38 terms

exam 1

economists assume that individuals
are rational and respond to incentives
a grocery store sells a bag of potatoes at a fixed price of $2.30. which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes
marginal cost
Economists reason that the optimal decision is to continue any activity up to the point where the
marginal benefit equals the marginal cost
If the marginal cost of producing an I phone is constant at $75, then Apple should produce this item
until the marginal benefit reaches zero
The highest valued alternative that must be given up to engage in an activity is the definition of
opportunity cost
The coffee Nook, a small cafe near campus, sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each. What is the opportunity cost of buying a cappuccino
2 1/2 Russian tea cakes
Ariene quits her $125,00-a-year job to take care of her ailing parents. What is the opportunity cost of her decision?
zero, since she will no longer be earning a salary
The production possibilities frontier shows the___. combinations of two products tat may be produced in a particular time period with available resources
maximum attainable
Bells can produce either a combination of 60 silk roses and 80 silk leaves or a combination of 70 silk opportunity cost of producing and additional 10 silks roses?
25 silks
2-3 shows the output per week of two jewelers, Serena and Haley. they can either devote their time to making bracelets or making necklace.
Haley has an absolute advantage in making bracelets and Serena in making necklace.
table 2-3. What is Harley opportunity cost of making a bracelets
1 1/3 necklaces
which of the following statements is true?
at a lower opportunity cost than any other producer
which of the following statements is true?
Individuals who have never been the best at doing anything cannot have a comparative advantage in producing any product.
table 2-4. if the two countries specialize and trade, who should export digital cameras?
The market for energy drinks grown rapidly over the past several years. One report predicts that energy drinks might replace coffee for the current generation of teens and young adults. This report implies that energy drinks and coffee are.
If red Bull and Monster Energy are considered substitutes,then,other things equal, an increase if the price of Red Bull will
decrease the quantity demanded for for Red Bull
If, in response to an increase in the price of chocolate, the quantity demanded of chocolate decrease economists would describe this as
a decrease in quantity demanded
What is the difference between an increase in demand and an increase in quantity demanded?
An increase in demand is represented by rightward shift of the demand curve while an increase in quantity demanded is represented by a movement along a given demand curve.
The law of demand implies,holding everything else constant, that
as the price of bagels increases, the quantity of bagels demanded will decrease
If a demand curve shifts to the right, then
demand has increase
which of the following will shift the demand curve for a good?
an increase in the price of the good
A movement along the demand curve for toothpaste would be caused by
a change in the price of toothpaste
If the price of grapefruit rises, the substitution effect due to the price change will caused by
a decrease in the quantity demanded of grapefruit
If the price of automobiles was to increase, then
the demand for gasoline would decrease
Suppose that when the price of hamburgers decrease, the Ruiz family increase their purchase of ketchup. To Ruiz family,
hamburgers and ketchup are complements
Buyers rush to purchase stocks in California vineyards following a forecast of a 30 percent decline in this year's harvest. What happens in the California wine market as a result of this announcement?
The demand curve for California wine shifts to the left in anticipation of higher prices in the future
Tom Searchinger, a senior attorney at the Environmental Defense Fund, observed that generous farm subsidies have encouraged farmers to produce more corn and more wheat. How does this affect the market of fertilize?
The supply of fertilizer increases
In June, buyers of titanium expect that the price of titanium will fall in July. What happens in the titanium market in June, holding everything else constant?
The quantity demanded increases
In January, buyers of gold expect that the price of gold will rise in February. What happens in the gold market in January, holding all else constant<
The demand curve shifts to the left
If the market for peaches, the supply curve has shifted to the left,
The supply of peaches had decreased
Last year, the pottery Palace supplied 8,000 ceramic pots at $40 each. This year, the company supplied the same quantity of ceramic pots at $55 each. Based on this evidence, The Pottery Palace has experienced.
An increase in supply
One would speak of a change in the quantity of a good supplied, rather than a change in supply, if
supplier expectations about future prices change
An increase in price of inputs would be represented by a movement from
S2 to S1
In 2004, hurricanes damaged a large portion of Florida's orange crop. As a result of this, many orange growers were not able to supply fruit to the market. At the pre-hurricane equilibrium price(i.e., at the initial equilibrium price), we would expect to see
a shortage of oranges
Best describes what happen in this market if there is a substantial increase in the prices
shift left and the demand go downward on the curve
what describes what happens in this market when the wages of seamstresses rise?
shift left and the demand middle on the curve
Describes what happen when the market increase in the productivity of almond harvesters?
shift right and demand increases
what happens in the market for fruitopia wen the price of Snapple, a substitute product,decrease?
shift from left and demand for decrease