A) produce efficiently. B) learn to limit our wants. C) have the most rapid economic growth possible. D) have unlimited resources. E) make choices about what goods and services to produce. 10) The study of economics is best described as a study of A) the factors that influence the stock and bond markets. B) capitalism. C) the choices made in producing goods and services. D) coping with scarcity, and choices made as a result of scarcity in a society. E) how people earn a living. 12) Which of the following best defines economics? A) Economics teaches how to limit our wants.
B) Economics studies how to choose the best alternative when coping with scarcity. C) Economics helps you earn as much money as possible. D) Economics analyzes all aspects of human behavior in general. E) Economics is concerned with prices and quantities of goods and services, both at the individual level and at the industry level. 29) Of the three major economic questions, which of the following is the best Macro Economics By brazen robots? B) Should higher-income or lower-income people buy Subs? C) Should we make faster microprocessors or pest-resistant corn?
D) Should migrant workers or domestic workers be used to
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B) efficiency. C) incentives. D) self interest. E) equity. 0) Which of the following statements is true regarding scarcity? A) Scarcity affects poorer countries only. B) An economy experiences scarcity only when the incomes of its citizens decline. C) wealthy economy experience scarcity. E) Scarcity could be overcome if people would make all choices in the social interest. 2) A rational choice is one that A) always turns out for the best for the decision maker. B) creates no costs for the decision maker. C) must be made with perfect information.
D) uses the available resources to most effectively satisfy the wants of the person making the choice. E) is made in the social interest rather than the self-interest. 6) Economists measure opportunity cost A) only when it is on the margin. B) as the best thing given up. C) as the sum of all forgone opportunities. D) as the same as marginal benefit. E) as equal to the sum of all the sunk costs. 9) If Jessie studies economics for two hours instead of going to the movies with her friends, then A) the benefit of studying is the missed movie. B) the opportunity cost of studying is the missed movie.
C) Jesse definitely is making a rational choice. D) Jessie is ignoring a sunk cost. E) Jessie is not responding to any incentives. 5) The cost of a one-unit increase in an activity is called the A) opportunity benefit. B) rational cost. C) marginal cost. D) marginal benefit. E) margin. 21) Hey has eaten two hamburgers and is considering a third. The marginal benefit in his decision is the pleasure from consuming A) the two previous hamburgers. B) all three hamburgers. C) Just the third hamburger. D) Just the second hamburger. E) the third hamburger minus the pleasure from consuming zero hamburgers. 6) Decision making on the margin involves A) comparing the marginal cost and marginal benefits when making a decision. B) comparing the total cost and the total benefit when making a decision. C) eliminating the additional cost when making a decision. D) determining the total benefits of a decision. E) comparing the benefits from the social interest to the benefits from the person’s self-interest. Bars, he did so by comparing the A) benefits of the candy bars to the desires he had for the candy bars. B) marginal benefits of the candy bars to the marginal costs of the candy bars.
C) opportunity costs of the candy bars to the scarcity of the candy bars. D) benefits of the candy bars to the scarcity candy bars. E) self-interest to the social interest. 37) An incentive is A) a reward or a penalty that encourages or discourages an action. B) when people make rational choices by comparing costs and benefits. C) what you must give up to get something. D) a choice is made on the margin. E) a good or service that satisfies wants. 1) The horizontal axis in a graph A) measures time on a scatter diagram. B) measures the quality of a variable. C) is named the y-axis. D) is named the x-axis.
E) is called the origin. [pick] 9) The figure above shows a A) time-series graph. B) scatter diagram. C) cross-section graph. D) slope. E) trend diagram 1 1) A time series graph A) shows how a variable changes over time. B) uses bars rather than lines. C) shows points in a scatter diagram. D) is similar to a cross-section graph because both can show trends over time. E) is in the shape off pie. 15) A time-series graph displays the price of gold. The slope of the line is negative for periods when the A) price of gold is falling. B) price of gold is rising. C) quantity of gold is falling.
D) price of gold is low and not changing. E) price of gold fluctuates. Kind of graph used to show these data would be a A) scatter diagram. B) time-series graph. D) Venn diagram. E) fixed-year figure. 27) You have data for the amount of rainfall in 50 cities for the month of June. The type of graph to best display these data would be a A) time-series graph. B) multi-variable time series graph. D) scatter diagram. E) trend-line diagram. 32) A graph that shows how the amount of advertising expenditure differs among various industries can be shown A) by a cross-section graph. B) by a time-series graph. C) as a trend.
D) by a scatter diagram. E) by a trend-section graph. 35) If two variables are positively related, then A) one variable causes the other. B) an increase in one variable is accompanied by a decrease in the other. C) an increase in one variable is accompanied by an increase in the other. D) they change together, but not necessarily in the same direction. E) neither variable can be positively related to any other variable. 39) Whenever people’s incomes increase, they buy more guitars. Hence a scatter diagram shows that the relationship between income and guitars purchased is A) a positive relationship.
B) a linear relationship. C) a negative relationship. D) some sort of relationship, but whether it is positive or negative depends on whether income is plotted on the vertical or horizontal axis. E) a U-shaped 45) As the number of days without rain increases, the amount of wheat grown per acre declines. A graph showing this relationship shows A) a horizontal line. B) a vertical line. C) a positive relationship. D) a line with a positive slope. E) None of the above answers is correct. 75) The graph shows A) positive relationship that becomes less steep. B) negative relationship that is linear.
C) positive relationship that is linear. D) no relationship between the variables. E) a trend relationship between the variables. Short answer Questions ) What is the relationship between wants, resources, scarcity, and choices? Discuss the relationship for an individual and for a society. 2) List and explain the three fundamental economic questions that must be answered by all economic systems. 3) What is an opportunity cost? Give an example. Encourage people to buy more hybrid cars. Week 1: Demand and Supply – Part 2 4) What is the “quantity demanded”?
A) the amount of a good people desire B) the amount of a good people are able and willing to buy during a specific time period and at a given price C) the amount of a good people are able and willing to ay at all possible prices D) the maximum amount of a good that can be consumed during a specific time period E) the minimum amount of a good that people are willing to buy during a specific time period and at a given price 6) The “law of demand” refers to the fact that, other things remaining the same, when the price of a good rises, A) the demand curve shifts rightward.
B) the demand curve shifts leftward. C) there is a movement down along the demand curve to a larger quantity demanded. D) there is a movement up along the demand curve to a smaller quantity demanded. E) the demand curve shifts rightward and there is a movement up along he demand curve to a smaller quantity demanded. 9) Gasoline prices increase by 50 percent and other things remain the same. As a result, there is A) an increase in the demand for gasoline. B) a decrease in the demand for gasoline. C) no change in the quantity of gasoline demanded. D) a decrease in the quantity of gasoline demanded.
E) More information is needed to determine if the demand for gasoline increases or decreases. 15) The price of cotton clothing falls. As a result, A) the quantity demanded of cotton clothing increases. B) the demand for cotton clothing increases. C) the quantity demanded of cotton clothing decreases. D) the demand for cotton clothing decreases. E) both the demand for cotton clothing increases and the quantity demand of cotton clothing increases. 16) The American Dairy Association starts a highly successful advertising campaign that makes most people want to drink more milk.
As a result, A) the demand for milk increases. B) the quantity demanded of milk increases. C) the price of milk falls to encourage people to drink more milk. D) the demand for milk is not affected. E) the demand for milk decreases because the price of milk rises. 1) Demand curves slope because as the price increases and other things B) downward; increases C) upward; decreases D) upward; increases E) downward; does not change 30) A change in the demand for apples could result from any of the following EXCEPT A) a change in the number of buyers.
B) increased preferences for fresh fruit consumption for health reasons. C) a change in the price of an apple. D) a change in the price off banana. E) a change in income. 32) If the demand for used cars decreases after the price of a new car falls, used cars and new cars are A) inferior goods. B) substitute goods. C) complementary goods. D) normal goods. E) none of the above. 33) Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the A) demand for Dell computers increases. B) demand for Apple computers increases.
C) demand for Apple computers decreases. D) supply of Dell computers increases. E) demand for Dell computers decreases. Answer: C Topic: Changes in demand, price of a substitute Skill: Level 3: Using models Section: Checkpoint 4. 1 Status: AS CABS: Reflective Thinking 36) Which of the following shifts the demand curve for movies rightward? A) an increase in the price of Entitle, a substitute for movies B) an increase in the price of movie tickets C) a decrease in the price of move tickets D) an increase in movie star salaries 42) Hot dogs and hot dog buns are complements.
If the price of a hot dog falls, then A) the demand for hot dogs will increase. B) the demand for hot dog buns will decrease. C) the quantity demanded of hotdogs will decrease. D) the demand for hot dog buns will increase. E) the quantity demanded of hot dog buns will increase. 46) If the demand for digital cameras increases when consumers’ incomes rise, then chital cameras are A) a normal good. B) an inferior good. C) a substitute for camcorders. D) a complement to camcorders. E) made using advanced technology. 50) If income increases and the demand for bus rides decreases, A) bus rides are a normal good.
B) consumers are behaving irrationally. C) bus rides are an inferior good. D) bus rides are a substitute good. E) bus rides must be a complement good with some other good. 56) Which of the following increases the demand for a good? A) a rise in the price off complement B) the expectation that future income will be higher C) an increase in income, assuming the good is an inferior good D) a decrease in the number of buyers E) a fall in the price off substitute 63) In the above figure, the movement from point a to point b reflects A) a decrease in the price of pizza.
B) an increase in the demand for pizza. C) an increase in the number of people who eat pizza. D) an increase in the price of the tomato sauce used to produce pizza. E) a decrease in the number of firms producing pizza. 64) In the above figure, the shift in the demand curve from D to Del can be the result of A) an increase in the price of pizza. B) an increase in the price of a sub sandwich, a substitute for pizza. C) an increase in the price of soda, a complement to pizza.
D) a change in quantity demanded. 8) A supply curve A) slopes downward. B) slopes upward. C) is a graph of the relationship between quantity supplied of a good and its price. D) Both answers B and C are correct. E) Both answers A and C are correct. 9) Which of the following results in a movement upward along the supply curve for movies in theaters? A) an increase in the price of movie tickets B) a decrease in the price of movie tickets C) a decrease in the price of downloaded movies
D) a decrease in movie star salaries E) an increase in the number of theaters 1 3) Which of the following does NOT increase the supply of personal computers, that is, does NOT shift the supply curve of personal computers? A) an advance in the technology used to produce personal computers B) an increase in the number of firms producing personal computer C) a fall in the cost of the components used to assemble personal computers D) a rise the price of a personal computer E) a change in the expected future price of a personal computer. 19) Which of the following increases the supply of gasoline?
A) a situation where the quantity of gasoline demanded exceeds the quantity supplied B) an increase in the price of gasoline C) a decrease in the price of a resource used to produce gasoline, such as crude oil D) a decrease in the demand for gas-guzzling, sport utility vehicles E) an increase in income if gas-guzzling, sport utility vehicles are a normal good 23) It is expected that the price of a bushel of wheat will increase in one month. This belief will result in A) an increase in the current supply of wheat. B) a decrease in the current supply of wheat. C) a decrease in the future supply of wheat.
D) no change in the current or future supply of wheat. E) an increase in the current quantity supplied of wheat. 26) An increase in the number of pineapple growers results in A) an increase in the quantity of pineapples supplied and no shift in the supply curve of pineapples. B) an increase in the supply of pineapples and a rightward shift in the supply curve of pineapples. C) an increase in the supply of pineapples and a leftward shift in the supply curve of pineapples. D) no change in the supply of pineapples and a movement along the supply curve of pineapples. E) None of the above answers is correct.