Econ Final

Question 1

Economics studies the allocation and use of:

scarce resources to satisfy unlimited human wants.

scarce resources to satisfy limited human wants.

unlimited resources to satisfy limited human wants.

unlimited resources to satisfy unlimited human wants.

Answer 1

scarce resources to satisfy unlimited human wants.

Question 2

A resource is anything that is ______ or used to make things that will ultimately be consumed:

only time

consumed directly

only a raw material

only an energy source

Answer 2

Consumed directly

Question 3

An example of a company engaged in an optimization would be its attempt to

Answer 3

Maximize profit

Question 4

When using marginal analysis, the goal is to ______.

maximize benefit

minimize cost

maximize average benefit

maximize net impact

Answer 4

maximize net impact

Question 5

The opportunity cost of doing this assignment is:

a worse grade for having done so.

what you would have done had you chosen to do something else.

that you hate doing economics.

a better grade for having done so.

what you will do after you finish this assignment.

Answer 5

what you would have done had you chosen to do something else.

Question 6

An ___ assumption is the one that suggests that the person in question is trying to maximize some objective.

Answer 6

Optimization

Question 7

The circular flow model depicts the interactions of which of the following economic actors?

Firms

Government

Religious institutions

Households

Answer 7

Firms

Government

Households

Question 8

Opportunity cost is the forgone alternative of the ____
made.

Answer 8

Choice

Question 9

___ analysis is a form of analysis that seeks to understand the way things should be.

Answer 9

Normative

Question 10

The ______ model depicts the interactions of all economic actors:

circular flow

marginal flow

growth

round flow

Answer 10

Circular flow

Question 11

Opportunity cost is the ___
alternative of the choice made.

Answer 11

forgone

Question 12

An ____ assumption is the one that suggests that the person in question is trying to maximize some objective.

Answer 12

optimization

Question 13

Suppose a subsidy is given to the consumers of a good. If that subsidy decreases, this will result in a(n)
____ in the equilibrium price and a(n) ____ in the equilibrium quantity.

Answer 13

decrease, decrease

Question 14

Which of the determinants of demand are also determinants of supply?

Expected Price

Population of potential buyers

Taste

Number of Sellers

Technology

Price of other goods

Subsidies

Income

Price of other potential outputs

Taxes

Price of inputs

Answer 14

Expected price

Subsidies

Taxes

Question 15

A decrease in the expected future price of a good would cause:

firms to sell off their current inventories.

consumers to stock up.

firms to hold onto their current inventories.

consumers to delay their purchase.

Answer 15

firms to sell off their current inventories.

consumers to delay their purchase.

Question 16

Consumers noting that the first donut is more satisfying than the fifteenth donut is an example of:

the real-balances effect.

the law of diminishing utility.

the substitution effect.

Answer 16

the law of diminishing utility.

Question 17

The Latin phrase ____ ____ means holding other things constant/other things being equal.

Answer 17

Ceteris Peribus

Question 18

Ceteris paribus means:

under typical circumstances.

holding those other factors constant.

other things equal.

at equilibrium

Answer 18

holding those other factors constant.

other things equal.

Question 19

Economists note that marginal utility ______ as you consume more.

increases

decreases

rises and falls

remains constant

Answer 19

decreases

Question 20

Which of the determinants of demand are subdivided (between normal/inferior; complement/substitute)?

Number of sellers

Expected price

Income

Price of other potential outputs

Price of other goods

Taste

Technology

Subsidies

Taxes

Price of inputs

Population of potential buyers

Answer 20

Income

Price of other goods

Question 21

Suppose you are looking at a price-quantity combination of P = 5, Q = 10. The reason a relatively flat demand curve is more elastic than a relatively steep one going through that same point is that (Select all that apply.)

the steeper one shows the same degree of responsiveness of quantity to changes in price.

the steeper one shows a greater degree of responsiveness of quantity to changes in price.

the flatter one shows a greater degree of responsiveness of quantity to changes in price.

the steeper one shows a lower degree of responsiveness of quantity to changes in price.

Answer 21

the flatter one shows a greater degree of responsiveness of quantity to changes in price.

the steeper one shows a lower degree of responsiveness of quantity to changes in price.

Question 22

Which of the following goods/services are likely to have perfectly inelastic demand (at realistic prices)? (Select all that apply.)

Multiple select question.

Gasoline

Eggs

Insulin to a diabetic

The services to set a broken leg

Answer 22

Insulin to a diabetic

The services to set a broken leg

Question 23

A good (such as a medication that is necessary to live) is likely to have perfectly ____ demand

Answer 23

Inelastic