question
Which of the following factors is likely to lead to an increase in the quantity demanded of pens?
answer
a fall in the price of pens
question
which of the following statements are true?
*when a firm lowers its price its total revenue nay either increase or decrease
*whenever a firm increases its quantity sold its revenue will increase
*total revenue will equal zero when the demand for a product is unit elastic
*whenever a firm raises its price its total revenue will increase
*when a firm lowers its price its total revenue nay either increase or decrease
*whenever a firm increases its quantity sold its revenue will increase
*total revenue will equal zero when the demand for a product is unit elastic
*whenever a firm raises its price its total revenue will increase
answer
when a firm lowers its price its total revenue may either increase or decrease
question
If the cross-price elasticity of demand for computers and software is negative, this means the two goods are:
answer
complements
question
Suppose the value of the price elasticity of demand is -3. What does this mean?
answer
a 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent
question
The production possibilities frontier shows the ______ combinations of two products that can be produced in a particular time period with available resources.
answer
maximum attainable
question
Suppose a decrease in the supply of wheat results in an increase in revenue. This indicates that...
answer
the resulting increase in price is proportionately greater than decrease in quantity sold
question
Using Table 2, assume the price of enchiladas is $3. The quantity supplied of tacos at a price of $1 will be...
Amanda and Matthew
Amanda and Matthew
answer
0
question
The producer with the least opportunity cost of picking cherries is...
Taylor and Jeff
Taylor and Jeff
answer
the producer who gives up the fewest apples to pick a bushel of cherries.
question
A model refers to:
answer
a simplified description, or representation, of reality.
question
When the price of tortilla chips rose by 10 percent, the quantity of tortilla chips sold fell 4 percent. This indicates that the demand for tortilla chips is
answer
inelastic
question
The restriction that a consumer's total expenditure on goods and services purchased cannot exceed the income available is referred to as...
answer
the budget constraint
question
When Audrina raised the price of her homemade cookies, her total revenue increased. This suggests that the demand for Audrina's cookies is elastic.
answer
false
question
The price elasticity of demand for Stork ice cream is -4. Suppose you're told that following a price increase, quantity demanded fell by 10 percent. What was the percentage change in price that brought about this change in quantity demanded?
answer
2.5 percent
question
In recent years the cost of producing organic produce in the U.S. has decreased largely due technological advancement. At the same time, more and more Americans prefer organic produce over conventional produce. Which of the following best explains the effect of these events in the organic produce market?
answer
both the supply and demand curves have shifted to the right. as a result, there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price.
question
Refer to the table above. If the market price of wine is $8/bottle, and the market demand for wine is 19 bottles, David's consumption of wine is:
Sandra, David and Mary
Sandra, David and Mary
answer
7 bottles
question
Which of the following is evidence of a shortage of walnuts?
answer
The quantity demanded of walnuts is greater than the quantity supplied
question
If Paige and Gage considered specializing, then both people would be better off if...
answer
Paige specialized in tacos and Gage specialized in enchiladas
question
The price elasticity of demand for Stork ice cream is -4. Suppose you're told that following a price increase, quantity demanded fell by 10 percent. What was the percentage change in price that brought about this change in quantity demanded?
answer
2.5 percent
question
If the demand and supply curves for a commodity both shift to the left and the shift in demand is less than the shift in supply, then in comparison to the initial equilibrium, the new equilibrium will be characterized by:
answer
a higher price and a lower quantity
question
A decrease in the equilibrium price for a product will result...
answer
when there is an increase in supply and a decrease in demand for the product
question
Which of the following examples best describes the Law of Demand?
answer
when the price of tea increased, the quantity demanded of tea decreased.
question
A correlation between two variables implies that:
answer
there is a mutual relationship between both the variables
question
Using the information in Table 4 and Figure 4, if the price of tacos is $5 and the price of enchiladas is $2, where will the economy be located on the PPF left-hand side of Figure 4?
Ben and Madysen
Ben and Madysen
answer
Point C
question
If the price of a good increases, _____.
answer
the consumer surplus decreases
question
Suppose when Nablom's Bakery raised the price of its breads by 10 percent, the quantity demanded fell by 15 percent. What was the effect on sales revenue?
answer
sales revenue decreased
question
A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in...
answer
a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease
question
Comparative advantage means the ability to produce a good or service...
answer
at a lower opportunity cost than any other producer
question
The opportunity cost for Taylor to pick a bushel of cherries is...
Taylor and Jeff
Taylor and Jeff
answer
4
question
Assume that an individual spends his income on sweaters and shirts. If the price of a sweater increases...
answer
the opportunity cost of buying sweaters increases
question
An outward shift of a nation's production possibilities frontier represents...
answer
economic growth
question
Using the production information in Table 1 and referring to Figure1, if Paige is the producer then, respectively, the values on her PPF of X1 and Y1 are...
Paige and Gage
Paige and Gage
answer
10 and 4
question
The best alternative use of resource is referred to as its...
answer
opportunity cost
question
Which of the following examples best describes the Law of Demand?
answer
when the price of bread doubles, John's consumption of bread halves
question
Economic decline (negative growth) is represented on a production possibilities frontier model by the production possibility frontier...
answer
shifting inward
question
The opportunity cost for David produce an enchilada is...
answer
2
question
An increase in the demand for a good is represented by...
answer
a right shift to a new demand curve
question
Economists use the concept of ____ to measure how one economic variable, such as quantity, responds to a change in another economic variable, such as price.
answer
elasticity
question
Suppose Tinsel Town Videos lowers the price of its movie club membership by 10 percent and as a result, CineArts Videos experienced a 16 percent decline in its movie club membership. What is the value of the cross-price elasticity between the two movie club memberships?
answer
1.6
question
Ranchers can raise either cattle or sheep on their land. Which of the following would cause the supply of sheep to increase?
answer
a decrease in the price of cattle
question
As the ____ increases, ____.
answer
price of a good; its quantity demanded decreases
question
The opportunity cost for David to produce an enchilada is...
David and Kourtelynne
David and Kourtelynne
answer
2
question
Using Table 1, what is the opportunity cost for Katherine to produce a shirt?
Katherine and Josh
Katherine and Josh
answer
.5 pairs of pants
question
If demand is inelastic, the absolute value of the price elasticity of demand is...
answer
less than one
question
Which of the following would cause a decrease in the supply of milk?
answer
an increase the price of a product that producers sell instead of milk
question
A(n) ____ is represented by a leftward shift of the demand curve while a(n) ____ is represented by a movement along a given demand curve.
answer
decrease in demand; increase in quantity demanded
question
Refer to Figure 3-5. At a price of $10, the quantity sold
answer
is 4 units
question
If the absolute value of the price elasticity of demand for aspirin equals 0.8 then...
answer
the demand for aspirin is inelastic
question
The larger the share of a good in a consumer's budget, holding everything else constant, the...
answer
more price elastic is a consumer's demand
question
Which of the following is a normative economic statement?
answer
Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable
question
As early societies became more complex, economies started to rely...
*on custom
*on centralized control of resources
*on markets and trade
*all of the above
*none of the above
*on custom
*on centralized control of resources
*on markets and trade
*all of the above
*none of the above
answer
all of the above
question
Which of the following is the correct way to describe equilibrium in a market?
answer
at equilibrium, quantity demanded equals quantity supplied
question
Using basic assumptions you can determine
*why markets are efficient
*when markets are efficient
*when government intervention helps or hurts economic performance.
*all of the above.
*A and B above.
*why markets are efficient
*when markets are efficient
*when government intervention helps or hurts economic performance.
*all of the above.
*A and B above.
answer
all of the above
question
If the demand for cell phone service is inelastic, then...
answer
the percentage change in quantity demanded is less than the percentage change in price (in absolute value)
question
Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium quantity of beef will...
answer
perhaps ride, fall, or stay the same, but more information is needed to determine which it does.
question
Which of the following is an example of capital?
answer
Kyle Field
question
A decrease in the equilibrium quantity for a product will result...
answer
when there is a decrease in supply and a decrease in demand for the product
question
The income effect of an increase in the price of peaches is...
answer
the change in the quantity of peaches demanded that results from the effect of the change in price on consumer purchasing power, holding all other factors constant
question
Taylor has...
Taylor and Jeff production per day (bushels) of apples and cherries
Taylor and Jeff production per day (bushels) of apples and cherries
answer
a comparative advantage and an absolute advantage in picking apples
question
Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln. What is the reason for this difference in price?
answer
There are more letters available for collectors to buy that were written by Lincoln than there are letters that were written by Booth
question
Which of the following is a positive economic statement?
*the government should mandate electric automobiles
*scarcity necessitates that people make trade-offs
*people should not buy SUVs
*foreign workers should not be allowed to work for lower wages than the citizens of a country
*the government should mandate electric automobiles
*scarcity necessitates that people make trade-offs
*people should not buy SUVs
*foreign workers should not be allowed to work for lower wages than the citizens of a country
answer
scarcity necessitates that people make trade-offs
question
Suppose the value of the price elasticity of demand is -3. What does this mean?
answer
A 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent
question
Which of the following is a positive economic statement?
answer
raising the tax on gasoline raises the selling price of gasoline
question
If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is...
answer
relatively inelastic
question
Figure 2 shows two lines showing the individual production possibilities for the individuals in Table 2, Katherine and Josh. Based on the information in Table 2, and using Figure 2, the value of x2 is...
answer
18
question
Which of the following statements is true?
*if the price of a good is lowered and total revenue decreases, demand is elastic
*if the price of a good is raised and total revenue does not change, demand is perfectly elastic
*if the price of a good is lowered and total revenue increases, demand is inelastic
*if the price of a good is raised and total revenue increases, demand is inelastic
*if the price of a good is lowered and total revenue decreases, demand is elastic
*if the price of a good is raised and total revenue does not change, demand is perfectly elastic
*if the price of a good is lowered and total revenue increases, demand is inelastic
*if the price of a good is raised and total revenue increases, demand is inelastic
answer
if the price of a good is raised and total revenue increases, demand is inelastic
question
A change in all of the following variables will change the market demand for a product except...
*income
*population and demographics
*tastes
*the price of the product
*income
*population and demographics
*tastes
*the price of the product
answer
the price of a product
question
A model refers to...
answer
a simplified description, or representation, of reality.
question
Demand for a luxury item, such as a yacht, is likely to be...
answer
both income elastic and price elastic
question
Consider the following statements:
a. Car owners purchase more gasoline from a gas station that sells gasoline at a lower price than other rival gas stations in the area.
b. Banks do not take steps to increase security since they believe it is less costly to allow some bank robberies than to install expensive security monitoring equipment.
c. Firms produce more of a particular DVD when its selling price rises.
Which of the above statements demonstrates that economic agents respond to incentives?
a. Car owners purchase more gasoline from a gas station that sells gasoline at a lower price than other rival gas stations in the area.
b. Banks do not take steps to increase security since they believe it is less costly to allow some bank robberies than to install expensive security monitoring equipment.
c. Firms produce more of a particular DVD when its selling price rises.
Which of the above statements demonstrates that economic agents respond to incentives?
answer
a, b, and c
question
If a decrease in income leads to an increase in the demand for mac and cheese, then mac and cheese is...
answer
a normal good
question
All else equal, as the price of a product falls, the quantity supplied increases.
answer
False
question
____ is the difference between the willingness to pay and the price paid for a good.
answer
consumer surplus
question
Elasticity is...
answer
the ratio of the percentage change in two variables
question
Positive analysis is concerned with "what ought to be," while normative analysis is concerned with "what is."
answer
False
question
When there few close substitutes available for a good, demand tends to be...
answer
relatively inelastic
question
Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln. Which of the following events would cause the price differences in these letters get smaller?
answer
the demand for Lincoln letters increase and the supply of Booth letters increases
question
If the price of a good increases, ____.
answer
the consumer surplus decreases
question
Hunter-gatherer societies allocated resources by a combination of...
*individual decisions
*sharing customs
*organized hunting/gathering activity
*all of the above
*individual decisions
*sharing customs
*organized hunting/gathering activity
*all of the above
answer
all of the above
question
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for bicycle helmets. Which panel best describes what happens in this market if there is a substantial increase in the price of bicycles?
answer
panel (d)
question
Refer to Figure 3-4. If the price is $10...
answer
there would be a shortage of 600 units
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