Mini Quizzes Flashcards
When we are forced to make choices we are facing the concept of:
Scarcity
An answer to the question “How are goods produced?” determines:
How resources are combined in the production of goods
Opportunity cost is:
The highest valued other choice that could have been made
Ceteris paribus means:
All other things unchanged
Positive statements are:
Statements that can be tested
The three broad types of factors of production are:
Capital, labor, and natural resources
The combination of guns and butter at point H:
Cannot be attained given the level of technology and the factors of production available
Suppose the economy is operating at point C. The opportunity cost of producing the fourth freight train would be:
80 tons of sugar (180:point C - 100:point D)
If the economy is operating at point Y on currently relevant Curve 1, this means that:
The economy is at full employment and is efficient
Technological improvements will:
Shift the production possibilities curve to outward
A decrease in the price of a good will, all other things unchanged, result in:
An increase in the quantity demanded
The exhibit shows how supply and demand might shift in response to specific events. Suppose oil becomes more expensive. Which panel best describes how this will affect the market for gasoline, which is made from oil?
Panel (D), which shows supply curve shifting to the left, which represents a decrease in supply of gasoline because oil has become more expensive
The slope and location of the demand curve depend on:
The number of buyers
In the 1990’s, the Monks of St. Benedict’s the Monks Determined that their _ were _ in the egg and cookie business, so they _.
Opportunity costs: too high: switched to providing private retreats
The key signals that send messages to buyers and sellers to buy or not to buy or to sell or not to sell are, all other things unchanged:
Prices
The price elasticity of demand is:
Always negative
The price elasticity of demand for the segment CD is: C: 40-200 D:30-300
Greater than 1 (absolute value)
The price elasticity of demand for gasoline in the short run has been estimated to be -0.1. If war in the Middle East causes the price of oil (from which gasoline is made) to increase, how will that affect total expenditures on gasoline in the short run, all other things unchanged?
Demand will not change, but total expenditures will rise
The demand for agricultural output is price inelastic. This means that if farmers, taken collectively, have a bumper crop, they will experience:
Lower prices, greater quantities sold, and lower incomes
Demand is price elastic between:
.80:30 .70:40 .60:50 .50:60 .40:70 .30:80
.60 and .70
The amount by which an additional unit of an activity increases total cost is:
Marginal cost
Activities of consumers and firms:
Have both costs and benefits
Referring to panel a:
The equilibrium quantity, determined by demand and supply, is efficient
An efficient allocation of resources implies _ allocation of goods and services
Neither an equitable nor an inequitable
Economic theory suggests that market failure is a result of:
Markets not reflecting and revealing the full costs and benefits of choices
A planning period during which all of a firm’s factors of production are variable is the:
Long run
Hiring L2 units of labor results in total product attainting a _ and the marginal product of labor _
Maximum; being equal to zero
The concept of diminishing marginal returns and the idea of negative marginal returns:
Are not the same thing
Variable cost divided by the quantity of output produced is:
Average variable cost
In making decisions about factor mix, a firm is seeking to:
Maximize profits
The assumptions of perfect competition imply that:
Individuals in the market accept the market price as given
If this is a perfectly competitive market, each firm:
Can sell all it wants to sell at the price determined by demand and supply
At approximately 4,500 pounds of carrots: (graph)
Total revenue is equal to total cost
The slope of the total cost curve is:
Marginal cost
A perfectly competitive firm will continue producing in the short run as long as it can cover its:
Average variable cost
Scarcity exists when:
A choice must be made among two or more alternatives
Whenever a choice is made:
The cost of that choice could be referred to as opportunity cost
A person who mistakenly assumes that because on event follows another, the second event results from the first commits the fallacy of:
False cause
Human effort that can be applied in the production process is called:
Labor
An exhibit (graph) shows production possibilities curves for two countries that produce only radishes and bicycles. The axes of both graphs are measured in equivalent units. Country A is now operating at point M, and Country B is now operating at point N. Suppose Country A discovered a new technology that greatly increased its ability to produce bicycles. This would:
Increase the opportunity cost of producing radishes in Country A
The movement from Curve 1 to Curve 2 indicates: (the graph shows an inner curve (1) and an outer curve (2))
Economic growth
If the economy is currently facing production possibilities Curve x, it is more likely to achieve Curve z in the future if it allocated resources to produce at point: (graph)
G
When economists study the behavior of buyers, they are studying:
Demand
Which statement best illustrates complementary goods?
The price of tennis rackets declines so your economics instructor decides to take tennis lessons and purchases several cans of new tennis balls
Which of the following would shift the demand curve for new textbooks to the right?
An increase in college enrollments
Which would not cause the supply curve to shift?
A change in the price of the good
An increase in supply would be caused by:
An advancement in the technology for producing the good
An increase in supply would be caused by:
An advancement in the technology for producing the good
If economists say, “the price is too high”, they mean that:
Quantity supplied us greater than quantity demanded
