Final questions

A tax on sellers causes which of the following?(i) a leftward shift of the supply curve(ii) a decrease in quantity sold(iii) an increase in the price buyers pay - (i), (ii), and (iii) - (i) and (iii) - only (i) - (ii) and (iii)

(i), (ii), and (iii)

The price of product C rises by 10%. As a result, the quantity demanded of product D rises by 20%. The cross-price elasticity of demand between product C and product D is _____, and they are _____. - 2; substitutes - -2; substitutes - 1.5; complements - 0.5; substitutes

2; substitutes

Consider the following statement: "An increase in the cost of oil will cause the price of a plane ticket to increase. This increase in price will cause a decrease in demand for airline travel and a leftward shift in the demand curve." What is the flaw of this reasoning? - The cost of oil affects supply and not demand so prices of tickets will remain the same. - The increase in the cost of oil will cause a decrease in the price of a plane ticket. - An increase in the price of a ticket will not cause a decrease in demand, but rather a decrease in quantity demanded. - A decrease in demand will shift the curve rightward, not leftward.

An increase in the price of a ticket will not cause a decrease in demand, but rather a decrease in quantity demanded.

Chin purchases five protein bars at a price of $3 each. The marginal benefit he receives from each bar is $5 for the first bar, $4.50 for the second bar, $4 for the third bar, $3.50 for the fourth bar, and $3 for the fifth bar. The marginal cost of producing the bars is $2 each. What is Chin's consumer surplus on the fifth bar? - $2 - $0 - $1 - $.50

$0

Instead of attending class, one could have worked an extra hour at the café for $10 or watched a neighbor's child for $15. The opportunity cost of attending class is: - $15. - $25. - $5. - $10.

$15.

Moira buys 3 wigs at a price of $100 each. She values the first wig at $200, the second wig at$175, and the third wig at $100. What is her consumer surplus? - $175 - $300 - $100 - $0

$175

Initially, the price of beer is $20. When a $5 tax on beer is imposed on buyers, the equilibrium pre-tax price of beer goes down to $18. If, instead, the tax was placed on sellers, what would the equilibrium pre-tax price of beer be? (The "pre-tax price of beer" is the amount on the price tag at the store) - $18 - $20 - $22 - $23

$23

It costs $9 to make 5 coffee mugs and $12 to make 6 coffee mugs. What is the marginalcost of the sixth coffee mug? - $.50 - $2 - $3 - $1.33

$3

Portia produces and sells headbands. Her marginal cost for one headband is $6, and her average cost is $4. She gains producer surplus only when she sells headbands at a price above: - $4. - $5. - $6. - $10.

$6

The price of product A is cut by 30%. As a result, the quantity demanded of product B rises by 40%. The cross-price elasticity of demand between product A and product B is _________, and they are _________. - -1.33; complements - 1.25; complements - -0.75; substitutes - -1.25; complements

-1.33; complements

A normal good is: - a good which is normally purchased by many consumers. - a good for which higher income causes a decrease in demand. - a good which is only purchased by high-income consumers. - a good for which higher income causes an increase in demand.

A good for which higher income causes an increase in demand.

A subsidy is a: - A government payment designed to encourage particular purchases or productive activities. - Government regulation of the quantity sold in a market. - A tax designed to encourage particular purchases or productive activities. - Form of tax.

A government payment designed to encourage particular purchases or productive activities.

According to what we learned in class about solving negative externalities, which of the following is not a method that could be used to deal with the negative externality of second- hand smoke: - A law banning smoking in public places. - A tax on cigarettes. - An advertising campaign telling people that smoking around others is rude. - A subsidy on cigarette lighters.

A subsidy on cigarette lighters.

When using coordination games to look at the issue of bank runs, the best outcome occurs when: - All people keep their money in the bank. - People run to withdraw their money from the bank. - People do not use the banking system. - Some people, but not all, keep their money in the bank.

All people keep their money in the bank.

A binding price floor is: - Always above the equilibrium price. - Always below the equilibrium price. - The maximum price that a seller can charge in a market. - Always at the equilibrium price.

Always above the equilibrium price.

According to diminishing marginal utility, which of the following people would gain the lowest marginal benefit from an extra $100 of income? - Ariana, an actress with an annual household income of $1,500,000 - Chin, a single person with an annual household income of $20,000 - Devin, head of a three-person household with an annual household income of $120,000 - Shawna, a single mother of three young children with an annual household income of $19,000

Ariana, an actress with an annual household income of $1,500,000

Which of the following is NOT one of the four steps for making good strategic decisions? - Play your best response. - Consider all the possible outcomes. - Think about the "what ifs" separately. - Assume that others will defer to your action.

Assume that others will defer to your action.

People gain consumer surplus when they purchase an item - At a price below the value of the benefit they receive from the item. - At a fair price. - At a price above marginal revenue but lower than the cost of production. - With a marginal benefit below the price of the item.

At a price below the value of the benefit they receive from the item.

People gain consumer surplus when they purchase an item: - At a price above marginal revenue but lower than the cost of production. - With a marginal benefit below the price of the item. - At an equitable price. - At a price below the value of the benefit they receive from the item.

At a price below the value of the benefit they receive from the item.

Coordination problems can be solved through each of the following approaches EXCEPT: - Communication. - Backward reasoning. - Laws and regulations. - Focal points, culture, and norms.

Backward reasoning.

What conditions must be met for private bargaining to be effective in resolving an externality? - There must be trade in public goods. - Bargaining costs must be low, and property rights must be clear. - Property rights must be clear, and production must begin at a socially optimal level. - Taxes must be low, and regulations must be minimal.

Bargaining costs must be low, and property rights must be clear.

Joshua Murphy is planning on studying late into the night for his economics exam. How many cups of coffee should he buy tonight? Joshua should keep buying coffee throughout the evening until the marginal: - benefit of purchasing one more coffee equals the marginal cost. - benefit of purchasing one more coffee is less than the marginal cost. - benefit of purchasing one more coffee is positive. - cost of purchasing one more coffee is positive.

Benefit of purchasing one more coffee equals the marginal cost.

Kathleen Alvarado is binge-watching her favorite show on Netflix. She is attempting to decide how many more episodes to watch. Kathleen should continue watching episodes as long as the marginal: - benefit of watching another episode is less than the marginal cost. - benefit of watching another episode exceeds the marginal cost. - benefit of watching another episode is positive. - cost of watching another episode is positive.

Benefit of watching another episode exceeds the marginal cost.

The key to using the cost-benefit principle is to think about ________ aspects of a decision. - neither financial nor nonfinancial - both financial and nonfinancial - only nonfinancial - only financial

Both financial and nonfinancial

In a voluntary economic transaction between a buyer and a seller, _____ can earn economic surplus from the transaction. - neither the buyer nor the seller - both the buyer and the seller - only the buyer - only the seller

Both the buyer and the seller

Bryson and Xander are roommates. They need to mow the lawn and wash dishes. Initially,Bryson's opportunity cost of washing dishes once is mowing one half of the lawn, and he has a comparative advantage at washing dishes. Then, Bryson breaks his arm. As a result, it takes him twice as long as before to mow the lawn and twice as long as before to wash dishes. Which of the following statements is definitely true? - Bryson's opportunity cost of washing dishes is now mowing one fourth of the lawn - Bryson's opportunity cost of washing dishes is now mowing the entire lawn. - - Bryson still has a comparative advantage at washing dishes. - Xander now has a comparative advantage at both tasks

Bryson still has a comparative advantage at washing dishes.

Consider the market for soybeans in Spartania. Initially, Spartania is an autarchy and there is no international trade, and the world price of soybeans is above the autarchy price. What happens if Spartania decides to allow free trade? - Consumer surplus goes up, producer surplus goes up. - Consumer surplus goes down, producer surplus goes up - Consumer surplus goes up, producer surplus goes down. - Consumer surplus goes down, producer surplus goes down

Consumer surplus goes down, producer surplus goes up

Ilsia is driving home from work. She needs to buy gas and notices an Exxon-Mobil station on one side of the street and a Shell station on the other side of the street. Although run by different companies, the two stations sell gasoline at the same price. The most likely reason that the price is the same is that - Drivers need gas and are willing to pay whatever price a gas station charges. - Gas stations always make a profit, so they can charge any price they want. - Consumers view gasoline from different gas stations as perfect substitutes. - Government regulation requires both gas stations to charge the same price.

Consumers view gasoline from different gas stations as perfect substitutes

The costs of working do NOT include what - Could have been done during the time spent at work. - It would cost to buy a professional wardrobe if needed for the job. - Could have been done with the time spent commuting. - Could have been bought with the income earned.

Could have been bought with the income earned.

When the economic surplus in a market is less than it would be if the market were efficient, the market is experiencing: - Asymmetry problems. - A situation in which marginal benefit equals marginal cost. - An inverse externality. - Deadweight loss.

Deadweight loss.

Which of the following is a decision that follows the net marginal benefit principle? - Choosing among different roller coasters based on their distance from the theme park entrance. - Choosing to give up eating meat due to concerns regarding the treatment of animals. - Deciding to order a dessert at a non-buffet restaurant more often than you have dessert at a buffet. - Deciding whether to spend one more hour studying for an exam.

Deciding whether to spend one more hour studying for an exam.

In 2016, Amazon began charging a 5.75% sales tax on products it sells in the District of Columbia. Holding all else constant, the effect of this tax would be to _____ in the District of Columbia. - Increase Amazon sales - Decrease prices for local businesses - Decrease Amazon sales - Decrease the number of consumers

Decrease Amazon sales

A subsidy for buyers of a product shifts the: - Demand curve to the left. - Supply curve to the left. - Supply curve to the right. - Demand curve to the right.

Demand curve to the right

Which of the following statements is true: - Demand for mint chocolate chip ice cream is more elastic than the demand for ice cream. - As consumers get more time to plan their purchases, demand becomes more inelastic - When it became easy to search for car insurance online, demand for car insurance became more inelastic. - Goods considered necessities typically have elastic demand.

Demand for mint chocolate chip ice cream is more elastic than the demand for ice cream.

The cross-price elasticity of demand measures how responsive the: - Demand for one good is to a change in the demand for another good. - Supply of one good is to a change in the price of another good. - Price of a good is to a change in the price of another good. - Demand for one good is to a change in the price of another good.

Demand for one good is to a change in the price of another good

Buyers bear a smaller incidence of the tax when: - Demand is perfectly inelastic. - The tax is higher. - Demand is more elastic than supply. - Supply is more elastic than demand.

Demand is more elastic than supply

A simultaneous game is one in which: - The alternative outcomes all occur on the same time line. - Regardless of which choices are made, the resulting outcome occurs at the same time. - Each player learns of the other's intention at the same time, before the final choices are made. - Each player must choose without knowing the other player's choice.

Each player must choose without knowing the other player's choice.

Which of the following is a mean-tested social safety net program in the United States? - Worker's compensation - Medicare - Social Security - Earned income tax credit

Earned income tax credit

Which of the following is NOT true of the incidence of poverty in the United States? - People of color are more likely than others to experience poverty. - Children and single moms are most likely to be in poverty. - Elderly people are more likely than other age groups to be in poverty. - Most people in poverty will spend much of their lives in poverty, but most people will spend some time in poverty during their lifetime.

Elderly people are more likely than other age groups to be in poverty.

Which of the following is NOT one of the three questions that should guide discussions and policies related to the redistribution of income that were presented in the chapter? - How large are the costs of redistribution of income? - How long will it take to redistribute income? - How fair is this redistribution? - How large are the benefits of redistributing income to those who most benefit from it?

How long will it take to redistribute income?

The three key labor market decisions that you make do NOT include - What kind of work to do. - Whether to work. - How many hours to work. - How many workers to hire.

How many workers to hire.

Suppose the percentage change in newspapers demanded for any price change is infinite. The absolute value of the elasticity of demand for newspapers is ___________, and demand is ______________. - 0; perfectly inelastic - 0; perfectly elastic - Infinity; perfectly inelastic - Infinity; perfectly elastic

Infinity; perfectly elastic

Which of the following is not a way that firms are affected by globalization? - Competition from international companies can prevent a firm from increasing its prices. - The global market makes it more profitable for firms to create specialized products. - U.S. companies may see reduced profits if there is a recession in Japan or China. - International trade makes countries poorer, which limits their ability to buy expensive goods

International trade makes countries poorer, which limits their ability to buy expensive goods

Callie's firm uses a proprietary and complicated production process to ensure product quality. Her workers are carefully trained in this process as soon as they are hired. Callie thereby: - Invests in job-specific skills. - Ensures that all workers have the needed general skills. - Raises production costs. - Prevents employees from leaving the firm.

Invests in job-specific skills.

Which of the following scenarios illustrates the law of demand? - A research company finds that the more expensive a particular brand of a designer handbag, the more that consumers are willing to purchase the brand. - Francis does not care about the price of coffee at the coffee shop - he must buy two cappuccinos every day, regardless of the price. - John likes to drink spring water. At $2 he buys four bottles of water, and at $1.50 he still buys four bottles of water. - Kathleen eats more steak when the price is low, and less when the price is high.

Kathleen eats more steak when the price is low, and less when the price is high.

If a company incurs expenses to start providing childcare at work so that employees can have lunch with their preschool children, the company's demand curve for labor will shift to the - Left because employees are more expensive to the firm. - Right because employees are more expensive to the firm. - Left because workers will be more loyal. - Right because workers will be more loyal.

Left because employees are more expensive to the firm.

The value of deadweight loss for a perfect price discriminator is __________ an imperfect price discriminator. - Greater than - The same as - Less than - Unknown compared to

Less than

Employees will be motivated to work hard and try to help their employer succeed if the company: - Focuses on extrinsic rewards. - Uses carrots and sticks. - Lives up to a core set of ideals that workers identify with. - Provides compensating differentials.

Lives up to a core set of ideals that workers identify with.

The marginal revenue product of labor is equal to: - MPL + P. - MR + Wage. - MPL × P. - MR × Wage.

MPL × P.

If the demand for Ono Yo's organic frozen yogurt increases, then the _________ Ono Yo's workers will __________. - Demand for; hold steady - Wages of; fall - Marginal revenue product of; increase - Productivity of; rise

Marginal revenue product of; increase

Which of the following is an example of a nonrival good? - Microsoft Excel - The front seat on a roller coaster - Fish in a lake - Cigarettes

Microsoft Excel

You are the coordinator of a nonprofit that distributes donated items to three local homeless shelters and want to figure out a way of distributing the donated items to the shelters who need it the most. Which of the following would most likely achieve your goal? - Divide the donations evenly among the three shelters. -Send all the donations to the shelter that has the least. -Offer each shelter a virtual "budget" and have them bid on different items. - Ask shelters to submit their requests, and decide what to send where based on their answers.

Offer each shelter a virtual "budget" and have them bid on different items.

In which market structure do the actions of a rival have a significant impact on your operations? - Monopolistic competition - Monopoly - Oligopoly - Perfect competition

Oligopoly

When cell phones first came out, the technology used in them was extremely advanced and made producing cell phones very expensive. Over time, the cost of cell phone components has gone down drastically. Based on what we've learned in class, how do we expect this to affect the price and quantity of cell phones? - Price decreases and quantity decreases. - Price decreases and quantity increases. - Price increases and quantity decreases. - Price increases and quantity increases.

Price decreases and quantity increases

The producer surplus on a unit sold equals: - 1/2 (price times quantity minus marginal cost). - Price minus marginal cost. - Marginal benefit minus price. - (price minus marginal cost) multiplied by (1/2 quantity sold).

Price minus marginal cost.

The tragedy of the commons is the: - Destruction of rival, excludable goods. - Tendency to overconsume common resources. - Destruction of nonrival, nonexcludable goods. - Tendency to underconsume common resources.

Tendency to overconsume common resources.

An individual demand curve is a graph: - that plots the quantity of an item that someone plans to buy, at each price. - that plots the market price of a product at different points in time. - that plots the quantity of an item that someone plans to buy, at one single price point. - that plots the quantity of an item that a seller plans to sell, at each price.

That plots the quantity of an item that someone plans to buy, at each price.

Which of the following is the best definition of comparative advantage: - What you give up when you decide to do a task - The ability to carry out a task at a lower opportunity cost - The ability to carry out a task more efficiently than someone else - The amount of time it takes you to do a task

The ability to carry out a task at a lower opportunity cost

Which of the following is NOT a factor that can shift supply? - The price of a substitute-in-production. - The price of a complement-in-production. - The market price of a product. - The expected future price of a product

The market price of a product.

Perfect price discrimination leads to _____________________ market output. - The socially efficient - An inefficient

The socially efficient

Vandelay Industries is polluting into a local lake; doing so benefits them $10,000 per year.People who enjoy swimming in the lake are made worse off. They would value swimming in a clean lake at $15,000 per year. Currently, Vandelay Industries has the rights to use the lake however they want. Which of the following is an optimal solution according to the Coase theorem? - Vandelay Industries pays the swimmers $5,000 and continues to pollute. - The swimmers pay Vandelay Industries $25,000 and Vandelay Industries continues to pollute. - The swimmers pay Vandelay Industries $4,000 and Vandelay Industries stops polluting. - The swimmers pay Vandelay Industries $12,000 and Vandelay Industries stops polluting

The swimmers pay Vandelay Industries $12,000 and Vandelay Industries stops polluting

Which of the following illustrates a positive externality? - Ella can buy a shirt at half price because someone else returned it. - Martin's company experiences an increase in profits due to his cost-cutting initiatives. - The value of Maria's house rises when the city builds a park nearby, enhancing her view. - Artem loses sleep when an airport is built near his home, and planes fly overhead.

The value of Maria's house rises when the city builds a park nearby, enhancing her view

How does the pay of unionized workers compare with that of nonunionized workers in similar jobs, on average? - Unionized workers earn more. - Unionized workers earn less. - Unionized workers earn the same. - The average incomes are the same, but unionized workers' incomes vary far less.

Unionized workers earn more.

Variable costs are the costs that - Stay fixed with the quantity of output produced. - Are incurred to build factories and assembly plants. - Are independent of the amount of output produced. - Vary with the quantity of output produced.

Vary with the quantity of output produced.

In a labor market graph, ___________ is measured on the vertical axis, and ___________ is measured on the horizontal axis. - Hours of labor; wage - Product price; number of workers - Number of workers; product price - Wage; hours of labor

Wage; hours of labor

Dependencies between your own choices reflect the fact that: - resources can be spread across time. - you have limited resources. - resources are spread across varying markets. - society has limited resources.

You have limited resources.

When it is hard to monitor worker productivity, employers often pay: - A lower wage. - A higher wage. - A wage based on worker qualifications. - A random wage.

a higher wage.

The cost-benefit principle states that _____ are the incentives that shape decisions. - opportunity costs - costs and benefits - incomes - framing effects

costs and benefits

When you calculate marginal costs, they should include: - Only variable costs. - Both the variable and fixed costs. - Only fixed costs. - The market price of the product.

only variable costs.

Diana is a student studying economics and currently working on her class schedule for next semester. She decides to enroll in a course on economic data analysis because she knows that data analysis is a highly sought-after skill from employers in her career field. Weighing what may affect her in the future opportunities demonstrated dependency: - through time. - between college courses. - between markets. - between people or businesses in the same market.

through time.

Which of the following taxes is regressive? Raj pays a 10% tax on the first $10,000 he earns plus a ___________ tax on any additional income. - 25% - 15% - 5% - 10%

5%

Kevin Williamson goes to a local coffee shop and orders a medium-sized latte. His willingness to pay for that latte is $6. The price of the latte is $2. The cost to the coffee shop to produce the latte is $1. How much economic surplus does Kevin gain when he purchases the latte? - $1 - $6 - $2 - $4

$4

You are deciding whether to live with your parents in their house or in an on-campus apartment. You can live with your parents for free, but the apartment costs $500 per month.You will have less privacy if you live with your parents. Both places are a 30 minute drive from campus, and you commute to campus every day. Which of the following is an opportunity cost of living in the apartment? - Having less privacy - The time you spend commuting - $500 in rent - Your college tuition

$500 in rent

A tax on buyers causes which of the following?(i) a leftward shift of the demand curve(ii) a decrease in quantity sold(iii) an increase in the price buyers pay - (i), (ii), and (iii) - only (i) - (i) and (iii) - (ii) and (iii)

(i), (ii), and (iii)

Which of the following are correct about fixed costs?(i) They do not change with the level of production in the short run.(ii) They include variable costs.(iii) They are present even when the firm is producing zero units.(iv) They are irrelevant to marginal cost. - (i), (ii), and (iii) - (ii) and (iv) - (i), (ii), (iii), and (iv) - (i), (iii), and (iv)

(i), (iii), and (iv)

Which of the following types of activities between businesses would be considered illegal in the United States? Select all that apply. - Delta, United, Southwest, and American airlines agree to restrict the number of flights they offer each day domestically in the United States. - Archer Daniels Midland and the Japanese firm Ajinomoto agree to raise the price on lysine, an additive used in livestock feed. - Delta Airlines and Coca-Cola sign a contract to make Coca-Cola the exclusive provider of soft drinks on Delta flights. - The cable television providers Comcast and Charter Communications agree not to compete in certain geographic regions of the country.

- Delta, United, Southwest, and American airlines agree to restrict the number of flights they offer each day domestically in the United States. - Archer Daniels Midland and the Japanese firm Ajinomoto agree to raise the price on lysine, an additive used in livestock feed. - The cable television providers Comcast and Charter Communications agree not to compete in certain geographic regions of the country.

Which of the following are factors that can create market power for a firm? Select all that apply. - Having fewer competitors in the market. - Being able to differentiate one's product. - Having a homogenous product.

- Having fewer competitors in the market. - Being able to differentiate one's product.

Most stores offer rotating promotions that provide discounts on various products. However, at many of them, you must become a rewards member to take advantage of the deals. The price of the membership is free. You are probably familiar with this process at grocery stores, pharmacies, and even pet supply chains. Rewards membership offerings benefit stores by enabling them to? (more than one) - gain a unque competitive advantage, so that they can dominate the market. - make sales they would not otherwise make. - track data, such as buying habits, on their customers.

- Make sales they would not otherwise make. - Track data, such as buying habits, on their customers.

Which of the following statements are true? (More than one) - Markets by definition involve the exchange of money for goods and services. - Your current economics course, the next election, and the dating scene can all be seen as markets. - Markets are forums in which parties exchange goods and services at a "price," where the latter can be flexibly construed.

- Your current economics course, the next election, and the dating scene can all be seen as markets. - Markets are forums in which parties exchange goods and services at a "price," where the latter can be flexibly construed.

Most stores offer rotating promotions that provide discounts on various products. However, at many of them, you must become a rewards member to take advantage of the deals. The price of the membership is free. You are probably familiar with this process at grocery stores, pharmacies, and even pet supply chains. Identify each hurdle that shoppers must typically clear to obtain these promotional deals. (more than one) - remembering to bring the discount card to the store or provide the clerk with your phone number - divulging personal information, such as one's age and e-mail address - taking time to fill out a form

- remembering to bring the discount card to the store or providing the clerk with your phone number - divulging personal information, such as one's age and e-mail address - taking time to fill out a form

The price of AirPods goes from $100 to $105 dollars. Following this change, consumption goes from 10 million units to 8 million units. What is the elasticity of demand? - -4 - -2.5 - -0.4 - -5 - -0.25

-4

The price of milk at the local grocery store rises by 25%, and the quantity of milk demanded falls by 10%. The absolute value of the price elasticity of demand for milk is __________, and demand is ___________. - 0.4; elastic - 2.5; elastic - 0.4; inelastic - 2.5; inelastic

0.4; inelastic

If income rises by 20% and the quantity demanded of an item rises by 10%, the income elasticity of demand for this item is: - -0.5. - 0.5. - -2. - 2.

0.5

The price of a dozen eggs falls from $3 to $2.70. In response to this price change, the quantity supplied of eggs falls from 100,000 dozen eggs to 75,000 dozen eggs. What is the price elasticity of supply for eggs? - 0.4 - 4 - 0.25 - 2.5

2.5

A survey of 100 people finds that, when the price of a hat is $15, the people in the survey will buy a total of 75 hats. Suppose the total market size is 10,000 people. When the price of That is $15, what is the total number of hats that will be sold in the market? - 0.75 - 7,500 - 1,500 - 75 - 10,750

7,500

Lisa is choosing between three alternatives: a) working at her job that pays 60 dollars; b) writing a term paper which she values at 40 dollars; or c) going out with a friend, which she values at 80 dollars. The opportunity cost of writing the term paper is: - 80 dollars. - 20 dollars. - 140 dollars. - 0 dollars.

80 dollars.

A Nash equilibrium can be identified on a payoff table when: - A check mark is put next to each player's best response, and there is a cell with no check marks in it. - One cell contains the highest gain for each player, although it may not be the player's best response. - A check mark is put next to each player's best response, and there is a cell with a check mark for each player. - Each player has an equilibrium that is opposite that of the other player, so they are not in conflict.

A check mark is put next to each player's best response, and there is a cell with a check mark for each player.

When a player faces the same strategic interaction a fixed number of times, the player is engaged in ___________ game. - An internally repeated - A temporarily constant - A finitely repeated - A limited repetition

A finitely repeated

Which of the following statements is FALSE: - Markets reallocate resources to better uses - A low price gives buyers an incentive to consume more - A high price gives strangers an incentive to cooperate - A low price is a signal that buyers have a high marginal benefit from the good

A low price is a signal that buyers have a high marginal benefit from the good

A market with a large number of sellers and a high level of product differentiation is known as - A perfectly competitive market. - A monopoly. - A monopolistically competitive market. - An oligopoly.

A monopolistically competitive market

Walmart has a large aisle that displays many different kinds of toothpastes. This observation indicates that the toothpaste market is - A monopolistically competitive market. - A perfectly competitive market. - A monopoly. - An oligopoly.

A monopolistically competitive market.

Once an original decision has been made, what happens on a game tree with each additional decision made by a player? - A root sprouts downward. - A new branch is formed. - A merger occurs between two branches. - A new tree is created.

A new branch is formed.

Which of the following lists only the factors that would cause a decrease in the supply of an item? - A fall in input prices; an increase in productivity; a fall in the price of a substitute-in-production. - A rise in the price of a substitute-in-production; a rise in the price of a complement-in-production; an expectation that the price of the item will rise in the future. - A decrease in the number of sellers in the market; a fall in the price of a complement-in-production; an increase in productivity. - A rise in input prices; a decrease in the number of sellers in the market; a rise in the price of a substitute-in-production.

A rise in input prices; a decrease in the number of sellers in the market; a rise in the price of a substitute-in-production

An externality is defined as: - The impact of an activity on buyers and sellers in the market where the activity takes place. - An effect of market activity that impacts the opposite side of the market from the side whose decision caused the effect. - The effect of an activity undertaken outside a building rather than inside a building. - A side-effect of an activity that affects bystanders whose interests are not taken into account.

A side-effect of an activity that affects bystanders whose interests are not taken into account

Which of the following would be both nonrival and nonexcludable? - A siren tornado warning system - A museum - An immunization - A road

A siren tornado warning system

When four roommates agree to specialize in the chores they are most efficient at, this can lead to: - a situation in which less time is spent on chores by every roommate. - some roommates doing many more chores than others. - one roommate who is most efficient doing all of the chores. - no chores getting done at all.

A situation in which less time is spent on chores by every roommate.

Which of the following scenarios depicts a seller who is following the Rational Rule for Sellers? - Mindy sets up a lemonade stand and calculates the cost of an additional cup of lemonade at 50 cents, and sells it for 25 cents. - An auto-rickshaw driver in New Delhi, India, calculates a trip to have a marginal cost of 350 rupees and accepts a ride request for 315 rupees. - Andy's Diner finds that the marginal cost of a fish and chips meal is $7 and lists the item for sale at $6.50. - American Airlines determines the marginal cost of an extra passenger to be $75 and sells a discount seat for $250.

American Airlines determines the marginal cost of an extra passenger to be $75 and sells a discount seat for $250.

Globalization has made it easier for American companies to offshore work formerly done in the U.S. Some people think that this has resulted in American workers "competing" against cheaper labor. Despite this, American wages are still much higher than the wages in China and other low-income companies. This is mostly because: - Tariffs prevent most international trade - American workers are more productive than the workers in these countries - - Americans choose not to import goods from low-wage companies - Greater competition prevents wages from changing

American workers are more productive than the workers in these countries

When a player's best response is to take a different (but complementary) action to the other player, then both participants are playing __________ game. - An anti-coordination - A coordination - A Coase equilibrium - A strategic dilemma

An anti-coordination

According to what we learned in class, which of the following statements is true? - There is general agreement that an economic efficient outcome is the "best"possible outcome. - An economically efficient outcome maximizes equality. - An economically efficient outcome maximizes total surplus. - How much you are willing to pay for something is determined entirely by the marginal cost of production.

An economically efficient outcome maximizes total surplus.

Marjean walks to work every day along a busy road. As she does so, she breathes in the fumes of many cars, often arriving at work coughing. The economic term for the impact of the cars on Marjean is: - A nonmarket repercussion. - An alternative action. - An externality. - Exploitative supply.

An externality.

You have a coupon for a free item at Starbucks. You can have either a cookie, a cappuccino, or an iced tea. You choose the cookie because that is your favorite item.Your second choice would have been the iced tea. What is the opportunity cost of the cookie you chose? - An iced tea - Nothing, because it was free - A cappuccino - A cookie - An iced tea and a cappuccino

An iced tea

According to what we learned in class, which of the following is not commonly seen when price ceilings are imposed: - A reduction in quantity supplied - People waiting in lines to buy the product - An increase in producer surplus - A secondary market for the good.

An increase in producer surplus

Which of the following is NOT true regarding discrimination in labor markets? - Discrimination may result in some workers being underpaid. - Differences in effort or bargaining power across groups can lead to differences in wages across groups. - Any differences in wages between members of different racial or age groups is due to discrimination. - Groups may differ in wages, due to differences in human capital or the types of jobs held.

Any differences in wages between members of different racial or age groups is due to discrimination

The economic burden of a tax is the: - Burden created by the change in after-tax prices faced by buyers and sellers. - Laws governing sales taxes in a country. - Government-designated burden of a tax payment. - Percentage increase in the tax on an item.

Burden created by the change in after-tax prices faced by buyers and sellers.

You want to get a new iPhone, but you don't want to have the color phone as your friends- you want yours to be unique. All of your friends feel the same way. This suggests that yellow iPhones are: - Network goods - Congestion goods - Inferior goods - Normal goods

Congestion goods

The statutory burden of a tax is the: - Burden created by the change in after-tax prices faced by buyers and sellers. - Government-designated burden of a tax payment. - Percentage increase in the tax on an item. - Laws governing sales taxes in a country.

Government-designated burden of a tax payment.

A bakery hires a baker who can make 15 cakes per day. The bakery then decides to hire a second baker who will use the kitchen at the same time as the first baker. The bakery finds that the second baker can produce only an additional nine cakes per day. What concept does this scenario illustrate? - The marginal principle - The cost-benefit principle - Diminishing marginal product - The opportunity cost principle

Diminishing marginal product

Why does an employer's labor demand curve slope downward? - Diminishing marginal product - Diminishing product demand - Marginal cost adjustment - Substitution rule

Diminishing marginal product

Which of the following is consistent with the view that "fairness" means equality of outcomes? - Equal access to education - Equal productivity that yields equal pay - Equal incomes - Nondiscrimination in hiring processes

Equal incomes

The marginal private benefit is the: - Extra benefit that goes to bystanders for each additional unit of a good consumed by others. - Extra benefit enjoyed by the buyer of one extra unit of a good or service. - Addition to the satisfaction a buyer receives from the total quantity of a product consumed. - Total extra benefit society gains from the consumption of an extra unit of a good.

Extra benefit enjoyed by the buyer of one extra unit of a good or service.

All of the solutions to externality problems involve: - Turning private costs and benefits into external costs and benefits. - Setting regulations that impose the socially optimal price and quantity in the market. - Converting social costs into private costs. - Getting buyers and sellers to consider marginal external costs and benefits.

Getting buyers and sellers to consider marginal external costs and benefits

The Rational Rule for Sellers says that a seller should sell one more unit of an item if the price is: - Less than the marginal benefit. - Less than the marginal cost. - Greater than or equal to the marginal cost. - Greater than or equal to the marginal benefit.

Greater than or equal to the marginal cost

Compensating differentials lead to: - Incomes based solely on productivity. - Lower salaries for more unpleasant jobs. - Equal salaries for equal levels of human capital. - Higher salaries for more unpleasant jobs.

Higher salaries for more unpleasant jobs

An efficiency wage is a: - System of tying wage rates to overall factory efficiency rather than personal productivity. - Wage that rises when workers invest in their human capital. - Higher wage paid to encourage greater worker productivity. - Higher wage paid to reward workers who show greater productivity.

Higher wage paid to encourage greater worker productivity.

Consider the labor market, predict which of the following create an incentive for investment in capital? - Higher wages - Higher capital prices - Lower land prices - Lower wages

Higher wages

The income effect measures - The impact of change in relative prices. - How people's choices change when they have to work more. - How people's choices change when they have more income. - The change in welfare when income rises.

How people's choices change when they have more income

The accumulated knowledge and skills that make a worker more productive are known as: - Human capital. - Labor factoring. - Efficiency investment. - Labor enhancement.

Human capital.

Which of the following statements describes the Coase Theorem? - Elimination of an externality is possible only when the marginal benefit of a good is no higher than its marginal cost. - If the marginal benefit of a good exceeds the good's marginal cost, more of it should be produced. - If bargaining is costless, and property rights are clearly established and enforced, then externality problems can be solved through private bargaining. - Even if bargaining is not costless, and property rights are unclear, externality problems can be solved through private bargaining.

If bargaining is costless, and property rights are clearly established and enforced, then externality problems can be solved through private bargaining.

Which of the following is a positive economic statement? - A 10% inflation rate is too high and should be reduced. - That company with a 50% profit rate made too much profit at the expense of consumers. - The government ought to balance its budget and eliminate the deficit. - If the government raises taxes, people will have less income available for purchases and saving.

If the government raises taxes, people will have less income available for purchases and saving

Consideration of the benefits of choosing an occupation should NOT include - The amount you love the work. - Salary or wage. - The trajectory of income over a career. - If you find it easy.

If you find it easy.

At the wholesale club, one can buy toothpaste at a lower unit price if one buys six tubes of toothpaste at once. This is an example of _____________, which ______________ producer surplus. - Imperfect price discrimination; increases - Perfect price discrimination; decreases - Perfect price discrimination; increases - Imperfect price discrimination; decreases

Imperfect price discrimination; increases

Jonathan Mendez is deciding whether to study for his economics exam at a café down the street or go to a concert a few cities over. The time spent commuting to the concert is ___________ in his opportunity cost calculations and represents a ___________ cost. - not included; financial - included; financial - not included; sunk - included; nonfinancial

Included; nonfinancial

Which of the following is a valid explanation of why a star movie actor earns many times more than a star Broadway actor? - In one evening, many more people can view a movie than can see a Broadway play. - There is discrimination against Broadway actors but not against movie actors. - Government regulations specify how much each type of actor earns. - Broadway actors are far less skilled than movie actors.

In one evening, many more people can view a movie than can see a Broadway play.

When the definition of poverty focuses on relative poverty, a person is in poverty if the household income is: - Below $3.10 per day. - Insufficient to provide basic food, shelter, medical care, and transportation. - In the bottom 10% of household incomes in the nation. - Is less than three times the cost of a basic food plan.

In the bottom 10% of household incomes in the nation

Which of the following is NOT one of the four key reasons that the government provides in-kind benefits rather than cash benefits? - An in-kind benefit like child care is a complement to work, which provides some incentive for recipients to provide for themselves rather than rely on the safety net. - Giving goods rather than cash prevents recipients from making bad choices. - In-kind benefits give the recipient the greatest flexibility to choose what matters most. - Taxpayers may care more about reducing homelessness or hunger than what will make the recipient happiest.

In-kind benefits give the recipient the greatest flexibility to choose what matters most.

When the absolute value of the price elasticity of demand is less than 1, demand is: - unit elastic. - perfectly elastic. - inelastic. - elastic.

Inelastic

If demand is _____, a higher price yields _____ total revenue. - Inelastic; higher - Elastic; no change in - Inelastic; lower - Elastic; higher

Inelastic; higher

A preconceived bias against a group that's not based on reason or experience is known as: - Compensatory bias. - Implicit bias. - Prejudice. - Statistical discrimination.

Prejudice.

The emergence of ride sharing apps like Uber have created gains from trade by - Requiring all of their drivers to have a valid driver's license and a clean driving history. - Introducing new sellers into the market for taxi services and decreasing the price of rides. - Introducing new buyers into the market for taxi services and increasing the price of rides. - Pushing traditional taxi companies and drivers out of the market.

Introducing new sellers into the market for taxi services and decreasing the price of rides

In the United States, the poverty line income: - Is adjusted based on family size. - Is based on estimated medical care costs. - Excludes medical care costs. - Is the same for all households.

Is adjusted based on family size.

Diminishing marginal benefit: - is when buying an additional item yields a smaller marginal benefit than the previous item. - is when buying an additional item yields a larger marginal benefit than the previous item. - is not important in determining a consumer's purchase decision. - is when consumers do not follow the rational rule.

Is when buying an additional item yields a smaller marginal benefit than the previous item.

What impact has technology had on the difference between the income of the best engineers and that of good engineers? - It has increased the gap in income significantly. - It has decreased some of the gap in income. - It has had little impact on the gap in income. - It has eliminated the large gap that once existed.

It has increased the gap in income significantly.

What problem arises in coordination games with multiple equilibria? - Players have no incentive to coordinate. - It is difficult to achieve the commonly desired outcome. - The equilibria make all players worse off. - The multiple equilibria mean that coordination yields no possible gain

It is difficult to achieve the commonly desired outcome.

What is quantity supplied? - It is the amount of an item that a seller is willing to sell at a particular price. - It is a graph that plots how much a seller produces at different points in time. - It is a graph that plots the quantities of an item that a seller plans to sell at different prices. - It is the amount of an item that a buyer is willing to buy at a particular price.

It is the amount of an item that a seller is willing to sell at a particular price

Which of the following is a good example of a positive externality? - Jonathan sets off fireworks for his family on the Fourth of July, and the neighbors can see them and enjoy them. - Gina doesn't buy her favorite prom dress because she's worried that someone else is going to buy the same dress. - Lance does steroids to help him win a race. - Ryan is the first person to go through the buffet line at a wedding and he takes all of the shrimp.

Jonathan sets off fireworks for his family on the Fourth of July, and the neighbors can see them and enjoy them.

Unions are organizations that: - Represent employers in negotiating with employees. - Jointly represent a group of workers in negotiating with employers. - Enable groups of workers to start their own companies. - Local governments sponsor to set work safety standards for employers.

Jointly represent a group of workers in negotiating with employers

The higher the level of market power among the sellers in a market, the _____ when the Rational Rule for Sellers is applied. - Lower the market output - Lower the market demand - Higher the marginal cost - Closer marginal revenue is to price

Lower the market output

When players in a game collude, they: - Change their products, so that they are in different markets and not competing with each other. - Make agreements not to compete with each other and, typically, to charge high prices. - Act independently to try to eliminate other players from the game. - Choose to avoid any outcomes that harm their rival.

Make agreements not to compete with each other and, typically, to charge high prices.

A basic logic that applies to all strategic interactions is: - Action should not be taken until there is a clear best choice. - Making a good choice requires that you anticipate what others will do. - Risk must be eliminated. - Games should be avoided, so that decisions can be based on facts.

Making a good choice requires that you anticipate what others will do.

The three sources of discrimination do NOT include: - Prejudice. - Statistical discrimination. - Implicit bias. - Malevolent bias.

Malevolent bias.

According to the Rational Rule for Sellers, a seller should choose the output level where _______________ and the price level __________________. - Average total cost is minimum; that is associated with maximum revenue - Marginal cost equals marginal revenue; that is on the seller's demand curve at that output level - Maximum revenue is obtained; that is on the seller's demand curve for that output - Sales are maximum; where revenue is maximum

Marginal cost equals marginal revenue; that is on the seller's demand curve at that output level

The ________________ suggests that decisions about quantities are best made incrementally (a little bit at a time) - Cost-benefit principle - Opportunity cost principle - Marginal principle - Interdependence principle

Marginal principle

The marginal revenue from hiring an additional worker is known as - Marginal worker revenue. - Labor marginal revenue. - Labor marginal product. - Marginal revenue product.

Marginal revenue product.

Mary loves avocados and must consume avocados every week, regardless of the price. Which of the following must be true? - All consumers in the market have a high demand for avocados. - Mary has an elastic demand for avocados. - Mary has an inelastic demand for avocados. - Avocados are in large supply in the market.

Mary has an inelastic demand for avocados

A quantity regulation is a: - Limit on the number of consumers allowed in a market. - Minimum or maximum price that can be charged. - Minimum or maximum quantity that can be sold. - Limit on how many firms can operate in a market.

Minimum or maximum quantity that can be sold

____________ using specific business practices that increase a seller's market power and excludes other sellers is illegal under U.S. law. - Differentiating - Rationalizing - Powering - Monopolizing

Monopolizing

An employer who discriminates in hiring based on prejudice is likely to have higher costs than necessary because: - All inputs will have higher prices as others shun the party who discriminates. - The employer pays a higher wage to the group of workers discriminated against. - More productive workers may be forgone in order to hire less productive workers who have preferred characteristics. - Less productive workers may be forgone in order to hire more productive workers who have preferred characteristics.

More productive workers may be forgone in order to hire less productive workers who have preferred characteristics.

In the field of economics, the observation that the living standard of a household is more stable than its income, because people think in terms of their long-term earnings as they spend, is known as: - Wealth and inequality of purchasing power. - Consumption and inequality of living standards. - Intergenerational mobility and inequality of opportunity. - Permanent income versus current income.

Permanent income versus current income.

Kaila wants her employer to pay her 20% more for making night deliveries in a high-crime neighborhood than the day delivery people receive. Most of the delivery people are willing to make night deliveries in the neighborhood for only a 10% differential. Kaila is seeking: - More than a compensating differential because she has greater concerns than most workers. - A compensating differential because others are undervaluing her concerns. - A compensating differential based on her individual concerns about the risks. - Less than a compensating differential because she is asking for more than others are.

More than a compensating differential because she has greater concerns than most workers.

The Gap increases the price it charges for sweatshirts. As a result, fewer people buysweatshirts from The Gap. What happened? - Demand shifted left. - Demand shifted right. - Movement up and to the left on the demand curve. - Movement down and to the right on the demand curve

Movement up and to the left on the demand curve

A market consists of ten similar suppliers that are making the same supply decisions. To find the market supply of these ten suppliers, you: - Take the individual supply of one supplier. - Multiply the individual supply of one of the suppliers by ten. - Take one-tenth of the individual supply of each supplier and add it up. - Find the average quantity produced by the ten suppliers.

Multiply the individual supply of one of the suppliers by ten.

In 2022, Netflix increased its monthly price for new subscribers by $1. In response, one individual tweeted the following: "So tired of being a college student. Can't wait until I have a stable job and won't have to give up Netflix cause they raised their price by $1". What does this statement indicate about the income elasticity of demand for Netflix? - Netflix violates the law of demand. - Netflix is a perfectly inelastic good. - Netflix is an inferior good. - Netflix is a normal good.

Netflix is a normal good

Which of the following statements regarding a Nash equilibrium is TRUE? - No player can do better by unilaterally changing his or her choice. - All players choose their overall best response without regard to the other player's likely choice. - Each player's expectation of the other player's choice is often incorrect. - Cooperation between players could not improve the outcome.

No player can do better by unilaterally changing his or her choice.

A good is characterized as __________ when one person's use of the good does not reduce another person's ability to use the same unit of the good. - Free - Nonexcludable - Shareable - Nonrival

Nonrival

The labor supply curve for social workers will shift to the right when: - The government increases benefits for those who are not working. - Wages in other occupations rise. - Nonwage benefits increase for social workers. - The wages of all workers rise

Nonwage benefits increase for social workers.

Statements about what option should be chosen are _____ statements. - Normative - Assessment - Positive - Valuation

Normative

When a company has market power, it is __________ in its market. - Not able to impact the market equilibrium price - A producer of nondifferentiated products - Not a price-taker - One of many small companies

Not a price-taker

Which of the following is an example of positive economics? - On average, more experienced workers are paid a higher salary - We should require children to be vaccinated in order to attend school

On average, more experienced workers are paid a higher salary

The Rational Rule for Workers is to work - One more hour as long as the wage exceeds the cost of necessities. - As long as there is a desire for more income that exceeds the loss of income from not working. - As long as the marginal cost exceeds the marginal benefit. - One more hour as long as the wage is at least as large as the marginal benefit of another hour of leisure.

One more hour as long as the wage is at least as large as the marginal benefit of another hour of leisure.

Decisions should reflect the _____________ costs, rather than just the ____________ costs. - opportunity; nonfinancial - opportunity; financial - nonfinancial; financial - financial; marginal

Opportunity; financial

By contrast with a market that produces the socially optimal output, a market with negative externalities will: - Overproduce. - Produce the correct output. - Underproduce. - Produce no output.

Overproduce

When resources are shared or owned in common, the Nash equilibrium leads to: - Higher profits than with unshared resources. - Underuse of resources. - Lower profits than with unshared resources. - Overuse of resources.

Overuse of resources.

Linking your workers' earnings to their performance is called: - Incentivizing profit. - Pay-for-performance. - Differential performance. - Productivity bracketing.

Pay-for-performance.

The price elasticity of demand for a good with a horizontal demand curve is: - Perfectly elastic - Perfectly inelastic - Ineleastic, but not perfectly inelastic - Not enough information to determine

Perfectly elastic

When the absolute value of the price elasticity of demand is infinite, demand is: - elastic. - perfectly elastic. - perfectly inelastic. - inelastic.

Perfectly elastic

The price elasticity of demand for a good with a vertical demand curve is: - inelastic. - elastic. - perfectly inelastic. - perfectly elastic.

Perfectly inelastic

Analysis that describes what would happen if various actions were taken is __________ analysis - Positive - Valuation - Normative - Partitioning

Positive

What type of relationship exists between the level of a company's market power and the price that its owner is able to charge for its product? - Positive - Opposing - Circular - Negative

Positive

Suppose you will be working for a local restaurant if you are not going to college. The opportunity costs of attending college include the: - Potential income that could be earned working. - Cost of room and board. - Cost of clothes to wear. - Effort and hard work.

Potential income that could be earned working

The opportunity costs of attending college include the: - cost of clothes to wear at school. - potential income that could be earned working. - cost of room and board. - effort and hard work.

Potential income that could be earned working

An income level below which a family is defined to be in poverty is known as the: - Relative poverty measure. - Bottom quintile. - Poverty line. - Needs-based indicator.

Poverty line.

Peanut butter and jelly are complements. Due to poor growing conditions, not many strawberries are grown this year, and the price of strawberries increases. Strawberries are an input good used in making jelly. What happens to the market for peanut butter? - Price increases and quantity increases. - Price increases and quantity decreases. - Price decreases and quantity increases. - Price decreases and quantity decreases. - Quantity decreases and price is unaffected

Price decreases and quantity decreases.

You've been browsing some new styles on Old Navy's website, where you often shop, and have filled your virtual cart with a few nice items. But you leave the site without completing your purchase. A few days later, Old Navy sends you an e-mail with a 10%10% discount code to apply to your cart, within a limited time frame. Old Navy is engaging in? - price discrimination. - quantity discounting. - group pricing. - hurdle pricing.

Price discrimination.

Consider the market for sunglasses. Demand increases and supply decreases. Which of the following is true? - Price increases. The effect on quantity is indeterminate. - Price decreases. The effect on quantity is indeterminate. - Price decreases. Quantity decreases. - The effect on price is indeterminate. Quantity decreases. - Price increases. Quantity decreases.

Price increases. The effect on quantity is indeterminate.

The goal of price discrimination is to increase _____ by charging more to those who have _____ demand. - Producer surplus; less elastic - Producer surplus; more elastic - Consumer surplus; less elastic - Consumer surplus; more elastic

Producer surplus; less elastic

When buyers in a market have market power, then the - Product price is lower. - Number of sellers falls. - Product price is higher. - Number of sellers rises.

Product price is lower.

Duolingo is a widely used foreign language app, with over 500 million users. While there is a free version of the app, a premium Duolingo subscription eliminates advertisements during language practice and offers new quizzes with the ability to save lessons for offline use. By offering both a free and a premium version of the app, Duolingo? - Profits less than it would if it offered just one version of the app. - Profits only from the premium version, not the free version. - Profits more than it would if it offered just one version of the app. - Profits only from the free version, not the premium version.

Profits more than it would if it offered just one version of the app

How can a company's hiring manager attract workers who are motivated to advance in their field? - Offer gym memberships. - Provide training. - Provide a retirement savings plan. - Avoid discrimination.

Provide training.

A Grim Trigger strategy is to: - Take extreme actions whenever profits fall. - Punish rivals who do not cooperate. - Aggressively announce actions in advance. - Defect on all agreements.

Punish rivals who do not cooperate.

In 2017, eBay started charging a 20% value-added tax on fees charged to small businesses in the United Kingdom. Holding all else constant, this would _____ in the United Kingdom. - Shift the demand for eBay products to the right - Shift the supply curve of eBay products to the right - Raise the prices that eBay sellers charge their customers - Lead to increased sales for eBay sellers

Raise the prices that eBay sellers charge their customers

Jan has determined that her "Serenity by Jan" candles have an elasticity of demand of-0.35. Which of the following is true: - Raising the price would increase revenues. - Decreasing price would increase revenues. - Demand is elastic. - A 10% decrease in price would result in a 35% increase in quantity sold

Raising the price would increase revenues.

Studies of the minimum wage indicate that minimum wage laws ___________ employment opportunities for low-skilled workers, but there is less agreement regarding __________. - Increase; whether wages rise or fall - Reduce; whether wages rise or fall - Increase; the amount of the increase - Reduce; the amount of the reduction

Reduce; the amount of the reduction

Which of the following is NOT a cost of the redistribution of income? - Administrative costs - Reduced incentive to work and earn - Reduced marginal benefits to extra income - Tax avoidance and fraud

Reduced marginal benefits to extra income

California has an ideal climate for growing grapes. As a result, it is a major exporter of wine.Thus, California provides the United States with a comparative advantage in wine production due to: - Relatively abundant inputs - Specialized skills - Mass production - No international production

Relatively abundant inputs

If an item is a necessity rather than a luxury, its demand curve will be: - Relatively flat. - Perfectly elastic. - Relatively steep. - Perfectly inelastic.

Relatively steep

Taking the absolute value of the income elasticity of demand is incorrect because it would: - Remove the ability to tell whether the two products have inelastic demand or elastic demand. - Remove the ability to tell whether the product is an inferior good or a normal good. - Cause the value of the cross-price elasticity of demand to become smaller. - Cause the value of the cross-price elasticity of demand to become zero.

Remove the ability to tell whether the product is an inferior good or a normal good.

You are given data on four products — toothpaste, shampoo, soap, and laundry detergent. The absolute value of the price elasticity of demand for toothpaste is 4. The absolute value of the price elasticity of demand for shampoo is 0.2. The absolute value of the price elasticity of demand for soap is 0.5. The absolute value of the price elasticity of demand for laundry detergent is 2. Which product has the most inelastic demand? - soap - toothpaste - laundry detergent - shampoo

Shampoo

Which of the following markets is an example of a perfectly competitive market? - Shares of McDonald's stock - Dining chairs - Apple computers - Fast-food hamburgers

Shares of McDonald's stock

Sarah runs a snowplow business. Usually, she charges $30 per hour and works 40 hours per week. After a big blizzard, she finds that she has lots more people wanting to hire her than usual.Based on what we've learned in class, what do we expect to happen? (Hint: Think about how the equilibrium price and quantity for Sarah's services will change.) - She increases her hourly rate and works more hours. - She keeps her hourly rate the same and works fewer hours. - She keeps her hourly rate the same and works more hours. - She increases her hourly rate and works the same number of hours

She increases her hourly rate and works more hours.

Sasha has diminishing marginal utility for hot wings. Which of the following must be true: - She would rather have 10 hot wings than 11 hot wings. - She does not like hot wings. - She will eat the number of hot wings that maximizes her marginal benefit. - She receives more enjoyment from the 10th hot wing than from the 11th hot wing - The hot wing eaten gives a marginal benefit of zero.

She receives more enjoyment from the 10th hot wing than from the 11th hot wing

Gains from trade come from: - Technological innovation - Reducing your opportunity cost - Shifting tasks to people with low opportunity costs - Shifting tasks to people with absolute advantage

Shifting tasks to people with low opportunity costs

There is more international trade in cheese than ice cream, even though they are made from similar materials. This is likely because: - Shipping ice cream involves higher trade costs, because ice cream can melt. - Shipping ice cream involves lower trade costs, because ice cream can melt. - No country has a comparative advantage at producing ice cream. - No country has an absolute advantage at producing ice cream

Shipping ice cream involves higher trade costs, because ice cream can melt.

The cash-assistance, goods, and services provided by the government to better the lives of those at the bottom of the income distribution are known as the: - Social insurance. - Social safety net. - Progressive tax system. - Offset tax system.

Social safety net

The outcome that is most efficient for society as a whole — including the interests of buyers, sellers, and bystanders — is the _________ outcome. - Social benefit maximizing - Public optimal - Socially optimal - Externally optimal

Socially optimal

This problem concerns the market for used electric scooters. At a price of $100 perscooter, there are 100 people wanting to buy scooters and 50 people wanting to sell scooters.According to what we learned in class, what do we expect to happen? - 50 scooters will be sold at a price of $100 per scooter. - The price will increase until 100 people are willing to sell scooters. - Some sellers will offer to sell at a price of less than $100 per scooter. - Some buyers will offer to pay more $100 per scooter

Some buyers will offer to pay more $100 per scooter

A good has a free-rider problem when: - It can be transported at no cost to the consumer, with sellers bearing all transportation costs. - Someone can enjoy the benefits of the good without bearing the costs. - Any seller provides it for free as a special promotion. - It has no negative externalities but only positive externalities.

Someone can enjoy the benefits of the good without bearing the costs.

The price of beer goes up. Following this price increase, you observe an increase inthe amount of bottled water sold. This suggests that beer and bottled water are: - Substitutes' - Complements - Normal goods - Inferior goods

Substitutes'

A tax on sellers shifts the: - Supply curve to the left. - Supply curve to the right. - Demand curve to the left. - Demand curve to the right.

Supply curve to the left.

When the government requires that a person have a license to work in a particular occupation, then in the labor market for that occupation: - Demand decreases. - Supply decreases. - Demand increases. - Supply increases.

Supply decreases

Government social insurance programs are funded by: - Progressive taxes on income. - A premium paid by those who choose to participate in the insurance programs. - A pay-back system where beneficiaries repay benefits over a 10-year period. - Taxes and fees that are assessed on workers and employers specifically for each program.

Taxes and fees that are assessed on workers and employers specifically for each program.

Which principle helps buyers and sellers make decisions about whether to trade? The law of diminishing returns The cost-benefit principle The law of surplus The equity principle

The cost-benefit principle

How would the discount effect on marginal revenue differ for a seller increasing sales from 100 units to 101 units compared to an increase in sales from 1,000 units to 1,001 units? - The discount effect would be the same in both situations and would be larger than price. - The discount effect would be the same in both situations and would be less than price. - The discount effect would be smaller for a change from 100 to 101 units than 1,000 to 1,001 units. - The discount effect would be larger for a change from 100 to 101 units than 1,000 to 1,001 units.

The discount effect would be smaller for a change from 100 to 101 units than 1,000 to 1,001 units.

Patents on drugs to treat AIDS were removed in South Africa. How would the market for these drugs have been different if there had never been patents on drugs? - Larger quantities of the drugs would have been produced. - The drug prices would have been even higher. - The drug prices would have been lower from the start. - The drugs would not have been developed.

The drugs would not have been developed

A market's deadweight loss is calculated as: - The loss to consumers when a product malfunctions or fails to meet expectations. - The price at equilibrium minus the price at actual quantity. - The economic surplus at the efficient quantity minus the economic surplus at the actual quantity. - The economic loss that a firm has when it is not producing its profit-maximizing output.

The economic surplus at the efficient quantity minus the economic surplus at the actual quantity.

The marginal benefit minus the marginal cost equals: - The consumer surplus minus the producer surplus. - The consumer surplus. - The efficiency balance. - The economic surplus.

The economic surplus.

In the labor market for computer programmers, the labor demand represents - All the employers looking to hire. - The workers looking for a job as a programmer. - All the workers looking for a job. - The employers looking to hire programmers.

The employers looking to hire programmers.

Market power is - The extent to which a firm can charge a higher price without losing many customers. - The ability of a firm to discriminate against customers based on age, sex, or ethnicity. - The amount of money a firm makes after covering the cost of production. - When there is only one seller in the market

The extent to which a firm can charge a higher price without losing many customers.

You purchased a ticket to the musical Hamilton through a verified reseller for $457.00. When your ticket arrives, you see that the face value printed on it is $259.00. Which of the following is correct? - The rate in the secondary market is below the equilibrium price because it falls below the face value. - The rate in the secondary market is above the equilibrium price because it exceeds the face value. - The face value is above the equilibrium price because the rate in the secondary market is below the face value. - The face value is below the equilibrium price because the rate in the secondary market exceeds the face value.

The face value is below the equilibrium price because the rate in the secondary market exceeds the face value.

Which of the following would shift the labor supply curve? - Demand increases for the output produced by workers. - There is more effective management at companies. - Technological advancement increases worker productivity. - The government increases its provision of childcare services

The government increases its provision of childcare services

The Rational Rule for Society is that society should produce another unit of a good if: - The marginal social benefit exceeds the marginal social cost. - Gains to the producer exceed losses to the producer. - The total social benefit exceeds the total social cost. - The marginal private benefit exceeds the marginal private cost.

The marginal social benefit exceeds the marginal social cost.

A binding price floor in a market is removed. Which of the following is likely to occur as a result? - The market price will rise. - The demand for the item will fall. - The market price will fall. - The supply of the item will rise.

The market price will fall.

A price ceiling is: - The maximum price that a seller can charge in a market. - The minimum price that a seller can charge in a market. - The average price that a seller can charge in a market. - Any price above the equilibrium price.

The maximum price that a seller can charge in a market.

Which principle tells you that the true cost of something is the next best alternative you have to give up to get it? - The marginal principle - The cost-benefit principle. - The interdependence principle. - The opportunity cost principle.

The opportunity cost principle.

The population of Japan is declining. What impact will this have on the labor market for optometrists in Japan? - There is a movement to a larger quantity on the optometrist labor supply curve. - There is a movement to a smaller quantity on the optometrist labor supply curve. - The optometrist labor supply curve shifts leftward. - The optometrist labor supply curve shifts rightward.

The optometrist labor supply curve shifts leftward.

The marginal revenue curve of a firm with market power will always lie below its demand curve because of - The discount effect and the substitution effect. - The output effect and the substitution effect. - The substitution effect and the income effect. - The output effect and the discount effect.

The output effect and the discount effect.

An article in Forbes noted that the Intercounty Connector toll road that connects two counties in Maryland was not generating as much toll revenue as predicted. At that time, the toll rate was $8 for a passenger car making a round trip from end to end on the tollway during rush hour. What additional information would you need to know in order to determine if the toll should be increased or decreased? - The income elasticity of drivers using the tollway - The price elasticity of demand - The price elasticity of supply - The number of vehicles using the tollway per day

The price elasticity of demand

When plotting a supply curve - The quantity demanded goes on the vertical axis. - The price goes on the horizontal axis. - The quantity supplied goes on the horizontal axis. - The quantity supplied goes on the vertical axis.

The quantity supplied goes on the horizontal axis

Game theory is: - The analysis of market forces when there is role reversal for buyers and sellers. - The science of making good decisions in situations involving strategic interactions. - A view on decision making when clear paths to optimum outcomes are known. - A view on the development of children's games and toys.

The science of making good decisions in situations involving strategic interactions.

Suppose lawn mowers create negative externalities because they pollute and are noisy. Which of the following is true? - The social supply curve is to the left of the private supply curve. - The social supply curve is to the right of the private supply curve. - The social demand curve is to the left of the private demand curve. - The social demand curve is to the right of the private demand curve

The social supply curve is to the left of the private supply curve.

What will happen in the labor market for aestheticians if the government deregulates the industry and no longer requires individuals to obtain a license to work as aestheticians? - The demand for workers will decrease, resulting in a lower wage and lower quantity of labor. - The supply of workers will increase, resulting in a lower wage and higher quantity of labor. - The demand for workers will increase, resulting in a higher wage and higher quantity of labor. - The supply of workers will decrease, resulting in a higher wage and lower quantity of labor.

The supply of workers will increase, resulting in a lower wage and higher quantity of labor

The price of gasoline is $2.50 per gallon at the closest gas station, but is only $2.30 per gallon at a gas station two miles away. By driving to the farther gas station, the opportunity cost is: - the cost of filling one's tank at the original price of $2.50 per gallon. - the value of one's time and expenses to go to the farther gas station. - $0.20 per gallon, the difference in price between the two gas stations. - non-existent because gas is cheaper at the farther station.

The value of one's time and expenses to go to the farther gas station.

The Rational Rule for Employers implies that they keep hiring until - Revenue equals cost. - The wage equals marginal product. - Marginal product equals marginal revenue. - The wage equals the marginal revenue product of the last worker hired.

The wage equals the marginal revenue product of the last worker hired.

Externalities tend to occur because decision makers consider _________ and do NOT consider _________. - Their own income as limitless; their income as limited - Their own needs as most important; the fact that others also have needs - The welfare of others; their own welfare - Their own costs and benefits; the effects of their actions on others

Their own costs and benefits; the effects of their actions on others

Demand slopes down. This implies that: - There is an inverse (negative) relationship between the price of a good and the quantity demanded. - There is a positive relationship between the price of a good and the quantity demanded. - When demand increases, the curve shifts to the left. - Supply is equal to demand.

There is an inverse (negative) relationship between the price of a good and the quantity demanded.

A downward-sloping demand curve implies: - there is an inverse relationship between price and quantity demanded. - buyers are willing to buy less when prices are lower. - there is no relationship between price and quantity demanded. - there is a positive relationship between price and quantity demanded.

There is an inverse relationship between price and quantity demanded.

Which of the following is a characteristic of monopoly that is not present in other market structures? - There is only one seller. - Sellers are price-takers. - There are many buyers. - The product is identical across all sellers.

There is only one seller.

Why are supply curves typically upward-sloping? - They slope upward because sellers prefer to sell more when prices are lower. - They slope upward due to the law of demand. - They slope upward because sellers demand more when prices are lower. - They slope upward because higher prices lead individual businesses to supply a larger quantity and more businesses are willing to supply goods and services.

They slope upward because higher prices lead individual businesses to supply a larger quantity and more businesses are willing to supply goods and services.

In a perfectly competitive labor market, employers will not pay less than the market wage because at a wage below the equilibrium - The equilibrium wage would rise. - They would be inundated with excess workers. - There would be a surplus of workers. - They would not be able to hire anyone

They would not be able to hire anyone.

In one hour, Mike can type 5 pages or wash 2 cars. What is his opportunity cost of washing a car? - Washing 2 cars. - Typing 5 pages - Typing .4 pages - Typing 2.5 pages

Typing 2.5 pages

One of the market failures caused by market power is - High costs. - High price. - Underproduction. - Reduced demand.

Underproduction.

According to the opportunity cost principle, the true cost of something is: - The total number of dollars you pay for it. - The marginal number of dollars you pay for it. - The benefits you get from it. - What you give up to get it.

What you give up to get it

Which of the following statements is based on normative analysis? - The temperature in the office room is 22 degrees centigrade. - We should protect the environment. - Mario is 24 years old. - When the burner beneath a pot of water on the stove is turned on, the water will heat up.

We should protect the environment.

The opportunity cost of working is - Too high to even consider not working. - The wage you earn for the time spent working. - What you can buy because you worked. - What you would have done during the time if you were not working.

What you would have done during the time if you were not working.

When, if ever, would a monopoly in a particular industry be preferred to competition within that industry? - When too many firms are in an industry, and the market is too chaotic to receive clear price signals. - When it would be less costly for one firm rather than many firms to provide a good, as in a natural monopoly. - When only a few firms exist in an industry, so that the government must intervene to promote competition. - It is never ideal to let a monopoly exist.

When it would be less costly for one firm rather than many firms to provide a good, as in a natural monopoly.

Which of the following is an example of a reason why the supply curve for an oil company slopes up? - When the company produces a lot of oil, it has to pay its employees overtime, which increases the marginal cost of making oil. - Oil is a normal good with lots of substitutes. - Oil is heavily taxed. - When the price of oil increases, people switch to hybrid cars that use less gasoline, which is made from oil. - Suppliers know that people need to use oil in order to commute to work, so demand is inelastic

When the company produces a lot of oil, it has to pay its employees overtime, which increases the marginal cost of making oil.

In general, who bears more of the economic burden of a tax? - Whoever is more elastic - Whoever is more inelastic - They split the burden evenly - Whoever bears the statutory burden of the tax

Whoever is more inelastic

Companies do not charge everyone their reservation price because? - willingness to pay is private information that people have the incentive to keep hidden. - a consumer's marginal benefit is fundamentally unknowable. - it is difficult for people to reveal to companies their willingness to pay. - companies wish to provide customers with some consumer surplus to instill customer loyalty.

Willingness to pay is private information that people have the incentive to keep hidden

Which of the following is a negative result of redistributing income toward equality? - Work incentives are reduced. - The poor have a higher standard of living. - Government expenses fall, and tax revenues rise. - Average income rises.

Work incentives are reduced.

To avoid harm to society, the government often becomes the supplier of a good or service when the respective market - Would be competitive enough to cause surpluses to develop. - Has been engaging in illegal activities that the government seeks to eliminate. - Would be a natural monopoly, and the good or service is considered essential. - Has high profit, and the government can use those to replace tax revenue.

Would be a natural monopoly, and the good or service is considered essential.

The cross-price elasticity of demand for good X and good Y is 3.5. This means that: - X and Y are complements. - X and Y are substitutes - X and Y are both normal - X and Y are both inferior

X and Y are substitutes

Alena manages a small theme park. She hires one more custodian at $450 per week, and her park is cleaner and more attractive. As a result of this improvement, ticket sales rise by 40 tickets per week. Tickets sell for $12. Use the Rational Rule for Employers to determine if hiring the extra custodian was a good move. - Yes, it was a good move because it added more to revenue than to cost. - No, it was a bad move because it added more to cost than revenue. - Yes, it was a good move because the ticket sales rose more than price. - No, it was a bad move because price did not rise as much as ticket sales.

Yes, it was a good move because it added more to revenue than to cost.

When the absolute value of the price elasticity of demand is greater than 1, demand is: - Elastic. - Inelastic. - Perfectly inelastic. - Unit elastic.

elastic.

According to the marginal principle, keep increasing quantity until the marginal benefit of an additional item is __________ the marginal cost of an additional item. - less than - greater than or less than - equal to - greater than

equal to

You are considering whether you should go out to dinner at a restaurant with your friend. The meal is expected to cost you $50, you typically leave a 20% tip, and a round-trip Uber ride will cost you $15. You value the restaurant meal at $30 and the time spent with your friend at $50. You should ________ to dinner with your friend because the benefit of doing so is __________ than the cost. _ not go; less - go; less - go; greater - not go; greater

go; greater

When you get hired for a well-paying job, you will most likely view older used cars as - substitute goods. - inferior goods. - complementary goods. - normal goods.

inferior goods.

The principle that your best choice depends on your other choices, the choices others make, developments in other markets, and expectations about the future is known as the ____________ principle. - opportunity cost - interdependence - marginal - cost-benefit

interdependence

A rational buyer will: - keep buying a product until marginal benefit equals price. - not consider costs versus benefits when purchasing a product. - buy the product only when the marginal benefit of consuming the product is twice as much as the price of the product. - buy a product until the marginal benefit of consuming the product is less than the price of the product.

keep buying a product until marginal benefit equals price.

Nerida Kyle could either commute to work via Uber or purchase a new car. The average cost of her one-way Uber trip is $15. Nerida works five days a week for 50 weeks a year. Based solely on avoiding the cost of an Uber, Nerida should purchase a car if the cost of the car is _________ than __________ per week. - less; $75 - greater; $150 - less; $150 - greater; $75

less; $150

The __________ suggests, decisions about quantities are best made incrementally. - opportunity cost principle - cost-benefit principle - interdependence principle - marginal principle

marginal principle

A government leader determines that the 5% unemployment rate is too high. She asks her staff to research policy options to reduce the rate and a few weeks later is given four options. Each option would reduce the rate by a different amount and at a different cost. The leader studies the options and chooses the one she feels is best for the country. In order, what types of analysis were used in this three-stage chain of events? - Positive; positive; normative - Normative; positive; normative - Positive; normative; positive - Normative, positive; positive

normative; positive; normative

The price of milk at the local grocery store is cut by 15%, and the quantity of milk demanded increases by 10% in response. What is the absolute value of the price elasticity of demand for milk? - 0.67 - -0.67 - -1.5 - 1.5

0.67

Michelle owns an independent bookstore and has observed that college graduates read more than people without degrees. She is considering offering a 10% discount on book purchases to customers who have a postsecondary degree. Why might Michelle's plan hurt rather than help her business? (More than one) - People with higher education typically earn more than others and so may have a higher willingness to pay. - People who read more books are likely to have a higher willingness to pay than others. - High educational achievement is not a difficult-to-change characteristic. - Whether an individual has a postsecondary degree is not easily verifiable.

- People with higher education typically earn more than others and so may have a higher willingness to pay. - People who read more books are likely to have a higher willingness to pay than others. - Whether an individual has a postsecondary degree is not easily verifiable

Duolingo is a widely used foreign language app, with over 500 million users. While there is a free version of the app, a premium Duolingo subscription eliminates advertisements during language practice and offers new quizzes with the ability to save lessons for offline use. Identify each hurdle for users of the free version of the app. (more than one) - The subscription fee paid for the premium version of the app - The absence of enhanced features—new quizzes and the ability to save lessons for offline use—enjoyed by users of the premium version - The advertisements that users of the free version must endure

- The absence of enhanced features—new quizzes and the ability to save lessons for offline use—enjoyed by users of the premium version - The advertisements that users of the free version must endure

In what ways does seeking a marriage partner resemble a market? - There is a demand side and a supply side: prospective partners both demand and supply time, effort, certain capabilities, and emotional commitment. - There is a "price," namely, the commitment one makes to love, support, and spend time with the prospective partner. - Marriage is usually solidified with a legal contract. - The impulse to marry is deeply rooted in emotion.

- There is a demand side and a supply side: prospective partners both demand and supply time, effort, certain capabilities, and emotional commitment. - There is a "price," namely, the commitment one makes to love, support, and spend time with the prospective partner. - Marriage is usually solidified with a legal contract.

Which of the following is an example of a quantity quota? - A city sets a limit on the maximum rent that tenants pay. - A city awards a construction firm a monopoly over all public housing construction. - A city enforces zoning laws that restrict the number of housing units. - A city imposes a tax on all people who move into the city.

A city enforces zoning laws that restrict the number of housing units.

You're shopping to replace your two front tires, and you've discovered a pattern: Most tire shops offer promotions that apply to buying four tires. Most tire shops offer promotions that apply to buying four tires. For example, one place you visited offered free installation and lifetime balance for purchasing four tires. Another offered $15 off per tire for purchasing four tires. A third place's offer: buy three tires, get the fourth free. Quantity discounts are? - A form of hurdle pricing, where the hurdle that gets you a discount on additional units of a good is buying one (or more) initial units of the good. - A form of bundling, where the products bundled consist of the same good. - A means of cementing customer loyalty. - A form of perfect price discrimination, where a customer's willingness to purchase in bulk at a discount precisely reveals the customer's reservation price.

A form of hurdle pricing, where the hurdle that gets you a discount on additional units of a good is buying one (or more) initial units of the good.

Quantity demanded is on the horizontal axis when you plot a demand curve and shows the: - amount of a good that a seller is willing to sell at a particular price. - amount where opportunity cost is equal to the marginal benefit. - amount of a good that a person actually buys at the market price. - amount of a good that a person is willing to buy at each price.

Amount of a good that a person is willing to buy at each price.

The interdependence principle: - implies that buyers decisions are affected by many factors other than the price of an item. - is the same as the cost-benefit principle. - implies that consumers depend on each other to make purchase decisions in the market. - refers to the marginal benefit of consuming additional units of an item.

Implies that buyers decisions are affected by many factors other than the price of an item.

How is the economic surplus generated by a decision calculated? - It is the total benefits minus total costs arising from the decision. - It is the sum of costs arising from the decision. - It is the sum of benefits arising from the decision. - It is the total benefits plus total costs arising from the decision.

It is the total benefits minus total costs arising from the decision.

Suppose the price of gasoline rises. As time passes, people adjust to the higher price, and the demand for gasoline becomes: - More inelastic. - More elastic. - Higher. - Steeper.

More elastic

The movie theater in your neighborhood charges lower ticket prices to senior citizens than to other patrons. Assuming that this pricing strategy increases the profits of the movie theater, we can conclude that senior citizens must have ________ for movie tickets than other patrons. - Lower demand - More elastic demand - Greater demand - Less elastic demand

More elastic demand

You are a pricing manager at a generic pharmaceutical distributor. The CEO of the company calls a meeting of all the managers and states that it is critical to increase revenue soon or you may have to start laying off employees. You know that the price elasticity of demand for your leading generic drug is 1.5 and you sell it for three times what it costs. As the pricing manager, you should - Suggest decreasing the price on the leading generic drug to increase revenue. - Suggest increasing the price on the leading generic drug to increase revenue. - Argue that the numbers must be off because the company is charging three times the cost of the leading generic drug and therefore must be making a profit. - Suggest laying off employees because elasticity of the leading generic drug is unit elastic, so there is no way to increase revenue by changing price.

Suggest decreasing the price on the leading generic drug to increase revenue.

Paint and paintbrushes are complements. If the price of paint rises, we can expect: - the quantity demanded of paint to increase. - the quantity demanded of paintbrushes to remain unchanged. - the demand for paintbrushes to increase. - the demand for paintbrushes to decrease.

The demand for paintbrushes to decrease.