Econ Final

The initial supply curve for Logitech speakers shows that at a price of ​$2525​, Logitech is willing to produce 3 comma 5003,500 units. At that same​ price, consumers demand 8 comma 0008,000 units. There is a A. ​surplus, which will increase the price and decrease the quantity supplied. B. ​surplus, which will increase the price and increase the quantity supplied. C. ​shortage, which will increase the price and increase the quantity supplied. D. ​shortage, which will increase the price and decrease the quantity supplied.

C. ​shortage, which will increase the price and increase the quantity supplied.

Consider the choice to attend college or work upon graduation from high school. Which of the following is NOT an opportunity cost of attending​ college? A. The money you would have earned over 4 years working. B. The money spent on books. C. The money spent on food and living expenses. D. The money spent on tuition.

C. The money spent on food and living expenses.

A commodity like gasoline has a greater elasticity in the long run than in the short run because A. consumers can cut recreational driving out of their routines. B. consumers have more flexibility in the short run than in the long run. C. the longer consumers have to digest price​ increases, the more substitutes they can come up with. D. in the long​ run, prices may readjust to their previous position.

C. the longer consumers have to digest price​ increases, the more substitutes they can come up with.

According to the principle of voluntary​ exchange, self-interested people​ won't exchange one thing for another unless it A. is among friends. B. provides them a monetary benefit. C. makes them worse off. D. makes them better off.

D. makes them better off.

According to the principle of diminishing​ returns, as each worker is added A. production will stay the same. B. production will fall drastically with each new worker. C. production will rise but by a greater amount with each new worker. D. production will rise but by a lesser amount with each new worker.

D. production will rise but by a lesser amount with each new worker.

Atlantic Coffee has recently decided to raise its prices by​ 10%. It was shocked by its​ customers' reaction to the price increase when sales dropped​ 24%. Such a sharp drop in sales occurred because A. the demand for coffee as a commodity is highly inelastic. B. Atlantic Coffee has changed to a new type of bean. C. Atlantic Coffee​ doesn't taste as good as Pacific Coffee. D. the demand for a specific brand of coffee is highly elastic.

D. the demand for a specific brand of coffee is highly elastic

Why does a production possibilities curve potentially bow​ outward? A. A production possibilities curve shows the production options for a given set of resources. B. The points on the curve show the combinations that are possible if the​ economy's resources are fully employed. C. A production possibilities curve separates the combinations that are attainable from those that are not. D. Resources are not perfectly adaptable for the production of both goods.

D. Resources are not perfectly adaptable for the production of both goods.

Which of the following is one of the three basic questions a society must​ answer? A. What products do we​ produce? B. Who consumes the​ products? C. How do we produce the​ products? D. All of the above.

D. All of the above

When the price of paper increases from ​$150 to ​$155 per​ ton, the quantity supplied increases from 300 to 330 tons per day. The price elasticity of supply is

3.00

Initial Value Percentage Change New Value 400 20% ? 200 6% ? 80 25% ?

480 212 100

People enjoy eating two types of​ cereal, Frosted​ Mini-Wheats and Rice Krispies. The price of wheat goes​ up, raising the price of Frosted​ Mini-Wheats. As a​ result, the demand for Rice Krispies increases. In this​ case, A. Rice Krispies and Frosted​ Mini-Wheats are complements. B. Rice Krispies is an inferior good. C. Frosted​ Mini-Wheats is a normal good. D. Rice Krispies and Frosted​ Mini-Wheats are substitutes.

D. Rice Krispies and Frosted​ Mini-Wheats are substitutes.

Which of the following is NOT considered a factor of​ production? A. Physical capital B. Entrepreneurship C. Human capital D. Scarcity

D. Scarcity

Suppose demand is inelastic and the price increases. Total revenue will A. remain the same. B. increase. C. change in an indeterminate way. D. decrease.

B. increase.

When a business asks how much its sales would increase if another employee is​ hired, it is considering which of the​ following? A. Ceteris paribus B. Making an assumption C. Using an incentive D. Thinking at the margin

D. Thinking at the margin

Which of the following is not an element of the economic way of​ thinking? A. Thinking at the margin. B. Rational people respond to incentives. C. Use assumptions to simplify complex behavior. D. Use normative statements.

D. Use normative statements.

The difference between a nominal value and a real value is that a nominal value A. expresses​ money's actual buying power and a real value is​ money's face value. B. is the face value of money and a real value expresses its actual buying power. C. is the face value of money and a real value is the value of interest. D. is the face value of money and a real value is the possibility to earn it.

B. is the face value of money and a real value expresses its actual buying power.

The intersection of the supply curve and the demand curve is known as the A. minimum supply price. B. market equilibrium. C. law of demand. D. law of supply.

B. market equilibrium.

All​ decisions, and the​ trade-offs associated with​ them, embody an opportunity cost because of A. productivity. B. scarcity. C. responsibility. D. dependency.

B. Scarcity

The price elasticity of demand for cigarettes among teenagers is 1.3. If the price of cigarettes increases by​ 20%, the quantity of cigarettes demanded by teenagers will A. decrease by​ 32.5%. B. decrease by​ 26%. C. increase by​ 26%. D. increase by​ 32.5%.

B. decrease by​ 26%.

1974 2011 minimum wage: $2.00 $7.25 Between 1974 and​ 2011, the federal minimum wage increased from​ $2.00 to​ $7.25. Was the typical​ minimum-wage worker worse off in​ 2011?

Yes

Suppose that stricter emissions standards would reduce​ health-care costs by ​$70 million but increase the costs of fuel and emissions equipment by ​$30 million. Is it sensible to tighten the emissions​ standards?

Yes

Why is it that when an additional worker is hired in a​ facility, the principle of diminishing returns​ applies? A. Each worker has less hours within the facility. B. Each worker has more space within the facility. C. Each worker has less space within the facility. D. Each worker has more pressure within the facility.

C. Each worker has less space within the facility.

Goods are considered to be complements when there is a A. positive relationship between the quantity demanded of one good and the price of another. B. negative relationship between the quantity demanded of one good and the price of that good. C. negative relationship between the quantity demanded of one good and the price of another. D. positive relationship between increased income and the quantity demanded.

C. negative relationship between the quantity demanded of one good and the price of another.

If demand is elastic​, the percentage change in A. price equals the percentage change in quantity demanded. B. price exceeds the percentage change in quantity demanded. C. quantity demanded exceeds the percentage change in price. D. quantity demanded is less than the percentage change in price.

C. quantity demanded exceeds the percentage change in price.

The market demand curve for a normal good will shift to the right (increase​) when: the price of a substitute good ______ ​, the price of a complementary good ___________ ​, consumer income _______________ ​, and population ______________ .

increases decreases increases increases

An increaseAn increase in demand​ (given a typical upward sloping supply​ curve) for a product _________ the equilibrium​ price, and ____________ the equilibrium quantity.

increases increases

Suppose we are on the lower portion of a linear demand curve. If the price increases by 10 ​percent, the quantity demanded will decrease by _______ 10 percent. In this​ case, total revenue will ______

less than increase

Excess demand occurs when the price is ________ the equilibrium​ price; excess supply occurs when the price is ______ the equilibrium price.

less than greater than

Demand is relatively elastic if the product has __________ ​substitutes, a __________ time​ passes, and the consumer spends a _______________ fraction of his or her budget on the product.

many long large

The​ cross-price elasticity of demand is _________ for complementary goods. The​ cross-price elasticity of demand is _______ for substitute goods.

negative positive

Consider the effects of online distribution of movies. An increase in the price of online movies shifts the demand curve for DVD movies to the _____ . A decrease in downloading time shifts the demand curve for DVD movies to the _____ .

right left

A change in demand causes a __________ A change in quantity demanded causes a ________ the demand curve.

shift of movement along

A change in supply causes a ____________ the supply curve. A change in quantity supplied causes a ______________ the supply curve.

shift of movement along

The supply curve for flashlights from the Atlantic Company is shown to the right. Suppose that the price of materials used to make flashlights drops.

shift supply curve to the right

Willie's widgets currently sell for ​$19 each. At that​ price, Willie has sold 30,000 widgets. Willie would like to maximize his​ revenue, so he raises the price of a widget to ​$22 each. Willie has seen the sales of his widgets drop only slightly to 29,000. Using the​ initial-value method, the price elasticity of demand for​ Willie's widgets is

.21 inelastic

If a 12 percent increase in the price of natural gas increases the quantity of residential electricity demanded by 10 ​percent, the​ cross-price elasticity is _____ ​ In this​ case, natural gas and residential electricity are considered __________

.83 substitutes

David has ​$144 to spend on entertainment each month. David likes to buy CDs and go to the movies. Each CD David buys costs​ $12. Each movie ticket David buys costs​ $8. Each​ month, David spends as much of his entertainment budget as possible. If David buys 18 movie tickets this​ month, he can purchase ______ CDs this month. If David buys 8 CDs this​ month, he can purchase _______ movie tickets this month.​

0 6

From the following​ list, choose the variables that​ "change" as we draw a market demand curve. If the variable does not​ change, indicate that it​ "is held​ fixed." 1. The price of the product _________ as we draw the market demand curve. 2. Consumer income __________ as we draw the market demand curve. 3. The price of other related goods ________________ as we draw the market demand curve. ' 4. Consumer expectations about future prices ___________ as we draw the market demand curve. 5. The quantity of the product purchased __________ as we draw the market demand curve.

1. changes 2. is held fixed 3. is held fixed 4. is held fixed 5. changes

From the following​ list, use the​ drop-down menu to choose the variables that are​ "held fixed" in drawing a market demand curve. 1. The price of the product __________ in drawing a market demand curve. 2. Consumer income ____________ in drawing a market demand curve. 3. The price of other related goods _____________ in drawing a market demand curve. 4. Consumer expectations about future prices __________________ in drawing a market demand curve. 5. The quantity of the product purchased ___________________ in drawing a market demand curve.

1. is not held fixed 2. is held fixed 3. is held fixed 4. is held fixed 5. is not held fixed

A 13​% increase in income produces a 19​% increase in demand for satellite television. The income elasticity of demand for satellite television is _____ This indicates that satellite television service is _________ good.

1.46 normal

When the price of CDs increased from ​$20.00 to ​$22.00​, the quantity demanded decreased from 240 to 200 units. Using the​ initial-value approach, the​ (absolute value) price elasticity of demand is Therefore, demand for CDs is considered to be

1.67 elastic

Consider the figure on the right. Between points b and​ c, the opportunity cost of ____ tons of wheat is ____ tons of steel

10; 90

Compute the percentage changes for the following: Initial Value New Value Percentage Change 1000 1020 ? 500 580 ? 100 125 ?

2% 16% 25%

If a 30​-percent decrease in price increases the quantity demanded by 78 ​percent, the price elasticity of demand is

2.6

The following is a demand schedule for International House of Falafel. The following are the number of falafel dishes customers are willing to purchase at the following prices. Price Quantity ​$7.50 12 ​$7.00 15 ​$6.50 18 ​$6.00 21 ​$5.50 24 International House of Falafel has decided to lower its pricing to​ $6.00 for a special sale. At this​ price, the quantity demanded is _______

21

Suppose the price elasticity of a supply of cheese is 0.80. If the price of cheese increases by 30 ​percent, the quantity of cheese supplied will increase by ____________ percent. ​

24

In an attempt to encourage a healthy​ society, the government is making soft drink manufacturers pay a tax for every bottle or can of soda they produce. What will be the effect on the market for soft​ drinks? A. Supply falls and equilibrium price increases. B. Supply increases and equilibrium price increases. C. Supply increases and equilibrium price decreases. D. Supply falls and equilibrium price decreases.

A. Supply falls and equilibrium price increases.

There is​ ___________ relationship between the price and the quantity demanded. A. a negative B. no C. a flat D. a positive

A. a negative

The manager of a pizza shop must decide how much pizza he will produce at a given price. Which of the following would NOT be a consideration for the​ manager? A. Consumer income. B. The wage paid to the pizza​ shop's employees. C. The cost of the pizza oven. D. The cost of​ dough, cheese, and toppings.

A. Consumer income.

Which of the following is not a factor of​ production? A. Money. B. Human capital. C. Land. D. Entrepreneurship.

A. Money

What does the Latin expression ceteris paribus​ mean? A. Other things being held fixed. B. Resources are limited. C. A measure of something that can take on different values. D. Seize the day.

A. Other things being held fixed

Assume that the demand curve you have just drawn is linear. If your state set a price of​ $50.00 per vanity​ plate, you could expect to sell how many vanity​ plates?

Approximately​ 11,000.

True or False: Adam Smith suggested that people are motivated exclusively by self−interest

False

A man has been laid off from his job. He has a wife and two children. To cut back on​ expenses, the family has begun purchasing​ mega-packs of generic brand macaroni and cheese to use for meals. In this​ case, macaroni and cheese is an example of ________ good.

Inferior

According to the law of​ supply, an increase in a​ good's price _________ the quantity supplied of that good.

increases

A decrease in the supply of a product __________ the equilibrium price and ___________ the equilibrium quantity.

increases decreases

Between 1970 and​ 1988, the average monthly welfare payment to single mothers increased from​ $160 to​ $360. Over the same​ period, the cost of a standard basket of consumer goods​ (a standard bundle of​ food, housing, and other goods and​ services) increased from​ $39 to​ $118. Fill in the blanks in the following table.

Number of baskets per month: 1970 : 4.1 1988: 3.1 The real value of welfare payments decreased over this period.

If both demand and supply decrease ​simultaneously, the equilibrium price will increase if the change in __________ is relatively large.

SUPPLY

If we are on the lower portion of a linear demand​ curve, a decrease in price will _________ total revenue.

decrease

Suppose at the current​ price, the price elasticity of demand for a campus film series is 0.85. If administrators cut the​ price, total revenue will

decrease

If the price elasticity of demand is 0.75​, a 10 percent increase in price will _____quantity demanded by ______ percent

decrease 7.5%

Assume that the elasticity of demand for chewing tobacco is 0.80 and the elasticity of supply is 2.40. Suppose an​ anti-chewing tobacco campaign decreases the demand for chewing tobacco by 28​%. The equilibrium price of chewing tobacco will __________ by _________ percent

decrease 8.75%

Excess supply of a product will cause the price to __________ As a consequence of the price​ change, the quantity demanded will __________​, and the quantity supplied will _______

decrease increase decrease

According to the law of​ demand, an increase in price _______ the quantity demanded.

decreases

As the number of substitutes for a particular product decreases​, the price elasticity of demand for the product

decreases

If demand is​ elastic, an increase in price ________ total​ revenue; if demand is​ inelastic, a decrease in price _______ total revenue.

decreases decreases

When ______​changes, the equilibrium price and equilibrium quantity move in the same direction. When ________ ​changes, the equilibrium price and equilibrium quantity move in opposite directions.

demand supply

If supply increases while demand decreases​, the equilibrium quantity will decrease if the change in _________________

demand is relatively large

Demand is ________ along the upper portion of the linear demand curve. Demand is ___________ along the lower portion of the linear demand curve.

elastic inelastic

The market demand curve is the __________ sum of the individual demand curves.

horizontal

The market supply curve is the _________ sum of the individual supply curves.

horizontal

If supply decreases while demand increases​, the equilibrium price will ____________

increase

Suppose the elasticity of demand for motel rooms is 1.00 and the elasticity of supply is 0.50. If the demand for motel rooms increases by 10 ​percent, the equilibrium price of motel rooms will _______ by ________ percent

increase 6.7

An excess demand for a product will cause the price to __________ As a consequence of the price​ change, the quantity demanded will __________ and the quantity supplied will____________

increase decrease increase

The income elasticity of demand is _____ for normal goods. The income elasticity of demand is ______ for inferior goods.

positive negative

To compute the price elasticity of​ demand, we divide the percentage change in ____________ by the percentage change in _____________ and then take the _______________ of the ratio.

quantity demanded price absolute value

A change in price causes movement along a demand curve and a change in _________

the quantity demanded

A change in price causes movement along a supply curve and a change in ________

the quantity supplied

At the midpoint of a linear demand​ curve, the price elasticity of demand is

unit elastic

If a 1 percent increase in the price of tennis rackets decreases the quantity demanded of tennis balls 20 ​percent, the​ cross-price elasticity of demand is ​ In this​ case, tennis rackets and tennis balls are considered to be

−20. complements