Econ 2113 Rupp Test 1
A competitive market is a market in which
no individual buyer or seller has any significant impact on the market price
Which of the following statements best characterizes a basic difference between market economies and centrally-planned economies?
none of the above
High-school athletes who skip college to become professional athletes
Understand that the opportunity cost of attending college is very high
Refer to figure 1-8. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for disposable ballpoint pens?
an increase in the price of ink
One advantage market economies have over centrally-planned economies is that market economies
are more efficient
The most obvious benefits of specialization and trade is that they allow us to
consume more goods than we otherwise would be able to consume
Market failure can be caused by
externalities and market power
The law of demand states that, other things equal, an increase in
price causes quantity demanded to decrease
A direct or positive relationship exists between a country's
productivity and its standard of living
A decrease in the price of a good will
increase quantity demanded
When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good
increases as more of the good is produced
An increase in the overall level of prices in an economy is referred to as
inflation
Prices direct economic activity in a market economy by
influencing the actions of buyers and sellers
An economy's production of two goods is efficient if
it is impossible to produce more of one good without producing less of the other
The production possibilities frontier is a graph that shows the various combinations of output that an economy can possibly produce given the available factors of production and
the available production technology
Refer to figure 1-1. This economy has the ability to produce at which points?
K, M, N
Normative statements are
claims about how the world should be
Specialization and trade are closely linked to
comparative advantage
Macroeconomics is the study of
economy-wide phenomena
Refer to table 1-4. Faldas opportunity cost of one yard of cloth is
2/3 bushel of wheat and Varick's opportunity cost of one yard of cloth is 2/5 bushel of wheat
Refer to Table 1-6. The opportunity cost of 1 plate for Huang is
3 parasol
Refer to table 1-4. Faldas opportunity cost of one bushel of wheat is
3/2 yards of cloth and Varick's opportunity cost of one bushel of wheat is 5/2 yards of cloth
In a market economy, supply and demand are important because they
Can be used to predict the impact on the economy of various events and policies
Refer to figure 1-1. Unemployment could cause this economy to produce at which points?
M
Mike and Sandy are two woodworkers who both make tables and chairs. In one month, Mike can make 4 tables or 20 chairs, while Sandy can make 6 tables or 18 chairs. Given this we know that
Mike has an absolute advantage in chairs.
In a competitive market, the price of a product
None of the above are correct
Refer to figure 1-5. The fact that the line slopes downward reflects the fact that
Peru faces a trade-off between producing emeralds and producing rubies
If Shawn can produce more donuts in one day than Sue can produce in one day, then
Shawn has an absolute advantage in the production of donuts
If labor in mexico is less productive than labor in the U.S. in all areas of production
Then both Mexico and the U.S. can benefit
Refer to table 1-3. Which of the following represents Zimbabwe's and Portugal's production possibilities frontiers when each country has 60 minutes of machine time available.
Zimbabwe: 6 hairbrushes, 20 toothbrushes and Portugal: 10 hairbrushes and 12 toothbrushes
Refer to figure 1-7. The movement from D to D' could be caused by
a decrease in the price of a substitute
If toast and butter are complements, then which of the following would increase the demand for toast?
a decrease in the price of butter
Refer to figure 1-8. Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for winter coats?
a decrease in the price of zippers and snaps
Refer to figure 1-2. Which of the following would most likely have caused the production possibilities frontiers to shift outward from A to B?
a general technological advance
Which of the following concepts cannot be illustrated by the production possibilities frontier?
equality
If Germany chooses to engage in trade, it
can benefit by trading with any other country
Any point on a country's production possibilities frontier represents a combination of two goods that an economy
can produce using all available resources and technology
An early frost in the vineyards of Napa valley would cause a(n)
decrease in the supply of wine, increasing the price
Efficiency
refers to how much a society can produce with its resources. Equality refers to how evenly the benefits from using resources are distributed between members of society
An increase in quantity demanded
results in a movement downward and to the right along a demand curve
For most students, the largest single cost of a college education is
the wages given up to attend school
The supply of a good or service is determined by
those who sell the good or service