Quiz

Increasing the level of education in the United States will:

lead to workers possessing greater human capital.

A rational person does not act unless

the action produces marginal benefits that exceed marginal costs.

Command economies differ from capitalist economies mainly because of which of the following?

Command economies have a higher degree of government ownership of resources.

"If you want something done right, you have to do it yourself." This quote violates the principle of which of the following economic concepts?

Comparative advantage

Which of the following involve a trade-off?

Going to college Watching this video Watching a football game on Saturday afternoon

Which of the following is most likely to cause the producgtion possibilities curve to shift outward toward E?

Improving the technology for the production of either consumer or capital goods

If there is an increase in demand for a good, what will most likely happen to the equilibrium price and quantity of the good?

Price: Increase; Quantity: Increase

Which of the following statements about the production possibilities curve is true?

The relative position of Point C and D reflect production alternatives rather than relative prices.

Kate is considering whether to take an after-school job as a veterinary assistant. If she works, she will not be able to join the school's soccer team. If Kate decides to take the job, what does her opportunity cost include?

The satisfaction she would get from playing the on the school's soccer team

The opportunity cost of choosing a Snickers bar over a bag of M and M's is

The value of the bag of M and M's

Assume snow cones and slushies are substitutes. An increase in the number of snow cone stands is likely to result in

a decrease in the demand for slushies

A shift of the demand curve for pizza to the right could be the result of

a rise in income if pizza is a normal good.

It is true that the equilibrium quantity will always go up if supply:

and demand both increase.

A factor that may have shifted supply of gasoline to the right is

better technology in the production of gasoline.

If the cost of producing automobiles increase, the price, equilibrium quantity and consumer surplus will most likely change in which of the following ways? Consumer Price Quantity surplus a. Increase Increase Increase b. Increase Decrease Increase c. Increase Decrease Decrease d. Decrease Increase Decrease e. Decrease Decrease Decrease

c

If an economy's factors of production were owned by the government sector and the coordinating activity was done by a government planning board, the economy would be called:

command

Consumer preferences, prices of related goods, income, and demographic characteristics are often termed:

demand determinants.

Candy makers accurately anticipate the increase in demand for candy for Halloween so that the supply of candy and the demand for candy increase by the same amount. As a result, the equilibirum price of candy _____ and the equilibrium quantity of candy _____.

does not change; increases

Since people respond to incentives, we would expect that, if the average salary of accountants increases by 50% while the average salary of teachers decreases by 20%, then

fewer students will take degree courses in education and more will take accounting courses.

A decrease in the price of eggs, all other things unchanged, will result in a(n):

greater quantity of eggs demanded.

The market supply curve is the _____ of the _____.

horizontal sum; individual supply curves.

If the opportunity cost of manufacturing machinery is lower in the United States than in Britain and the opportunity cost of manufacturing sweaters is higher in the United States than in Britain, then the United States will:

import sweaters from Britain and export machinery to Britain.

If the country moves from Point D to Point F, future economic growth will

increase

During 2005 the supply of marshmallows decreased while at the same time the demand for marshmallows increased. If the magnitude of the increase in demand was greater than the magnitude of the decrease in supply, then the equilibrium price of marshmallows _____ and the equilibrium quantity _____.

increased; decreased

Teenagers demand more soda than other age groups. If the number of teenagers increases, everything else remaining the same,

market demand for soda increases.

The model that shows the goods and services the economy is capable of producing is the model of

production possibilities

The equilibrium price of a good occurs if the

quantity of the good demanded equals the quantity of the good supplied.

A rational decision maker will choose to act only if

the marginal benefit of the action is greater than the marginal cost of that action.

According to the theory of comparative advantage, a good should be produced in the country where

the opportunity costs are least.

When moving along a demand curve, which of the following changes?

the price of the good