are not liking the smell from the algae

A: an increase in the vegetation and fish population would be a unforeseen positive effect of the algae growth.

What is the effect of the demand for a product or service increasing on the demand curve? A. It shifts to the right. B. It shifts to the left. C. It does not shift. D. It is deleted.

A: because after analyzing the scenario you would see that the other two economic questions are answered. (Which word(s) answers the economic question: How to produce? = make pizzas from scratch. Which word(s) answers the economic question: What to produce? = Pizzas. When to produce? Not an economic question)

Look at the graph. Where P is price and Q is quantity, what might cause a move from d to e? A. The cost of raw materials to manufacture the product increases. B. A National price celling was lifted. C. Machinery was shut down for repair. D. Minimum wage was increased.

A: because as demand for a product increases the amount paid for the product will also increase.

Which economic question is addressed by targeting shoppers that age from 30-40? A. What to produce? B. Where to produce? C. D. How to produce? E. For whom to produce?

D: Remember opportunity cost is opportunity lost. In this case, you made the decision to study for your exam rather than go to the movies.

When you gave your friend a fifty-dollar bill for an iPod, you used money as a standard store of value medium of exchange measure of value

medium of exchange

A new superhero movie has become very popular, and its toy action figures have recently hit the market. What impact will production of the new movie's toys have on the toys of last year's superhero movie? A. Demand for the old action heroes will decrease, causing a decrease in equilibrium quantity. B. Demand for the old action heroes will decrease, causing an increase in market price. C. Demand for the old action heroes will increase, causing a decrease in market price. D. Demand for the old action heroes will increase, causing an increase in equilibrium quantity.

A. Demand drops, so the entire demand curve would shift to the left. As demand lessens, the price will also drop.

Your teacher says your history book is worth about fifty dollars. Your teacher is using money as a A. Standard. B. Store of value. C. Measure of value. D. Medium of exchange.

B - Price alone will NOT cause the entire curve to shift. Use the values on the y-axis to determine a reduction in price and the new plotted point on the original curve.

Use the graph to answer the following question. Which line indicates the demand curve? A. one B. two C. The x-axis D. The y-axis

A: Demand goes Down to the group (and sUPply goes UP to the sky)

Interpret the graph below for Kookie cookies and pick an explanation as to why the line shifts because of ROTTEN Price S1 Quantity A. Minimum wage increased to $10 an hour resulting in the cost to produce Kookie cookies to increase. B. Next week is cookie appreciation week. People come from all over to purchase Kookie cookies C. For every Kookie cookie produced a $1 tax must be paid to the government D. The oven used to produce Kookie cookies broke.

B (producer expectations - producers expect people to purchase cookies. The supply will increase to prepare for this)

The government determined to cut sales taxes. Which of the following may result in a negative externality for the local environment? A. non-profits would have to lay off employees. B. trash pickup may experience delays C. households would increase their shopping list D. conservation programs can suffer budget cuts

B - Quantity demanded is the quantity people will purchase at a specific price - a specific point along the curve. A change in price alone will not cause the entire curve to shift.

Which line indicates an increase in supply? A. 1 B. 2 C. 3 D. 4

B - Quantity demanded is the quantity people will purchase at a specific price - a specific point along the curve. A change in price alone will not cause the entire curve to shift.

A cookie costs $2 and a shirt costs $20. If your allowance is $20 and you choose to purchase a shirt, your opportunity cost is A. One cookie. B. Ten cookies. C. One shirt. D. Ten shirts.

B - You could have spent the same $20 on cookies, since each cookie costs $2, you must divide $20 by $2 to determine how many cookies were given up by buying 1 shirt.

Due to the rising costs of business, a popular local clothing store in a small town is forced to close its doors. Who will be impacted by the negative externalities the most? A. The workers laid off and their families B The clothing store in the next town over C The President of the United States D The designers who supply the store with their brand

B - You could have spent the same $20 on cookies, since each cookie costs $2, you must divide $20 by $2 to determine how many cookies were given up by buying 1 shirt.

On a supply and demand graph, the line that indicates quantity is A. The longest line. B. The line equal to zero. C. The x-axis. D. The y-axis.

C - Equilibrium is the point where supply and demand curves meet. This is how much suppliers should charge for their product. If suppliers charge too little, it will create a shortage. Charging too much will create a surplus.

Louise wants to go to the Imagine Dragons concert next Saturday but her sister reminds her it is also their dad's birthday that day. Which of these is an opportunity cost of Louise choosing to spend her dad's birthday with him? A. Her dad will be disappointed B. She will save the cost of buying her dad a present C. Enjoying the Imagine Dragons concert D. The price of the Imagine Dragons ticket 38.

C: Louise's scarce resource here is time, not money. So her enjoyment from the Imagine Dragons concert is what she will give up in order to spend time with her dad on his birthday. Opportunity cost = opportunity lost.

Can you draw a conclusion as to what will happen to the quantity supplied when the price increase? A. It will decrease. B. It will stay the same. C. It will increase. D. Nothing.

C: The point where supply and demand meet is also known as the equilibrium price.

The price (P) of designer jeans is affected by the supply (S) and the demand (D). Which of these can cause an increase in the price of designer jeans? a.Increased demand and no change in supply b.Decreased demand and increased supply c.Increased supply alone d.Decreased demand alone

Increased demand and no change in supply An increase in demand means more people will want to buy designer jeans. If store owners realize their supply of designer jeans will soon get smaller because of increased demand, they will increase the price of jeans as people are willing to pay more for the existing supply of jeans.

Jenni wants to start a print shop making specialty papers and cards. Which economic question has she answered? a. For whom to produce? b. How much to produce? c. How to produce? d.What to produce?

What to produce? In this scenario, Jenni decided she would like to sell specialty paper and cards. In making this choice Jenni has determined what she will produce.

The new IPhone has come out and is better than ever. All of your friends have the new phone and it makes you want to have the new IPhone that much more. Which part of TRIBE is impacted in this example? A. Taste and Preferences B. Related goods C. Income D. Buyers in the market

A (Taste and preferences target your likes and your dislikes)

Pollution in your community is growing. Which of the following scenarios explains the relationship between household and government in the circular flow diagram? A. There is no relationship between households and government B. Less tourism causes government shut down C. Governments decrease taxes to allow people more money to spend in the economy D. Increased pollution causes government to raise taxes on the citizens to pay for pollution cleanup.

A - "Opportunity cost = Opportunity lost", the best alternative, what you gave up.

Your friend wanted a big screen TV and a class ring for birthday gifts. When her mom said she could only have one, she chose the class ring. Her opportunity cost is the A. The enjoyment of having a big screen TV. B. Price of the big screen TV. C. The enjoyment of having a class ring. D. Price of the class ring.

A - "Opportunity cost = Opportunity lost", the best alternative, what you gave up.

When price decrease, quantity supplied A. Decreases. B. Increases. C. Becomes zero. D. Stays the same.

A - For shifts in supply and demand, "Left is Less and Right is more". Review ROTTEN and TRIBE for reasons for supply or demand curve shifts.

Use the above graph to answer the following question. What event is shown by line 2? An increase in demand A decrease in demand An increase in supply A decrease in supply

An increase in demand

Your community has recently built 2 additional schools. Which of the following would be a negative externality for the local environment? A. Less use of renewable resources B. Higher Property Taxes C. More groundwater pollution D. More water consumption

B - Price alone will NOT cause the entire curve to shift. Use the values on the y-axis to determine a reduction in price and the new plotted point on the original curve.

A severe cold front reaches through to Southern Georgia, closing businesses and schools for 3 days. What is a positive externality? A. Jacket sales are up B. Overtime approved for sanitation workers C. 3 more days of school in June D. Gas prices go up

B: A positive externality means we are looking for a positive third effect. Jacket sales going up would be an initial effect. 3 more days of school and Gas prices going up are not positive effects while approved overtime for workers would be a positive 3rd effect because they have to provide for the cleanup but are being given the overtime.

The supply and demand curves reflect the availability and cost of a smart phone. If the smart phone market is currently at Demand and Supply, which change to the graph, would have to occur to increase equilibrium price while lowering equilibrium quantity? A. Add Demand 1 to left of Demand. B. Add Demand 1 to right of Demand. C. Add Supply 2 to left of Supply. D. Add Supply 2 to right of Supply.

B: Because to slide up and down on the line you need to have a change in price. Lifting the price celling allowed prices to rise and supply to increase. The rest of the options would cause a change in the overall supply and make the curve shift.

1. In this circular flow diagram, the flow direction that could represent personal income taxes corresponds to letter A. B B. E C. O D. P

D: Opportunity Cost = Opportunity Lost. She chose the books so she gave up the movies.

After working very hard at your after school job you have managed to save $1000! You can invest your money into the stock market or you can spend your money on a trip this summer with your friends. If you decide to invest your money into the stock market, what is your opportunity cost? A. $1000 B. Going to college C. Investing in the stock market D. Going on a trip with your friends

D (opportunity cost is your next valued alternative - you can invest your money or go on a trip with your friends. If you decide to invest your money than your opportunity cost would be a trip with your friends)

You chose to study for your final exam rather than go to the movies with your friends. You made the choice with the lowest? A. Demand B. Supply C. Benefit D. Opportunity Cost

D - The gold standard was abandoned in the Great Depression. Now money is backed by public and government acceptance.

Starbucks opens next to the local coffee shop in town. Which situation is a negative externality? A. Local coffee shop loses customers B. Increase taxes C. Higher cost of local coffee shop products D. There are no negative externalities everyone loves Starbucks

D - This answer demonstrates all three economics questions (option A does not show "how to produce").

Which situation best illustrates ALL THREE of the basic economic questions? A. You start your own shirt design company and sell your services to local businesses. B. You start your own shirt design company for fun, making shirts for your friends. C. You pay a shirt design company to make shirts for you. D. You start a shirt design company using your own equipment and serve local businesses.

D - This answer demonstrates all three economics questions (option A does not show "how to produce").

The price (P) of designer jeans is affected by the supply (S) and the demand (D). What does this graph show? a.Demand for more pairs of jeans causes reduced supply and increased price. b.Demand for more pairs of jeans results in an increase in both price and quantity supplied. c.Fewer pairs of jeans sold causes increased supply and decreased price. d.Fewer pairs of jeans sold results in a decrease in both price and supply.

Demand for more pairs of jeans results in an increase in both price and quantity supplied. Demand for more jeans is shown on the graph by a shift in demand from D1 to D2. When demand increases, the equilibrium price (price where demand equals supply) increases. This is shown on the graph as a move from P1 to P2 along the y-axis. Quantity supplied at the new demand also increases, shown on the graph as a move from Q1 to Q2 along the x-axis. Thus, when demand increases, it results in increased price and quantity supplied.

Which statement shows that money is a "measure of value?" This bill is worth twenty dollars. My mp3 player is worth two hundred dollars. The dollar I just found in my drawer is still worth a dollar. The more gigabytes it has, the more it is worth.

My mp3 player is worth two hundred dollars. Money as a measure of value means it can be used to explain the worth of an item. "My mp3 player is worth two hundred dollars" describes the worth of the player in terms of money.

Anything called money will be large and heavy easy to create scarce backed by gold

Scarce The supply of money is limited and this scarcity helps it to hold its value. Currency is no longer backed by gold and is difficult to create to reduce counterfeiting. In addition, money is no longer large and heavy.

Use the cost-benefit analysis table to answer the question: Should Mrs. Baxter allow her students to take an open-book test? A cost benefit table with two columns. The first column is labeled Cost and includes the statements, 1. Students will not want to study as hard, 2. Students may not learn the material as well, and 3. Mrs. Baxter will have to make the test harder. The second column is labeled Benefit and includes the statements, 2. Students will feel better about the test, and 3. Students will do better on the state test. The Benefit column also has the number 1 with a blank space after it. Which of the following would best fill the blank space? Mrs. Baxter will have to make the test harder. Parents may complain about grades. Students may not bring their books to class. Students will be happier with Mrs. Baxter

Students will be happier with Mrs. Baxter.

The products available for purchase are the demand equilibrium point equilibrium price supply

Supply Once products have been made and are ready for customers to purchase them, they have become the supply for the customers

Devon enters his poem in a nationwide contest, rather than joining his friends at a football game. Which would be a long-term benefit of his choice? Getting extra credit in his literature class Saving money on food concessions at the game Watching his favorite team win the championship Winning a scholarship for his writing

Winning a scholarship for his writing

Quantity demanded is the quantity customers will purchase at a specific point in time producers will sell at a specific price government demands to be produced people will purchase at a specific price

people will purchase at a specific price

Economics is defined as a study of the properties of money ways people obtain their wants with limited resources ways businesses and government operates best ways to increase the profits of a company

ways people obtain their wants with limited resources

How does the use of solar power might result in a positive externality to local businesses? A. decrease in sales from a hardware store B. increase in the utility bill C. expansion of the inventory in hardware stores D. savings on household taxes

A - For shifts in supply and demand, "Left is Less and Right is more". Review ROTTEN and TRIBE for reasons for supply or demand curve shifts.

A new bowling alley opened on a very poor neighborhood. Which of the following may result in a negative externality for the local environment? A. neighborhood gets disrupted by an increase in noise of people listening to concerts at night. B. littering in surrounding areas C. crime increases D. diners would feel an increase in sales

A - Quantity supplied is the quantity suppliers will produce at a specific price - a specific point on the curve. A change in price will not cause the entire curve to shift.

Which may occur as a result of a decrease in the price of minivans? A. Increase in demand B. Increase in quantity demanded C. Decrease in demand D. Decrease in quantity demanded

A - Quantity supplied is the quantity suppliers will produce at a specific price - a specific point on the curve. A change in price will not cause the entire curve to shift.

The state of Florida decides to create a train route that would travel directly from Jacksonville to Tampa. Which of the following would be an example of a positive externality for the local people? A. The state will have to increase taxing in order to pay for the new project B. Many jobs would be created to build the railway, as well as keep it running C. The governor would be re-elected for a 2nd term D. The amount of tolls taken in from travelers on the roadways will decrease

A - Scarcity is limited resources, or rarity. It is often time or money.

You have to choose between being in the school play or being on the baseball team because the practices overlap. This choice exemplifies that A. Time is scarce. B. Demand is scarce. C. Music lessons are scarce. D. Sports teams are scarce.

A - Scarcity is limited resources, or rarity. It is often time or money.

What would cause the overall demand for books to increase? An increase in the price of books Fires that destroy the paper factories A decrease in the price of book-binding glue A celebrity commercial encouraging reading

A celebrity commercial encouraging reading

Which situation would cause an increase in the overall supply of books? An increase in the price of books Fires that destroy the paper factories A decrease in the price of book-binding glue A celebrity commercial encouraging reading

A decrease in the price of book-binding glue

A decrease in demand causes the demand curve to A. Shift to the left. B. Shift to the right. C. Increase its slope. D. Decrease its slope.

B - Equilibrium is the point where supply and demand curves meet. This is how much suppliers should charge for their product. If suppliers charge too little, it will create a shortage. Charging too much will create a surplus.

A console game, ZOMBIES!, has come out recently. It sells for $60. Which of these might lower the price of the game? A negative article about the game from a well-known reviewer, causing sales to drop A positive article about the game from a well-known reviewer, causing sales to rise A significant increase in the cost of a competitor's game, U.S. Zombies A significant rise in the cost of gas, causing shipments of the game to slow down

A negative article about the game from a well-known reviewer, causing sales to drop

The map above shows air release, or emissions, sites across the United States. These sites include locations such as smokestacks, factories, and high vehicle traffic areas. The data in the map most directly relate to potential negative and positive externalities affecting A. commons B. incentives C. free resources D. free riders

A: Demand goes Down to the group (and sUPply goes UP to the sky)

A local factory is found to be dumping waste into the water supply. What is a negative externality resulting from this practice? A. Hospital visits rise due to increased illness B. A new ER doctor is hired at the hospital C. Factory workers lose their jobs D. Neighboring businesses see more customers after the factory shuts down

A: Hospital visits rise would be the negative externality as the ones getting sick are not directly related to the initial problem and since they are not well it is a negative effect. If a new doctor is hired that is a positive effect and neighboring businesses are happy to have increased business. Factory workers losing their jobs would be a negative impact but directly as they are the ones who worked for the factory.

Use the equilibrium graph to help answer the question. Which situation would cause a shift from line 4 to line 3? A. A decrease in the cost of rubber to make the soles B. A factory worker strike C. A decrease in the price of Nikes D. Kobe Bryant creating his own line of shoes

A: Lines 3 and 4 are supply lines so your scenario relates to supply. Moving from line 4 to line 3 indicates an increase in supply (remember "right is more" and "left is less"). A factory worker strike would cause a decrease so b) is incorrect. C) is incorrect because price is not an indicator for an entire line to shift. D) would also not cause an increase in supply for Nikes, but rather a decrease.

Aaron heads to the store on a Wednesday to purchase the latest book in a series he enjoys. He doesn't get paid again until Friday, and uses the last 20 dollars he has to pay for the book, which costs 15 dollars. When he hands the cashier the 20 dollar bill, she inspects it with her counterfeit marker, determines it is a real bill, and then gives Aaron back his 5 dollars in change. Which characteristics of money are best demonstrated in Aaron's scenario? A. Scarcity, acceptability, and divisibility B. Medium, value, store C. Divisibility, stability, portability D. Standard, durability, scarcity

A: When Aaron heads to the store with his LAST 20 dollars this demonstrates that money is scarce. The cashier inspects his bill and determines it is real, thus accepting it and showing acceptability. Getting his change shows that money is divisible and can be broken down into smaller denominations.

Which of the following may occur as a result of a decrease in the price of cell phones? A. Shift from line 1 to line 2 B. Move from point S to point U C. Shift from line 2 to line 1 D. Move from point U to point S

C - Supply curves point from left to right up on the page. Shifts to the right indicate increases. Shifts to the left indicate decreases.

The renowned M and S, a candy producer is seeking a new location to manufacture their new line of candy called Snickerdoodle. This mouthwatering and savory caramelized chocolate will be introduced the week before Valentine's Day at a discounted rate and will be sold and distributed nationally from their new location. How will the manufacturing of the new plant negatively impact the local environment? A. M and S will be holding interviews for 100 new jobs in the community B. The trucks will be diesel fueled, therefore, increasing the fuel sales of local gas stations C. New roads will be constructed to accommodate the increased demand for delivery trucks cutting through forest and farm land. D. More highway patrols will be required to enforce safety laws, therefore leading to an increase in local property taxes

B - Equilibrium is the point where supply and demand curves meet. This is how much suppliers should charge for their product. If suppliers charge too little, it will create a shortage. Charging too much will create a surplus.

Using the circular flow diagram above, which of the following scenarios would best represent D on the chart? A. The city uses donated land to establish a new park B. High school students receive scholarships established by the mayor C. A local manufacturing plant adds new machinery to increase production D. Congress increases import taxes

B - Point D on the circular flow diagram represents the relationship between the household and the government. High school students receiving scholarships would best represent the effect of this relationship on the household.

Lara has earned $20 mowing grass around her neighborhood. She takes her money to the bookstore and purchases a CD for $11.99. She wants to buy a book as well, but she has to choose between the hardcover for $12 and the softcover for six dollars. Lara's use of her money and the decision she makes best illustrate which two functions of money? A. Measure of value and standard B. Medium of exchange and measure of value C. Standard and store of value D. Store of value and medium of exchange

B: It illustrates a medium of exchange because she hands 11.99 to the cashier and in return gets a CD. It shows the measure of value because the hardcover is worth $12 while the softcover is worth $6.

You have a lot of free time after school. You applied for a temporary job to save money for college. Two companies called to offer you a part-time position. The criterion likely to be most important to you in choosing which company to work for is the A. pay rate B. schedule C. nature of work D. ability to advance

B: It illustrates a medium of exchange because she hands 11.99 to the cashier and in return gets a CD. It shows the measure of value because the hardcover is worth $12 while the softcover is worth $6.

The city council allocates funds for new school buildings to be built. Which of the following circumstances would be a positive externality? A. Students would enjoy the schools B. The cost to build would allow jobs to be created and the unemployment rate to decrease. C. Citizens would support the building of the schools. D. Students would score better on standardize tests.

B: The cost to build would allow jobs to be created and the unemployment rate would decrease is the best positive externality as it would have the most impact on a third party.

Due to a recent major gas leak, the local government is forced to mandate that all people must stay indoors for at least 24 hours during clean up. This shows a connection between: A The government and financial market sectors B The household and product market sectors C The government and household sectors D The financial market and product market sectors

C - Equilibrium is the point where supply and demand curves meet. This is how much suppliers should charge for their product. If suppliers charge too little, it will create a shortage. Charging too much will create a surplus.

The gold standard is: A. What United States paper money is "backed" by B. The weight of US paper money. C. Government stores of valuables. D. No longer in use - money is backed by public and government acceptance

C - Measure of Value - Money is used to describe the worth of an item.

SM Air has manufactured Hardy, a super lightweight alloy twice the strength of steel but at half the weight and at only 2/3rds the labor force. This new revolutionary alloy will change our perception on energy conservation, therefore, fostering a new era of environmental conservation. Using the Circular flow chart, what major players of our economy will be impacted the greatest as a result of the mass production of Hardy? A. Government and household B. Factor Market and household C. Product market and rest of the world D. Business firms and the factor market

C - On a supply and demand graph, the line that indicates quantity is the x-axis. The y-axis indicates price.

Stores are overflowing with the latest car racing video game at $20. Store managers are frustrated with the lack of sales. The equilibrium price for this video game is A. More than $20. B. Less than $20. C. $20. D. Not calculable

C - On a supply and demand graph, the line that indicates quantity is the x-axis. The y-axis indicates price.

A new bookstore opens in your neighborhood. Which circumstance would most likely be a positive externality? (6.02) A. Sales taxes increase to fund added services to the community. B. The old bookstore down the street loses some customers. C. Traffic increases in your neighborhood D. Property taxes increase

C - Supply curves point from left to right up on the page. Shifts to the right indicate increases. Shifts to the left indicate decreases.

Florida's Congress decides to allow more coal shipping into the state by trains. Which of the following would be a negative externality for the environment? A. Increase taxes on citizens B. More renewable resources used C. Increase air pollution D. Higher costs on coal

C - The basic economic questions are: What to produce, How to produce, & For whom to produce?

Which situation best illustrates the basic economic questions? A. Your sister decides to make beaded bracelets and give them to friends. B. Your sister decides to make beaded bracelets and wear them all herself. C. Your sister hand beads the bracelets and sells them to neighbors D. Your sister goes to the store and purchases beaded bracelets from the jewelry department.

C - The basic economic questions are: What to produce, How to produce, & For whom to produce?

A new manufacturing plant is opening in your community. Which of the following would be a possible positive externality of this new business? A. The plant dumps waste into the local river leading to polluted drinking water B. Local hospitals see an increase in on-the-job injuries C. New restaurants open due to an increase in employment and earnings by residents D. A sales tax increase to fund new roads to support more traffic around the plant

C - The only positive externality listed here is under answer C. New business opening due to the manufacturing plant will have a positive effect on unemployment and the overall local economy.

The local YMCA starts offering after school sports activities to kids of all ages for free. What is a potential negative externality? A. Less neighborhood crime B. Improved wellness visits C. Decrease in business at the local fast food restaurant D. Bus pass use goes up

C: All but the third option are positive effects. The fast food restaurant is the third party and a decrease in business means less jobs overall for the community.

Fiona and her fellow Green Committee members are studying the effects of the use of energy-efficient light bulbs. Which of these may be a reason to oppose the switch? A. Learning government standards involved in light bulb manufacturing B. Learning that energy-efficient light bulbs are harder to recycle C. Reading literature about government-sponsored solar-power initiatives D. Reading that the old light bulbs are more plentiful and less cost effective

C: As the price of gas increases, supply would decrease (left is less and right is more). Thus the supply curve would shift to the left. Once supply moves to the left, equilibrium price would decrease.

An automobile company is building a new factory in your town. What may be a positive externality of this event? A. Better schools from increase in property tax revenue B. Noise produced by the workers and factory machines C. Reduction of contaminants in the local water supply D. Improvement in the level of pollutants in the air

C: Equilibrium is where demand and supply intersect. It is the perfect price and quantity so that there is not a surplus or a shortage. Buyers and sellers are both happiest at this price.

Please analyze the following scenario paying special attention to the wording. Dominic is opening a pizzeria in which he will make pizzas from scratch as they are ordered. He is located on the boardwalk. Which of the three economic questions has he not considered? A. For whom to produce? B. How to produce? C. What to produce? D. When to produce?

C: This occurs because the supplier is making an economic decision based on a prediction for future demand of the product and also sees this as a good time to earn more profit.

The point where supply and demand meet is the? A. X-axis B. Y-axis C. Equilibrium D. Minimum price

D: Companies will analyze which age group they are targeting for a particular product then market that item to that specific age group. This will help them decide whom to produce the item for.

Jen has a twenty dollar bill in her pocket but she needs change. Shea gives her a ten dollar bill, a five dollar bill and four ones and four quarters. Jen takes the one dollar to by some chips from the vending machine. Which characteristics of money has Jen best demonstrated? A. Medium, scarcity, and value B. Scarcity, and stability of value, divisibility C. Durability, portability, and standard D. Acceptability, divisibility, and portability

D: In this scenario Jen's 20 dollars was accepted by the vending machine, it was also divisible by Shea breaking it down into smaller amounts and it was portable by her carrying it to the machine.

In a week you could read two books or see four movies. The opportunity cost of choosing to read one book is A. one book B. two books C. one movie D. two movies

D: Opportunity Cost = Opportunity Lost. She chose the books so she gave up the movies

Mark has been given an invite by friends to attend the opening night of a movie but has also received tickets to the upcoming football game on the same night, creating a dilemma as to which event to attend. In assessing the scenario above, Mark's opportunity cost for choosing the football game would be....? A. Cost of food B. Going to the football game C. Time spent D. Going to the movie

D: Opportunity Cost is the opportunity lost in the making of a choice. In this case, by choosing to go to the football game, Mark is giving up the opportunity to attend the movie.

In the graph, a shift from point A to point B represents which of the following? A. A decrease in demand B. A decrease in quantity demanded C. An increase in demand D. An increase in quantity demanded

D: Quantity demanded is a shift along the same graph, from one point to a new point. A change in demand would mean the entire line moves

An externality is an A. intended consequence for a third-party B. unintended consequence for a third-party C. intended consequence for a second-party D. unintended consequence for a second-party

D: Quantity demanded is a shift along the same graph, from one point to a new point. A change in demand would mean the entire line moves.

Ezra runs a gyro stall at the local farmers' market. He would like to expand and open his own shop downtown. He has made the chart above, listing some potential costs and benefits of expansion. Item 3 under Costs best illustrates which concept? A. Businesses must grow to stay competitive. B. Fluctuations in demand cause fluctuations in supply. C. Labor shortages drive up business costs. D. Scarcity of resources necessitates economic choices.

D: Scarcity - Time is a scare resource, you cannot be in more than one place at the same time.

Steve's stock portfolio makes a five percent gain and he sells a portion of his holdings. Under which heading on the chart would this go? Who else benefits from Steve's gain? A. Factors for Production; Steve would pay the rest of the world via foreign policy B. Factors for Production; Steve would pay the government more in the form of taxes C. Wages, Rent, and Dividends; Steve would pay the rest of the world via foreign policy D. Wages, Rent, and Dividends; Steve would pay the government more in the form of taxes

D: Scarcity - Time is a scare resource, you cannot be in more than one place at the same time.

The supply and demand curves reflect the availability and cost of a new gaming system. The producer announces that the new system will be compatible with existing games under the same brand. Which change will most likely occur to the graph? Demand will shift left, lowering the market price. Demand will shift right, raising the market price. Supply will shift right, lowering the market price. Supply will shift left, raising the market price.

Demand will shift right, raising the market price.

Julio earns $300 a week working a summer job. The paycheck he deposits in the bank is for $250. Which of these accounts for the difference in amounts? Direct tax Gasoline tax Sales tax Tips for services

Direct Tax

Felicia knits scarves and sells them to her friends. The first week, she knits four scarves and sells three for $50 each. The next week she buys her yarn at a discount, so she knits six scarves and is able to sell five for $40 each. Which number represents quantity demanded at $40? Two Three Five Eight

Five

Jen is starting a nonprofit store. She plans to sell handmade African scarves and jewelry. Which economic question(s) would Jen still need to answer? For whom to produce? How to produce? What to produce? and For whom to produce? What to produce? and How to produce?

For whom to produce?

XYZ Tutoring provides educational services for students struggling in math. Which economic question does students struggling in math answer? A.For whom to produce? B.How much to produce? C. How to produce? D.What to produce?

For whom to produce? In this scenario, XYZ Tutoring decided it would provide services to students struggling in math. As the students struggling in math are potential consumers, XYZ Tutoring has decided for whom to produce.

Costa Rica is a top exporter of coffee. The highest quality coffee is sold abroad, and the lower quality coffee is consumed by native Costa Ricans. Which of the following statements best describes the economic questions this paragraph addresses? For whom to produce? and What to produce? For whom to produce? and When to produce? How to produce? and For whom to produce? What to produce? and How to produce? Points earned on this question: 5

For whom to produce? and What to produce?

Use the cost-benefit analysis table to answer the question: Should Duane buy a utility trailer? A cost benefit table with two columns. The first column is labeled Cost and includes the statements, 1. He will have to give up leisure time to work overtime, and 2. Is a blank space to be filled in. The second column is labeled Benefit and includes the statements, 1. He will have a permanent place to store his tools 2. The trailer is an investment he can sell later. Duane has a small woodworking business and saves the money for college. He stores his tools in his apartment. Duane would like to buy a utility trailer for his tools. It will cost $2,800. He creates a cost-benefit analysis table to examine his choices. What statement would best complete the chart, and why? He will not have as much money for college classes, because he will have to pay for the trailer and its maintenance. He will not have as much money in savings, and that will be a problem because he wants to work longer hours. He will not have to drive back and forth from home, and that will be a benefit because he can save money on gas. His customers might not live in places he can park with the trailer, and that will be a benefit because he can avoid some jobs.

He will not have as much money for college classes, because he will have to pay for the trailer and its maintenance.

Which statement shows that money is a "store of value?" I exchanged my dollar for ten dimes. You can only use currency at that store. I just used the ten dollars given to me last year. I carried the money to the store.

I just used the ten dollars given to me last year. Money as a store of value means that it maintains its value over time. Saving money and then spending it a later time demonstrates this function of money.

How do we know our current money has value? People talk about money a lot. It is backed by gold. People accept it in exchange for goods or services. It has many security measures.

People accept it in exchange for goods or services. Money is valuable because we know that it is "accepted." Money can be used to purchase goods and services even though it is no longer backed by gold. Security measures prevent counterfeiting but do not add value.

The U.S. economy begins to slow, so the U.S. prints more currency. What is the risk of this action? The currency will be hoarded. The currency will lose value. The government will gain debt. The government will pressure banks.

The currency will lose value.

The price (P) of designer jeans is affected by the supply (S) and the demand (D). Which of these represents an equilibrium price for designer jeans? a.The arrow pointing to D2 b.The intersection of P1 and Q1 c.The line marked D1 d.The line marked S

The intersection of P1 and Q1 In economics, equilibrium is reached when demand equals supply. In the graph, the intersection of P1 and Q1 marks the location of the intersection of the demand and supply curves.

Based on the graph, what would happen if customers demanded 550 units of this product? The price would drop to 0.5. The quantity would be 0. The quantity would be 0.5. The price would rise to 2.

The price would drop to 0.5.

Alpaca Yarn employs factory workers to hand spin wool yarn and fabric in a workshop on the company farm. Which economic questions does this statement answer? A.How much to produce? How much to charge? B.How to produce? How much to produce? C.What to produce? For whom to produce? D.What to produce? How to produce?

What to produce? How to produce? In this scenario, Alpaca Yarn uses workers to produce yarn and fabric. The company has determined what to produce by making yarn and fabric. It has determined how to produce yarn and fabric by hiring factory workers to spin by hand.

Money and currency are related because they are interchangeable terms currency is a form of money money is a form of currency money refers only to debts

currency is a form of money Money can be used in exchange for goods and services and includes debit and credit cards, government bonds, and currency. Currency, or bills and coins, is a specific form of money.