Exam #1 Review

a price floor.

A minimum wage law is an example of...

decrease the cost of production.

Advances in productivity increase supply because they might...

a household's supply of work effort at its new business.

An example of a real flow in the circular flow diagram is? A. Nike's payment of wages to workers in China. B. a household's supply of work effort at its new business. C. a teacher's salary at the local high school. D. your county's collection of property taxes. the government's payment of wages to a soldier.

its PPF shifts outward.

As an economy grows...

Don produces beef and Claire produces corn.

Claire and Don are farmers who produce beef and corn. In a​ year, Claire can produce 10 tons of beef or 100 bushels of corn. In a​ year, Don can produce 30 tons of beef or 240 bushels of corn. How do Clair and Don maximize their total output of beef and​ corn? To maximize their total output of beef and corn,

4 Envelopes

Deb and Pete have volunteered to help their favorite charity mail out fundraiser information. The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes. What is Deb's opportunity cost of assembling 1 packet?

Deb has a comparative advantage in stuffing envelopes.

Deb and Pete have volunteered to help their favorite charity mail out fundraiser information. The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes. Which of the following statements is correct?

increased; increased

During 2008 the supply of gasoline decreased while at the same time the demand for gasoline increased. If the magnitude of the increase in demand was greater than the magnitude of the decrease in supply, then the equilibrium price of gasoline ________ and the equilibrium quantity ________.

an absolute advantage in producing a good, it might or might not have a comparative advantage in producing that good.

If a country has... an absolute advantage in producing a good, it might or might not have a comparative advantage in producing that good. a comparative advantage in the production of a good, it must also have an absolute advantage in producing that good. an absolute advantage in producing a good, it definitely also has a comparative advantage in producing that good. an absolute advantage in producing a good, it definitely will not have a comparative advantage in producing that good. None of the above answers is correct.

increases; might rise, fall, or not change.

If both demand and supply increase, the equilibrium quantity _______ and the equilibrium price _____.

a shortage of dog food occurs

If the government sets a price ceiling on dog food that is below the equilibrium price, _________.

movement up along; shift of

If the price of a taco rises, a __________ the supply curve occurs. If any factor that influences selling plans other than the price changes, then a ________ the supply curve occurs.

an increase in the number of teenagers, all of whom demand more pizza than other age groups

In the above figure, the shift in the demand curve from D to D1 can be the result of

buy goods and services from firms, which flow through the goods markets.

In the circular flow model, governments...

capital goods

Items bought by businesses to help produce other goods and services are called

winter vacations are normal goods

Miles graduates from college and his income increases by $30,000. Nothing else changes. Miles decreases the quantity of ramen noodles and pizza that he buys and increases the quantity of winter vacations that he buys.

the existence of tradeoffs.

Moving along the production possibilities frontier itself illustrates

surplus, so the price falls and quantity demanded increases.

Suppose the current price of a pound of steak is $12 per pound and the equilibrium price is $9 per pound. In this case, there is a

an increase in the price of laptops

The above figure shows the market for laptops. Which of the following causes a movement from A to B?

points A, B, and C.

The above figure shows the production possibility frontier for an economy. The point or points that are attainable and production efficient are

might rise, fall, or remain the same depending on whether the effect on buyers is larger than, less than, or the same as the effect on sellers.

The graph illustrates the market for British pounds, the currency of the United Kingdom. As the number of buyers of pounds increases and the number of sellers of pounds increases, the equilibrium price of a pound ______?

less; less

The graph shows the PPF of an economy that produces butter and ice cream. Based on the graph, fill in the blanks. The opportunity cost of producing a pound of butter is _______ at point A than at point B. The opportunity cost of producing a tub of ice cream is ________ at point B than at point A.

decrease in the quantity of the other good by the increase in the quantity of the good whose opportunity cost we're calculating.

The opportunity cost of producing one more unit of a good is calculated by dividing the...

it will be unable to do so because the production point is unattainable.

The table above shows a nation's production possibilities frontier. If the nation wants to produce 4 robots and 34 pizzas

Orange Rose; Blue Violet

Two​ countries, Orange Rose and ​Blue Violet, produce only two​ goods: teapots and coffee pots. The table gives their production possibilities. Which country has a comparative advantage in producing tea pots and which country has a comparative advantage in producing coffee pots? ________has a comparative advantage in producing teapots and has a ______ comparative advantage in producing coffee pots.

a shortage; is greater than

Using the data in the table above, if the price of a stapler is $5, then there is ________ of staplers, and the quantity of staplers demanded ________ the quantity of staplers supplied.

It analyzes the aggregate effects on the national economy of the choices made by individuals, firms, and governments.

Which of the following BEST describes macroeconomics? Proving causation is never a problem for macroeconomics. A. It is not a social science because its predictions cannot be tested. B. It examines how the choices that individuals affect governments. C. It analyzes the aggregate effects on the national economy of the choices made by individuals, firms, and governments. D. It studies the choices that individuals and businesses make when coping with scarcity.

money

Which of the following is NOT a factor of production? capital entrepreneurial ideas labor money land

i only

Which of the following is TRUE regarding demand? i.Demand is the relationship between quantity demanded and the price of a good when all other influences on buying plans remain the same. ii.Demand refers to one quantity at one time. iii."Demand" and "quantity demanded" are the same thing.

we make choices in the face of scarcity.

Which of the following statements best describes the study of economics? Economics studies how A. businesses reach decisions. B. we make choices in the face of scarcity. C. to organize production so that scarcity does not occur. D. to create incentives so that scarcity does not exist. E. firms make profits.