econ exam 1-3
The Farm Factory, a booth at the local Farmer's Market, sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon. What is the opportunity cost of buying a gallon of milk?
1 2/3 dozen eggs
Refer to Figure 2-5. If the economy is currently producing at point X, what is the opportunity cost of moving to point W?
3 million tons of steel
Figure 2-2 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. Refer to Figure 2-2. If Vidalia chooses to produce 80 dozen roses, how many orchids can it produce to maximize production?
48 dozen orchids
Refer to Table 3-2. The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market. At a price of $10, the quantity demanded in the market would be
52 lbs
Refer to Figure 2-6. If the economy is currently producing at point D, what is the opportunity cost of moving to point B?
ANSWER IS NOT 16 thousand spoons
Refer to Figure 2-12. One segment of the circular flow diagram in the Figure shows the flow of funds from market F to economic agents G. The funds represent spending on goods and services. What is market F and who are economic agents G?
ANSWER IS NOT F = product markets; G = households
Figure 2-4 shows various points on three different production possibilities frontiers for a nation.Refer to Figure 2-4. Consider the following events: a.an increase in the patent protection period to 75 years b.a hurricane that destroys a substantial portion of a nation's capital stock c.the implementation of a secure and enforceable property rights system Which of the events listed above could cause a movement from W to Z?
ANSWER IS NOT a only
Refer to Figure 3-2. A technological advancement would be represented by a movement from
ANSWER IS NOT a to b
The opportunity cost of taking an on-line history class is
ANSWER IS NOT zero because there is no classroom time involved if you are enrolled in the course.
Refer to Figure 3-1. An increase in taste or preference would be represented by a movement from
D1 to D2.
Refer to Figure 3-1. A decrease population would be represented by a movement from
D2 to D1
Refer to Figure 3-1. An increase in the price of a complement would be represented by a movement from
D2 to D1.
Two U.S. Senators have introduced a bipartisan bill to strengthen patent protection in the United States. The STRONGER Patents Act, designed to improve the patent system, includes provisions which would permit injunctions to protect patent owners against infringement both during and after court cases and guarantee fairness in administrative proceedings by limiting repetitive and harassing challenges against inventors. Changes over the last decade have lessened some U.S. patent rights, while countries such as China and Germany have moved to strengthen their own patent protections. In 2016, the United States fell to 10th place in the U.S. Chamber of Commerce's international ranking of patent system strength.Source: Brian Pomper, "Senators Coons and Cotton Introduce STRONGER Patents Act of 2017," ipwatchdog.com, June 21, 2017.Refer to the Article Summary. If the STRONGER patents Act of 2017 does not become law and patent protection in the United States continues to fall further behind patent protection in other countries, which of the following would most likely occur in the United States?
Fewer patents would be issued to innovators and inventors.
Refer to Figure 2-13. Which two arrows in the diagram depict the following transaction: Carter earns a $400 commission for selling men's designer shoes at Brooks Brothers.
J and M
In January, buyers of gold expect that the price of gold will fall in February. What happens in the gold market in January, holding everything else constant?
NOT THE ANSWER The demand curve shifts to the right.
________ exists because unlimited wants exceed the limited resources available to fulfill those wants.
Scarcity
How does the increasing use of digital cameras affect the market for traditional camera film?
The demand curve for traditional camera film shifts to the left.
A decrease in input costs in the production of LCD televisions caused the price of LCD televisions to decrease. Holding everything else constant, how would this affect the market for video game consoles (a complement to LCD televisions)?
The demand for video game consoles would increase and the equilibrium price of video game consoles would increase.
Suppose a positive technological change in the production of disease-resistant corn caused the price of corn to fall. Holding everything else constant, how would this affect the market for wheat (a substitute for corn)?
The demand for wheat would decrease and the equilibrium price of wheat would decrease.
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S2 (point E). If the technology to produce motorcycles improves and the number of buyers increases, how will the equilibrium point change?
The equilibrium point will move from E to A.
Which of the following would shift the supply curve for smartphones to the right?
a decrease in the price of an input used to produce smartphones
In April, market analysts predict that the price of titanium will fall in May. What happens in the titanium market in April, holding everything else constant?
The supply curve shifts to the right.
Which of the following would shift the supply curve for energy drinks to the left?
a decrease in the number of firms that produce energy drinks
A decrease in the demand for eggs due to changes in consumer tastes, accompanied by a decrease in the supply of eggs as a result of an outbreak of Avian flu, will result in
a decrease in the equilibrium quantity of eggs; the equilibrium price may increase or decrease
Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation.Refer to Figure 2-4. Consider the following events:a.an increase in the unemployment rateb.general technological advancementc.an increase in consumer wealthWhich of the events listed above could cause a movement from Z to V?
a only
A decrease in the price of pork will result in
a smaller quantity of pork supplied.
Which of the following is a factor of production?
an acre of forested land
Figure 3-8Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S1 (point C). Which of the following changes would cause the equilibrium to change to point B?
an increase in the wages of motorcycle workers and a decrease in the price of motorcycle insurance, a complement to motorcycles
Productive efficiency is achieved when firms produce goods and services
at the lowest cost.
Which of the following would shift a nation's production possibilities frontier outward?
discovering a more efficient process to desalinate water
Figure 2-4 shows various points on three different production possibilities frontiers for a nation.Refer to Figure 2-4. Consider the following movements: a.from point V to point W b.from point W to point Y c.from point Y to point Z Which of the movements listed above represents advancements in technology with respect to only plastic production?
c only
All ________ economies have been political dictatorships.
centerally planned
There is often a trade-off between
economic efficiency and economic equity.
Allocative efficiency is achieved when
firms produce the goods and services that consumers value most.
Skeeter's Skeeball Castle has seen its business slow down ever since Kerrie's Off-Key Karaoke opened up next door. Since the opening of Kerrie's Off-Key Karaoke, the opportunity cost of playing skeeball at Skeeter's has
increased
How are the fundamental economic decisions determined in Canada?
individuals, firms, and the government interact in a market to make these economic decisions.
Adam Smith's ________ refers to the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole.
invisible hand
Suppose that when the price of oranges decreases, Sarita decreases her purchases of peaches. To Sarita
oranges and peaches are substitutes.
Refer to Table 2-1. Assume Dina's Diner only produces sliders and hot wings. A combination of 60 sliders and 50 hot wings would appear
outside Dina's production possibilities frontier.
In a production possibilities frontier, a point inside the frontier is
productively inefficient.
A critical function of the government in facilitating the operation of a market economy is
setting up and enforcing private property rights.
The substitution effect of a price change refers to
the change in quantity demanded that results from a change in price making a good more or less expensive relative to other goods that are substitutes.
According to the production possibilities model, if more resources are allocated to the production of physical and human capital, then all of the following are likely to happen except
the country's total production will fall.
Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen. One can conclude that
the demand for personal trainers has increased.
Assume that both the demand curve and the supply curve for DVD players shift to the left but the supply curve shifts more than the demand curve. As a result
the equilibrium price of DVD players will increase; the equilibrium quantity will decrease.
If a firm expects that the price of its product will be lower in the future than it is today
the firm has an incentive to increase supply now and decrease supply in the future.
Which of the following are represented by the same flow in the circular flow model?
the flow of costs and the flow of revenue
When Feeding America changed its food allocation system to one that resembled a market, each food program was given a number of "shares" that they could use in bidding against other food programs for the types of food that best met the needs of the people using their programs. This is an example of how the market leads firms to provide consumers with the goods they want, which Adam Smith described by using the metaphor
the invisible hand.
A demand curve shows the relationship between
the price of a product and the quantity of the product demanded.
Hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the Gulf coast states. In the market for gasoline
the supply curve shifted to the left resulting in an increase in the equilibrium price.
