question
The difference between the highest price a consumer is willing to pay for a good and the price the consumer actually pays is called
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Consumer surplus
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The idea that because of scarcity, producing more of one good or service means producing less of another goof or service refers to the economic concept of
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trade-off
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If the price of grapefruit rises, the substitution effect due to the price change will cause
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A decrease in the quantity demanded of grapefruit
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Bella can produce either a combination of 60 silk roses and 80 silk leaves or a combination of 70 silk roses and 55 silk leaves. If she now produces 60 silk roses and 80 silk leaves, what is the opportunity cost of producing an additional 10 silk roses?
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25 silk leaves
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Arlene quits her $125,000-a-year job to take care of her ailing parents. What is the opportunity cost of her decision?
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At least $125,000
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Economic efficiency is defines as a market outcome in which the marginal benefit to consumers of the last unit produced is equal to the marginal cost of production, and in which
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the sum of consumer surplus and producer surplus is at a maximum
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The basic economic problem of ______ has always existed and will continue to exist
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Scarcity
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Assume that the hourly price for the services of tarot card readers has risen and sales of these services has also risen. One can conclude that
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the demand for tarot card readers has increased
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The slope of a production possibilities frontier
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measures the opportunity cost of producing one more unit of a good
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If an increase in income leads to an increase in the demand for peanut butter, then peanut butter is
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a normal good
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What is the difference between an "increase in demand" and an "increase in quantity demanded"?
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An "Increase in demand" is represented by a rightward shift of the demand curve while an "increase in quantity demanded" is represented by a movement along a given demand curve.
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The area ___________ the market supply curve and __________ the market price is equal to the total amount of producer surplus in a market.
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above; below
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Which of the following is the correct way to describe equilibrium in a market?
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At equilibrium, quantity demanded equals quantity supplied
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Holding everything else constant, an increase in the price of MP3 players will result in
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a decrease in the quantity of MP3 players demanded.
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For each bottle of wine that Italy produces, it gives up the opportunity to make 10 pounds of cheese. France can produce 1 bottle of wine for every 25 pounds of cheese it produces. Which of the following is true about the comparative advantage between the two countries?
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Italy has the comparative advantage in wine.
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Which of the following would cause an increase in the equilibrium price and decrease in the equilibrium quantity of watermelon?
answer
a decrease in supply
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