Econ 202 test 1 Cheng
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To obtain the market demand curve for a product, sum the individual demand curves
When the quantity grows rapidly, inflation is a predictable consequence
What is an example of a positive, as opposed to normative, statement
A change in the price of the good or service
What would not shift the demand curve for a good or service
Understand that the opportunity cost of attending college is very high
High School athletes who skip college to become pro athletes
there is movement along a given demand curve
When the price of a good or service changes
Buyers and sellers are price takers
A competitive market is a market in which
the total quantity supplied at all possible prices
A market supply curve shows
the price of a good or service that is being supplied
A movement along the supply curve might be caused by a change in
decrease in quantity demand
A movement upward and to the left along a demand curve is called an
Marginal benefit is greater than the marginal cost
A rational decision maker takes an action only if the
of an increase in price gives producers motivation to supply a larger quantity
A supply curve slopes upward because
Efficiency and Equality
A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. In other words, the society faces trade-off between
Can be useful in helping economists understand the complex world of international trade between many countries and many goods
An economic theory about international trade that is based on the assumption that there are only 2 countries trading two goods
Demand, Supply
Buyers determine ______________ and sellers determine ____________
a decrease in the price of butter
If toast and butter are compliments, then which of the following would increase the demand for toast
Sum the quantities that individual firms are willing and able to supply at that price
In a market, to find the total amount supplied at a particular price, we must
The enjoyment she would have received had she watched the video
Denise decides to spend 3 hours working overtime rather than watching a video with her friends. She earns $10 an hour. Her opportunity cost of working is
make a complex world easier
Economist make assumptions to
group of buyers and sellers
For a market for a good or service to exist, there must be a
shifted to the left
Ford Motor company announces that the next month it will offer $3,000 rebates on new Mustangs. As a result of this information, todays curve for Mustangs
the buyer will make purchases from other seller
If a seller in a competitive market chooses to charge more than the going price, then
people face trade-offs
Mitch has $100 to spend and wants to buy either a new amplifier for his guitar or a new mp3 player to listen to music while working out. Both the amplifier and the mp3 player cost $100 so he can only buy one. This illustrates the basic concept that
make assumptions
One thing economist do to help them understand how the real world works is
if the policy changes the cost or benefits of their behavior
People are likely to respond to a policy change
The marginal benefit of an extra diamond far exceeds the marginal benefit of an extra water bottle
People are willing to pay more for a diamond than for a bottle of water because
Resources are specialized, that is, some are better at producing particular goods rather than other goods
Production possibilities frontiers are usually bowed outward. This is because
for soup falls when income rises
Soup is an inferior good if the demand
The nation is not using all available resources
Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that
a decrease in demand for chocolate pudding
Suppose scientists provide evidence that chocolate pudding increases the bad levels of cholesterol who eat it. We would expect to see
Substitute goods
Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are
People respond to incentives
Suppose the state of Tennessee passes a law that increases the tax on alcoholic beverages. As a result, residents in Tennessee start purchasing their alcohol in surrounding states. Which of the following principles does this best illustrate
The total benefit Claire gets from purchasing 3 pairs of flip flops minus the total benefit she gets from purchasing 2 pairs of flip flops
The marginal benefit Claire gets from purchasing a third pair of flip flops is
the sum of quantities demanded by all the buyers at each price of the good
The market demand curve represents the
shifted to the left
When quantity demanded decreases at every possible price, the demand curve has
shifted to the left
When quantity supplied decreases at every possible price, we know that the supply curve has
all non-price determinants of demand are held constant
When we move along a given demand curve
A change in the price of the good or service
Which of the following changes would not shift the supply curve for a good or service
Kendra must decide between going to Colorado or Cancun for spring break
Which of the following statements best represents the principle represented by the adage, "There is no such thing as free lunch?"
Compare the cost of staying one more semester, or the benefits of staying one more semester
You are considering staying in college another semester so that you can complete a major in econ. In deciding whether or not to stay you should
increases as more of the good is produced
when a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good
