IDS 300 Exam 1

Demand is the relationship between and quantity , ceteris paribus.

Blank 1: price Blank 2: demanded

In a supply and demand diagram, equilibrium represents a - combination.

Blank 1: price Blank 2: quantity

supply is the relationship between and quantity , ceteris paribus.

Blank 1: price Blank 2: supplied

Fill in the blank question. A model is a simplification that can be manipulated to explain the world.

Blank 1: real

When the word "should" appears in a question, it suggests the use of which form of analysis? Multiple choice question. Both positive and normative Neutral Normative Positive

Normative

Multiple Choice Question When using marginal analysis, the goal is to ______. Multiple choice question. minimize cost maximize benefit maximize net impact maximize average benefit

maximize net impact

Suppose that there are five types of people in the world: (1) those really good at producing pizza but lousy at producing soda; (2) those pretty good at producing pizza and not so good at producing soda; (3) those sort of OK at both; (4) those good at producing soda and not so good at producing pizza; and (5) those really good at producing soda but lousy at producing pizza. If everyone is producing soda and you want to produce pizza as well, you would move person ______. Multiple choice question. 1 4 2 3 5

1

Suppose there are five types of people in the world: (1) those who are really good at producing pizza but lousy at producing soda; (2) those who are pretty good at producing pizza but not so good at producing soda; (3) those sort of OK at both; (4) those who are good at producing soda but not so good at producing pizza; and (5) those who are really good at producing soda but lousy at producing pizza. If you have already moved person 1 to soda and you want to produce even more pizza, you would move person ______ to pizza. Multiple choice question. 3 4 5 2

2

Multiple Choice Question The opportunity cost of producing the second unit of pizza given that one has already been produced is Multiple choice question. 5 15 0 10

5

Select all that apply Which of the following occurs when the expected price of a good increases? (Check all that apply.) Multiple select question. An increase in the current supply of the good A decrease in the current supply of the good An increase in the current demand for the good A decrease in the current demand for the good

A decrease in the current supply of the good An increase in the current demand for the good

Select all that apply Which of the following would constitute an incentive? Multiple select question. A price A subsidy A regulation for which there is no consequence for its violation A tax

A price A subsidy A tax

Multiple Choice Question Increased education among workers would be associated with which source of economic growth? Multiple choice question. An increase in the ability of resources to produce goods and services An increase in the availability of resources A decrease in the ability of resources to produce goods and services A decrease in the availability of resources

An increase in the ability of resources to produce goods and services

Multiple Choice Question Hydraulic fracturing makes natural gas available when it would otherwise be locked away. Which source of growth is this? Multiple choice question. A decrease in the ability of resources to produce goods and services An increase in the ability of resources to produce goods and services An increase in the availability of resources A decrease in the availability of resources

An increase in the availability of resources

Select all that apply What are the sources of economic growth? Multiple select question. A decrease in the availability of resources An increase in the availability of resources A decrease in the ability of resources to produce goods and services An increase in the ability of resources to produce goods and services

An increase in the availability of resources An increase in the ability of resources to produce goods and services

Select all that apply What are the sources of economic growth? Multiple select question. An increase in the availability of resources A decrease in the availability of resources A decrease in the ability of resources to produce goods and services An increase in the ability of resources to produce goods and services

An increase in the availability of resources An increase in the ability of resources to produce goods and services

want to exchange their money for goods or services while want to exchange the goods or services they have for money.

Blank 1: Consumers Blank 2: Producers

growth is where there is an increase in, or an increase in the ability of, resources to produce all goods.

Blank 1: Generalized

analysis is a form of analysis that seeks to understand the way things should be.

Blank 1: Normative

Fill in the blank question. analysis is a form of analysis that seeks to understand the way things are and why they are that way. Listen to the complete question

Blank 1: Positive

Fill in the Blank Question Fill in the blank question. growth is where there is an increase in the ability to produce a particular good because there is an increase in, or an increase in the ability of, resources to produce a particular good that does not generalize to other goods.

Blank 1: Specialized

fill in the blank question. Suppose you know from history that every time the winner of your local high school basketball sectional tournament is from a smaller school than the runner-up, a recession has followed the next year. If you acted on the assumption that it would happen again, you would have fallen for the fallacy that correlation and are the same. Listen to the complete question

Blank 1: causation

Economists, when using models to predict an outcome of a change in one variable while holding all other things constant, use the phrase to acknowledge that is what they are doing.

Blank 1: ceteris Blank 2: paribus

The Latin phrase means holding other things constant/other things being equal.

Blank 1: ceteris Blank 2: paribus

Opportunity cost is the forgone alternative of the made.

Blank 1: choice or decision

Fill in the Blank Question Fill in the blank question. Suppose you understand that a grower of lettuce will have a more profitable season if they have a great crop. Suppose you conclude that all growers of lettuce would have profitable seasons if all growers had great crops. You would have fallen victim to the fallacy of .

Blank 1: composition.

Fill in the blank question. From the graph, we know that the opportunity cost of producing pizzas and sodas is because the opportunity cost going from 0 to 1 unit is the same as going from 2 to 3 units.

Blank 1: constant

If people are identical in their abilities (given the technology available to them), then there is likely to be opportunity cost.

Blank 1: constant

Fill in the Blank Question Fill in the blank question. You know from this graph that opportunity cost is because it is a downward-sloping line.

Blank 1: constant Blank 2: linear or straight

A decrease in the taste for a good will result in a(n) (increase/decrease) in the equilibrium price and a(n) (increase/decrease) in the equilibrium quantity.

Blank 1: decrease, fall, or reduction Blank 2: decrease, fall, or reduction

An increase in income for a good that is considered inferior will result in the equilibrium price (increasing/decreasing) and the equilibrium quantity (increasing/decreasing).

Blank 1: decreasing, falling, or dropping Blank 2: decreasing or falling

A decrease in the population of potential buyers for a good will result in a(n) in the equilibrium price and a(n) in the equilibrium quantity

Blank 1: fall or decrease Blank 2: decrease or fall

Suppose there is a tax on a good and the tax is paid by producers. Now suppose the tax decreases. This will result in a(n) in the equilibrium price and a(n) in the equilibrium quantity. (Enter one word in each blank.)

Blank 1: fall or decrease Blank 2: increase or rise

If good A and good B are substitutes and there is an decrease in the price of good A, in the market for good B this will result in equilibrium price and equilibrium quantity .

Blank 1: falling or decreasing Blank 2: decreasing or falling

If a firm can produce good A or good B with its resources and the price of good A decreases, in the market for good B this will result in in equilibrium price and equilibrium quantity .

Blank 1: falling or decreasing Blank 2: rising or increasing

A law that sets a minimum price is a price and must be above equilibrium in order to be relevant.

Blank 1: floor

A market is a mechanism by which buyers and sellers of thecurrencies of various countries negotiate an exchange.

Blank 1: foreign Blank 2: exchange

Something is a(n) if it motivates an individual to make a decision.

Blank 1: incentive

A decrease in income for a good that is considered inferior will result in equilibrium price and equilibrium quantity .

Blank 1: increasing or rising Blank 2: rising or increasing

Suppose a college student is cleaning her dorm room in anticipation of a date. She might clean until the benefit equals the cost.

Blank 1: marginal Blank 2: marginal

An example of a company engaged in an optimization would be its attempt to .

Blank 1: maximize Blank 2: profit

Fill in the blank question. An increase in the population of potential buyers for a good will result in a(n) in the equilibrium price and a(n) in the equilibrium quantity

Blank 1: rise or increase Blank 2: increase or rise

Suppose there is a tax on a good and the tax is paid by consumers. Now suppose the tax decreases. This will result in a(n) in the equilibrium price and a(n) in the equilibrium quantity.

Blank 1: rise or increase Blank 2: increase or rise

If a firm can produce good A or good B with its resources and the price of good A increases, in the market for good B this will result in equilibrium price ___ and equilibrium quantity ___.

Blank 1: rising or increasing Blank 2: falling or decreasing

Recharge Question Mode Fill in the Blank Question Fill in the blank question. A decrease in the technology associated with the production of a good will result in equilibrium price and equilibrium quantity .

Blank 1: rising or increasing Blank 2: falling or decreasing

The positive relationship between price and quantity supplied is called the law of .

Blank 1: supply

The and model is the most important model in economics.

Blank 1: supply Blank 2: demand

A decrease in the demand for a good will result in a unless the price is allowed to adjust.

Blank 1: surplus

Economics is the study of the allocation and use of scarce resources to satisfy human wants.

Blank 1: unlimited, infinite, or endless

Which of the following represents "how much consumers want to buy at all prices." Multiple choice question. Quantity demanded Supply Demand Quantity supplied

Demand

Multiple Select Question Select all that apply Identify all of the determinants of demand. Multiple select question. Expected price Price of other goods Taxes Price of other potential outputs Price of inputs Population of potential buyers Subsidies Taste Income Technology Number of sellers

Expected price Price of other goods Taxes Population of potential buyers Subsidies Taste Income

Select all that apply Which of the determinants of supply are also determinants of demand? Multiple select question. Expected price Price of other potential outputs Number of sellers Price of inputs Taste Taxes Technology Price of other goods Subsidies Population of potential buyers Income

Expected price Taxes Subsidies

Which of the determinants of demand are also determinants of supply? Multiple select question. Income Price of other goods Price of other potential outputs Expected price Taxes Price of inputs Population of potential buyers Technology Taste Subsidies Number of sellers

Expected price Taxes Subsidies

Select all that apply The circular flow model depicts the interactions of which of the following economic actors? Multiple select question. Religious institutions Firms Government Households

Firms Government Households

Select all that apply Which of the following are examples of optimization? Multiple select question. Firms maximizing profit A student cleaning a dorm room to make it perfect to the exclusion of all other useful things Consumers deciding which goods to buy with their money A student cleaning a dorm room and choosing not to make it perfect

Firms maximizing profit Consumers deciding which goods to buy with their money A student cleaning a dorm room and choosing not to make it perfect

Select all that apply The places where economic actors interact are the following: Multiple select question. Goods and services markets Factor markets Foreign exchange markets Religious institutions

Goods and services markets Factor markets Foreign exchange markets

If there is a tax on a good, that tax is paid by producers, and that tax increases, this will result in equilibrium price _____ and equilibrium quantity _____. (Enter one word in each blank.)

Increasing/rising Decreasing/falling

Consider the market for corn. Indicate whether each of the following events will cause a shift in the demand curve or a movement along the demand curve. If it causes a shift in demand, specify the direction of the shift. a. A drought hits corn-growing regions, reducing the supply of corn. (Click to select) Leftward shift of demand Movement along the demand curve Rightward shift of demand b. The government announces a new subsidy to encourage consumers to purchase biofuels made from corn. (Click to select) Leftward shift of demand Movement along the demand curve Rightward shift of demand c. A global recession reduces the incomes of consumers in poor countries who rely on corn as a staple food (assuming corn is a normal good). (Click to select) Movement along the demand curve Rightward shift of demand Leftward shift of demand d. A new hybrid variety of corn seed causes a 15 percent increase in the yield of corn per acre. (Click to select) Movement along the demand curve Rightward shift of demand Leftward shift of demand e. An advertising campaign by the beef producer's association highlights the health benefits of corn-fed beef. (Click to select) Movement along the demand curve Rightward shift of demand Leftward shift of demand

Movement along the demand curve Rightward shift of demand Leftward shift of demand Movement along the demand curve Rightward shift of demand

Select all that apply Which of the determinants of demand are subdivided (between normal/inferior; complement/substitute)? Multiple select question. Taxes Subsidies Price of other goods Population of potential buyers Taste Price of inputs Number of sellers Price of other potential outputs Expected price Income Technology

Price of other goods Income

Select all that apply Identify all of the determinants of supply. Multiple select question. Price of other potential outputs Population of potential buyers Taxes Expected price Subsidies Price of inputs Technology Income Taste Number of sellers Price of other goods

Price of other potential outputs Taxes Expected price Subsidies Price of inputs Technology Number of sellers

Select all that apply Identify all of the determinants of supply. Multiple select question. Price of other potential outputs Taxes Price of inputs Subsidies Technology Price of other goods Number of sellers Taste Income Population of potential buyers Expected price

Price of other potential outputs Taxes Price of inputs Subsidies Technology Number of sellers Expected price

Which of the following represents "how much consumers are willing and able to buy at a particular price during a particular period of time?" Multiple choice question. Demand Quantity demanded Supply Quantity supplied

Quantity demanded

Answer the following questions about correlation and causation. a. Which of the following situations is an example of causation? multiple choice 1Skipping lunch causes hunger.Birthdays cause people to age.Snow causes Christmas.Rain causes clouds. b. Which one of these examples is NOT an example of causation? multiple choice 2Umbrellas cause rainstorms.Temperatures of less than 32˚F cause water to freeze.Stepping on the gas pedal causes a car to move faster.Kryptonite causes Superman to lose all his powers. c. Match the choices that are correlated to one another. Height: (Click to select) Income Shoe size Snowfall Grades Level of education: (Click to select) Shoe size Income Snowfall Grades Temperature: (Click to select) Income Grades Snowfall Shoe size Time spent studying: (Click to select) Shoe size Snowfall Grades Income

Skipping lunch causes hunger. Correct Umbrellas cause rainstorms shoe size income snowfall grades

Which model is considered the most important in all of economics? Multiple choice question. Circular flow Production possibilities Supply and demand Solow growth

Supply and demand

One reason that the law of supply makes sense and that supply is upward sloping is that firms have output alternatives. True false question. True False

True

Suppose you understand that a grower of lettuce will have a more profitable season if they have a great crop. Suppose you conclude that all growers of lettuce would have profitable seasons if all growers had great crops. Multiple choice question. You would have fallen victim to the fallacy of composition. You would be well supported in your reasoning. You would have fallen victim to the fallacy that correlation and causation are the same.

You would have fallen victim to the fallacy of composition.

Answer the following questions about the real-balances effect. a. The real-balances effect indicates that multiple choice 1a higher price level will increase the real value of many financial assets and therefore increase spending.an increase in the price level will increase the attractiveness of a product and therefore increase spending on that good.a lower price level will decrease the real value of many financial assets and therefore reduce spending.a higher price level will decrease the real value of many financial assets and therefore reduce spending. b. The real-balances effect is illustrated by which of the following examples? multiple choice 2You get a raise at work.Your favorite pizza place offers a two-for-one pizza sale.You find a coffee shop that has your favorite coffee.The fees at your college fall.

a higher price level will decrease the real value of many financial assets and therefore reduce spending. Your favorite pizza place offers a two-for-one pizza sale

Part of the Patient Protection and Affordable Care Act involved a tax on indoor tanning that tanning salons are required to collect from tanners and send to the federal government. Which of the following would be the predicted result? multiple choicea movement to the left in the supply of tanninga movement to the right in the demand for tanninga movement to the left in the demand for tanninga movement to the right in the supply of tanning

a movement to the left in the demand for tanning

If Florida vegetable farmers can plant either green peppers or tomatoes on their land with equal profitability and there is an increase in the price of green peppers, which of the following will result? multiple choicea movement to the left in the demand for tomatoesa movement to the right in the supply of tomatoesa movement to the right in the demand for tomatoesa movement to the left in the supply of tomatoes

a movement to the left in the supply of tomatoes

As the baby boom generation (born between 1946 and 1964) ages, which of the following is a likely outcome? multiple choicea movement to the left in the supply for nursing home bedsa movement to the left in the demand of nursing home bedsa movement to the right in the supply of nursing home bedsa movement to the right in the demand for nursing home beds

a movement to the right in the demand for nursing home beds

A model is an abstract description of the real world. a physical representation of larger object only. a simplification of the real world that can be manipulated to explain the real world. a mathematical representation of the real world only.

a simplification of the real world that can be manipulated to explain the real world.

In order to be relevant, price floors must be ______ equilibrium. Multiple choice question. above below equal to

above

A production possibilities frontier is a simple model of the cost of producing goods.the number of inputs required to produce varying levels of output.allocating scarce inputs to the production of alternative outputs.price and production/consumption in a market.

allocating scarce inputs to the production of alternative outputs

A production possibilities frontier represents Multiple choice question. supply. alternative output combinations that are the least possible. demand. alternative output combinations that are the most possible.

alternative output combinations that are the most possible.

A counterfactual is Multiple choice question. a more accurate piece of data than the one offered. a fact that contradicts another fact. an educated guess as to what would have happened had a policy or an event not occurred. a made-up piece of data.

an educated guess as to what would have happened had a policy or an event not occurred.

If a combination of goods production is on the production possibilities frontier, then that combination is Multiple choice question. unattainable. attainable. inefficient

attainable.

If there is an excise tax on a good, that tax is placed on consumers, and it increases, this will result in a(n) Multiple choice question. decrease in demand. increase in demand. increase in supply. decrease in supply.

decrease in demand.

Multiple Choice Question On a production possibilities frontier, economic growth is shown when more production is possible for. only the good on the vertical axis. both goods. only the good on the horizontal axis.

both goods.

A change in the expected price of a good will impact Multiple choice question. both supply and demand. supply. demand. neither supply nor demand.

both supply and demand.

A change in the expected price of a good will impact Multiple choice question. demand. supply. neither supply nor demand. both supply and demand.

both supply and demand.

A change in the expected price of a good will impact Multiple choice question. neither supply nor demand. supply. both supply and demand. demand.

both supply and demand.

Demand is the relationship between price and quantity demanded, Multiple choice question. ipso factor. post hoc ergo propter hoc. ceteris paribus.

ceteris paribus.

Demand is the relationship between price and quantity demanded, Multiple choice question. post hoc ergo propter hoc. ipso factor. ceteris paribus.

ceteris paribus.

Multiple Choice Question The ______ model depicts the interactions of all economic actors. Multiple choice question. marginal flow growth circular flow round flow

circular flow

North Dakota oil producers were striking oil throughout 2012-2015 and they were all getting rich. Had they assumed that everyone else's success was a good sign for them, they would have fallen victim to the fallacy of .

composition

Suppose you understand that a grower of lettuce will have a more profitable season if they have a great crop. Suppose you conclude that all growers of lettuce would have profitable seasons if all growers had great crops. You would have fallen victim to the fallacy of .

composition.

If there is an excise tax on a good, that tax is placed on producers, and it increases, this will result in a(n) _____. Multiple choice question. decrease in supply increase in supply increase in demand decrease in demand

decrease in supply

Good simplifying assumptions will make the problem easier and Multiple choice question. conclusions that spring from them are only valid in simple scenarios. are perfectly accurate. are useless. conclusions that spring from them are valid in a more complicated scenario.

conclusions that spring from them are valid in a more complicated scenario.

A resource is anything that is ______ or used to make things that will ultimately be consumed. Multiple choice question. only a raw material only an energy source consumed directly only time

consumed directly

A resource is anything that is ______ or used to make things that will ultimately be consumed. Multiple choice question. only time consumed directly only a raw material only an energy source

consumed directly

An important reason for the downward-sloping nature of the demand curve is that multiple choiceconsumers frequently make substitutions between goods when the price of one changes.consumers rarely make substitutions between goods when the price of one changes.the consumption of most goods comes with increasing marginal utility.consumers have unlimited resources.

consumers frequently make substitutions between goods when the price of one changes

Multiple Choice Question An increase in the expected future price of a good would cause Multiple choice question. consumers to wait to purchase. firms to sell off their current inventories. consumers to stock up. firms to hold onto their current inventories.

consumers to stock up.

Select all that apply An increase in the expected future price of a good would cause Multiple select question. firms to sell off their current inventories. consumers to stock up. firms to hold onto their current inventories. consumers to wait to purchase.

consumers to stock up. firms to hold onto their current inventories.

Select all that apply If the expected price of a good increases, this will result in a(n) Multiple select question. decrease in current supply. increase in current supply. decrease in current demand. increase in current demand.

decrease in current supply. increase in current demand.

If good A and good B are complements and the price of good A rises, then in the market for good B this will result in a(n) Multiple choice question. decrease in supply. decrease in demand. increase in demand. increase in supply.

decrease in demand.

If income falls and the good is normal, this will result in a(n) Multiple choice question. decrease in demand. increase in supply. decrease in supply. increase in demand.

decrease in demand.

If the population of potential buyers of a good decreases, this will result in a(n) Multiple choice question. decrease in supply. increase in supply. increase in demand. decrease in demand.

decrease in demand.

If there is a subsidy on a good, that subsidy is paid to consumers, and it decreases, this will result in a(n) Multiple choice question. decrease in demand. decrease in supply. increase in demand. increase in supply.

decrease in demand.

If good A and good B are alternative outputs for a firm and the price of good A rises, then in the market for good B this will result in a(n) Multiple choice question. increase in demand. decrease in supply. decrease in demand. increase in supply.

decrease in supply.

If good A is used as an input to make good B and the price of good A rises, then in the market for good B this will result in a(n) Multiple choice question. increase in demand. increase in supply. decrease in supply. decrease in demand.

decrease in supply.

If there is a subsidy paid for the production of a good, that subsidy goes to producers, and it decreases, this will result in a(n) Multiple choice question. decrease in supply. increase in demand. increase in supply. decrease in demand.

decrease in supply.

Select all that apply If there is a decrease in the expected future price of a good, this will result in a(n): Multiple select question. decrease in the current demand for the good. increase in the current demand for the good. decrease in the current supply for the good. increase in the current supply for the good.

decrease in the current demand for the good. increase in the current supply for the good.

An increase in the number of firms selling a good will result in equilibrium price ___ and equilibrium quantity ____ . (Enter one word in each blank.)

decreasing/falling increasing/rising

A change in income for a good will impact Multiple choice question. demand, and the direction of the shift will depend on whether the good is normal or inferior. demand, but the direction of the shift will be unambiguous. supply. both supply and demand.

demand, and the direction of the shift will depend on whether the good is normal or inferior.

A change in income for a good will impact Multiple choice question. demand, but the direction of the shift will be unambiguous. demand, and the direction of the shift will depend on whether the good is normal or inferior. both supply and demand. supply.

demand, and the direction of the shift will depend on whether the good is normal or inferior.

If there is an excise tax on a good, that tax is placed on consumers, and it changes, it will impact Multiple choice question. supply. both supply and demand. neither supply nor demand. demand.

demand.

Multiple Choice Question If there is subsidy on a good, that subsidy is paid to consumers, and it changes, it will impact Multiple choice question. supply. both supply and demand. demand. neither supply nor demand.

demand.

If the marginal benefit of an action exceeds the marginal cost Multiple choice question. do none of the action. do more of the action. you should do less until they are equal. do that amount of the action- no more, no less.

do more of the action.

Where the supply and demand curves cross, the amount that consumers want to buy and the amount firms want to sell are the same. This is called a(n) .

equilibrium

There is a price at which neither consumers nor producers leave with less value than they came with; no consumers wish they could have purchased more goods at the price; no producers wish they could have sold more at that price—in short, everyone is better off for participating. Economists call such a price the Multiple choice question. equilibrium price. supply price. justifiable price. demand price.

equilibrium price.

b. Sue spends her money on only two things: books and eggs. For her, the substitution effect dominates. When the price of eggs falls, Sue will naturally buy more eggs. And she will buy (Click to select) fewer more the same number of books.

fewer

The reason that the supply curve is upward sloping is that Multiple select question. firms face diminishing marginal utility of profits. firms are governed by the desire to maximize market share. firms have output alternatives so an increase in price is necessary for them to forgo those. the marginal cost of producing more goods is increasing.

firms have output alternatives so an increase in price is necessary for them to forgo those. the marginal cost of producing more goods is increasing.

If you have two goods for which critical thinking skills are important in their respective production process, then an increase in the education level of workers would create ______ growth. Multiple choice question. little generalized specialized slow

generalized

If you have two goods for which critical thinking skills are important in their respective production process, then an increase in the education level of workers would create ______ growth. Multiple choice question. specialized generalized little slow

generalized

If you were modeling the impact of the introduction of computer automation into manufacturing on a production possibilities frontier (PPF) with two manufactured goods on their respective axes, it would be more likely that the result would be ________. generalized growth with the PPF moving both up and right. specialized growth with the PPF moving both up and right. generalized growth with the PPF just moving up and not to the right. specialized growth with the PPF just moving up and not to the right.

generalized growth with the PPF moving both up and right. Correct

Of course, all individual students are better off if they get better grades. If you were to conclude that all students would be better off if everyone received an A, you would be right. have fallen victim to the fallacy of composition. be mistaking correlation with causation. have fallen victim to the fallacy of scarcity.

have fallen victim to the fallacy of composition.

Select all that apply Growth can be the result of having fewer resources. resources becoming expensive. having more resources available. increased capability associated with using the same resources. decreased capability associated with using many different resources.

having more resources available. increased capability associated with using the same resources.

According to the law of demand, when prices are _____, we tend to buy less. Multiple choice question. predictable higher stable lower

higher

A production possibilities frontier graphs the amounts of different goods that can be produced ______. Multiple choice question. at various wages in a fully employed society in a realistic fashion at various prices

in a fully employed society

a. Ed spends his money on only two things: pasta and socks. Suppose the price of socks rises. Naturally, Ed buys fewer socks. He also buys less pasta. This means that for Ed, the (Click to select) income effect substitution effect demand effect lake effect dominates

income effect

The opportunity cost for you to attend college might best be described as the cost of books.the cost of tuition.income you could have earned at a full-time job.the value to you of not working.

income you could have earned at a full-time job

If good A and good B are complements and the price of good A falls, then in the market for good B this will result in a(n) _____. Multiple choice question. increase in demand decrease in demand decrease in supply increase in supply

increase in demand

If good A and good B are complements and the price of good A falls, then in the market for good B this will result in a(n) _____. Multiple choice question. increase in demand increase in supply decrease in demand decrease in supply

increase in demand

If a particular kind of beverage becomes fashionable, this will result in a(n) Multiple choice question. decrease in demand. increase in supply. decrease in supply. increase in demand.

increase in demand.

If there is a subsidy on a good, that subsidy is paid to consumers, and it increases, this will result in a(n) Multiple choice question. increase in supply. decrease in demand. decrease in supply. increase in demand.

increase in demand.

If there is an excise tax on a good, that tax is placed on consumers, and it decreases, this will result in a(n) Multiple choice question. decrease in demand. increase in supply. decrease in supply. increase in demand.

increase in demand.

If good A is used as an input to make good B and the price of good A falls, then in the market for good B this will result in a(n) Multiple choice question. decrease in supply. increase in supply. decrease in demand. increase in demand.

increase in supply.

If there is an excise tax on a good, that tax is placed on producers, and it decreases, this will result in a(n) Multiple choice question. increase in demand. decrease in demand. increase in supply. decrease in supply.

increase in supply.

Select all that apply If there is a decrease in the expected future price of a good, this will result in a(n): Multiple select question. increase in the current supply for the good. increase in the current demand for the good. decrease in the current supply for the good. decrease in the current demand for the good.

increase in the current supply for the good. decrease in the current demand for the good.

If people have very different skills relative to producing the goods on a production possibilities frontier, then there is likely to be ______ opportunity cost. Multiple choice question. constant zero extraordinary increasing

increasing

If people have very different skills relative to producing the goods on a production possibilities frontier, then there is likely to be ______ opportunity cost. Multiple choice question. increasing extraordinary constant zero

increasing

When using marginal analysis, the changes examined are ______. Multiple choice question. averaged monumental percentage changes incremental

incremental

In the context of a production possibilities frontier, unemployment is a situation that occurs when resources are Multiple choice question. inefficient and unattainable. efficient and attainable. inefficient but attainable. unattainable.

inefficient but attainable.

A production possibilities frontier is graphed using two goods because Multiple choice question. it is much easier to see the explanation in two dimensions. it is much clearer to do it in three or more dimensions. it is totally irrelevant to graph something in two dimensions when you really need thousands.

it is much easier to see the explanation in two dimensions.

Select all that apply A factor market is a mechanism by which buyers and sellers of ______ negotiate an exchange. Multiple select question. labor financial capital basic commodities foreign currencies

labor financial capital

For a normal good, a decrease in income is likely to result in a(n) (increase/decrease) in the equilibrium price and a(n) (increase/decrease) in the equilibrium quantity.

lank 1: decrease Blank 2: decrease

Imagine an economist ordering donuts one-by-one. When deciding how many donuts to order she would pick that number where the enjoyment of the ________ equals the enjoyment she could get from using the money on another good. multiple choicetotal number of donutsfirst donutaverage/typical donutlast/marginal donut

last/marginal donut

When the price of a good or service is ______ the equilibrium price there will be shortage but when the price of a good or service is ______ the equilibrium price there will be surplus. Multiple choice question. greater than; less than less than; greater than greater than; greater than less than; less than

less than; greater than

Economists label the place (physical or otherwise) where buyers and sellers get together a .

market

A production possibilities frontier represents the ______ of one good that can be produced for any given amount of another good. Multiple choice question. various amounts least most

most

In the context of a production possibilities frontier, unemployment is a situation that occurs when resources are being fully utilized. not possible. not being fully utilized. unattainable.

not being fully utilized.

The point where supply and demand cross is called equilibrium because multiple choicenothing will cause it to move (even if supply changes).price will move away from it quickly.nothing will cause it to move (even if demand changes).once the price settles there, unless supply or demand changes, it will not move.

once the price settles there, unless supply or demand changes, it will not move.

If everyone in the world was trying to produce a single good, we could produce Multiple choice question. an infinite amount. only a finite amount.

only a finite amount.

An assumption is the one that suggests that the person in question is trying to maximize some objective.

optimization

If you were to conclude, after carefully examining data and using proper evaluation techniques, that a tax credit for attending college benefits the poor more than a tax deduction (of equal total cost to the government) would, you would have engaged in _________ analysis to reach that conclusion. negative normative positive creative

positive

Rent control laws make it so that landlords are limited either in the rents they set or the increases in rent they can impose. They are examples of Multiple choice question. price gouging. price floors. price ceilings.

price ceilings.

Minimum wage laws make it so that employers are required to pay that wage or higher. They are examples of Multiple choice question. price gouging. price floors. price ceilings.

price floors.

When there is a significant increase in the price of a good like bottled water that results from a hurricane, flood, or electricity outage, it is known as ______. Multiple choice question. price floor price elasticity of demand price gouging price ceiling

price gouging

Economists refer to the amount that consumers want to buy at any particular price as the Multiple choice question. quantity demanded. demand. quantity supplied. supply.

quantity demanded.

If someone says that they can tell you how much they want to buy if the price is $1, that person is telling you their Multiple choice question. supply. quantity demanded. demand. quantity supplied.

quantity demanded.

If someone says that they can tell you how much they want to sell if the price is $1, that person is telling you their Multiple choice question. supply. quantity supplied. quantity demanded. demand.

quantity supplied.

a. The Law of Supply states that when the price of a good rises, the Quantity Supplied will (Click to select) rise fall stay the same b. The Law of Supply states that when the price of a good falls, the Quantity Supplied will (Click to select) rise fall stay the same

rise fall

A decrease in the supply for a good will result in a unless the price is allowed to adjust.

shortage

The term excess demand and the term _____ mean the same thing. Multiple choice question. shortage surplus supply demand

shortage

The underlying reason production possibilities frontiers are likely to be bowed out (rather than linear) is choices have consequences. there is always some level of unemployment. some resources and people can be better used producing one good rather than another. there is always opportunity costs. c. A linear production possibilities frontier implies constant opportunity cost .increasing opportunity cost. zero opportunity cost. None of these are correct.

some resources and people can be better used producing one good rather than another constant opportunity cost

The underlying reason production possibilities frontiers are likely to be bowed out (rather than linear) is some resources and people can be better used producing one good rather than another. there is always some level of unemployment. there are always opportunity costs. choices have consequences.

some resources and people can be better used producing one good rather than another. Correct

Suppose the price of salmon rises so health-conscious consumers choose chicken breast instead. This is an example of the Multiple choice question. real-balances effect. substitution effect. law of diminishing marginal utility.

substitution effect.

If good A and good B are alternative outputs for a firm and the price of good A changes, then in the market for good B this will impact Multiple choice question. demand. supply. neither demand nor supply. both demand and supply.

supply

If good A is used as an input to make good B and the price of good A changes, it will impact Multiple choice question. both supply and demand. demand. supply. neither supply nor demand.

supply.

If good A is used as an input to make good B and the price of good A changes, it will impact Multiple choice question. supply. both supply and demand. demand. neither supply nor demand.

supply.

If the number of sellers producing a good changes, it will impact Multiple choice question. both demand and supply. supply. neither demand nor supply. demand.

supply.

If the technology involved in producing a good changes, it will impact Multiple choice question. neither supply nor demand. supply. demand. both supply and demand.

supply.

If there is a subsidy paid for the production of a good, that subsidy goes to producers, and it changes, this will impact Multiple choice question. supply. neither demand nor supply. demand. both demand and supply.

supply.

If there is an excise tax on a good, that tax is placed on producers, and it changes, it will impact Multiple choice question. neither demand nor supply. both demand and supply. demand. supply.

supply.

An increase in the supply for a good will result in a unless the price is allowed to adjust. (Enter one word in the blank.)

surplus

If the supply and demand curves cross at a price of $5, at any price above that, there will be an equilibrium.a shortage.a crisis.a surplus.

surplus

Multiple Choice Question The term "excess supply" and the term ______ mean the same thing. Multiple choice question. shortage surplus supply demand

surplus

Answer the following questions about marginal utility. a. According to the law of diminishing marginal utility, as more of a product is consumed, multiple choice 1the amount of extra happiness decreases.income falls.the price falls.the amount of extra happiness increases. b. If a consumer purchases more of a good as the price falls, we can assume that the consumer's multiple choice 2preferences have changed.marginal utility has also fallen.total utility has also fallen.marginal utility has risen.

the amount of extra happiness decreases marginal utility has also fallen.

A quantity sold cannot be called the equilibrium quantity if Multiple select question. the amount producers want to sell is that quantity. the amount producers want to sell is less than that quantity. the amount producers want to sell is greater than that quantity.

the amount producers want to sell is less than that quantity. the amount producers want to sell is greater than that quantity.

Multiple Choice Question A point on a production possibilities frontier represents ______. Multiple choice question. the amount that it will cost to produce a particular volume of one of one good. the combination of goods that can be produced at the same time the opportunity cost of producing two goods relative to other goods the amount that it will cost to produce a particular volume of two goods

the combination of goods that can be produced at the same time

An increase in the income of consumers will cause the multiple choicedemand for all goods to rise.the demand for some goods to rise and for others to fall.supply of all goods to fall.supply of all goods to rise.

the demand for some goods to rise and for others to fall

Consumers noting that the first slice of pizza is more satisfying than the fifteenth slice is an example of Multiple choice question. the law of diminishing utility. the real-balances effect. the substitution effect.

the law of diminishing utility.

Consumers responding to a price increase of one good by noting their fixed income will mathematically not allow them to buy the same things is an example of Multiple choice question. the law of diminishing utility. the real-balances effect. the substitution effect.

the real-balances effect.

Select all that apply The reason that only a finite amount of a good can be produced even if everyone is focused on production of that good is that the resources are finite. the resources are infinite. the capabilities of the resources are infinite. the capabilities of the resources are finite.

the resources are finite. the capabilities of the resources are finite.

Something is scarce as long as ______. Multiple choice question. the price of it is high there is not a freely available and infinite source of it there is an infinite source of it you do not have to pay money for it

there is not a freely available and infinite source of it

An increase in supply would have the supply curve move (horizontally) Multiple choice question. to the left. to the right.

to the right.

Scarcity implies that the allocation decision chosen by society can typically make more of one good but at the expense of making less of another.always make more of all goods simultaneously.always make more of any good.not make more of any one good.

typically make more of one good but at the expense of making less of another

If the combination of goods produced is outside the production possibilities frontier, then that combination is Multiple choice question. inefficient but attainable. unattainable. attainable. inefficient.

unattainable

A resource is anything that is consumed directly or Multiple choice question. only a raw material. used to make things that will ultimately be consumed. only an energy source. only time.

used to make things that will ultimately be consumed.

Select all that apply A resource is anything that is Multiple select question. used to make things that will ultimately be consumed. only a raw material. consumed directly. discarded during the manufacture of consumable goods. only time.

used to make things that will ultimately be consumed. consumed directly.

The opportunity cost of doing this assignment is Multiple choice question. a better grade for having done so. what you would have done had you chosen to do something else. what you will do after you finish this assignment. a worse grade for having done so. that you hate doing economics.

what you would have done had you chosen to do something else.

Suppose you know from history that every time the winner of your local high school basketball sectional tournament is a smaller school than the runner-up, that a recession has followed the next year. If you acted on the assumption that it would happen again, Multiple choice question. you would be well supported in your reasoning. you would have fallen victim to the fallacy of composition. you would have fallen victim to the fallacy that correlation and causation are the same.

you would have fallen victim to the fallacy that correlation and causation are the same.