Test 1 Flashcards
Why do people tend to purchase more when the price of something falls? (That is, why is demand downward sloping?)
- Because people must compete for scarce resources..
- Because more is preferred to less.
- Because marginal values are decreasing.
- Because you can’t always get what you want at the price you want to pay.
Because marginal values are decreasing.
Of the options given below, check all that apply.
Which of the following are examples of a price?
- The ratio at which two things exchange.
- The value of a good to a consumer.
- $5.99
- $5.99 for a gallon of premium gasoline.
- A political donation in exchange for casting a supportive vote on a particular school bond measure.
- Three bushels of wheat for a pair of shoes.
- The ratio at which two things exchange.
- $5.99 for a gallon of premium gasoline.
- $5.99
- A political donation in exchange for casting a supportive vote on a particular school bond measure.
- Three bushels of wheat for a pair of shoes.
Fill in the blanks in the following statement:
It is _____ to change just one _____.
It is difficult to change just one behavior.
It is beneficial to change just one price.
It is impossible to change just one policy.
It is impossible to change just one price.
It is impossible to change just one price.
What is the strongest statement of support that one should make in evaluating a theory?
This theory predicts behavior well.
The evidence fails to disprove this theory.
This theory is correct.
This theory is the right theory.
The evidence fails to disprove this theory.
At an equilibrium price and quantity,
- there is downward pressure on price, otherwise price would be rising with inflation.
- there is downward pressure on price.
- there is upward pressure on quantity.
- there is no pressure for price to change.
- None of the above.
there is no pressure for price to change.
Fill-in the blank1: When there is currently a shortage in a market, one should expect ______ .
- Prices to Rise
or - Prices to fall
Prices to rise
Fill-in the blank2: When there is currently a surplus in a market, one should expect ____________.
- the quantity demanded to fall
or - the quantity supplied to fall
the quantity supplied to fall.
Economists consider the value of a good to be best measured by
- the price one is observed paying in order to acquire the good.
- the cost to firms of producing the good.
- what one is willing to give up in order to acquire the good.
- None of the above.
what one is willing to give up in order to acquire the good.
Of the options given below, check all that apply.
If Texas passes a law that raises the cost of obtaining an abortion in Texas
- the price of obtaining an abortion in Texas will increase.
- we would expect fewer abortions to be performed in Texas.
- we would expect fewer abortions to be performed in neighbouring states.
- the price of obtaining an abortion in Texas will increase.
- we would expect fewer abortions to be performed in Texas.
Fill-in the blank: Due to ______ , people must make choices about what and when to consume.
scarcity
When we see that someone is willing to pay more for something just because it saves them time, we would expect that
- they are among those who see their time as more valuable.
- they are among those who see their time as less valuable.
they are among those who see their time as more valuable.
Suppose we learn from a survey that people think the Portland Police Bureau is more important than any other of the public services provided by the city of Portland–the most valuable to them, in a way. Does this imply that people are likely to support a ballot measure that requests additional funding for purpose of hiring additional police officers?
- Yes. If it’s the most valuable of services, people would be inclined to support additional funding when given the opportunity.
- No, it doesn’t inform whether people will support such a ballot measure. To be informative, the survey should have inquired into the value of hiring additional officers in Portland.
No, it doesn’t inform whether people will support such a ballot measure. To be informative, the survey should have inquired into the value of hiring additional officers in Portland.
Fill-in the blanks: Every _____ has a _____ associated with it.
- Every choice has a benefit associated with it.
- Every human action has a cost associated with it.
- Every price has a demand associated with it.
Every human action has a cost associated with it.
How is the diamond-water paradox resolved?
- People are greedy.
- Prices are determined by marginal values and water’s marginal value is lower.
- The total value of diamonds exceeds that of water so people are willing to pay more for a diamond.
- None of the above.
Prices are determined by marginal values and water’s marginal value is lower.
What policy would you suggest be considered at the same time as fines for not wearing one’s seat belt are increased?
- Increasing the speed limit.
- Decreasing the number of police patrol officers on the highways.
- Increasing the fines associated with speeding.
- None of these options are likely to change drivers’ incentives in a beneficial way.
Increasing the fines associated with speeding.