Micro Economics Chapters 1-4
T1: The amount of the good buyers are willing and able to purchase is the
quantity demanded
T1: Two goods are complements if a decrease in the price of one good
raises the demand for the other good
T1: Two goods are substitute if a decrease in the price of one good
reduces the demand for the other good
Q1:The term "Productivity"
refers to the quantity of goods and services produced from each hour of a worker's time
Q3: When an economists points out that you and millions of other people are interdependent, he or she is referring to the fact that we all
rely upon one another for the goods and services we all consume
Q2: The slope of a straight line is calculated by
rise divided by run
T1: The law of demand says that when price
rises, quantity of demand falls
T1: Economics deals primarily with the concept of
scarcity
Q1:Which of the following firms is mostly likely to have market power
the last gas station in New Mexico for 100 miles
T1: For each good produced in a market economy, demand and supply determine
both price and quantity
T1: what is true
buyers determine demand and sellers determine supply
Q2:Refer to the figure above, Production is efficient if the economy is producing (pictures on phone)
30 barrels and 6 bathtubs
Q2: Refer to the figure above. What is the opportunity cost of moving from point A to point B? (picture on phone)
20 barrels
Q3: Specialization and trade are closely linked to
comparative advantage
T1: People make decisions at the margin by
comparing cost and benefits
T1: If Francis receives a decrease in his pay, we would expect
Francis's demand for inferior goods to increase
T1: best example of marginal cost
Morgan gets a raise at her part-time job and is now paid $7.25 per hour instead of $7.00
Q3:If Shawn can produce more donuts in one day than sue can produce in one day, then
Shawn has a comparative advantage in the production of donuts
Q2:A demand curve shows the relationship
between price and quantity demanded
Q4: A leftward shift of a supply curve is called
a decrease in supply
T1:The gains from trade are
a result of more efficient resource allocation
Q4: An increase in demand is represented by
a rightward shift of a demand curve
Q3:Trade can make everybody better off because it
allows people to specialize according to comparative advantage
T1: If a good is "normal" then an increase will result in
an increase in the demand for the good
T1: The forces that make market economics work are
demand and supple
T1: Total output in an economy increases when each person specializes because
each person spends more time producing that product for which they have advantage
T1: In a competitive market,
each seller has limited control over the price of his product
Q2: Macroeconomics is the study of
economy-eide phenomena
T1: A good is considered scarce in a society when
everyone in that society cannot have all they want of the of the good
Q3: imports are
goods produced abroad and sold domestically
T1: imports are
goods produced abroad and sold domestically
Q3: exports are
goods produced domestically and sold abroad
T1: exports are
goods produced domestically and sold abroad
T1: An example of complementary goos would be
hamburgers and fries
Q3: The producer that requires a smaller amount of inputs to produce a certain amount of a good,relative to the quantities of of inputs required by other producers to produce the same amount of that good,
has an absolute advantage in the production of that good
T1: The producer that requires a smaller quantity of inputs to produce a good
has an absolute advantage in the production of that good
Q4: A market supply curve is determined by
horizontally summing individuals supply curve
T1: Economics is the study for
how societies manages its scarce resources
T1: For a competitive market, which is true
if a seller charges more than the going price, buyers will go elsewhere
Q2:In a circular flow diagram,
income payments flow from firms to households, and sales revenue flows from households to firms
Q2:Factors of production are
inputs into the production process
Q4: The negative relationship between price and quantity demanded
is referred to as the law of demand
Q1:A rational decision maker takes an action only if the
marginal benefit is greater than the marginal cost
T1: A rational decision maker takes an action only if the
marginal benefit is greater than the marginal cost
Q1:The term used to describe a situation in which markets fail to allocate resources efficiency is called
market failure
Q2:Which of the following items is not a factor of production
money
Q3: Trade between countries
must benefit both countries equally: otherwise trade is not mutually beneficial
Q4: The relationship between price and quantity supplied is
negative
Q2: Refer to the figure above, If this economy puts all of its resources into the production of bathtubs it could produce. (picture on phone)
no barrels and 16 bathtubs
Q4: If Francis experiences a decrease in his income, we would expect that, as a result, Francis's demand for
normal goods will decrease
Q3: Suppose that the country of XENO chose to be isolate itself from the rest of the world. Its ruler proclaimed that XENO should become self sufficient, so it would not engage in foreign trade. From an economic perspective, this idea would,
not make sense as long as XENO had a comparative advantage in some good
T1: The word economy comes form the Greek word for
one who manages a household
Q1:What you give up to obtain an item is called your
opportunity cost
T1: Comparative advantage is based on
opportunity cost
T1: What you give up to obtain an item is called your
opportunity cost
Q1:An example of an externality is the impact of
pollution from a factory on the health of people in the vicinity of the factory
Q4: According to the law of demand
price and quantity demanded are negatively related
T1: Buyers and seller who have no influence on market price are referred to as
price takers
T1: If shawn can produce donuts at a lower opportunity cosy than sue then,
shawn has a comparative advantage in the production of donuts
T1: When quantity of demand decrease at every price we know that the demand curve has
shifted to the left
T1: The country that has a comparative advantage in a product
should export that product
Q1:A marginal change is a
small, incremental adjustments
Q1:Efficiency means that
society is getting the maximum benefits from its scarce resources.
T1: Efficiency means that
society is getting the most it can from its scarce resources
T1: Suppose that a decrease in the price of X results in less of good Y sold. This would mean that X and Y are
substitute goods
Q4: A technological advance will shift the
supply curve to the right
T1: What is not a determining factor of demand
technology
T1: Economists use the phrase "There is no such thing as a free lunch, " to illustrate
that to get one thing, we must give up something else
T1: Henry decides to spend two hours playing golf rather than working at his job which pays $8 per hour. Henry's tradeoff is
the $16 he could have earned working for two hours
Q3: Suppose the US has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asserts that
the US should produce more pork than what is required and export some of it to Mexico
T1: Economists use the word equity to describe a situation in which
the benefits of societies resources are distributed fairly among societies members
Q1:Economists use the word equity to describe a situation in which
the benefits of society's resources are distributed fairly among society's members
T1:One result of a drought in the midwest could be an increase in
the price of frosted shredded wheat
Q1:The opportunity cost of going to college is
the value of the best opportunity a student gives up to attend college
T1: A competitive market is one in which
there are so many buyers and many sellers that each has a negligible impact on price
T1: Who is that ultimately determines the demand for a product or service?
those who buy the product or service
Q2:The circular-flow diagram is a
visual model of how the economy is organized
T1: According to Adam Smith, a person should never attempt to make at home
what it will cost him more than to buy
T1: The opportunity cosy of an item is
what you give up to get that item
Q4: Ford Motor Company announces that it will offer $3,000 rebates on new Mustangs starting next month. As a result of this information, today's demand curve for Mustangs
will not shift, rather, the demand curve for mustangs will shift to the right next month
Q4: You love peanut butter. You hear on the news that 50 percent of the crop in the South has been wiped out by drought, and that this will cause the price of peanuts to double by the end of the year. As a result,
your demand for peanut butter decrease as you look for a substitute good
