Test 1 Review

400 tacos and 250 burritos.

Refer to Figure 3-3. If Arturo and Dina each divides his/her time equally between the production of tacos and burritos, then total production is

face a constant trade-off between producing pitchers of lemonade and pizzas.

Refer to Figure 3-4. Both Alice and Betty

400 pitchers per day.

Refer to Figure 3-4. If Alice produces only lemonade, she can produce

Alice produces more lemonade and Betty produces more pizzas.

Refer to Figure 3-4. If point A represents Alice's current production and point B represents Betty's current production, under what circumstances can both Alice and Betty benefit from specialization and trade?

Alice produces 200 pitchers of lemonade and 100 pizzas while Betty produces 180 pitchers of lemonade and 180 pizzas.

Refer to Figure 3-4. If point A represents Alice's production and point B represents Betty's production,

an increase in the quantity supplied.

Refer to Figure 4-4. The movement from point A to point B on the graph is called

$1,050.

Refer to Figure 5-3- At a price of $70 per unit, sellers' total revenue equals

$50.

Refer to Figure 5-3. The maximum value of total revenue corresponds to a price of

increase by $4,800, and demand is elastic between points X and Z.

Refer to Figure 5-5 . If the price decreased from $36 to $12, total revenue would

Supply curve A

Refer to Table 5-4 . Using the midpoint method, which of the three supply curves represents the least elastic supply?

a decrease in the demand for energy drinks.

Suppose scientists provide evidence that people who drink energy drinks are more likely to have a heart attack than people who do not drink energy drinks. We would expect to see

The prices of food and the wages of farmers would adjust.

Suppose the United States had a short-term shortage of farmers. Which market mechanisms would adjust to remove the shortage?

How are the gains from trade shared among the parties to a trade?

The principle of comparative advantage does not provide answers to certain questions. One of those questions is

elastic, and the demand curve will be horizontal.

When small changes in price lead to infinite changes in quantity demanded, demand is perfectly

A computer

Which of the following is an example of a capital input?

The steepness or flatness of the supply curve for the good

Which of the following is not a determinant of the price elasticity of demand for a good?

Comparative advantage is determined by which person or group of persons can produce a given quantity of a good using the fewest resources.

Which of the following statements about comparative advantage is not true?

The cost of the fabric used to make the jerseys increases.

Which of the following would shift the supply of Green Bay Packers football jerseys to the left?

supply of bicycles will shift to the left.

Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the

be positive, and your roommate's would be negative.

You and your college roommate eat three packages of Ramen noodles each week. After graduation last month, both of you were hired at several times your college income. You still enjoy Ramen noodles very much and buy even more, but your roommate plans to buy fewer Ramen noodles in favor of foods she prefers more. When looking at income elasticity of demand for Ramen noodles, yours would

the quantity demanded of one good changes in response to a change in the price of another good.

Cross-price elasticity of demand measures how

the baker to supply less bread now than she was supplying previously.

A baker recently has come to expect higher prices for bread in the near future. We would expect

no individual buyer or seller has any significant impact on the market price.

A competitive market is a market in which

a market.

A group of buyers and sellers of a particular good or service is called

pencils and pens.

A likely example of substitute goods for most people would be

her opportunity cost of mowing her lawn is higher than the cost of paying someone to mow it for her.

A popular celebrity that is paid highly for her time should probably not mow her own lawn because

The United States should withdraw from the North American Free Trade Agreement (NAFTA).

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

Lianna cannot influence the price of coffee beans even if he buys a large quantity of them.

Assume Lianna buys coffee beans in a competitive market. It follows that

24.

Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. Refer to Table 3-11. Assume that Jamaica and Norway each has 4 days available for production. Originally, each country divided its time equally between the production of coolers and radios. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of coolers increased by

2 coolers.

Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. Refer to Table 3-11. Jamaica and Norway would not be able to gain from trade if Norway's opportunity cost of one radio changed to

(8 computers set up, 32 computers tested)

Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies. Refer to Table 3-7. Which of the following points would not be on Barb's production possibilities frontier, based on a 40-hour week?

how individual households and firms make decisions.

Microeconomics is the study of

advising the president and writing the annual Economic Report of the President.

Duties of the Council of Economic Advisers include

focus their thinking on the essence of the problem at hand.

Economists make assumptions to

Diamonds

For which of the following goods is the income elasticity of demand likely highest?

more elastic demands.

Goods with many close substitutes tend to have

They cannot run lab experiments in the same way that other scientists can.

How are economists not like mathematicians, physicists, and biologists?

Iowa has a comparative advantage in the production of corn.

If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn, then

an inferior good.

If a decrease in income increases the demand for a good, then the good is

supply in that market will increase.

If the number of sellers in a market increases, then the

the availability of close substitutes in determining the price elasticity of demand.

If the price of walnuts rises, many people would switch from consuming walnuts to consuming pecans. But if the price of salt rises, people would have difficulty purchasing something to use in its place. These examples illustrate the importance of

demand for cigarettes is perfectly inelastic.

Marcus says that he would smoke one pack of cigarettes each day regardless of the price. If he is telling the truth, Marcus's