Ch 3&4
A. quantities demanded; a demand schedule
A demand schedule is a list of the ______ at each different price when all other influences on buying plans remain the same. A demand curve is a graph of _____ . A. quantities demanded; a demand schedule B. shortages; price rises C. quantities actually bought; quantities demanded D. surpluses; price falls
C. produced in place of; produced together with
A substitute in production is a good that is _____ another good, and a complement in production is a good that is _____ another good. A. produced in place of; consumed with B. produced together with; produced in place of C. produced in place of; produced together with D. consumed in place of; produced together with
D. consumed in place of; consumed together with
A substitute is a good that is _____ another good, and a complement is a good that is _____ another good. A. produced in place of; sold with B. consumed in place of; produced with C. consumed together with; consumed in place of D. consumed in place of; consumed together with
E. all of the above
An economy grows when it _______. A. develops better technologies B. acquires more machines to help it produce C. implements on-the-job training D. improves the quality of labor by education E. all of the above
A. At a price of $1 gallon, we plan to sell 2,000 gallons per day.
Aqua Springs makes the following four statements about bottled spring water. Which statement best describes the firm's quantity supplied in the bottled water market? A. At a price of $1 gallon, we plan to sell 2,000 gallons per day. B. We'll switch from plain water to flavored water is flavored is more profitable. C. If we could get a higher price, we'd bottle more water. D. We would sell more water if the demand for it were greater.
U.S.
Brazil is almost self-sufficient in ethanol. Brazilian ethanol is made from sugar and costs 83cents¢ per gallon whereas U.S. ethanol, made from corn, costs $1.14 per gallon. The United States has set a zero quota on imports of ethanol, so it does not import ethanol. Draw the PPF for ethanol and other goods and services for the United States and Brazil. Which ppf is steeper?
D. increases; becomes steeper
As more resources are used to reduce the number of malaria cases, the opportunity cost of controlling malaria _______. With the percentage of malaria cases eliminated plotted on the x-axis of the PPF and other goods and services plotted on the y-axis, the PPF _________ as the percentage of malaria cases eliminated increases. A. decreases; becomes less steep B. increases; has a slope that remains constant C. increases; becomes less steep D. increases; becomes steeper E. decreases; becomes steeper
B. sustained expansion of production possibilities
Economic growth is defined as the _____ . A. overtaking of the United States by China B. sustained expansion of production possibilities C. recovery from recession D. increase in wage rates
D. increase the cost of production and with no change in productivity, China's supply of manufactured goods will decrease
Chinese private-sector wages rose 14 percent in 2012. This trend in rapidly rising wage rates might hurt its manufacturing dominance. Rising wage rates ______. A. increase the cost of China's manufactured goods, which increases the supply of U.S. imports from other countries B. do not change China's supply of manufactured goods C. decrease the demand for China's manufactured goods D. increase the cost of production and with no change in productivity, China's supply of manufactured goods will decrease E. increase the cost of production and with no change in productivity, China's supply of manufactured goods will increase
A. The cost of economic growth is fewer consumption goods today
Choose the correct statement. A. The cost of economic growth is fewer consumption goods today. B. There is no tradeoff associated with economic growth. C. Economic growth abolishes scarcity. D. With economic growth, production becomes a free lunch. E. The cost of economic growth is fewer consumption goods in the future.
B. The quantity of cell phones demanded increases and the demand for cell phones is unchanged.
Consider the market for cell phones. Suppose producers announce that the price of a cell phone will fall next month. Explain the effect of this event on the quantity of cell phones demanded and on the demand for cell phones. A. The quantity of cell phones demanded decreases and the demand for cell phones also decreases. B. The quantity of cell phones demanded increases and the demand for cell phones is unchanged. C. The quantity of cell phones demanded is unchanged and the demand for cell phones decreases. D. The quantity of cell phones demanded decreases and the demand for cell phones is unchanged. E. The quantity of cell phones demanded increases and the demand for cell phones also increases.
A. decreases the supply of bread
Drought decreases the supply of wheat, which increases the price of wheat and leads to a rise in the price of bread because in the market for bread, the rise in the price of wheat ______. A. decreases the supply of bread B. increases the supply of bread C. decreases both the supply of bread and the demand for bread D. increases the demand for bread as people buy it before the price rises further and decreases the supply of bread E. decreases the demand for bread
A. supply of coffee decreased; supply of coffee increased; demand for coffee increased
During 1994, Brazil experienced severe frosts, which wiped out many coffee plantations. New plantations in Brazil began to produce coffee beans in 1999. During the early 2000s, countries such as Vietnam started to produce coffee beans and coffee shops such as Starbucks started to spring up across Europe. Use these events to explain why the price rose during the late 1990s, fell during the early 2000s, and rose again after 2003. The price rose during the late 1990s because the ______. The price fell during the early 2000s because the ______. The price rose again after 2003 because the ______. A. supply of coffee decreased; supply of coffee increased; demand for coffee increased B. demand for coffee increased; demand for coffee decreased; demand for coffee decreased further C. supply of coffee decreased; supply of coffee increased; supply of coffee decreased further D. demand for coffee increased; demand for coffee decreased; supply of coffee decreased E. supply of coffee decreased; supply of coffee increased; supply of coffee increased further
B. the Central Valley PPF shifts inward
Explain how a 30 percent drop in honeybees would affect the Central Valley PPF if almonds are measured on the x-axis. With no change in the quantity of other resources and technology, and with the no change in the quantity of other crops produced, _______. A. there is a movement down along the Central Valley PPF B. the Central Valley PPF shifts inward C. there is a movement up along the Central Valley PPF D. the Central Valley PPF shifts outward E. Central Valley PPF does not shift but the Central Valley produces at a point inside its PPF
Decreases supply
How is supply effected if airlines reduce the number of flights each day? Increases supply; Increases the quantity supplied; Decreases in supply; Decreases the quantity supplied
A. the quantity demanded equals the quantity supplied and equals the quantity bought and sold
In market equilibrium, at the equilibrium price and equilibrium quantity, _____ . A. the quantity demanded equals the quantity supplied and equals the quantity bought and sold B. demand equals supply C. both the quantity demanded equals the quantity supplied and demand equals supply. D. demand is not greater than supply
B. New technology that lowers the cost of making a cell phone
In the market for cell phones, which of the following events increases the supply of cell phones? A. A rise in the wage rate paid to electronics workers B. New technology that lowers the cost of making a cell phone C. An increase in people's incomes D. A rise in the price of an e-book reader (a substitute in production)
B. price adjustments are being prevented from playing their role as the regulator of buying and selling plans
In the summer of 2008, the price of crude oil hit a record high above $135 a barrel. OPEC reported that there was no shortage of oil and that speculators had forced the price up A shortage in the market for oil implies that ______. A. the market for oil needs government regulation B. price adjustments are being prevented from playing their role as the regulator of buying and selling plans C. more people are traveling than expected D. the market for oil is a competitive market
B. an increase; an increase
In the summer of 2008, the price of crude oil hit a record high above $135 a barrel. OPEC reported that there was no shortage of oil and that speculators had forced the price up If OPEC is correct, the price change could have occurred as a result of demand changing because of ______ in the expected price of oil and supply changing because of ______ in the expected price of oil. A. a decrease; a decrease B. an increase; an increase C. a decrease; an increase D. an increase; a decrease
C. decreases; increases; does not change
International Air Transport Association reported that passenger numbers fell by 11 percent last month. What will be the impact of swine flu? Recovery of passenger numbers depends on a rise in consumer confidence and a return to increased consumer spending. In response to the fall in passenger numbers, airlines cut capacity. When people are concerned about coming into contact with swine flu, the demand for air travel ______. When consumer confidence and consumer spending increase, the demand for air travel ______. When airlines cut capacity, the demand for air travel ______. A. does not change; does not change; decreases B. does not change; increases; decreases C. decreases; increases; does not change D. decreases; does not change; does not change E. decreases; increases; decreases
B. decreases; increases; does not change
International Air Transport Association reported that passenger numbers fell by 11 percent last month. What will be the impact of swine flu? Recovery of passenger numbers depends on a rise in consumer confidence and a return to increased consumer spending. In response to the fall in passenger numbers, airlines cut capacity. When people are concerned about coming into contact with swine flu, the demand for air travel ______. When consumer confidence and consumer spending increase, the demand for air travel ______. When airlines cut capacity, the demand for air travel ______. A. decreases; does not change; does not change B. decreases; increases; does not change C. decreases; increases; decreases D. does not change; increases; decreases E. does not change; does not change; decreases
D. increased the demand for corn
Some corn is used to produce ethanol and an increase in the demand for ethanol has raised the price of corn because it has ______. A. decreased the supply of corn B. increased the quantity of corn demanded C. decreased the quantity of corn supplied D. increased the demand for corn
A. the relationship between the quantity supplied of a good and the price of the good
Supply is _____, when all other influences on buying plans remain the same. A. the relationship between the quantity supplied of a good and the price of the good B. the relationship between the quantity supplied of a good and the cost of labor used to produce it C. the is the quantity of a good that producers would be willing to sell if costs were lower D. the quantity of a good that producers plan to sell
B. there would be a shortage of pasta; eventually rise
Suppose that as a result of the boycott, supermarkets did not raise the price of pasta next month as predicted. Most likely, _____ and the price would _____. A. there would be a shortage of pasta; eventually fall B. there would be a shortage of pasta; eventually rise C. the market would be in equilibrium; remain constant D. there would be a surplus of pasta; eventually fall E. there would be a surplus of pasta; eventually rise
B. The supply of skim milk increases.
Suppose that the wage rate of dairy workers falls. Explain the effect of this event on the quantity of skim milk supplied and on the supply of skim milk. A. The quantity of skim milk supplied decreases. B. The supply of skim milk increases. C. The supply of skim milk decreases. D. The quantity of skim milk supplied increases.
Increase; decrease
Suppose wheat is a complement in production of oats. A decrease in the price of wheat will _________ the equilibrium of oats and __________ the equilibrium quantity of oats
E. falls; demand decreases by more than supply decreases and when demand decreases the price falls
The demand for a good decreases by 10 percent and the supply of the good decreases by 8 percent. The price of the good _______ because _______. A. rises; demand decreases by more than supply decreases and when demand decreases the price rises B. rises; when demand decreases or supply decreases the price rises C. either rises or falls; demand decreases and supply decreases D. falls; when demand decreases or supply decreases the price falls E. falls; demand decreases by more than supply decreases and when demand decreases the price falls
B. increases; decreases
The price of oil rises if the demand for oil ______ and the supply of oil ______. A. decreases; decreases B. increases; decreases C. decreases; increases D. increases; increases
B. can be produced and the combinations that cannot be produced
The production possibilities frontier is the boundary between the combinations of goods and services that ____________, given the available factors of production and the state of technology. A. we want to produce and what we want to consume B. can be produced and the combinations that cannot be produced C. we want to produce but cannot consume D. can be produced and the prices paid for those
B. An increase in demand; is; A decrease in supply; is not Your answer is correct.
Using the demand and supply model we know the following: _____ brings an increase in both price and quantity, which _____ what happened in the market for college education. _____ brings an increase in price and a decrease in quantity, which _____ what happened in the market for college education. A. An increase in demand; is not; A decrease in supply; is B. An increase in demand; is; A decrease in supply; is not C. A decrease in supply; is; An increase in demand; is not D. A decrease in supply; is not; An increase in demand; is
B. rose; decreased
When floods wiped out the banana crop in Central America, the equilibrium price of bananas ______ and the equilibrium quantity of bananas ______. A. rose; increased B. rose; decreased C. fell; decreased D. fell; increased
C. the demand for gasoline increases
When motorists increase their driving in the summer months, ______ and the price of a gallon of gasoline rises. A. the demand for and supply of gasoline increase B. the supply of gasoline increases C. the demand for gasoline increases D. the demand for gasoline does not change E. the supply of gasoline decreases
C. the supply of gasoline decreases
When refineries shut down, ______ and the price of a gallon of gasoline rises. A. the demand for gasoline decreases B. the supply of gasoline does not change C. the supply of gasoline decreases D. the demand for gasoline increases E. the supply of and demand for gasoline increase
D. decrease the quantity demanded of that good
Which of the following events illustrates the law of demand: Other things remaining the same, a rise in the price of a good will ______. A. increase the demand for a substitute of that good B. decrease the demand for the good C. increase the demand for a complement of that good D. decrease the quantity demanded of that good
Event #1 only
Which of the following events in the market for cell phones illustrates the law of demand? 1. The price of a cell phone falls. 2. Producers announce that cell phone prices will fall next month. 3. The price of a call made from a cell phone falls. 4. The price of a call made from a land-line phone increases. 5. The introduction of camera phones makes cell phones more popular.
C. Tom does his math homework in 2 hours while Harry takes only 30 minutes to do the same task.
Which of the following is an example of absolute advantage? A. Amy is smart and performs well in exams. B. Charlie enjoys skiing while Ryan enjoys hiking. C. Tom does his math homework in 2 hours while Harry takes only 30 minutes to do the same task. D. Nick has an advantage over others in the industry because he knows many software programs.
C. Dave makes 4 pizzas giving up 6 jars of milk shakes while Rob makes 2 pizzas giving up 4 jars of milk shakes.
Which of the following is an example of comparative advantage? A. The United States produces less textile products and more electronic products. B. Angela makes better pastries than Sherrie. C. Dave makes 4 pizzas giving up 6 jars of milk shakes while Rob makes 2 pizzas giving up 4 jars of milk shakes. D. Michael Jordan is an American basketball player.
A. A shortage of cabbage increased the price of cabbage and a surplus of corn lowered its price.
Which of the following statements describes the law of market forces? A. A shortage of cabbage increased the price of cabbage and a surplus of corn lowered its price. B. A rise in the price of cabbage creates a surplus of cabbage and a fall in the price of corn creates a shortage of corn. C. When the price of cabbage increased, nothing else changed and people bought less cabbage. D. When the price of corn fell, nothing else changed and farmers planted fewer acres with corn.
A. I is inferior, II is normal, III is neither, and IV is both
Which of the following statements is about a normal good, which is about an inferior good, which is about both, and which is about neither? I With incomes falling in the recession, people are buying more chicken. II People are buying more beef now that incomes have increased. III People are buying more chicken because the price of chicken has fallen. IV With higher incomes people are switching from chicken to beef. A. I is inferior, II is normal, III is neither, and IV is both B. II is inferior, I is normal, III is neither, and IV is both C. IV is inferior, III is normal, II is neither, and I is both D. III is inferior, II is normal, IV is neither, and I is both
C. The supply of food in the United States decreases. The supply curve shifts leftward and the price of food rises.
Why does more U.S. food going to China increase the price of food in the United States? A. The supply of food in the United States increases. The supply curve shifts rightward and the price of food rises. B. The increase in the demand for U.S. food increases the supply of U.S. food. The demand for U.S. food increases by more than the supply, so the price rises. C. The supply of food in the United States decreases. The supply curve shifts leftward and the price of food rises. D. The quantity of food supplied in the United States decreases. A movement upward along the supply curve occurs and the price rises.
When there is a surplus, the price falls; and when there is a shortage, the price rises
law of market forces
C. false; as the price of a bicycle helmet falls, the supply of bicycle helmets does not decrease
"As fewer people buy bicycles, the demand for bicycle helmets will decrease and the price of a bicycle helmet will fall. The fall in the price of a bicycle helmet will decrease the supply of bicycle helmets." This statement is ______ because ______. A. false; the price of a bicycle helmet does not fall when the demand for bicycle helmets decreases B. true; when demand decreases, supply decreases so that no surplus occurs C. false; as the price of a bicycle helmet falls, the supply of bicycle helmets does not decrease D. true; the decrease in the price of a bicycle helmet decreases the supply of bicycle helmets, which eliminates any shortage E. true; when demand decreases, supply decreases so that the price of the good does not rise
D. false; as the price of a bicycle helmet rises, the supply of bicycle helmets does not increase
"As more people buy bicycles, the demand for bicycle helmets will increase and the price of a bicycle helmet will rise. The rise in the price of a bicycle helmet will increase the supply of bicycle helmets." This statement is ______ because ______. A. false; the price of a bicycle helmet does not rise when the demand for bicycle helmets increases B. true; the increase in the price of a bicycle helmet increases the supply of bicycle helmets, which eliminates any shortage C. true; when demand increases, supply increases so that the price of the good does not fall D. false; as the price of a bicycle helmet rises, the supply of bicycle helmets does not increase E. true; when demand increases, supply increases so that no surplus occurs