Econ 203 test 1 review

D. Means that price has changed and there is movement along the demand curve

A change in demand means there has been a shift in the demand curve, and a change in quantity demanded: A. Results from a change in price of other goods B. Means a shortage or surplus will result from holding prices constant C. Also means demand has shifted D. Means that price has changed and there is movement along the demand curve

A. Choices have to be made about how resources are used.

A consequence of the economic problem of scarcity is that: A. Choices have to be made about how resources are used. B. There is never too much of any good or service produced C. The production of goods and services must be controlled by the government. D. The production-possibilities curve is bowed outward.

B. Land, labor, or capital is bought and sold

A factor market is any place where: A. Finished goods are bought and sold B. Land, labor, or capital is bought and sold C. Finished services are bought and sold D. Factories are bought and sold

B. Decrease and quantity to decrease

A leftward shift of the market demand curve for HDTVs, Ceteris paribus, causes equilibrium price to: A. Increase and quantity to decrease B. Decrease and quantity to decrease C. Increase and quantity to increase D. Decrease and quantity to increase

B. The same slope throughout the line

A linear function can be distinguished by: A. The continuous change in its slope B. The same slope throughout the line C. The changing relationship between the 2 variables D. A shift in the function

C. A higher price of the good

A lower quantity demanded of a good reflects, ceteris paribus: A. Lower income B. A downward shift of the supply curve C. A higher price of the good D. Fewer units actually purchased

B. Product market

A market in which final goods and services are exchanged is a: A. Public-goods market B. Product market C. Factor market D. Labor market

B. Utilizies both market and nonmarket signals to allocate goods and services

A mixed economy: A. Is justified by the superiority of laissez fairs over government intervention B. Utilizes both market and nonmarket signals to allocate goods and services C. Relies on the use of central planning by private firms rather than the government D. Is one that allows trade with other countries

D. The full employment of resources to achieve a particular combination of goods and services

A point on a nations production-possibilities curve represents: A. An undesirable combination of goods and services B. Combinations of production that are unattainable, given current technology and resources C. Levels of production that will cause both unemployment and inflation D. The full employment of resources to achieve a particular combination of goods and services

B. Maximum combinations of goods and services an economy can produce given its available resources and technology

A production-possibilities curve indicates the: A. Combinations of goods and services an economy is actually producing. B. Maximum combinations of good and services an economy can produce given its available resources and technology C. Maximum combinations of good and services an economy can produce given unlimited resources. D. Average combinations of goods and services an economy can produce given its available resources and technology

D. Higher equilibrium quantity

A rightward shift in a demand curve and a rightward shift in a supply curve both result in a: A. Lower equilibrium price B. Lower equilibrium quantity C. Higher equilibrium price D. Higher equilibrium quantity

D. Supply because of a change in a non-price determinant

A shift in supply is defined as a change in: A. Price B. Quantity supplied because of a change in price C. Equilibrium quantity D. Supply because of a change in a non-price determinant

Social mobility

Ability to move up or down the earnings distribution (U.S has less social mobility than most rich countries)

B. Increases as it's price falls, Ceteris paribus

According to the law of demand, during a given period of time, the quantity of a good demanded: A. Increases as it's prices rises; ceteris paribus B. Increases as it's prices fall; ceteris paribus C. Decreases as it's price falls; ceteris paribus D. Does not change when price changes

C. Greater production of one good requires increasingly larger sacrifices of other goods

According to the law of increasing opportunity costs: A. Greater production leads to greater inefficiency B. Greater production means factor prices rise C. Greater production of one good requires increasingly larger sacrifices of other goods D. Higher opportunity costs induce higher output per unit of input

law of increasing opportunity cost

As more units of a good are produced, the opportunity cost of each additional unit increases

C. Decrease and the equilibrium quantity of ice cream to increase

Assume milk is used to produce ice cream. Ceteris paribus, a decrease in the price of milk will cause the equilibrium price of ice cream to: A. Increase and the equilibrium quantity of ice cream to increase B. Increase and the equilibrium quantity of ice cream to decrease C. Decrease and the equilibrium quantity of ice cream to increase D. Decrease and the equilibrium quantity of ice cream to decrease

C. Decrease and the equilibrium quantity of jelly to decrease

Assume peanut butter and jelly are complements. Ceteris paribus, an increase in the price of peanut butter will cause the equilibrium price for jelly to: A. Increase and the equilibrium quantity of jelly to decrease B. Increase and the equilibrium quantity of jelly to increase C. Decrease and the equilibrium quantity of jelly to decrease D. Decrease and the equilibrium quantity of jelly to increase

A. An increase in the demand for pens

Assume that pencils and pens are substitutes. If the price of pencils rise, then we will see: A. An increase in the demand for pens B. A decrease in the demand for pens C. An increase in the supply of pens D. A decrease in the supply of pens

A. The supply curve for monkey wrenches will shift to the left

Assume that steel is used to produce monkey wrenches. Ceteris paribus, if the price of steel rises, then: A. The supply curve for monkey wrenches will shift to the left B. The supply curve for monkey wrenches will shift to the right C. There will be a leftward movement along the initial supply curve for monkey wrenches D. There will be a rightward movement along the initial supply curve for monkey wrenches

B. On the curve

At which point is society producing the most output possible with the available resources and technology?

D. Final goods that are used to produce other goods & services

Capital, as economists use the term, refers to: A. The money needed to start a new business B. The costs of operating a business C. Shares of stock issued by businesses D. Final goods that are used to produce other goods and services

C. A decrease in the demand for airline tickets

Ceteris paribus, if buyers expect the price of airline tickets to fall in the future, then right now there should be: A. An increase in the demand for airline tickets B. A decrease in the supply of airline tickets C. A decrease in the demand for airline tickets D. No change in the supply of or demand for airline tickets because the price is not changing right now

B. A decrease in the supply of corn syrup

Ceteris paribus, if the subsidies given to corn syrup producer decrease, then we can expect: A. A decrease in the demand for corn syrup B. A decrease in the supply of corn syrup C. An increase in the demand for corn syrup D. An increase in the supply of corn syrup

A. A decrease in the price of perfume

Ceteris paribus, which of the following is most likely to cause an increase in the quantity demanded of perfume? A. A decrease in the price of perfume B. A decrease in tastes for perfume C. An increase in income D. An increase in the price of electricity

b. expectations

Ceteris paribus, which of the following is most likely to shift both the demand and the supply curve? A. Technology B. Expectations C. The price of the good itself D. Income

B. Straight line going downward

Choose the letter of the curve that best represents a production-possibilities curve for 2 goods for which are constant opportunity costs

Demand

Entire curve of table

Positive economic analysis

Focuses on "what is" and is based on facts. Can be "verifiable" like true or false

Normative economic analysis

Focuses on "what should be" & based on opinions or judgements. Is NOT verifiable

A. John Maynard Keynes

Greater regulation to correct the imbalances in the economy, as well government intervention to maintain full employment was associated primarily with the work of: A. John Maynard Keynes B. Adam Smith C. Karl Marx D. Ronald Reagan

350 - 500 years

How long (years) does it take for descendants to have their income become average?

C. It can produce more of one good without giving up some of another good

If an economy is producing inside the production-possibilities curve, then: A. There is full employment of resources B. It is operating efficiently C. It can produce more of one good without giving up some of another good D. There are not enough resources available to produce more output

C. The market mechanism has failed to achieve social efficiency

If market signals result in pollution beyond the optimal level then: A. The economy experiences government failure B. A laissez-fairs approach will reduce the level of pollution C. The market mechanism has failed to achieve social efficiency D. The government is allocating resources inefficiently

D. Increasing opportunity costs will occur with greater tank production

If the United States decides to convert automobile factories to tank production, as it did during World War II, but finds that some auto manufacturing facilities are not well suited to tank production, then: A. The production-possibilities curve between tanks and automobiles will appear as a straight line B. The production-possibilities curve between ranks and automobiles will shift outward C. Decreasing opportunity costs will occur with greater automobile production D. Increasing opportunity costs will occur greater rank production

A. There would be a surplus of 40 units

If the actual market price were fixed at $15 per unit in figure 3.2:

D. There would be a shortage of 20 units

If the actual market price were fixed at $6 per unit in figure 3.3:

B. More people will die from cancer

If the government places a binding price ceiling on cancer-treating drugs, then: A. Fewer people will die from cancer B. More people will die from cancer C. There will be no change in the number of people who die from cancer D. The supply of cancer-treating curves will increase

A. Price will increase until it reaches the equilibrium price

If the quantity demanded of a good is greater than the quantity supplied of the good at the current price, then: A. Price will increase until it reaches the equilibrium price B. The demand curve will shift to the left to create equilibrium C. The supply curve will shift to the right to create equilibrium D. There is a surplus of the good

A. The demand curve will shift to the right

If there are only 2 airlines that fly between Dallas and New Orleans, what will happen in the market for one airline if the other one goes out of business? A. The demand curve will shift to the right B. The demand curve will shift to the left C. There will be a movement to the right along the initial demand curve D. There will be a movement to the left along the initial demand curve

B. The demand for MP3 players increased from 2007 to 2008

In 2007 a company sold 35,000 MP3 players at $150 each. In 2008 the same company sold 40,000 MP3 players at $170 each. This information suggests that: A. The supply of MP3 players increased from 2007 to 2008 B. The demand for MP3 players increased from 2007 to 2008 C. The price of MP3 players increased because the costs of production increased from 2007 to 2008 D. From 2007 to 2007 the demand curve for MP3 players was upward sloping because of improved technology

A. Increases

In Figure 1.9, as you move up the curve from Point J toward Point M, the slope:

B. 0.80

In Figure 1.9, the slope of the line between Points K & L is:

C. There would be a shortage

In Table 3.1, if government held the price at $3:

C. Experience a shortage of 22 units

In Table 3.1, if the price is $2 the market will:

D. Are willing to pay the highest price

In a market economy, the people who receive the goods and services that are produced are those who: A. Need the goods and services the most B. Have the most political power C. Want the goods and services the most D. Are willing to pay the highest price

B. Profits

In a market economy, which of the following is an incentive for producers to produce efficiently? A. Government laws and regulations B. Profits C. The production-possibilities curve D. The public's welfare

C. Society's desires exceed the want-satisfying capability of the resources available to satisfy those desires

In economics, scarcity means that: A. A shortage of a particular good will cause the price to fall. B. A production-possibilities curve cannot accurately represent the trade off between 2 goods. C. Society's desires exceed the want-satisfying capability of the resources available to satisfy those desires. D. The market mechanism has failed.

A. Point F

In figure 1.6, at which of the following points would the opportunity cost of producing one more car be the lowest?

D. Through trail and error

In most markets, the equilibrium price is achieved: A. Through detailed databases B. Using an equilibrium price formula C. Through government mandate D. Through trial and error

A. Factors of production; final goods and services

Individual consumers supply _______ and purchase ________ A. Factors of production; final goods and services B. Intermediate goods; final goods and services C. Final goods and services; factors of production D. National goods and services; factors of production

Her opportunity cost of buying candy bars

Jessie's demand schedule for candy bars indicates: A. Her opportunity cost of buying candy bars B. How much she likes candy bars C. How many candy bars she will actually buy D. Why she likes candy bars

A. The demand for bottled water by individuals

Microeconomics is concerned with issues such as: A. The demand for bottled water by individuals B. The level of inflation in the economy C. Maintaining a strong level of economic growth D. All of the choices

A. 4

On the basis of your calculations in Table 1.3, in the production range of 1 to 2 combs the opportunity cost of producing 1 more comb in terms of brushes is:

B. 7.0

On the basis of your calculations in Table 1.3, in the production range of 2 to 3 combs the opportunity cost of producing 1 more comb in terms of brushes is:

D. The alternative that must be given up in order to get something else

Opportunity cost is: A. Only measured in dollars and cents B. The dollar cost of society of producing the goods C. The difficulty associated with using one good in place of another D. The alternative that must be given up in order to get something else

C. Market participation allows individuals to specialize and, ultimately, consume more

People benefit by participating in the market because: A. Resources are no longer limited B. There are always participants in the market that are more efficient than you are in production C. Market participation allows individuals to specialize and, ultimately, consume more D. Participants in the market do not have to make choices

Law of demand

Price increases, quantity demanded decreases or vice verse

C. Point N

Refer to Figure 1.7, which of the following points are unattainable?

B. Can move to points D, G, or J

Refer to Figure 1.7. If this economy is currently producing at Point F, then by employing more resources this economy:

B. KL units of clothing

Refer to Figure 1.7. The benefit of producing at Point G rather than point D is:

D. Points D, G, & J

Refer to Figure 1.7. This economy will achieve efficiency in production at:

A. A

Steel, the government introduces environmental restrictions on the dumping of wastes from producing steel.

C. Shortages of building materials and a slower recovery from the storm

Suppose a hurricane hits Florida causing widespread damage to houses and businesses. The governor of Florida places a price ceiling on all building materials to keep the prices reasonable. Which of the following is the most likely result?

C. The quantity increases but the change in the price cannot be determined

Suppose both the demand and supply of salsa increase (although not necessarily by the same amount). What can we conclude about changes in the price and quantity of salsa? A. Both the price and quantity increase B. The price increases but the change in the quantity can not be determined C. The quantity increases but the change in the price cannot be determined D. Both the price and quantity decrease

C. Other things remain equal

The Latin phrase "Ceteris paribus" means: A. The production-possibilities curve never shifts B. Laissez faire C. Other things remain equal D. The invisible hand

A. The market supply curve intersects the market demand curve

The equilibrium price in a market is found where: A. The market supply curve intersects the market demand curve B. The market supply curve intersects the y-axis C. The market demand curve intersects the y-axis D. The market supply curve intersects the x-axis

A. Scarcity

The fact that there are too few resources to satisfy all our wants is attributed to: A. Scarcity B. Greed C. Shortages D. Lack of money

D. The set of goods and services that maximizes their utility

The goal of the consumer in a market economy is to use his/her limited income to buy: A. The greatest number of goods and services possible B. The goods and services that maximize profits for businesses C. Those goods and services with the lowest prices D. The set of goods and services that maximizes their utility

B. Supply curves are upward-sloping to the right

The laws of supply implies that: A. Supply curves are flat B. Supply curves are upward-sloping to the right C. Supply curves are downward-sloping to the right D. A change in a determinant of demand shifts the supply curve

D. Works because prices serve as a means of communication between consumers and producers

The market mechanism: A. Is not a very efficient means of communicating consumer demand to the producers of goods and services B. Works through central planning of government C. Eliminates market failures created by government D. Works because prices serve as a means of communication between consumers and producers

D. The best alternative use of your time.

The opportunity cost of studying for an economics test is: A. Negative, since it may improve your grade B. Zero, Bc you knew when you registered for the class that studying would be required C. The money you spent on tuition for the class D. The best alternative use of your time

C. Potential output

The points on a production-possibilities curve show: A. Desired output B. Actual output C. Potiential output D. All of the above

A. Bring the factors of production together and assume the risk of production

The role of the entrepreneur in an economy is to: A. Bring the factors of production together and assume the risk of production B. Work with government planners to determine what goods are produced C. Arrange bank financing for the owners of new businesses D. Ensure full employment of labor

Change in y coordinates between two points divided by the change in their x coordinates

The slope of a curve at any point is given by the formula, the: A. Change in Y coordinates between 2 points divided by the change in their X coordinates B. Change in X coordinates between 2 points divided by the change in their Y coordinates C. Percentage change in Y coordinates between 2 points divided by the percentage change in their X coordinates D. Percentage change in X coordinates between 2 points divided by the percentage change in their Y coordinates

Add the quantities demanded for each individual demand schedule horizontally

To calculate market demand we: A. Add the quantities demanded for each individual demand schedule horizontally B. Add the quantities demanded for each individual demand schedule vertically C. Find the average quantity demanded at each price D. Find the difference between the quantity demanded and the quantity supplied at each price

A. There is inefficient use of available resources

Using Figure 1.3, at Point A: (use the paper)

B. A decrease in the amount of capital available

Using Figure 1.4, if an economy is currently producing on PP2, which of the following would shift the production-possibilities curve toward PP1?

D. An efficient use of resources

Using Figure 1.6, if an economy has the capacity to produce represented by PP1 then point E represents:

1. WHAT to product with our limited resources 2. HOW to produce the goods and services we select 3. FOR WHOM goods and services are produced (involves inequality)

What are the 3 core questions for society?

20% of income

What does the top 1% receive in terms of income?

50% of income

What does the top 10% receive in terms of income?

Output divided by unit of work

What is the equation for productivity?

Y axis / X axis

What is the equation for slope

D. Producers reduce the level of output and reduce price

When a surplus exists for a product: A. Producers increase supply B. Consumers increase demand C. Government purchases decrease D. Producers reduce the level of output and reduce price

B. Getting the most goods and services from the available resources

When an economy is producing efficiently it is: A. Producing a combination of goods and services beyond the production-possibilities curve B. Getting the most goods and services from the available resources C. Experiencing decreasing opportunity costs D. Producing equal amounts of all goods

Econ growth is when resources and technology increase

When does economic growth occur?

C. The allocation of resources by the market is likely to be the best possible, given scarce resources and income constraints

When economists talk about "optimal outcomes" in the marketplace, they mean that: A. The allocation of resources by the market is perfect B. All the consumer desires are satisfied and business profits are maximized C. The allocation of resources by the market is likely to be the best possible, given scarce resources and income constraints D. Everyone who wants a good or service can have it

C. The mix of output to be produced, the resources to be used in the production process, and for whom the output is produced

When the market mechanism is allowed to operate freely, prices will determine: A. The mix of output to be produced and the resources to be used in the production process B. The resources to be used in the production process and for whom the output is produced C. The mix of output to be produced, the resources to be used in the production process, and for whom the output is produced D. For whom the output is produced and the mix of output to be produced

B. More teenagers enter the labor force

Which of the following events would allow the production-possibilities curve to shift outward? A. The economy's capital stock declines B. More teenagers enter the labor force C. Technology is lost D. People begin to retire at earlier ages

B. The prices of the factors of production

Which of the following is a determinant of supply? A. Consumer tastes or preferences B. The prices of the factors of production C. Income D. Number of buyers

D. Bureaucratic delays, required use of pollution-control technologies that are obsolete, and inefficient incentives

Which of the following is an example of government failure? A. Bureaucratic delays B. Required use of pollution-control technology that is obsolete C. Inefficient incentives D. Bureaucratic delays, required use of pollution-control technologies that are obsolete, and inefficient incentives

D. Jenny's wage rate rose and, in response, she decided to work more hours

Which of the following is not a macroeconomic statement? A. The unemployment rate for the United States rose to 5 percent in the last quarter B. The Federal Reserve lowered interest rates at their last meeting. C. Congress increased the minimum wage rate in January D. Jenny's wage rate rose and, in response, she decided to work more hours

A. Markets necessarily have a physical location

Which of the following statements about markets is not true? A. Markets necessarily have a physical location B. Markets have to have both a demand side and a supply side C. The 2 types of markets include the factor and product markets D. Every market transaction involves an exchange of dollars for goods or resources

B. A decrease in the size of the labor force

Which of the following will cause the production-possibilities curve to shift inward? A. An increase in population B. A decrease in the size of the labor force C. A technological advance D. An increase in knowledge

B. B

Which panel of figure 3.3 represents the changes in the market for cigarettes when the government increases subsidies for the production of tobacco and at the same time bans smoking in public buildings?

A. A

Which panel of figure 3.3 represents the changes in the market for textbooks when the cost of paper decreases and the government increases the number of student loans it grants?

Adam Smith

Who invented/came up with "the invisible hand" for the market?

D. Only those resources that are privately owned are counted as factors of production

With respect to factors of production, which of the following statements is NOT true? A. Factors of production are also known as resources B. In order to produce any good or service, it is necessary to have factors of production. C. Factors of production include land, labor, capital, and entrepreneurship. D. Only those resources that are privately owned are counted as factors of production.

Quantity demanded

quantity demanded at certain price