ECON 2302 EXAM 1

When a non (one word) determinant of demand changes, the demand curve shifts.

price

The process of assigning a good, a service, or a resource to one use instead of another describes ______

allocation

the quantity demanded will rise, all else held constant."

as the price of a good, service, or resource falls

When producers expect higher future prices, current supply shifts to the

left

demand"

price & quantity demanded

The subject of economics can be divided into two main categories: _____ and _____

"Blank 1: microeconomics or micro Blank 2: macroeconomics or macro"

Surplus

A situation in which the quantity supplied is greater than the quantity demanded at the current market price. Also called excess supply.

According to the law of diminishing marginal productivity, the marginal productivity of additional variable resources will eventually fall, all else held constant, if at least one input is ____

Blank 1: fixed or constant

On the supply side of the market, when the price of a good increases, the quantity supplied of the good _____.

Blank 1: increases or rises

Economics studies how individuals and businesses make decisions in a world of _______ resources.

Blank 1: scarce or limited

Any change in technology and the availability and the quality of resources are likely to affect the _____ that producers are willing and able to supply to the market at every price.

Quantity

"A tax on producers: Multiple choice question. increases the cost of producing. increases the quantity. lowers the price. decreases the cost of producing."

increases the cost of producing.

"All else held constant, if farmers receive a subsidy for their corn, then this would cause a Multiple Choice rightward shift in the current supply of corn. movement up along the current supply curve of corn. leftward shift in the current supply of corn. movement down along the current supply curve of corn."

rightward shift in the current supply of corn.

"Equilibrium occurs when: the total benefit equals the marginal cost. the marginal benefit equals the total cost. the total benefit equals the total cost. the marginal benefit equals the marginal cost."

the marginal benefit equals the marginal cost.

"In equilibrium: Multiple choice question. the quantity cannot change. the market is high. the price cannot change. the quantity supplied equals the quantity demanded."

the quantity supplied equals the quantity demanded.

"The marginal benefit of an activity can be found by calculating the change in: total costs of the level of the activity. total benefits of the level of the activity. total benefits as the level of the activity increases by one unit. total costs as the level of the activity increases by one unit."

total benefits as the level of the activity increases by one unit.

"A market cannot exist: Multiple choice question. if there is no government to regulate and control it. when prices do not change for long periods of time. without individuals and firms that are willing and able to buy a good. without other markets for comparison purposes."

without individuals and firms that are willing and able to buy a good.

"A surplus is sometimes called: Multiple choice question. excess price control. excess demand. excess supply. excess consumption."

excess supply.

When the government sets the price below market equilibrium, a _____ will result.

Shortage

_____ in trade causes individuals and nations to become interdependent.

Specialization

and her time studying economics the least. What is the opportunity cost of planting a garden? Deciding what to plant in the garden Studying economics Washing her car Planting her garden"

Washing her car

Define Marginal Decision Making

" The process of making choices in increments by evaluating the additional, or marginal, benefit against the additional, or marginal, cost of an action."

Labor as a resource is defined as all ______ and ______ activity devoted to producing goods and services.

"Blank 1: physical or manual Blank 2: mental"

Define Optimization

"The idea that people make choices in order to maximize the overall benefit, or utility, of an action subject to its cost

"Which is the broadest definition of a market? Multiple choice question. Any individual or business that consume or use goods and services. A group of buyers and sellers who exchange a good, service, or resource, not necessarily at a specific place. An institution engaged in the business of dealing with financial transactions such as loans and deposits. Any individual or business that consume or use goods and services."

A group of buyers and sellers who exchange a good, service, or resource, not necessarily at a specific place.

Each row of the production possibilities schedule illustrates the ________ amount of a good or a service that may be produced, given the production of the other.

Blank 1: maximum, most, highest, largest, greatest, or max

Combinations of production that fall inside the production possibilities frontier are ______ but not efficient.

Blank 1: possible, attainable, achievable, or feasible

The line (or curve) that represents the combinations of the two goods produced on the production possibilities frontier is a boundary between output levels that are _______ and output levels that are unattainable.

Blank 1: possible, attainable, achievable, or obtainable

"Martin has given himself an entertainment budget of $5 per week. He has decided that each week he will spend that $5 by either attending a matinee movie at his local theater or downloading five songs by one of his favorite artists. What is the non-monetary opportunity cost of seeing a movie this week? $5 One movie Five songs One movie and five songs"

By choosing to see a movie this week, Martin gives up the 5 songs he could have bought instead.

Define Optimal Level of Output

The level of output at which the marginal benefit of the last unit produced and consumed is equal to the marginal cost of that unit..

Define Decreasing Marginal Benefit

The negative relationship between the marginal benefit associated with the use of a good or service and the quantity consumed

"A change in quantity demanded can be described as: Multiple choice question. a shift in the supply curve that results from a change in the good's own price. a movement along the demand curve that results from a change in the good's own price. a movement along the supply curve that results from a change in the good's own price. a shift in the demand curve that results from a change in the good's own price."

a movement along the demand curve that results from a change in the good's own price.

When production is characterized by _______ opportunity costs, the resulting production possibilities frontier will be a straight line.

constant, equal, unchanging, or fixed

"If the marginal benefit of an activity exceeds the marginal cost of the activity (MB > MC), we should continue to increase output until MB < MC. discontinue production of output altogether. continue to increase output until MB = MC. continue to decrease output until MB = MC."

continue to increase output until MB = MC.

The quality of a(n) _______ model can be measured by how well it reflects reality and whether it gives us insights that can be used in the real world.

economic

"Consider the words "supply" and "production." Which of the following statements is true? Multiple choice question. "Production" refers to what is provided to the market, while "supply" refers to the quantity produced. The production quantity is the quantity supplied to the market. The quantity supplied is defined as the production quantity. "Supply" refers to what is provided to the market, while "production" refers to the quantity produced."

"Supply" refers to what is provided to the market, while "production" refers to the quantity produced.

Change (Shift) in Demand

A change in the quantity of a good, service, or resource demanded at every price. Graphically, an increase in demand is represented by a rightward shift of the demand curve, while a decrease in demand is represented by a leftward shift of the demand curve.

"When a nonprice determinant of supply changes what will be the effect on the market? Multiple choice question. A shift in the supply curve below the market price, but not above Movement along an existing supply curve A shift in the supply curve at all possible prices A shift in the supply curve above the market price, but not below"

A shift in the supply curve at all possible prices

______ means that resources are limited.

Blank 1: Scarcity or Scarce

Market supply is the ______ summation of the quantities supplied by individuals, firms, states, or even nations at each price over a fixed time period.

Blank 1: horizontal, quantity, total, or overall

The value of the next-best forgone alternative is the ______ cost.

Opportunity

Firms will be willing and able to produce more output only when prices rise, because the _______ cost of production is rising.

Opportunity cost of production is rising.

"Firms expecting a cold winter will anticipate an increased demand for scarves resulting in an increased future price. How will the market adjust today? Multiple choice question. Supply will increase at every possible price. Supply will decrease at every possible price. Quantity supplied will increase. Quantity supplied will decrease."

Supply will decrease at every possible price.

"Producing a good or a service at a lower opportunity cost gives the producer: disadvantage. a negative advantage. a comparative advantage in the market. an absolute advantage in the market."

a comparative advantage in the market.

"If an activity is performed where the marginal benefit is greater than the marginal cost (MB > MC), there is: a net gain to the economy. an opportunity cost. a net loss to the economy. equilibrium."

a net gain to the economy.

"When economists refer to a "good," they are referring to: Multiple choice question. the willingness to assemble the factors of production into output. a tangible product that consumers, firms, or governments wish to purchase. a product such as medical treatment or tax assistance. an intangible product that consumers, firms, or governments wish to purchase."

a tangible product that consumers, firms, or governments wish to purchase.

"The demand schedule represents the relationship between the prices of a good, service, or resource: Multiple choice question. and the quantity that individuals and firms are willing and able to buy, all else held constant, in a tabular form. and the quantity that individuals and firms are willing and able to sell, all else held constant, in a tabular form. and the quantity that individuals and firms are willing and able to buy, all else held constant, as a curve. and the quantity that individuals and firms are willing and able to sell, all else held constant, as a curve."

and the quantity that individuals and firms are willing and able to buy, all else held constant, in a tabular form.

"Shortages: Multiple choice question. typically cause prices to fall. generally occur after surpluses. are usually indicated by high prices. are usually the product of price controls."

are usually the product of price controls.

"When the market is in equilibrium, the price that consumers pay and that producers receive: Multiple choice question. must make sure that there is a marginal benefit and marginal cost of consuming and producing a good or service. balances the marginal benefit and marginal cost of consuming and producing a good or service. cannot equal the marginal benefit and marginal cost of consuming and producing a good or service. ensures that the marginal benefit exceeds the marginal cost of consuming and producing a good or service."

balances the marginal benefit and marginal cost of consuming and producing a good or service.

"The demand curve: Multiple choice question. is always a nonlinear curve. is never horizontal. is always a straight line. can be a straight line or a nonlinear curve."

can be a straight line or a nonlinear curve.

"As the amount of an activity increases, its marginal benefit: is infinite. decreases. stays the same. increases."

decreases

The law of ______ focuses entirely on the effect of a change in the good's price on the quantity of the good consumed and holds everything else constant.

demand

"According to a popular statement in economics, "if not for _______________, we should be able to grow the world's food supply in a flower pot"". Multiple choice question. diminishing marginal productivity the production possibilities frontier increasing returns to scale diminishing marginal utility"

diminishing marginal productivity

"In economics - resources can also be called production possibilities. factors of profit. factors of production. marginal resources."

factors of production

_______ markets are highly structured, whereas _______ markets are less structured with fewer rules.

formal & informal

"he horizontal summation of individual demand curves: Multiple choice question. is the same as averaging them. is the quantity demanded. gives the market demand curve. cannot be done."

gives the market demand curve.

"When the producer of a good or service has a lower opportunity cost than other producers, that producer has an advantage in the market because: he or she will be able to sell at a lower price than other producers. he or she is more innovative. he or she can collaborate with other producers. he or she can produce a better quality product than other producers."

he or she will be able to sell at a lower price than other producers.

"According to the principle of diminishing marginal productivity: Multiple choice question. if all inputs of production are fixed, the marginal productivity of additional variable resources will eventually fall, all else held constant. if at least one input of production is fixed, the marginal productivity of additional variable resources will eventually fall, all else held constant. if all inputs of production are variable, the marginal productivity of all fixed resources will eventually fall, all else held constant. if at least one input of production is variable, the marginal productivity of additional fixed resources will eventually fall, all else held constant."

if at least one input of production is fixed, the marginal productivity of additional variable resources will eventually fall, all else held constant.

Suppose you have $30 to spend on tacos each week. When the price of tacos increases from $2.00 to $3.00, the purchasing power falls from 15 tacos per week to 10 tacos per week. This decrease in the quantity of tacos demanded illustrates the _______ effect.

income effect

"As the amount of an activity increases, its marginal cost: increases. stays the same. is infinite decreases."

increases

All natural resources used in production are classified under the resource category called _______

land

"You have just returned from seeing a movie with a friend and are relaxing at home. Another friend calls and asks whether you will watch the same movie with her. Though you enjoyed the movie, you are not interested in watching it again. This scenario is an example of the: Multiple choice question. marginal effect. price effect. income effect. law of diminishing marginal utility."

law of diminishing marginal utility.

"When the price of a good rises, we can expect that: Multiple choice question. less of the good will be purchased. people will want more of the good. the good will be in short supply. the market will be disrupted."

less of the good will be purchased.

"The negative relationship between the quantity of a good, service, or resource and the marginal utility obtained from each additional unit consumed in a given period of time describes: Multiple choice question. the marginal effect. the substitution effect. the income effect. diminishing marginal utility."

minishing marginal utility.

_______ is the idea that people make choices to maximize the overall benefit - or utility - of an action subject to its cost.

optimization

"Money spent by a firm on machinery that is designed to improve future productivity is called: human capital. entrepreneurship. physical capital. labor."

physical capital.

"Shortages cannot push the market to an equilibrium in the presence of: Multiple choice question. high prices. surpluses. price controls. profits."

price controls.

"The primary determinant of the quantity demanded by consumers is the: Multiple choice question. cost of production of a good or service. price of a good or service. characteristics of a good or service. supply of a good or service."

price of a good or service.

"The income effect is the effect that a change in the: Multiple choice question. price of a good, service, or resource has on the purchasing power of income. quantity of a good, service, or resource has on the purchasing power of income. quantity of one good, service, or resource has on the price of another. price of one good, service, or resource has on the demand for another."

price of a good, service, or resource has on the purchasing power of income.

"Each row of the tabular __________ illustrates the maximum amount of a good or a service that can be produced given the production of the other. production possibilities schedule demand schedule production possibilities curve supply schedule"

production possibilities schedule

"A surplus occurs when: Multiple choice question. quantity demanded < quantity supplied. quantity demanded > quantity supplied. quantity demanded = quantity supplied. quantity demanded - quantity supplied > 0."

quantity demanded < quantity supplied.

"A change in a nonprice determinant of demand will: Multiple choice question. result in a movement along the demand curve. cause the market to fall. rarely occur. result in a shift of the demand curve."

result in a shift of the demand curve.

"Economics is the study of how individuals and societies allocate: unlimited resources among many competing users. scarce resources among limited users. scarce resources among many competing users. unlimited resources among limited users. "

scarce resources among many competing users.

Economics is the study of how individuals and societies allocate ______ resources among many competing uses.

scarce, limited, or finite

"A common economic situation where an economy's resources are insufficient to meet the existing wants and must be used judiciously is referred to as ______. allocation scarcity distribution poverty"

scarcity

_________interest is the idea that people choose to do the things that interest them.

self interest

"An intangible product that consumers wish to purchase is a: Multiple choice question. patent. service. resource. good."

service

A _______ is an intangible product or action that consumers, firms, or governments wish to purchase.

service

A situation in which the quantity of output demanded is greater than the quantity of output supplied at the current market price is called a _______

shortage or deficit

"A strong economic model allows us to analyze the economic events of the world by: simplifying a very complex economic world. replicating the economic world exactly. ignoring the ceteris paribus assumption. employing the resources of the federal government."

simplifying a very complex economic world.

"The size of the producer subsidy will influence the: Multiple choice question. direction of the shift in demand. size of the shift in supply. size of the shift in demand. direction of the shift in supply."

size of the shift in supply.

"The opportunity cost of producing a good or a service can be found by: identifying the two products that can be produced. subtracting the cost of one good from the cost of another good. comparing the cost of one good to the total cost. solving for the cost of one good in terms of another."

solving for the cost of one good in terms of another.

"For an entire economy, the production possibilities frontier is going to be bowed out because: prices rise over time, so costs will increase. the cost of producing more of one good is the forgone production of another good. some resources are better suited for producing some goods or services than others. higher production levels are always associated with higher costs."

some resources are better suited for producing some goods or services than others.

"In the real world, the opportunity cost increases as production increases, because: prices rise over time, so costs will increase. the cost of producing more of one good is the forgone production of another good. higher production levels are always associated with higher costs. some resources are better suited for producing some goods or services than others."

some resources are better suited for producing some goods or services than others.

When the price of oranges increases, Jack buys more apples and fewer oranges. The decrease in the quantity demanded for oranges and the increase in the quantity demanded for apples is an example of the effect.

substitution

"The law that states that as the price of a good, service, or resource rises, the quantity supplied will increase, all else held constant, is the law of Multiple choice question. supply. marginal choice. demand. opportunity cost."

supply

"Marginal benefit is: the opportunity benefit associated with one more unit of an activity. the total benefit associated with one more unit of an activity. the additional benefit associated with one more unit of an activity. the opportunity cost associated with one more unit of an activity."

the additional benefit associated with one more unit of an activity.

"Marginal cost is: the total benefit associated with one more unit of an activity. the additional benefit associated with one more unit of an activity. the change in average cost with one more unit of an activity. the additional cost associated with one more unit of an activity."

the additional cost associated with one more unit of an activity.

"If there is a change in a nonprice determinant of demand for a good,: Multiple choice question. there is a movement along a demand curve. the quantity supplied at each price level will change. the demand curve shifts. the good will have a higher rate of diminishing marginal utility."

the demand curve shifts.

"Decreasing marginal benefit describes: the inverse relationship between the marginal benefit associated with the use of a good or a service and the quantity consumed. the inverse relationship between the marginal cost associated with the use of a good or a service and the quantity consumed. the direct relationship between the marginal cost associated with the use of a good or a service and the quantity consumed. the direct relationship between the marginal benefit associated with the use of a good or a service and the quantity consumed."

the inverse relationship between the marginal benefit associated with the use of a good or a service and the quantity consumed.

"There is no incentive to either increase or decrease the level of the activity performed when: the total benefit equals the marginal cost. the marginal benefit equals the total cost. the marginal benefit equals the marginal cost. the total benefit equals the total cost."

the marginal benefit equals the marginal cost.

"The overall or total demand for a good, service, or resource is: Multiple choice question. the market demand. the individual demand. the same as supply. unavailable information."

the market demand.

"Increased scarcity and inefficiency will result when: Multiple choice question. producers outnumber consumers. the market is in disequilibrium. consumers outnumber producers. "

the market is in disequilibrium.

"The interaction of buyers and sellers in a market is fundamental for the determination of: Multiple choice question. the price of goods and services. minimum wage. price floors and price ceilings. inflation."

the price of goods and services.

"A surplus occurs when: Multiple choice question. the quantity of output demanded is greater than the quantity of output supplied at any market price. the quantity of output supplied is greater than the quantity of output demanded at the current market price. the quantity of output demanded is greater than the quantity of output supplied at the current market price. the quantity of output supplied is greater than the quantity of output demanded at the base year price."

the quantity of output supplied is greater than the quantity of output demanded at the current market price.

"When the price of smart phones increases: Multiple choice question. the quantity of smart phones supplied will decrease. the quantity of smart phones supplied will increase. the quantity of smart phones demanded will increase. "

the quantity of smart phones supplied will increase.

"When the price of a good, service, or resource increases: Multiple choice question. the quantity demanded increases. the quantity supplied decreases. the quantity demanded does not change. the quantity supplied increases."

the quantity supplied increases.

"In a market, when the price or availability of resources used in the production of a certain good changes,: Multiple choice question. supply does not change. the supply curve shifts. both the supply curve and the demand curve shift. the demand curve shifts."

the supply curve shifts.

"Opportunity cost is defined as: the financial cost of purchasing a good or a service. the expected value of buying a good or a service. the marginal benefit minus the marginal cost. the value of the opportunity that you give up when you choose one activity instead of another."

the value of the opportunity that you give up when you choose one activity instead of another.

"A decrease in the supply of cellphones implies: Multiple choice question. the cost of producing cellphones has decreased. the quantity of cellphones produced will decrease in the long run. there is a decrease in the quantity of cellphones supplied at each price. the price of cellphones has decreased."

there is a decrease in the quantity of cellphones supplied at each price.

"Because resources are scarce they tend to be owned by one large entity. they do not need to be allocated between competing uses. producers and consumers can always satisfy their unlimited wants. they must be allocated between competing uses."

they must be allocated between competing uses.

"The marginal cost of an activity can be found by calculating the change in: total costs as the level of the activity increases by one unit. total benefits as the level of the activity increases by one unit. total costs of the entire activity. total benefits of the entire activity."

total costs as the level of the activity increases by one unit.

"1. Microeconomics: a.

typically deals with issues like inflation, interest rates, and unemployment. b. is not concerned with details, but only with the overall ""big picture"" of the economy. c. deals mainly with individuals, firms and specific markets. d. None of the above. " "c. deals mainly with individuals, firms and specific markets. "

"A society's ability to produced needed goods and services is permanently reduced if it relies too heavily on capital production. all of the above uses resources too slowly. uses resources too quickly."

uses resources too quickly.

"If you continue producing when marginal benefit is less than marginal cost, you are: reducing scarcity. optimizing your use of resources. wasting resources that would be better spent elsewhere. producing at the lowest cost."

wasting resources that would be better spent elsewhere.

"When we graph the relationship between price and quantity demanded: Multiple choice question. we cannot predict the shape of the graph. it could be a U-shaped curve. we call the result a demand curve, which is drawn as a backward-bending curve. we call the result a demand curve, but demand curves are often drawn as strai"

we call the result a demand curve, but demand curves are often drawn as straight lines.

"The income effect, the substitution effect, and diminishing marginal utility together explain: Multiple choice question. the importance of prices. why demand curves are downward-sloping. why demand curves exist. how markets function."

why demand curves are downward-sloping.

"The income effect, the substitution effect, and diminishing marginal utility explain: Multiple choice question. why the quantity demanded will rise when prices rise. why the price tends to be in equilibrium. why the quantity demanded will fall when prices rise. why the quantity demanded will fall when prices fall."

why the quantity demanded will fall when prices rise.

"Which of the following scenarios would likely shift the supply curve for potatoes to the right (increase in supply)? multiple choice Teenagers in potato-farming towns leave to go to college. Potato growers expect the price of potatoes to be lower this year than last year. The price of fertilizer increases. A new harvester enables farmers to bring in ripe potatoes twice as fast as they did before."

"A new harvester enables farmers to bring in ripe potatoes twice as fast as they could do before. This will increase the amount of potatoes produced causing an increase in supply due to which the supply curve will shift to the right."

A ______ is usually the product of price controls that do not allow markets to adjust to unforeseen events that disrupt supply.

Blank 1: Shortage, Surplus, shortage, or surplus

Individuals and businesses must choose between the different uses for their available resources. This is called ______ resources and is due to the concept of ______.

allocating

"When resources are allocated in such a way that it is possible to increase the production of one good only by decreasing the production of another, then the allocation of resources is: impossible. efficient. inefficient. suboptimal."

efficient

"The quantity traded when the quantity supplied of a good, service, or resource equals the quantity demanded is the _____ quantity. (Enter one word answer.) Multiple choice question. market demanded supplied equilibrium"

equilibrium

"When the quantity supplied of a good, service, or resource equals the quantity demanded, this quantity traded is known as the: Multiple choice question. absolute quantity. equilibrium price. expected quantity. equilibrium quantity."

equilibrium quantity.

"Any place where, or mechanism by which, buyers and sellers interact to trade goods, services, or resources is a called a(n): Multiple choice question. market. system. opening. store."

market

"The sum of individual supply curves added together reflect the: Multiple choice question. marginal productivity. overall cost. market supply. opportunity cost. "

market supply.

"Because of differences in opportunity costs, individuals and businesses produce as much of each good as possible. specialize in the production of the good for which they wield a comparative advantage. rarely trade with each other. specialize in the production of the good for which they wield an absolute advantage."

specialize in the production of the good for which they wield a comparative advantage.

Equilibrium price

The price at which the quantity supplied of a good, service, or resource equals the quantity demanded

Equilibrium Quantity

The quantity traded when the quantity supplied of a good, service, or resource equals its quantity demanded.

Without individuals and households that are willing and able to buy a good, the ________ side of the market cannot exist.

demand

up"

down

The market-clearing price is the same as the ________ price.

equilibrium

"Economics is about: the ways in which consumers and producers negotiate. how people get wealthy. how people make choices in a world of scarcity. the various types of insurance people can purchase."

how people make choices in a world of scarcity.

". Economics deals with a.

how to profit from the stock market. b. how to satisfy limited human wants. c. how society allocates unlimited resources. d. how to allocate scarce resources to satisfy unlimited human wants." how to allocate scarce resources to satisfy unlimited human wants.

"Specialization causes individuals and nations to rely on one another and: does not change the degree of interdependence among them. decreases the degree of interdependence among them. increases the degree of interdependence among them."

increases the degree of interdependence among them.

"When resources are allocated in such a way that it is possible to increase the production of one good without decreasing the production of another, then the allocation of resources is: inefficient. optimal. possible. efficient."

inefficient

"A subsidy to producers: Multiple choice question. lowers the cost of producing. decreases the product quantity. increases the product price. raises the cost of producing"

lowers the cost of producing.

The sum of individual supply curves added together reflect the _____ supply curve.

market

"The total quantity all producers are willing and able to produce at every price is known as: Multiple choice question. market quantity. market supply. total demand. total equilibrium."

market supply.

"The equilibrium price is also known as the: Multiple choice question. expected price. market-clearing price. balanced price. only price."

market-clearing price.

"The substitution effect is the effect that a change in the: Multiple choice question. price of one good, service, or resource has on the demand for another. quantity of one good, service, or resource has on the price of another. price of one good, service, or resource has on the price of another. quantity of one good, service, or resource has on the demand for another."

price of one good, service, or resource has on the demand for another.

"When analyzing demand and supply curves for an individual good, the vertical axis measures the: Multiple choice question. price of the good and the horizontal measures quantity. quantity and the horizontal measures the number of workers. cost of production and the horizontal measures number of workers. quantity and the horizontal measures the price of the good"

price of the good and the horizontal measures quantity.

"Companies will be willing and able to produce additional units of a good only if the: Multiple choice question. price of the good is constant. demand for the good is decreasing. supply of the good is decreasing. price of the good increases enough to cover the increasing costs."

price of the good increases enough to cover the increasing costs.

When the price of a good or service decreases:

quantity demanded increases.

" Drinkable water is ______ water in general. relatively more scarce than as scarce as relatively less scarce than"

relatively more scarce than

"Tomatoes represent a small subset of food, so tomatoes are: relatively less scarce than food in general. as scarce as food in general. as abundant as food in general. relatively more scarce than food in general."

relatively more scarce than food in general.

"Any item, whether a gift of nature, the result of production, or the result of human effort, that is used to produce goods and services is a: Multiple choice question. resource. market. commodity. good."

resource

Every person's and every economy's standard of living relies on the effective use of ______

resources

If you decide to produce at a level where marginal cost exceeds marginal benefit (MC > MB), there is a waste of ______ that could be better used somewhere else.

resources or inputs

Comparative advantage is the foundation for establishing the benefits of _____

trade or specialization

"Referring to the graph, suppose the market price is $1.50. What is the size of the shortage or surplus in this market at $1.50? Multiple choice question. Surplus of 700 Shortage of 400 Surplus of 400 Shortage of 700"

"Shortage of 400 Reason: (At a price of $1.50, Qd = 700, and Qs = 300). Qs - Qd = 300 - 700 = -400. Since Qs < Qd, there is a shortage of 400 here.)"

"The income effect: Multiple select question. is the same as the substitution effect. refers to the change in the demand for a good caused by a change in a consumer's purchasing power. works in the same direction as the substitution effect for inferior goods. works in the same direction as the substitution effect for normal goods. only works in conjunction with the law of diminishing marginal utility."

"refers to the change in the demand for a good caused by a change in a consumer's purchasing power. works in the same direction as the substitution effect for normal goods. "

"After graduating from high school, Adam is thinking about going to college. The college tuition is $15,000 a year. Instead of going to college, Adam could take a full-time job that pays $25,000. What is Adam's opportunity cost of attending college for one year? a.

$10,000 b. $15,000 c. $25,000 d. $40,000" d. $40,000

"The government decides to implement a tax on turnips. What will be the effect on the turnip market? Multiple choice question. A change in the quantity of workers A change in supply A change in demand A change in resource cost"

A change in supply

Change (Shift) in Supply

A change in the quantity of a good, service, or resource supplied at every price. Graphically, an increase in supply is represented by a rightward shift of the supply curve, while a decrease in supply is represented by a leftward shift of the supply curve.

Nonprice Determinant (Demand)

A characteristic of the demand for a good, service, or resource other than its own market price. A change in a nonprice determinant of demand changes the relationship between price and quantity demanded, either increasing or decreasing quantity demanded at every price. Sometimes referred to as non-own-price determinant.

Nonprice Determinant (Supply)

A characteristic of the supply of a good, service, or resource other than its own market price. A change in a nonprice determinant of supply changes the relationship between price and quantity supplied, either increasing or decreasing quantity supplied at every price. Sometimes referred to as non-own-price determinant.

Define Increasing Marginal Cost

A condition in which the additional cost associated with each successive unit of an activity increases.

"A new technology increases the production of widgets by 25% at all possible prices. Which of the following statements offers the best description of the location of the new supply curve, relative to the original curve? Multiple choice question. Quantity supplied remains unchanged below the equilibrium price and shift to the right above the equilibrium price. A shift to the right with a greater increase occurring at higher price levels. A parallel shift to the right. A shift to the right with a greater increase occurring at lower price levels."

A shift to the right with a greater increase occurring at higher price levels.

Shortage

A situation in which the quantity demanded is greater than the quantity supplied at the current market price. Also called excess demand.

______ explores how market prices for individual goods are determined and how the prices adjust to a variety of different events - such as weather conditions or even government regulation.

Blank 1: Microeconomics or Micro

The (one word) demand represents the horizontal summation of individual demand curves.

Blank 1: market or aggregate

The term ____ describes the fact that unlimited wants cannot be completely satisfied with limited resources.

Blank 1: scarcity or scarce

"5. Chile can produce 100 units of coffee or 200 units of soybeans, and Colombia can produce 110 units of coffee or 330 units of soybeans. Assume that the trade-offs between the two products are constant at all levels of output for both countries. Which country has a comparative advantage at producing coffee, and what is that country's opportunity cost of producing one unit of coffee? a.

Colombia, 3 units of soybeans b. Colombia, 1/3 unit of soybeans c. Chile, 2 units of soybeans d. Chile, 1/2 unit of soybeans" "c. Chile, 2 units of soybeans"

________ results in increased scarcity and inefficiency in the production of a good or service.

Disequilibrium

The more of a good or a service that is produced in a given period of time, the higher the marginal ______ that is associated with each additional unit.

Marginal cost

"Identify which of the following is an example of a shortage. Multiple choice question. Snow shovel prices rise as a blizzard is forecast. Food prices fall as a blizzard is forecast. No snow shovels are available when a blizzard is forecast. Snow shovels this year cost more than they did last year."

No snow shovels are available when a blizzard is forecast.

"12. Assume that the market for gasoline in Houston is in equilibrium, and then many people move to Houston. Assuming all else remains constant, what would happen to the equilibrium price and quantity? a.

Price increases and quantity demanded increases b. Price increases and quantity demanded decreases c. Price decreases and quantity demanded increases d. Price increases and quantity demanded decreases" "a. Price increases and quantity demanded increases"

"How is a supply curve plotted? Multiple choice question. Quantity supplied is on the horizontal axis and price of the good is on the vertical axis. Quantity supplied is on the horizontal axis and number of firms is on the vertical axis. Price of the good is on the horizontal axis and quantity supplied is on the vertical axis. Number of firms is on the horizontal axis and quantity supplied is on the vertical axis."

Quantity supplied is on the horizontal axis and price of the good is on the vertical axis.

"Self-interest, marginal decision making, and optimization form the basis for: microeconomics. macroeconomics. rational decision making. government intervention."

Rational Decision Making

"The change in the quantity of a good, service, or resource that consumers, firms, and governments are willing and able to buy due to a change in its price is called: Multiple choice question. the price effect. a change in the quantity demanded. the market effect. a change in demand."

a change in the quantity demanded.

"A nonprice determinant of demand is: Multiple choice question. some change in demand that is not readily observable. a characteristic of demand for a good, service, or resource other than its own market price. a characteristic of demand for a good, service, or resource other than its own market quantity. a variation of a price change related to the supply of a good."

a characteristic of demand for a good, service, or resource other than its own market price.

"In economics, a downward-sloping or upward-straight line is often called: Multiple choice question. an expected relationship. an equation. a curve. a linear object."

a curve

"When less output is being produced at every price, we say there is: Multiple choice question. a decrease in demand. a decrease in the quantity supplied. a decrease in supply. an indication of a normal good."

a decrease in supply.

"A change in quantity demanded can be described as: Multiple choice question. a movement along the demand curve that results from a change in the good's own price. a shift in the demand curve that results from a change in the good's own price. a movement along the supply curve that results from a change in the good's own price. a shift in the supply curve that results from a change in the good's own price."

a movement along the demand curve that results from a change in the good's own price.

"What will happen to the market for gasoline now if buyers expect higher gasoline prices in the near future? a. The demand for gasoline will increase. b. The demand for gasoline will decrease c. The demand for gasoline will be unaffected. d. The supply of gasoline will increase"

a. The demand for gasoline will increase.

"If the government imposed a price floor (such as the minimum wage) on the wages of certain workers, which of the following would we NOT expect to happen?

a. some workers would lose their job b. some workers would see their paychecks go up c. businesses that hire these workers would incur higher costs d. none of the above" d. none of the above

"If the cost of potatoes decreases, and McDonalds buys potatoes to make their french fries, McDonalds: a. supply of French fries would increase. b. make less profit. c. supply of French fries would decrease. d. none of the above."

a. supply of French fries would increase.

"Which of the following would not affect the demand curve for electric cars? a. the cost of making electric cars b. the price of gasoline-powered cars c. the attractiveness and reliability of electric cars d. none of the aboveTimes New Roman"

a. the cost of making electric cars

"The demand curve should slope downward because: Multiple choice question. according to marginal analysis, a lower price will lead to a higher quantity demanded. according to the law of demand, a lower price will lead to a higher quantity demanded. according to the law of demand, a higher price will lead to a higher quantity demanded. according to the law of demand, a lower supply will lead to a lower quantity demanded."

according to the law of demand, a lower price will lead to a higher quantity demanded.

"In economics, the word "curve" is typically used to refer to: Multiple choice question. almost any graphical representation of the relationship between two variables. a conceptual relationship. a relationship between two variables that is unknown. a relationship between two variables that is constantly changing."

almost any graphical representation of the relationship between two variables.

"An increase in the quantity of a good - service - or resource supplied at every price is: Multiple choice question. an increase in supply. rare. an increase in demand. an increase in the quantity supplied."

an increase in supply.

" If the market price of a good is currently below the equilibrium price, this would create a: a. surplus b. shortage c. price floor d. none of the above"

b. shortage

"Comparative advantage refers to: being the producer who has been in the market the longest. being the lowest relative opportunity cost producer of a good. being the one who can produce the most. being the highest relative opportunity cost producer of a good."

being the lowest relative opportunity cost producer of a good.

Combinations lying ______ the production possibilities frontier are impossible to produce with the current resources and technology.

beyond, outside, above, past, or over

"7. If ramen noodles are an inferior good, which of the following would increase the demand for ramen noodles? a. an increase in the price of ramen noodles b. an increase in incomes c. a decrease in incomes d. a decrease in the price of ramen noodles"

c. a decrease in incomes

When you plot the data from the demand schedule on a graph, the result is called the demand ________

curve, line, or function

"1. Which of the following statements is true about supply? a. There is an inverse relationship between price and quantity supplied. b. Supply refers to the amount of inventory that sellers have in their warehouses. c. As price decreases, producers are willing and able to put more of the good on the market for sale. d. As price increases, producers are willing and able to put more of the good on the market for sale."

d. As price increases, producers are willing and able to put more of the good on the market for sale.

The ______ _____ represents the relationship between the price of a good, service, or resource and the quantity that individuals and firms are willing and able to buy, all else held constant, in a tabular form.

demand schedule

"On a production possibilities frontier (PPF) with Good X on the horizontal axis and Good Y on the vertical axis, we can say that the slope of the PPF (in absolute value) equals the opportunity cost of producing Good X with respect to the production of Good Y. This is true because the slope: measures how much of Good X and Good Y can be produced. describes the trade-off resulting from the production of Good X in terms of Good Y. is always positive. describes the gains the economy experiences when it trades with another economy."

describes the trade-off resulting from the production of Good X in terms of Good Y.

"If a fitness center owner decides to hire additional employees but does not change the size of the fitness center or the amount of capital available to its employees to perform their tasks, the fitness center will likely experience: Multiple choice question. exceptional marginal productivity. declining demand. decreasing maximum productivity. diminishing marginal productivity."

diminishing marginal productivity.

"The principle that if at least one input of production is fixed, the marginal productivity of additional variable resources will eventually fall, all else held constant, is known as: Multiple choice question. demonstrated marginal productivity. diminishing marginal productivity. diminishing measured production. diminishing measured productivity."

diminishing marginal productivity.

"As the benefit of consuming more of a good falls with each additional unit, the price consumers are willing and able to pay also falls with increased consumption. This scenario describes: Multiple choice question. the law of supply. the income effect. diminishing marginal utility. the marginal effect."

diminishing marginal utility.

"The non-price determinants or other factors that affect demand are: Multiple choice question. changing along the demand curve. the price and quantity demanded. held constant for any given demand curve. the same as those that influence the supply curve."

held constant for any given demand curve.

"Shortages and surpluses are represented by the: Multiple choice question. vertical distance between a point on the demand curve at a particular price and a point on the supply curve at the same price. horizontal distance between the market price and the equilibrium price. horizontal distance between a point on the demand curve at a particular price and a point on the supply curve at the same price. vertical distance between the market price and the equilibrium price."

horizontal distance between a point on the demand curve at a particular price and a point on the supply curve at the same price.

"The harm in specializing is that: other firms will try to copy your production techniques and steal the market. consumers may boycott a producer and cause a demand collapse. if the demand for the good or service you produce increases, its price and your income will increase too. if the demand for the good or service you produce decreases, its price and your income will decrease too."

if the demand for the good or service you produce decreases, its price and your income will decrease too.

"According to the the law of supply, if the price of apple juice rises, producers of apple juice will be willing and able to: Multiple choice question. increase the quantity of apple juice they buy in the market. decrease the quantity of apple juice they supply to the market. decrease the quantity of apple juice they buy in the market. increase the quantity of apple juice they supply to the market."

increase the quantity of apple juice they supply to the market.

On a production possibilities frontier (PPF), if you are able to increase the production of both goods at the same time then, initially, resources were allocated ________

inefficiently

"Markets such as swap meets or garage sales are called _____ markets. Multiple choice question. tethered informal formal "

informal

"Taxes charged on and subsidies provided to consumers are: Multiple choice question. likely to cause a movement along the supply curve. likely to shift the demand curve. likely to cause a movement along the demand curve. likely to shift the supply curve."

likely to shift the demand curve.

"When the market is in equilibrium, the price that consumers pay and that producers receive exactly balances the Multiple choice question. total benefit and total cost of consuming and producing a good or service. total benefit and marginal cost of consuming and producing a good or service. marginal benefit and total cost of consuming and producing a good or service. marginal benefit and marginal cost of consuming and producing a good or service."

marginal benefit and marginal cost of consuming and producing a good or service.

"From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are too long, they have concluded that the a.

marginal cost of waiting is less than the marginal benefit of being served. b. marginal cost of waiting is greater than the marginal benefit of being served. c. management is exhibiting irrational behavior by not maximizing profits. d. all of the above." marginal cost of waiting is greater than the marginal benefit of being served.

"The production possibilities frontier, or curve, is a graphical representation of the: production possibilities theory. consumer possibilities schedule. production possibilities schedule. production possibilities ladder."

production possibilities schedule.

"Because the world is characterized by scarcity, people must allocate the limited ______ at their disposal among many competing uses."

resources

_____ is a branch of economics that typically deals with how prices are determined in markets and how markets adjust to a variety of different events.

Microeconomics

"Equilibrium means that: Multiple choice question. the price and the quantity will never change. we should expect to see the price and the quantity converge at specific levels. the factors that affect supply and demand do not change. we should expect to see the price and the quantity converge at historic levels."

we should expect to see the price and the quantity converge at specific levels.