Econ 1 Exam 1
Which of the following will shift the demand curve for bacon to the left?
A claim by a magazine article that a link between the consumption of bacon and cancer exists
It is Gross Domestic Product (GDP) that measures economic growth - whenever the economy is able to produce more goods and services GDP increases and this increase in ______ represents economic growth.
GDP
Factors of production
Inputs.
Slope
Rise over the run.
Opportunity cost
The cost of what you have to give up.
Non-linear relationship
The graph is a curve.
Inverse relationship
The graph is a negatively sloped line.
Direct relationship
The graph is a positively sloped line.
Linear relationship
The graph is straight line.
Which of the following is not correct:
The payment for capital is profit.
Circular flow diagram
The representation of the economy.
Macroeconomics
The study of all consumers and all businesses.
Microeconomics
The study of individual household and business decision making process.
One can be sure that it is an inverse relationship if:
X increases as Y decreases.
Variables X and Y are directly related if:
Y increases whenever X increases
Which of the following will shift the supply curve of cellphones to the right?
a decrease in the price of microchips used in cellphones.
Any point on the production possibilities curves represents the fact that a nation can produce:
a particular combination of the two goods only if all the resources are efficiently used in the economy.
Models are:
abstractions of reality.
A boom in Silicon Valley increases incomes in the area. In the local farmer's market, due to this increase in income, we can expect:
an increase in demand for organically grown apples.
A shortage occurs in a market if:
at a certain price consumers want to buy more than producers want to sell.
All the demand curves slope downward because:
at a higher price less is purchased
In the equation of a straight line, Y=a+bX:
b is the slope coefficient.
When people make a cost-benefit analysis they weigh the costs against the benefits of an action, trying to determine whether the _____ of taking the action outweigh the costs.
benefits
The production possibilities curve is a downward sloping ______-out curve.
bowed
If supply decreases, at the new equilibrium:
consumers will purchase less at a higher price
When people are acting in their own rational self-interest they are taking an action that is, according to their______ benefit analysis, in their own self interest.
cost
Scarcity is represented with the ______ itself.
curve
The graph of a non-linear relationship is a __________.
curve
If one of the variables ____________ and the other variable also decreases, then the two variables are directly related.
decreases
If one of the variables on the graph __________ while the other variable increases, then the two variables are inversely related.
decreases
If the price of mobile phone service decreases, then:
demand for landlines decreases
The slope of a curve measures at what rate does the ____________ variable change for every one unit change in the independent variable.
dependent
Any ______ of resources will shift the production possibilities curve inward.
destruction
At a higher price producers always produce more and at a lower price producers produce less, which means that along the supply curve prices and quantities are ______ related.
directly
The law of supply says that prices and quantities are _______ related.
directly
The demand curve can be a curve or a straight line but it has to slope ______.
downward
The graph of an inverse relationship is either a straight line or a curve that slopes
downward
Trade-offs are represented with a _______ sloping production possibilities curve.
downward
The circular flow diagram represents how the _____ works.
economy
The labor market is initially at an equilibrium at wage rate W1 and quantity Q1. If the supply of labor decreases, then at the new equilibrium:
fewer workers will have a job and command higher wages.
Opportunity cost is the next best alternative _____ up when making a choice.
given
Gross Domestic Product measures what amount of ____ and services is the economy able to produce.
goods
The change in quantity demanded is measured on the _______ axis.
horizontal
The change in quantity supplied is measured on the _______ axis.
horizontal
In Microeconomics we study individual decision makers - _______ and businesses.
households
Within the circular flow diagram:
households supply the factors of production
Which of the following will shift the production possibilities curve outward?
increased production of capital goods
______ in the economy due to recessions and unemployment where some of the existing resources are not used causes a movement inside the curve, and as a result, the economy is not producing to its potential.
inefficiency
The term factors of production refers to the:
inputs in the production process.
Along the demand curve there is an _______ relationship between price and quantity demanded, which means that if price increases, quantity demanded decreases, and if price decreases, quantity demanded increases.
inverse
The law of demand says that prices and quantities are ____ related.
inversely
The factors of production are land, _____, capital, and entrepreneurship.
labor
The resources in the economy include _____, other natural resources, capital, time, energy, information, technology, labor, and entrepreneurship.
land
Scarcity refers to the _____ amount of resources available in the economy.
limited
The pig's postulate states that since human wants are unlimited, people always want to have ______ of a good thing.
more
Economic theories are based on:
observations of real life
The law of increasing opportunity cost is represented with a downward sloping line that is bowed ________.
out
Microeconomics deals with:
people and businesses making decisions.
A change in ______ along with a change in quantity supplied makes us move from one point to another along the supply curve.
price
The law of demand states that:
price and quantity move in opposite directions.
There is a surplus in a market if:
producers produce more at a given price than consumers wish to buy.
The trade-offs a country is facing is represented by the:
production possibilities curve
Land, labor, capital and entrepreneurship are examples of:
productive resources.
If the price of avocados increases from $1.50 to $1.90 then consumers will:
purchase a smaller quantity of avocados.
A change in price along with a change in ______ demanded brings about a movement along the demand curve.
quantity
Anything that increases the ______ or quality of resources in the economy will shift the production possibilities curve outward.
quantity
If the price of ink cartridges increases, then:
quantity demanded of ink cartridges decreases.
A model is a simplified __________ of reality.
representation
Scarcity implies that:
resources are available in limited quantities.
The slope of a curve is defined as the rise over the
run
A change in supply is graphed by _______ the supply curve.
shifting
In the process of abstraction economists are leaving things out to
simplify
According to the law of demand, demand curves have to:
slope downward because at a lower price people want to buy more.
Mixed economies have some signs of capitalism and some signs of _______.
socialism
A movement from a point on the production possibilities curve to a point inside the curve means that:
some of the workers are being laid off.
Increasing opportunity cost is incurred because resources are _____ - they are not equally well suited for the production of both goods.
specialized
The graph of a linear relationship is a ________ line.
straight
Scarcity exists because:
the amount of resources is finite.
The opportunity cost of parking on campus includes all of the following except:
the cost of giving up parking on the street.
In an open economy:
the foreign sector provides a bridge to other countries.
The circular flow diagram represents:
the interaction of households and businesses in the economy
Since the production possibilities curve indicates the limit a nation is facing:
the nation will face trade-offs.
Which of the following relationships can be represented with a downward sloping line?
the number of music downloads and free space on the hard drive
A new operating system for smart-phones that makes visiting social networking sites easier attracts new smart-phone users. At the same time new firms enter the smart-phone market. We can conclude that:
the number of smart-phone users will increase.
Jenny and Joe went to a Rolling Stones concert because they received free tickets to it. For Jenny and Joe:
the opportunity cost may be different.
According to the law of demand, if the price of cars decreases, holding everything else constant:
the quantity demanded of cars increases
The slope coefficient measures:
the rate of change of the dependent variable
The definition of a direct relationship implies that:
the slope of the line is positive.
In making a cost-benefit analysis of whether to purchase a parking permit for on-campus parking, the benefit of buying a parking permit includes:
the time saved by not having to look for parking on the street
When people are altruistic and help others:
they believe that it's "worth it" to help
When people are acting in their own rational self-interest:
they must be doing what's best for them.
Points to the right of curve are ______ with the current amount of resources that are available for use in the economy.
unattainable
According to the law of supply all the supply curves slope ______.
upward
The graph of a direct relationship is either a straight line or a curve that slopes
upward
The graph of a direct relationship is a(n):
upward sloping line.
Economic system is that part of the social system that determines ____ goods and services to produce, how to produce these goods and services, and for whom these goods and services are going to be produced.
what
The law of supply shows that:
whatever affects price affects quantity supplied.
In Macroeconomics we study the economy as a ______.
whole
A closed economy represents a simplified view of the economy with two sectors only - private and public - with no connection with the rest of the ______.
world
An open economy is a three sector economy with the foreign sector separated out, connecting the economy with the rest of the ______.
world
