Question 1

ceteris paribus

Accepted Answer

To study the effect of price on Brett\'s demand for rock climbing lessons we hold his monthly income constant. This is an example of a(n) _______ assumption.

Question 2

why a movie theatre charges different prices to different groups of people

Accepted Answer

Which of the following is an example of a microeconomic topic?

Question 3

efficiency.

Accepted Answer

In some countries it is legal for people to sell their human organs, particularly kidneys. Those who would favor this argue that it results in ____.

Question 4

Macroeconomics

Accepted Answer

________ is (are) concerned with how high unemployment will get during a recession.

Question 5

equity.

Accepted Answer

Economists and policy makers often deal with the tradeoff between efficiency and:

Question 6

we face tradeoffs in nearly every choice we make

Accepted Answer

Because of scarcity:

Question 7

Making sure that critical resources such as oil and forests do not run out.

Accepted Answer

What is the main problem addressed with scarcity?

Question 8

scarcity

Accepted Answer

If you see a large group of stranded passengers standing next to a disabled bus, and you have only three seats in your car, deciding who to rescue deals with the issue of:

Question 9

choices

Accepted Answer

Which of the following words best describes what economics is about?

Question 10

How rising wages affects the choice of working instead of going to school

Accepted Answer

Which of the following would be most closely related to microeconomics?

Question 11

80 dollars

Accepted Answer

Lisa is choosing between three alternatives: a) working on her job that pays her 60 dollars; b) writing a term paper which she values at 40 dollars; or c) going out with a friend, which she values at 80 dollars. The opportunity cost of writing the term paper is:

Question 12

$15

Accepted Answer

Instead of attending class, one could have worked an extra hour at the cafÃ© for $10 or watched a neighbor\'s child for $15. The opportunity cost of attending class is:

Question 13

the value of one\'s time and expenses to go to the farther gas station.

Accepted Answer

The price of gasoline is $2.50 per gallon at the closest gas station, but is only $2.30 per gallon at a gas station two miles away. By driving to the farther gas station, opportunity cost is:

Question 14

a situation in which less time is spent on chores by every roommate.

Accepted Answer

When four roommates agree to specialize in chores they are most efficient, this can lead to:

Question 15

Deciding whether to spend one more hour studying for an exam.

Accepted Answer

Which of the following is a decision that follows the net marginal benefit principle?

Question 16

Scarcity

Accepted Answer

Alex loves candy and could eat it all day long. However, his weekly allowance of $5 allows him to buy only a small bag of candy. Which of the following key ideas of economics does this illustrate?

Question 17

$40

Accepted Answer

Suppose a friend invites you to attend the opening day game for your favorite baseball team. You will have to miss a day of work in order to go. You would have earned $40 that day. Your ticket to the game cost your friend $10, and your friend treats you to another $10 worth of food and beverage. What is the opportunity cost of this choice?

Question 18

marginal analysis.

Accepted Answer

Lindsay is an inventory planner at a local retailer. She is currently making a decision as to how many units she should stock in the store based on projected demands of the consumer. She has determined that she should keep 200 units in the store because an additional unit would not sell. This is an example of:

Question 19

specialization.

Accepted Answer

Both Maggie and Angie can make beaded necklaces and clay bowls, but Maggie is most efficient at making necklaces. Therefore, Maggie makes necklaces and trades them for clay bowls. This is an example of:

Question 20

Jan, Martin, and Marcus

Accepted Answer

Jan is most efficient at making braided bracelets, Martin is most efficient at making clay pots, and Marcus is most efficient at making beaded necklaces. If these three people engage in trade in a mutually beneficial manner, who will benefit from the exchange?

Question 21

Increase

Accepted Answer

Suppose you have a very efficient study system. Then, as you increase the hours that you study for an economics exam, the opportunity costs of studying for the exam:

Question 22

start with very few details in order to simplify the model.

Accepted Answer

When an economic model is used, it tends to:

Question 23

A discovery of a new technology that expands production possibilities

Accepted Answer

If an economy moves from a point on a PPF line to a point to the right of that PPF, what event might have occurred?

Question 24

Yes, if new regulations restrict a country\'s capacity to produce goods.

Accepted Answer

Can a PPF ever shrink inwards?

Question 25

an expansion of the productive capacity of the economy.

Accepted Answer

An outward parallel shift of the PPF signals:

Question 26

Production possibilities for eggs and butter

Accepted Answer

Which of the following would be possible to illustrate on a production possibilities frontier?

Question 27

A point outside the curve

Accepted Answer

Which point in the following production possibilities frontier (PPF) is unattainable?

Question 28

a new curve that is to the right of the original curve

Accepted Answer

Assume that the population of Lauronia increased and so did its total production, since more people can produce more things. What would this look like on a graph of the production possibilities frontier?

Question 29

increases.

Accepted Answer

As you move from left to right along a production possibilities frontier that is bowed out from the origin, the opportunity cost of producing the product on the horizontal axis:

Question 30

stays the same

Accepted Answer

As you move left to right on a linear production possibilities frontier (PPF), the opportunity cost of producing the good on the vertical axis:

Question 31

It depends (need to know opportunity cost)

Accepted Answer

Sally can type 100 words per minute and David can type 200 words per minute. Given these numbers, society would be better off if which one of the two was employed as a typist?

Question 32

Indonesia has a comparative advantage in producing seaweed salads.

Accepted Answer

If Japan can produce 3 rice cakes or 6 seaweed salads in an hour, while Indonesia can produce 2 rice cakes and 5 seaweed salads in an hour, which of the following is true?

Question 33

one is able to produce the good at a lower opportunity cost.

Accepted Answer

Having a comparative advantage in producing a good means that:

Question 34

can benefit from trade by specializing in its comparative advantage.

Accepted Answer

A country that does not have an absolute advantage in producing any good:

Question 35

definitely has an absolute advantage in producing watches.

Accepted Answer

If Switzerland can produce more watches in a year than Austria, we know that Switzerland:

Question 36

absolute advantage

Accepted Answer

In a single day, the United States can produce more lobsters than Mongolia because the United States has the extensive coastline that is necessary for trapping lobsters. In terms of lobsters, the United States has a(n) ________ over Mongolia.

Question 37

Demand exceeds supply and a shortage occurs

Accepted Answer

If a technology company introduces a new gadget to the market which creates long lines of eager customers at stores, what is true about this market?

Question 38

The demand for snow-clearing services would increase, causing prices to rise.

Accepted Answer

Suppose that an especially harsh winter blankets a town in snow all winter, what would happen in the market for snow-clearing services?

Question 39

increase supply, which would push airfares lower.

Accepted Answer

If gas prices drop significantly and remain low for an extended time, industries that use a lot of gasoline, such as airlines, would likely:

Question 40

surplus of shares which causes prices to fall.

Accepted Answer

If a public offering of new stock is initially priced too high relative to market demand, the result would be a:

Question 41

negatively related.

Accepted Answer

According to the law of demand, the price of coffee and the quantity of coffee demanded are:

Question 42

positively related.

Accepted Answer

According to the law of supply, the price of potato chips and the quantity of potato chips supplied are:

Question 43

Quantity supplied and quantity demanded are equal.

Accepted Answer

Market equilibrium price exists when:

Question 44

a shortage.

Accepted Answer

The Green Bay Packers, an NFL team, have over 90,000 names on its waiting list for season tickets. This situation is referred to as:

Question 45

Equilibrium price would increase.

Accepted Answer

The demand for guitars increases but supply stays the same. What would happen to the equilibrium price in this situation?

Question 46

wrong; demand is not the same as quantity demanded.

Accepted Answer

Your friend tells you the following:   \"The Law of Demand does not work ALL the time. As an example, think about the demand for luxury cars (e.g. BMWs, Porshe, etc). Demand for those luxury cars increases when the price of the car increases.\"  Your friend is:

Question 47

A rise in the price of popsicles, a substitute for ice cream.

Accepted Answer

Which of the following would cause the demand curve for ice cream to shift to the right?

Question 48

Falling incomes due to a weakening economy.

Accepted Answer

Which of the following factors would most likely cause a shift in the demand curve for candles?

Question 49

decrease because demand for cheap pizza is negative related to income.

Accepted Answer

College students often buy cheap pizza because it\'s more affordable. Suppose after graduating, college students find high paying jobs. The demand for cheap pizza will likely:

Question 50

A big sale on socks

Accepted Answer

What would cause a movement from one point on the demand curve for socks to a point farther down on the same curve?

Question 51

willing and able

Accepted Answer

Demand is defined as the amount of a product that buyers are __________ to purchase over some time period at various prices.

Question 52

The quantity demanded will increase.

Accepted Answer

Because of increased competition in the late 1990s and early 2000s the price of cell phones dropped dramatically. According to the law of demand, what will happen to the quantity of cell phones demanded based on this price change?

Question 53

Inferior good

Accepted Answer

Because Shannon just got a significant raise at work, she has started to eat less macaroni and cheese. In this example, macaroni and cheese is what type of good?

Question 54

The quantity demanded of hot dogs will increase and the demand for hot dog buns will shift to the right.

Accepted Answer

Suppose that the local food store lowers the price of hot dogs. Which of the following would likely to occur as a result?

Question 55

a new curve to the left of the original curve.

Accepted Answer

The demand for theme park tickets has decreased, even though their price has stayed the same, because people are taking fewer vacations. The change in demand is represented by:

Question 56

Firms perceive that the marginal benefit of producing the good has increased.

Accepted Answer

The supply curve is upward sloping because at higher prices ________

Question 57

An increase in the cost of pet grooming supplies.

Accepted Answer

Which of the following is most likely to shift the supply curve for pet grooming services leftward?

Question 58

The supply curve will shift to the right, increasing supply.

Accepted Answer

If the government offers a tax deduction to companies producing solar panels, what will happen in the market for solar panels?

Question 59

Profits of copper producers decrease.

Accepted Answer

As the price of copper continues to rise, which of the following is a consequence that may result?

Question 60

It would increase as the risk of prosecution falls.

Accepted Answer

If more states legalize recreational marijuana, what is the likely effect on the supply of marijuana?

Question 61

supply.

Accepted Answer

The maximum amount of a product that sellers are willing and able to provide for sale over some period at various prices, ceteris paribus, is called:

Question 62

A movement from one point on the line to a higher point on the line.

Accepted Answer

The quantity supplied of sugar has increased due to a change in price. How would this change in quantity supplied be represented on the supply curve?

Question 63

A new supply curve to the right of the original curve

Accepted Answer

Advances in technology can make it less costly to produce a good or service. How would this be illustrated on a graph?

Question 64

fall in price to avoid letting the ticket go unsold.

Accepted Answer

Many Super Bowl football tickets are resold online for several times their face value. As the game day approaches, unsold tickets will likely:

Econ Exam 1 Test Questions – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards