AGEC final

Scarcity is a situation in which

The three groups of decision makers in the economy are

How retail gasoline stations behave in a local market is an example of a macroeconomic issue

What an economic decision maker must give up when choosing one economic activity over others is known as the

Macroeconomics focuses on the behavior of economic agents such as the consumer, a business firm or a specific market

Carl is considering attending a concert with a ticket price of $35. He estimates that the cost of driving to the concert and parking there will total an additional $20. In order to attend the concert, Carl will have to take time off from his part-time job or forgo studying for an exam scheduled for the next morning. He estimates that he will lose 5 hours of work, at a wage of $6 per hour or 5 hours of study time. If Carl considers studying the best alternative use of his time, his opportunity cost of attending the concert equals

High-income people will sometimes pay higher prices at convenience stores for goods that are available at discount stores. They do this because

After graduating from high school, Steve had three choices, listed in order of preference: (1) matriculate at our campus, (2) work in a printing circuit board company, or (3) attend a rival college. His opportunity cost of going to college here includes which of the following?

A family on a trip budgets $800 for sit-down restaurant meals and fast food. If the price of a fast food meal for the family is $20, how many such meals can the family buy if they do not eat at restaurants?

The percentage of disposable income currently spend on food in the US is about

Assume that for John Paxton, a soybean producer from Iowa, the only source of farm income is from the production of soybeans. Paxton produced 100,000 bushels of soybeans in 2012, receiving $12 per bushel. Assuming this producer had production expenses of $800,000, and assuming the CPI for 2012 was 2.00, his real farm income for 2012 was:

Use the table below to answer question dealing with the output and price of corn for 2011 and 2012.

Year Output (in bushels) Price/Bushel2011 10,000 $4.002012 12,000 $5.00

Which of the following statements is true? (Let 2011 be the base year.)

Data for Wilson's Lamb Slaughtering Plant are given below:
Year Pounds of Lamb Slaughtered1998 100,0001999 75,0002000 110,000 Let the base year be 1.0 in 1998.
What is the output index for 1999?

If income increases, there will be a parallel downward shift of the budget line

The change in total utility is arising from one unit increase in consuption of a good is referred to as

If bread costs $1 and meat costs $4 per pound, a consumer whose marginal utility of meat equals to 80 utils per pound is maximized only if the marginal utility per pound of bread equals

The marginal utility associated with drinking one more soda is:
Total Utility = 20 35

Cans of Soda = 2 5

For desert Mac has the choice between cheesecake and apple pie. The cheesecake has a marginal utility of 50 and a price of $5 and the apple pie has a marginal utility of 30 and a price of $3. Therefore, Mac should buy

Suppose that a consumer's original budget line was AB in Figure below, but it has now changed to line AC. Which of the following must have occurred?

Anita consumes both pizza and Pepsi. The following tables show the amount of utility she obtained from different amounts of these two goods. Suppose Pepsi costs $0.5 per can, pizza costs $1 per slice and Anita has $9 to spend on food and drinks. MU is Marginal Utility and MU/P is Marginal Utility per dollar.

Find marginal utility of the 7th slice of pizza?

Stanley receives the following marginal utilities from the first four car washes that he buys each year, respectively: 20, 15, 10, and 5. If each car wash sells for $10, then the marginal utility per dollar spent on the third car wash is

A market in which there are many buyers and sellers so that each has a negligible impact on the market price and the goods offered for sale are all the same is called

The law of demand says that as the price of a good rises, the quantity demanded of the good tends to fall.

which of the following items is most likely to be an inferior good?

according to the law of demand,

In economics, a market is a specific location where buying and selling take place: a supermarket, a flea market, etc.

Which of the following statements about demand is correct?

An increase in the price of a good results in a(n)

Betsy graduates from college, where she earned $3,000 a year working part-time, and takes a job as a third grade teacher, where she now earns $30,000 per year. About the same time she received her first paycheck, her bicycle was stolen. With her old income she would have purchased a new bike but with her new income she purchased a new car. Therefore,

The fact that travel on buses fell as incomes increased in many cities suggests that

When there is a positive cross-price elasticity of demand between two goods,

If the cross-price elasticity of demand between two goods is negative, then

The price elasticity of demand is usually equal to the slope of the demand curve.

If the percentage change in quantity demanded divided by the percentage change in price equals 1, then

If demand is perfectly inelastic,

if the demand curve is a vertical line, then

If the percentage change in quantity demanded is smaller (in absolute value) than the percentage change in price, then demand is

If the price of food falls by 10 percent and the quantity sold increases by 5 percent, then the price elasticity of demand in that range equals

If the numerical value of the price elasticity of demand is 3, then a one-percent change in price will cause a(n)

For which of the following medical services is the income elasticity of demand likely to be the smallest?

Suppose a local bookstore notices that a 2 percent increase in book prices leads to a 2 percent decrease in the number of books sold. Which of the following is true?

If the income elasticity of demand for a good is -2.5, then

The more available substitutes there are for a good, the

If a 5 percent increase in income leads to a 15 percent increase in the quantity demanded of a service, then the income elasticity of demand for that service equals 0.33.

A $1.00 increase in the price of a restaurant meal results in a drop in quantity demanded of 5 meals. Which of the following statements is correct?

An example of average physical product in agriculture is the yield or number of bushels of corn produced per acre

When a firm incurs losses in the short run, the most important consideration in determining whether to continue producing is whether

if a firm is producing the level of output at which the total cost curve intersects the total revenue curve,

Suppose that a firm produces 9 units at a price of $13 and 12 units at a price of $12.Then marginal revenue is:

Alwite is a perfectly competitive firm that produces white t-shirts. The market for white t-shirts is perfectly competitive and the market price of a t-shirt is $10.What will be Alwite's total revenue if it sells 20 t-shirts?

When Better Beds produces 40 beds per day, its average variable cost is $600 and its average total cost is $800. The marginal cost of producing the 40th bed is $700. Based on this information, what is the Better Beds' average fixed cost (AFC) for quantities of 20 and 40 beds per day?

Which of the following is true?

Flora's Flowers operates in a perfectly competitive market. At the point where marginal cost equals marginal revenue, ATC = $10, AVC = $5, and the price per unit is $15. In this situation,

Federal subsidies to higher education have the effect of

In a competitive market, when price is below the equilibrium level, the price will be driven upward due to

Of the following, which is true of the relationship between the quantity of a good supplied and its price?

A price floor on corn would have the effect of

Jordan wants to sell her wedding gown for $250, but her cousin Jessica offered her $375 for it. If the gown is sold for $375, what is Jordan's producer's surplus

in a competitive market, excess demand for a good exists whenever

An increase in demand causes

If the supply of coffee falls due to bad weather conditions in coffee-exporting countries, then the

If the resource prices faced by a firm rise, the result is a(n)

If the market for a good is initially in equilibrium and there is a rightward shift of the demand curve, then

A $10,000 federal subsidy per student in higher education would benefit

If the government wants to manipulate the equilibrium price, it will normally create a price floor or price ceiling; if the government want to manipulate the equilibrium quantity, it will normally impose taxes or award subsidies.

Oil and Natural Gas can each be used as a source of energy and are, for many purposes interchangeable. Which of the following best explains the increase in the price of natural gas that accompanied the increase in the price of oil during the 1990-1991 Persian Gulf War?

Which of the following will decrease the amount of a good that is traded in the market?

A copyright

Although there are barriers to entry in a monopolized industry, there are usually many close substitutes for the monopolist's product.

Charging different customers different prices is always illegal in the United States.

When there are many buyers and sellers, no significant barriers to entry, and a differentiated product, the market structure is called

The extent to which a firm is viewed by consumers as being a monopoly depends primarily on

Marginal revenue, average revenue, and price are all equal for a monopolist.

A profit-maximizing, single-price monopoly must lower its price in order to sell more output.

A monopoly that does not practice price discrimination

A monopolist that does not price discriminate will set the output level where

Absent an ability to price discriminate, if a monopoly wants to sell more output, it must

To maximize profit, a monopolist should produce the level of output at which

monopolies change

The change in total revenue obtained by selling an additional unit of output is

A single-price monopolist is producing 8,000 units of output. At that level, price equals $10, average total cost equals $12, and average variable cost equals $8. In addition, both marginal cost and marginal revenue equal $6. Which of the following statements is correct in the short run?

Brittany provides manicures at the only salon in town. Her marginal cost is constant at $5 per client, her fixed cost is $25 per day, and she is able to do 8 manicures per day. On a given day, half of her clients are willing to pay $15 for a manicure; half are willing to pay only $10. If she charges all of her clients $10, then her maximum daily profit equals

A record level of crop production can lead to:

Marginal propensity to consume is the slope of the aggregate consumption function and tells us how much consumption will change if consumer disposable income changes.

Consumption expenditures includes:

Disposable income in the economy reflects:

Given the following equation where DPI represents disposable personal income: C = 1,500 + 0.85(DPI) If disposable personal income is $5,000, consumer spending would be equal to:

The economy's aggregate supply curve includes:

An inflationary gap occurs in the economy when:

A barter economy occurs where:

Investment expenditures consists of:

Expansionary monetary policy actions:

Automatic fiscal policy instruments include:

If government spending is $1,000 and tax revenue collected by the government is $900, the nation's national debt would be equal to:

Contractionary fiscal policy actions:

A decrease in the fractional reserve requirement ratio will:

the national debt

The functions of the Federal Reserve System include:

the functions of money include