Econ Exam 1 Review(quiz questions)

question

Normative statements are based upon

answer

value judgements

question

Which of the following statements is "positive" in nature?

answer

College tuition is higher for out of state students than in state students.

question

A farmer can produce 1 ton of Apples for $11,000, 2 tons of apples for $20,000 and 3 tons of apples for $42,000. What is the marginal cost of the 2nd ton of apples?

answer

$9,000

question

Assume a nation has constant opportunity costs. If at most the nation can produce at most 400 dishwashers or 700 cars, what is the opportunity cost of producing a car in terms of dishwashers?

answer

4/7

question

If a country has a comparative advantage in the production of a good it means for certain that they:

answer

Can produce the good for a lower opportunity cost.

question

Assume a country has a starting GDP of 300 which grows at 3% per year. Using the formula for compounding growth, what will GDP be after 20 years? (Round to the nearest whole dollar)

answer

$542

question

Which of the following is most likely to encourage sustained long run economic growth (ceteris paribus)?

answer

Technological progress.

question

Ceteris paribus, for an inferior good, if my income decreases:

answer

Demand will increase.

question

Assume peanut butter and jelly are compliments, if the price of peanut butter decreases, for jelly:

answer

Demand will increase.

question

Ceteris Paribus, if the price of a good increases:

answer

Neither supply nor demand change.

question

Supply is _____ sloping because of ___________

answer

upward, diminishing marginal returns

question

When the percentage change of quantity demanded for a good is greater in magnitude (absolute value) than the percentage change of price, the demand for that good or service is _________ and the elasticity of demand is ________
unitary elastic: less than 1

answer

elastic: greater than 1

question

As a demand curve becomes steeper (closer to vertical), we can say that demand

answer

becomes more inelastic

question

Assume the elasticity of demand is equal 0.8, this means that if the price of a good increased 20%, the quantity demanded would:

answer

Decrease 16%

question

For a normal good if my income increases, demand will __________, equilbrium quantity will ____________, and equilibrium price will ____________

answer

Demand will increase, equilibrium quantity will increase, and equilibrium price will increase.

question

If supply decreases and demand increases, we can say for certain that:

answer

Equilibrium price will increase

question

If the supply for a good increases but the market price does not immediately change, this will most likely cause:

answer

a surplus

question

Assume coffee and tea are substitutes, if the price of coffee decreases, for tea:

answer

Demand will decrease, equilibrium quantity will decrease, and equilibrium price will decrease.

1 of 18

question

Normative statements are based upon

answer

value judgements

question

Which of the following statements is "positive" in nature?

answer

College tuition is higher for out of state students than in state students.

question

A farmer can produce 1 ton of Apples for $11,000, 2 tons of apples for $20,000 and 3 tons of apples for $42,000. What is the marginal cost of the 2nd ton of apples?

answer

$9,000

question

Assume a nation has constant opportunity costs. If at most the nation can produce at most 400 dishwashers or 700 cars, what is the opportunity cost of producing a car in terms of dishwashers?

answer

4/7

question

If a country has a comparative advantage in the production of a good it means for certain that they:

answer

Can produce the good for a lower opportunity cost.

question

Assume a country has a starting GDP of 300 which grows at 3% per year. Using the formula for compounding growth, what will GDP be after 20 years? (Round to the nearest whole dollar)

answer

$542

question

Which of the following is most likely to encourage sustained long run economic growth (ceteris paribus)?

answer

Technological progress.

question

Ceteris paribus, for an inferior good, if my income decreases:

answer

Demand will increase.

question

Assume peanut butter and jelly are compliments, if the price of peanut butter decreases, for jelly:

answer

Demand will increase.

question

Ceteris Paribus, if the price of a good increases:

answer

Neither supply nor demand change.

question

Supply is _____ sloping because of ___________

answer

upward, diminishing marginal returns

question

answer

elastic: greater than 1

question

As a demand curve becomes steeper (closer to vertical), we can say that demand

answer

becomes more inelastic

question

Assume the elasticity of demand is equal 0.8, this means that if the price of a good increased 20%, the quantity demanded would:

answer

Decrease 16%

question

For a normal good if my income increases, demand will __________, equilbrium quantity will ____________, and equilibrium price will ____________

answer

Demand will increase, equilibrium quantity will increase, and equilibrium price will increase.

question

If supply decreases and demand increases, we can say for certain that:

answer

Equilibrium price will increase

question

If the supply for a good increases but the market price does not immediately change, this will most likely cause:

answer

a surplus

question

Assume coffee and tea are substitutes, if the price of coffee decreases, for tea:

answer

Demand will decrease, equilibrium quantity will decrease, and equilibrium price will decrease.

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