Econ 2

Refer to the table below. If D2 and S2 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are __________ and __________, respectively.PriceD 1D 2S 1S 2$12 5 91914$10 8121712$811151510$6131813 8$4162111 6$21824 9 4 Select one: a.$8; 15 b.$10; 12 c.$6; 18 d.$12; 12

$10; 12

Refer to the figure below. With reference to Graph A, at a price of $10, total revenue equals: Select one: a.$400. b.$1,000. c.$500. d.$200.

$400

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is: Select one: a. $0 b. $4 c. $40 d. $44

$44

Refer to the table below. If D1 and S1 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are __________ and __________, respectively.PriceD 1D 2S 1S 2$12 5 91914$10 8121712$811151510$6131813 8$4162111 6$21824 9 4 Select one: a.$6; 13 b.$8; 15 c.$4; 16 d.$4; 11

$4; 16

In May and June, Tammy spent all her clothing budget on bathing suits and beach bags. Each bathing suit cost $75. At Tammy's optimal choice, her marginal utility from the last bathing suit purchased is 300 and her marginal utility from the last beach bag purchased is 200. This means that each handbag must cost: Select one: a.$150 b.$50 c.$25 d.$100

$50

Refer to Figure 5-1. With reference to Graph A, at a price of $5, total revenue equals: Select one: a.$400. b.$500. c.$200. d.$1,000.

$500.

In 2010, Americans had about _____________ outstanding in credit card debts not paid on time. Select one: a.$900 million b.$90 billion c.$900 billion d.$90 million

$900 billion

Alex has $18 per week in his entertainment budget. He splits his time between going to the movies and renting video games. Each movie costs $6 while each video game rental costs $3. The measured total utility of each of his activities is shown in the table below. What is Alex's utility maximizing point? Movies Total Utility Video Game Rentals Total Utility 0 0 0 0 1 40 1 30 2 75 2 55 3 105 3 76 4 130 4 92 5 160 5 106 6 114 7 116 Select one: a.5 movies, 7 video game rentals b.0 movies, 6 video game rentals c.1 movie, 4 video game rentals d.2 movies, 2 video game rentals

1 movie, 4 video game rentals

Suppose that Mimi plays golf 5 times per month when the price is $40 and 4 times per month when the price is $50. What is the price elasticity of Mimi's demand curve? Select one: a.1.0 b.0.1 c.0.8 d.10.0

1.0

The United States has approximately ___________ credit card holders. Select one: a.18 million b.80 million c.1.8 million d.180 million

180 million

Josh's weekly budget for lunch is $24. He eats only pizza and burgers. Each pizza costs $6 and each burger costs $3. Josh knows that 2 pizzas and 4 burgers will give him a utility of 8. What is Josh's utility-maximizing point? Select one: a.4 pizzas, 1 burger b.2 pizzas, 4 burgers c.0 pizzas, 8 burgers d.3 pizzas, 2 burgers

2 pizzas, 4 burgers

Bob budgets $12 a week for entertainment. He splits his time between going to the movies and going to the gym. Each movie costs $3 and each session at the gym also costs $3. The total utility from each of these activities is shown in the table below. Bob's utility maximizing point is: Movies Total Utility Gym Costs Total Utility 0 0 0 0 1 30 1 50 2 55 2 85 3 76 3 115 4 92 4 107 5 103 5 111 6 114 7 115 Select one: a.3 movies; 3 gym workout sessions b.4 movies; 2 gym workout sessions c.4 movies; 0 gym workout sessions d.1 movie; 5 gym workout sessions

3 movies; 3 gym workout sessions

For lunch, Maria eats only salads or vegetarian burgers. Her weekly food budget is $36. Each salad costs $6 and each vegetarian burger costs $3. When deciding how much of each good to buy, Maria knows that 2 salads and 4 vegetarian burgers will give her a utility of 8. Maria's utility-maximizing point is: Select one: a.4 salads, 6 vegetarian burgers b.3 salads, 6 vegetarian burgers c.2 salads, 8 vegetarian burgers d.6 salads, 1 vegetarian burger

3 salads, 6 vegetarian burgers

Rick eats only french fries and burgers at his office cafeteria. His weekly lunch budget is $48. Each burger costs $6 and each order of fries costs $3. When deciding how much of each good to buy, Rick knows that 2 burgers and 4 orders of french fries will give him a utility of 8. At his utility-maximizing point, Rick's utility is: Select one: a.32 b.40 c.48 d.24

32

For lunch, Wendy eats only salads or fruit & yogurt smoothies. Her weekly food budget is $48. Each salad costs $6 and each smoothie costs $3. When deciding how much of each good to buy, Wendy knows that 2 salads and 4 smoothies will give her a utility of 8. What is Wendy's utility-maximizing point? Select one: a.4 salads, 8 smoothies b.1 salad, 14 smoothies c.5 salads, 6 smoothies d.6 salads, 4 smoothies

4 salads, 8 smoothies

Suppose that Bobo purchases 1 pizza per month when the price is $19 and 3 pizzas per month when the price is $15. What is the price elasticity of Bobo's demand curve? Select one: a.6.33 b.0.235 c.4.25 d.2.00

4.25

Todd is a cattle rancher. In June and July he spent his clothing budget on jeans and cowboy hats. Each pair of jeans cost $50 and each hat cost $100. At Todd's optimal choice, his marginal utility from the last pair of jeans purchased is 200. This means that his marginal utility from the last cowboy hat purchased is: Select one: a.450 b.550 c.400 d.500

400

Jed's weekly budget for lunch is $24. He eats only pizza and burgers. Each pizza costs $6 and each burger costs $3. Jed knows that 2 pizzas and 4 burgers will give him a utility of 8. At his utility-maximizing point, Jed's utility is: Select one: a.10 b.6 c.4 d.8

8

On April 1, 2009, in the middle of a recession, the government of the province of Ontario, Canada increased the provincial minimum wage from $8.75 to $9.50. What will the likely effect of this policy be? Select one: a.Low income workers will be better able to survive the recession at the new, higher wage rate. b.The higher wage will increase the supply of labor offsetting the effects of the recession. c.Both the leftward shift in the labor demand curve and the higher minimum wage will lead to an increase in the unemployment rate. d.More people will be hired at the higher wage rate offsetting the effects of the recession.

Both the leftward shift in the labor demand curve and the higher minimum wage will lead to an increase in the unemployment rate.

Which of the following best characterizes the circular flow of income? Select one: a.Households buy factors of production from businesses, and businesses buy goods and services from households. b.The government purchases resources from businesses and households and then sells goods and services to businesses and households. c.Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses. d.Businesses buy resources from the government, and households buy goods and services from businesses.

Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.

In countries like _____________ the command economy predominates. Select one: a.South Africa and Kenya b.China and Vietnam c.Germany and France d.Cuba and North Korea

Cuba and North Korea

Are markets always in equilibrium? Select one: a.No, they never "settle down" into a stable price and quantity. b.No, but if there is no outside interference, they tend to move toward equilibrium. c.Yes, because very few things tend to alter supply and demand. d.Yes, they are always at the equilibrium point, or very close to it.

No, but if there is no outside interference, they tend to move toward equilibrium.

Refer to the figure below. The movement from __________ to __________ is consistent with a successful advertising campaign that claims wool keeps you warm. Select one: a.Point A; Point F b.Point A; Point H c.Point A; Point B d.Point A; Point D

Point A; Point F

Refer to the figure below. The movement from __________ to __________ is consistent with a decrease in the price of cotton (a substitute). Select one: a.Point A; Point B b.Point A; Point D c.Point A; Point H d.Point A; Point F

Point A; Point H

Steel mill wage costs increase by 18 percent over a year. What is the likely economic effect on the market for steel? Select one: a.There is an increase in the cost of producing steel, which shifts the supply curve of steel to the right, thereby increasing the price of steel. b.The increase in wage costs will shift the demand curve for steel to the left, increasing the cost of steel. c.There is an increase in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel. d.There is a decrease in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel.

There is an increase in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel.

How do apple growers react to the news of medical research findings that suggest that eating apples leads to greater health benefits than were previously known? Select one: a.They decrease the supply of apples. b.They increase the quantity of apples supplied. c.They decrease the quantity of apples supplied. d.They increase the supply of apples.

They increase the quantity of apples supplied.

Which of the following best denotes the reason for the existence of substantial black markets? Select one: a.a market-oriented economy b.a command economy c.government laws and rules d.the microeconomy

a command economy

In terms of microeconomic analysis, what is the function of "utils"? Select one: a.a form of budget constraint b.relates to a consumers original choice c.a measurement of utility d.applies to changes in income

a measurement of utility

The supply curve of textbooks (which are produced using paper made from trees) will shift to the left in response to: Select one: a.a sharp increase in the demand for and construction of wood-frame homes. b.a decline in college tuition. c.an end to government regulations that limit timber harvesting in national forests. d.an increase in the supply of lumberjacks.

a sharp increase in the demand for and construction of wood-frame homes.

After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is: Select one: a.a shift of the demand curve for beef to the right. b.a shift of the demand curve for beef to the left. c.no change; only the supply curve for beef is likely to be affected. d.a movement down along the demand curve for beef to the right.

a shift of the demand curve for beef to the left.

The imposition of a price ceiling on a market often results in: Select one: a.an increase in investment in the industry. b.a decrease in discrimination on the part of sellers. c.a surplus d.a shortage

a shortage

Which of the following lies primarily within the realm of macroeconomics? Select one: a.an analysis of supply and demand conditions in the electricity market b.a study of the impact of "mad cow" disease on the price of beef worldwide c.a study of how tax cuts stimulate aggregate production d.a study of the demand for gasoline

a study of how tax cuts stimulate aggregate production

Any given demand or supply curve is based on the ceteris paribus assumption that ___________________. Select one: a.all else is held equal b.everything is variable. c.no one knows which variables will change and which will remain constant. d.what is true for the individual is not necessarily true for the whole.

all else is held equal

The term "ceteris paribus" means that: Select one: a.everything is variable. b.all variables except those specified are constant. c.no one knows which variables will change and which will remain constant. d.what is true for the individual is not necessarily true for the whole.

all variables except those specified are constant.

Refer to the diagram below. Which of the following is a true statement? Select one: a.long run reaction to higher wages is an increase in hours worked to gain more income b.backward-bending supply curves for labor are typical in the short run c.workers react to higher wages by working more hours in the long run d.backward-bending supply curves for labor are not typical in the short run

backward-bending supply curves for labor are not typical in the short run

Many cooks view butter and margarine to be substitutes. If the price of butter rises, then in the market for margarine: Select one: a.the equilibrium price will fall and the equilibrium quantity will fall. b.the equilibrium price will rise and the equilibrium quantity will decrease. c.the equilibrium price will rise, while the change to equilibrium quantity is indeterminate. d.both the equilibrium price and quantity will rise

both the equilibrium price and quantity will rise.

Macroeconomics primarily examines: Select one: a.the output levels that maximize the profits of business firms b.broad issues such as national output, employment and inflation. c.how prices are determined within individual markets. d.the behaviour of individual households and firms.

broad issues such as national output, employment and inflation.

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the _________________, sometimes also called the opportunity set, a diagram which shows what choices are possible Select one: a.original budget b.income cap c.consumption set d.budget constraint

budget constraint

The slope of the _________________ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good. Select one: a.production possibilities frontier b.Opportunity cost c.productive efficiency d.budget constraint

budget constraint

In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of: Select one: a.producers and input suppliers. b.producers and government planning committees. c.all consumers. d.buyers and sellers.

buyers and sellers.

The nature of demand indicates that as the price of a good increases: Select one: a.suppliers wish to sell less of it. b.buyers desire to purchase less of it. c.more of it is desired. d.more of it is produced.

buyers desire to purchase less of it.

When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right. Select one: a.costs of production fall b.equilibrium is achieved c.there is a population increase d.prices rise

costs of production fall

A 10 percent increase in the price of soda leads to a 20 percent increase in the quantity of iced tea demanded. It appears that: Select one: a.elasticity of demand for soda 0.5 and is inelastic. b.cross-price elasticity of demand for soda is -0.5. c.cross-price elasticity of demand for iced tea is -2. d.elasticity of demand for iced tea is 2 and is elastic.

cross-price elasticity of demand for iced tea is -2.

A 10 percent decrease in the price of potato chips leads to a 30 percent increase in the quantity of soda demanded. It appears that: Select one: a.elasticity of demand for potato chips is 3. b.elasticity of demand for potato chips is 3. c.elasticity of demand for soda 3. d.cross-price elasticity of demand for soda is -3.

cross-price elasticity of demand for soda is -3.

The labor ____________ curve(s) will shift _______________ if there is an increase in productivity or an increase in the demand for the final product. Select one: a.supply; left b.demand; right c.demand; left d.supply; right

demand; right

The law of ____________________________ explains why people and societies rarely make all-or-nothing choices. Select one: a.marginal analysis b.utility c.consumption d.diminishing marginal utility

diminishing marginal utility

The most common pattern for marginal utility is ____________________. Select one: a.a budget constraint model b.substitute consumption c.diminishing marginal utility d.a long-term perspective theoretical model

diminishing marginal utility

In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers. Select one: a.modern economy b.task economy c.interconnected economy d.division of labor

division of labor

A price cut will increase the total revenue a firm receives if the demand for its product is: Select one: a.unit elastic. b.inelastic. c.elastic. d.unit inelastic.

elastic

Demand is said to be ___________ when the quantity demanded is very responsive to changes in price. Select one: a.independent b.unit elastic c.inelastic d.elastic

elastic

Supply is said to be ____________ when the quantity supplied is very responsive to changes in price. Select one: a.elastic b.independent c.inelastic d.unit elastic

elastic

The government wants to make medicare benefits available to more people, but to achieve this goal, it needs to make cuts in the existing medicare budget. The two areas where they are considering cuts are non-essential elective surgery and 6-12 month mental health care programs. Applying the concept of diminishing marginal utility, the budget cuts should be made for spending on: Select one: a.mental health therapy due to its higher marginal return rate. b.elective surgery due to its lower marginal return rate. c.neither can be compared by measuring marginal utility. d.both programs, which have the same marginal return rate.

elective surgery due to its lower marginal return rate.

If the supply curve for a product is horizontal, then the elasticity of supply is: Select one: a.greater than 1 but less than infinity. b.equal to zero. c.equal to 1. d.equal to infinity.

equal to infinity.

If the supply curve for a product is vertical, then the elasticity of supply is: Select one: a.equal to 1. b.equal to zero. c.greater than 1 but less than infinity. d.equal to infinity.

equal to zero.

The ___________ is the only price where quantity demanded is equal to quantity supplied. Select one: a.market price b.vertical axis intercept c.equilibrium price d.horizontal axis intercept

equilibrium price

In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made. Select one: a.business sector b.market c.firm d.government

government

A perfectly elastic supply curve is: Select one: a.vertical. b.horizontal. c.downward sloping to the left. d.upward sloping to the right.

horizontal

The demand schedule for a good: Select one: a.indicates the quantities that suppliers will sell at various market prices. b.indicates the quantities that will be purchased at alternative market prices. c.indicates the quantity that people will buy at the prevailing price. d.is determined primarily by the cost of producing the good.

indicates the quantities that will be purchased at alternative market prices.

The key assumption that accompanies the use of numbers for measuring utility is that: Select one: a.utility can be perfectly measured. b.individuals choose based on their preferences. c.people make consumption decisions. d.utility cannot be measured by an outside party.

individuals choose based on their preferences.

Demand is said to be _____________ when the quantity demanded is not very responsive to changes in price. Select one: a.elastic b.inelastic c.unit elastic d.independent

inelastic

When economists are sketching examples of demand and supply, it is common to sketch a demand or supply curve that is close to vertical, and then to refer to that curve as _________. Select one: a.income elasticity b.unitary elasticity c.elastic d.inelastic

inelastic

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________. Select one: a.market equilibrium b.income gap c.law of demand d.price model

law of demand

If a firm faces ________________________, while the prices for the output the firm produces remain unchanged, a firm's profits will increase. Select one: a.higher demand b.a shift in demand c.equilibrium d.lower costs of production

lower costs of production

A 10 percent increase in income leads to a 15% decrease in the quantity of macaroni and cheese demanded but no change in the price of macaroni and cheese. From this information, we can assume: Select one: a.macaroni is an inferior good and price elasticity of supply is equal to zero. b.macaroni is a normal good and price elasticity of demand is greater than 1. c.macaroni is an inferior good and price elasticity of demand is less than 1. d.macaroni is an inferior good and price elasticity of supply is infinite.

macaroni is an inferior good and price elasticity of supply is infinite.

As a person receives more of a good, the _______________ from each additional unit of the good declines. Select one: a.sunk costs b.utility c.marginal utility d.budget constraint

marginal utility

The step-by-step process of finding the choice with highest total utility involves a comparison of the: Select one: a.marginal utility gained and lost from different choices along the budget constraint. b.household consumption choice budget and the labor-leisure budget using an utilimometer. c.budget constraint and low-income housing expenses. d.various categories of economic proverbial wisdom.

marginal utility gained and lost from different choices along the budget constraint.

The basic difference between macroeconomics and microeconomics is that: Select one: a.macroeconomics is concerned with groups of individuals while microeconomics is concerned with single countries. b.microeconomics looks at the forest (aggregate markets) while macroeconomics looks at the trees (individual markets). c.microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets). d.macroeconomics is concerned with generalization while microeconomics is concerned with specialization.

microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets).

The demand curve for a typical good has a: Select one: a.negative slope because consumer incomes fall as the price of the good rises. b.inverse slope because as the price goes up, the good has more profitability. c.negative slope because some consumers switch to other goods as the price rises. d.negative slope because the good has less "snob appeal" as its price falls.

negative slope because some consumers switch to other goods as the price rises.

Many economists believe that the trend toward greater wage inequality across the U.S. economy was primarily caused by _____________. Select one: a.new technologies b.the recession c.inflation d.the rise of global markets

new technologies

Attending college is a case where the ________________ exceeds the monetary cost. Select one: a.opportunity cost b.marginal utility c.budget constraint d.marginal analysis

opportunity cost

The elasticity of supply is defined as the ________ change in quantity supplied divided by the _______ change in price. Select one: a.total; percentage b.percentage; marginal c.marginal; percentage d.percentage; percentage

percentage; percentage

Philosophers draw a distinction between ___________________, which describe the world as it is, and normative statements, which describe how the world should be. Select one: a.negative statements b.utilitarianism c.tradeoffs d.positive statements

positive statements

As a general rule, utility-maximizing choices between consumption goods occur where the: Select one: a.rise in income has created the greatest utility. b.price ratio and marginal utilities ratio of two goods is equal. c.constraints on budget expenditures has fallen substantially. d.higher-income households have the greatest satisfaction.

price ratio and marginal utilities ratio of two goods is equal.

The downward slope of the demand curve again illustrates the pattern that as _____________ rises, _________________ decreases. Select one: a.quantity demanded, price b.price, quantity supplied c.quantity supplied, quantity demanded d.price, quantity demanded

price, quantity demanded

A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and ____________, shown on the horizontal axis. Select one: a.quantity demanded b.demand c.quantity d.quantity supplied

quantity

A demand curve shows the relationship between price and _________________ on a graph. Select one: a.quantity produced b.costs c.quantity demanded d.economies of scale

quantity demanded

_________________ refers to the total number of units that are purchased at that price. Select one: a.supply b.quantity c.quantity demanded d.market quantity

quantity demanded

When economists talk about supply, they are referring to a relationship between price received for each unit sold and the _________________. Select one: a.market price b.quantity supplied c.demand schedule d.demand curve

quantity supplied

A straightforward example of a _______________, often used for simplicity, is the interest rate. Select one: a.rate of return b.price ceiling c.price floor d.financial investment

rate of return

The price elasticity of demand measures the: Select one: a.responsiveness of quantity demanded to a change in quantity supplied. b.responsiveness of quantity demanded to a change in price. c.responsiveness of price to a change in quantity demanded. d.responsiveness of quantity demanded to a change in income.

responsiveness of quantity demanded to a change in price.

A more efficient means of processing algae to produce an anticancer drug is discovered. As a result, the supply curve for the drug will: Select one: a.shift to the left, increasing the price of the drug. b.shift to the left, decreasing the price of the drug. c.shift to the right, increasing the price of the drug. d.shift to the right, decreasing the price of the drug

shift to the right, decreasing the price of the drug

Garth inherited $25,000. He needs to decide now much to spend now and how much to save for later. If he saves the money, then he can earn 15% interest on the total before he spends it. Using the information about his marginal utility in the table below, Garth should: Present Consumption Marginal Utility from Present Consumption Future Consumption Marginal Utility from Future Consumption 0 - 0 - $5,000 500 $5,750 900 $10,000 400 $11,500 800 $15,000 300 $17,250 700 $20,000 200 $23,000 600 Select one: a.spend nothing now and $28,750 in the future b.spend $5,000 now and $22,250 in the future c.spend $15,000 now and $13,500 in the future d.spend $10,000 now and $16,750 in the future

spend nothing now and $28,750 in the future

As the _____________ complement for high-skill labor becomes cheaper, the demand curve for high-skill labor will shift to the right. Select one: a.market b.low-skill labor c.lower wage d.technology

technology

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is: Select one: a.the benefit to his grades from studying for an hour. b.nothing, because he had a free pass into the sports complex to play basketball. c.the increase in skill he obtains from playing basketball for that hour. d.nothing, because he enjoys playing basketball more than studying.

the benefit to his grades from studying for an hour.

In a discussion of economics, which of the following would exert the most influence on an individual firm's decision to hire workers? Select one: a.the firm's income b.household income c.wage levels d.the macroeconomy

the macroeconomy

Which of the following is considered to be a tell-tale signal that the point with the highest total utility has been found? Select one: a.the marginal utility per dollar is the same for both goods b.the demand curves are flatter reducing quantity c.the quantities demanded change so total utility rises d.the marginal utility per dollar is controlled by trade-offs

the marginal utility per dollar is the same for both goods

Price elasticity of demand is defined as: Select one: a.the slope of the demand curve divided by the price. b.the percentage change in quantity demanded divided by the percentage change in price. c.the percentage change in price divided by the percentage change in quantity demanded. d.the slope of the demand curve.

the percentage change in quantity demanded divided by the percentage change in price.

Whenever there is a surplus at a particular price, the quantity sold at that price will equal: Select one: a.the quantity demanded at that price. b.the quantity supplied minus the quantity demanded. c.(quantity demanded plus quantity supplied)/2. d.the quantity supplied at that price.

the quantity demanded at that price.

Whenever there is a shortage at a particular price, the quantity sold at that price will equal: Select one: a.the quantity supplied minus the quantity demanded. b.(quantity demanded plus quantity supplied)/2. c.the quantity supplied at that price. d.the quantity demanded at that price.

the quantity supplied at that price.

If new manufacturers enter the computer industry, then (ceteris paribus): Select one: a.the supply curve shifts to the right. b.the demand curve shifts to the left. c.some established manufacturers must exit the industry. d.the supply curve shifts to the left.

the supply curve shifts to the right.

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of: Select one: a.both the supply and demand curves. b.the supply curve. c.the demand curve, as consumers try to economize because of the shortage. d.the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.

the supply curve.

If cola and iced tea are good substitutes for consumers, then it is likely that: Select one: a.their price elasticities of supply are less than one . b.their income elasticities are less than zero. c.their cross price elasticities are greater than zero. d.their price elasticities of demand are less than one

their cross price elasticities are greater than zero.

When quantity demanded decreases in response to a change in price: Select one: a.there is a movement down along the demand curve. b.the demand curve shifts to the right. c.there is a movement up along the demand curve. d.the demand curve shifts to the left.

there is a movement up along the demand curve.

The typical pattern revealed in a budget constraint model shows that as the quantity consumed rises, Select one: a.total utility decreases, but marginal utility rises. b.total utility rises, but marginal utility falls. c.marginal utility increases. d.total utility decreases.

total utility rises, but marginal utility falls.

Demand is said to be __________ when the quantity demanded changes at the same proportion as the price. Select one: a.independent b.elastic c.inelastic d.unit elastic

unit elastic

Scarcity exists because of: Select one: a. the market mechanism. b. specialization and division of labor. c. the allocation of goods by prices. d. unlimited wants and limited resources.

unlimited wants and limited resources

Scarcity exists because of: Select one: a.the allocation of goods by prices. b.specialization and division of labor. c.unlimited wants and limited resources. d.the market mechanism.

unlimited wants and limited resources

But nearly all supply curves share a basic similarity: they slope _______________. Select one: a.down from right to left b.up from right to left c.down from left to right d.up from left to right

up from left to right

In economics, the demand for a good refers to the amount of the good that people: Select one: a.will buy at alternative income levels. b.will buy at various prices. c.need to achieve a minimum standard of living. d.would like to have if the good were free.

will buy at various prices.

The marginal utility of two goods changes ______________. Select one: a.if the mother controls the household budget b.with the quantities consumed c.if they are intertemporal choices d.for the better, if taxes are imposed

with the quantities consumed