Foundations of Microeconomics, Chapter 1-6, Quizzes – Flashcards

Which of the following describes the reason why scarcity exists?

Which of the following defines economics?

Of the three big questions, what, how, and for whom, which of the following is an example of a how question? - Why do doctors and lawyers earn high incomes? - Why don't we produce more small cars and fewer gas guzzlers? - Why do we use machines rather than migrant workers to pick grapes? - Why do college football coaches earn more than professors?

Which of the following is not a key idea in the economic way of thinking? - People make rational choices by comparing costs and benefits - Poor people are discriminated against and should be treated more fairly - A rational choice is made at the margin - Choices respond to incentives

A rational choice is - the best thing you must forgo to get something - what you are willing to forgo to get something - made by comparing marginal benefit and marginal cost - the best for society

Which of the following best illustrates your marginal benefit from studying? - The knowledge you gain from studying 2 hours a night for a month - The best things forgone by studying 2 hours a night for a month - What you are willing to give up to study for one additional hour - What you must give up to be able to study for one additional hour

The scientific method uses models to

Which of the following is a positive statement? - We should stop using corn to make ethanol because it is raising the cost of food - you will get the most out of college life if you play a sport once a week - Competition among cell-phone providers across the borders of Canada ,Mexico, and the United States has driven roaming rates down - Bill Gates ought to spend more helping to eradicate malaria in Africa

Which of the following classifications is correct? - City streets are consumption goods because they wear out with use - Stocks are capital goods because when people buy and sell them they make a profit - The coffee maker in the coffee shop at an airport is a consumption good because people buy the coffee it produces - White House security is a government service because it is paid for by the government

Which of the following statements about U.S. production is correct?

Which of the following items is NOT a factor of production?

What is human capital?

Which of the following statements is correct?

How are goods and services produced in the global economy?

In the circular flow model, which of the following items is a real flow?

Which of the following events illustrates the law of demand: Other things remaining the same, a rise in the price of a good will ______

In the market for jeans, which of the following events increases the demand for a pair of jeans?

Other things remaining the same, a fall in the price of peanuts will___

In the market of cell phones, which of the following events increases the supply of cell phones?

When floods wiped out the banana crop in Central America, the equilibrium price of bananas _____ and the equilibrium quantity of bananas _____

A decrease in the demand for chocolate with no change in the supply of chocolate will create a ____ of chocolate at today's price, but gradually the price will ____

Many Americans are selling their used cars and buying new fuel-efficient hybrids. Other things remaining the same, in the market for used cars, _____ and in the market for hybrids _____

When the price of ice cream rises from $3 to $5 a scoop, the quantity of ice cream bought decreases by 10 percent. The price elasticity of demand for ice cream is ___

In Pioneer Ville, the price elasticity of demand for bus rides is 0.5. When the price of a bus ticket rises by 5 percent, ______

The price elasticity of demand for a good is 0.2. A 10 percent rise in the price will ____ the total revenue from sales of the good

If the price of a good falls and expenditure on the good rises, the demand for the good is ____

When the price of a good rises from $5 to $7 a unit, the quantity supplied increases from 110 to 130 units a day. The price elasticity of supply is ______. The supply of the good is _______

The cross elasticity of demand for good A with respect to good B is 0.2. A 10 percent change in the price of good B will lead to a _____percent change in the quantity of good A demanded. Goods A and B are _____

A 2 percent increase in income increases the quantity demanded of a good by 1 percent. The income elasticity of demand for this good is _____. The good is a _______

The method of allocation that most stores use during Thanksgiving sales is:

All of the following statements are correct EXCEPT - the value of an additional unit of the good equals the marginal benefit from the good - marginal benefit is the excess of value over the price paid, summed over the quantity consumed - the maximum price willingly paid fo a unit of a good is the marginal benefit from it - price is what we pay for a good but value is what we get from it

Choose the best statement. - an increase in the demand for a good increases producer surplus - if producers decrease the supply of the good, their producer surplus will increase - producer surplus equals the total revenue from selling the good - producer surplus is the excess of the value of the good over the market price, summed over the quantity produced

The market for a good s efficient if ____

When the marginal benefit from a good exceeds its marginal cost, _____

Market failure arises if _____

The allocation of resources is fair _____