Economic exam 1 chapter2

A decrease in the price of a complement will shift the demand curve for a good to the left: True False

False

Refer to Table 2-3. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels? A. 200 bushels of wheat B. 400 bushels of wheat C. 600 bushels of wheat D. 800 bushels of wheat

B. 400 bushels of wheat

Refer to Table 3-10. What is Brad's opportunity cost of producing one pound of beef? Table 3-10Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. ​ A.5/6 bushel of wheat B.6/5 bushels of wheat C.3/5 bushels of wheat D.5/3 bushels of wheat​

B.6/5 bushels of wheat

A circular-flow diagram is a model that: A. helps to explain how consumers and the government interact with one another. B. explains how countries trade with each other. C. incorporates all aspects of the real economy. D. helps to explain how the economy is organized.

D. helps to explain how the economy is organized.

Refer to Figure 3-4. If Alice produces only lemonade, she can produce: a. 400 pitchers per day. b. 200 pitchers per day. c. 300 pitchers per day. d. 450 pitchers per day.

a. 400 pitchers per day.

Refer to Figure 3-3. If Arturo and Dina each divides his/her time equally between the production of tacos and burritos, then total production is: a. 400 tacos and 250 burritos. b. 200 tacos and 150 burritos. c. 800 tacos and 500 burritos. d. 400 tacos and 300 burritos.

a. 400 tacos and 250 burritos.

Refer to Figure 4-3. The shift from Da to Db in the market for potato chips could be caused by: a. an increase in the price of a pretzels. b. a decrease in the price of potato chips. c. an announcement by the FDA that potato chips cause cancer. d. a decrease in income, assuming that potato chips are a normal good.

a. an increase in the price of a pretzels.

An increase in the price of a good will: a. decrease quantity demanded. b. increase quantity demanded. c. increase demand. d. decrease demand.

a. decrease quantity demanded.

As a student, Jordyn spends 40 hours per week writing term papers and completing homework assignments. On one axis of her production possibilities frontier is measured the number of term papers written per week. On the other axis is measured the number of homework assignments completed per week. Jordyn's production possibilities frontier is a straight line if: a. she can switch between writing term papers and completing homework assignments at a constant rate. b. the rate at which she can switch between homework assignments and term papers depends on the number of homework assignments she is completing and on the number of term papers she is writing. c. she faces no trade-off between writing term papers and completing homework assignments. d. she is required by her professors to spend half of her time on term papers and the other half of her time on homework assignments.

a. she can switch between writing term papers and completing homework assignments at a constant rate.

Refer to Figure 4-10. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children? a. Point A to Point D b. Point A to Point B c. Point C to Point B d. Point C to Point D

a. Point A to Point D

A farmer has the ability to grow either corn or cotton or some combination of the two. Given no other information, it follows that the farmer's opportunity cost of a bushel of corn multiplied by his opportunity cost of a bushel of cotton: a. is equal to 1. b. is greater than 1. c. is equal to 0. d. is between 0 and 1.

a. is equal to 1.

Refer to Figure 3-2. If the production possibilities frontier shown is for two months of production, then which of the following combinations of peanuts and cashews could Brazil produce in two months? a. 5 pounds of peanuts and 150 pounds of cashews b. 3 pounds of peanuts and 150 pounds of cashews c. 2 pounds of peanuts and 240 pounds of cashews d. 7 pounds of peanuts and 135 pounds of cashews

b. 3 pounds of peanuts and 150 pounds of cashews

Currently you purchase ten frozen pizza per month. You will graduate from college in December, and you will start a new job in January. You have no plans to purchase frozen pizzas in January. For you, frozen pizzas are: a. a normal good. b. an inferior good. c. a substitute good. d. a complementary good.

b. an inferior good.

A decrease in the price of a good will: a. increase quantity supplied. b. decrease quantity supplied. c. increase supply. d. decrease supply.

b. decrease quantity supplied.

Refer to Figure 3-4. Both Alice and Betty: a. would benefit from specializing in lemonade production. b. face a constant trade-off between producing pitchers of lemonade and pizzas. c. would benefit from specializing in pizza production. d. can produce more pizzas than pitchers of lemonade if they devote all of their time to pizza production.

b. face a constant trade-off between producing pitchers of lemonade and pizzas.

A competitive market is a market in which: a. an auctioneer helps set prices and arrange sales. b. no individual buyer or seller has any significant impact on the market price. c. there are only a few sellers. d. the forces of supply and demand do not apply.

b. no individual buyer or seller has any significant impact on the market price.

A supply schedule is a table that shows the relationship between: a. profit and quantity supplied. b. price and quantity supplied. c. quantity demanded and quantity supplied. d. input costs and quantity supplied.

b. price and quantity supplied.

A professor spends 10 hours per day giving lectures and writing papers. For the professor, a graph that shows his various possible mixes of output (lectures given per day and papers written per day) is called his: a. line of tastes. b. production possibilities frontier. c. trade-off curve. d. consumption possibilities frontier.

b. production possibilities frontier.

A baker recently has come to expect higher prices for bread in the near future. We would expect: a. the demand for bread to fall. b. the baker to supply less bread now than she was supplying previously. c. the baker to supply more bread now than she was supplying previously. d. no change in the baker's current supply of bread; instead, future supply will be affected.

b. the baker to supply less bread now than she was supplying previously.

Refer to Figure 4-6. The shift from S' to S in the market for chocolate cake could be caused by: a. a decrease in the price of butter. b. a decrease in the number of commercial bakers. c. a decrease in the price of chocolate cake. d. an improvement in oven technology.

b. a decrease in the number of commercial bakers.

Refer to Figure 3-2. If the production possibilities frontier shown is for 24 hours of production, then how long does it take Brazil to make one pound of cashews? a. 1/3 hour b. 10 hours c. 1/10 hour d. 3 hours

c. 1/10 hour

Assume Lianna buys coffee beans in a competitive market. It follows that: a. Lianna has a limited number of sellers from which to buy coffee beans. b. Lianna will negotiate with sellers whenever he buys coffee beans. c. Lianna cannot influence the price of coffee beans even if he buys a large quantity of them. d. Lianna might have trouble finding coffee beans at his local store.

c. Lianna cannot influence the price of coffee beans even if he buys a large quantity of them.

A group of buyers and sellers of a particular good or service is called: a. a competition. b. an economy. c. a market. d. a coalition.

c. a market.

An example of a perfectly competitive market would be the: a. shampoo market. b. breakfast cereal market. c. soybean market. d. cable TV market.

c. soybean market.

Refer to Figure 3-3. If Arturo and Dina both spend all of their time producing tacos, then total production is: a. 800 tacos and 500 burritos. b. 400 tacos and 0 burritos. c. 400 tacos and 250 burritos. d. 800 tacos and 0 burritos.

d. 800 tacos and 0 burritos.

Consider two individuals, Marquis and Serena each of whom would like to wear sweaters and eat tasty food. The gains from trade between Marquis and Serena are most obvious in which of the following cases?: a. Marquis is very good at knitting sweaters and at cooking tasty food, but Serena's skills in both of these activities are very poor. b. Marquis and Serena both are very good at cooking tasty food, but neither has the necessary skills to knit a sweater. c. Marquis's cooking and knitting skills are very poor, and Serena's cooking and knitting skills are also very poor. d. Marquis's skills are such that he can produce only sweaters, and Serena's skills are such that she can produce only tasty food.

d. Marquis's skills are such that he can produce only sweaters, and Serena's skills are such that she can produce only tasty food.

Equilibrium quantity must decrease when demand: a. increases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease. b. increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease. c. decreases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease. d. decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.

d. decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.

Refer to Figure 4-1. It is apparent from the figure that the: a. demand for the good decreases as income increases. b. good is a normal good. c. good is inferior. d. demand for the good conforms to the law of demand.

d. demand for the good conforms to the law of demand.