Econ 1B - 1st Midterm

1 / 50
According to the text, economics is the study of how:
Click the card to flip 👆
Terms in this set (50)
Refer to the graph above. With the resources available, you can make the combinations of Ums and Umies (trinkets from a place called Bandarban) shown in the table. The opportunity cost of producing 60 Umies instead of 30 Umies is:20 Ums.Refer to the graph above. Laura's production possibility curve for math and economics problems in one night is shown in the graph. Her opportunity cost of finishing 6 math problems instead of 4 math1 Economics Problem.Increasing marginal opportunity cost means that the production possibility curve is:C. bowed out so that for every additional unit of a good given up, you gain fewer and fewer units of the other good.Refer to the graph above. Given the production possibility curve, which point is unattainable?BRefer to the graph above. In the 1980s, desktop publishing reduced the costs of producing books. Assuming no change in the cost of producing CDs, which of the shifts reflects this change in technology?IVThe text largely attributes the growth of economies over the last 2000 years to:A. the development of markets.If there is a direct relationship between two variables, then the graph relating these two variables will be:A. upward sloping.In the linear equation y = mx + b, m is the:SlopeTwo countries that specialize their production along the lines of comparative advantage and then trade with one another will be able to:A. both produce and consume more.Mexico has a comparative advantage in producing corn:C. if its opportunity cost of producing corn is lower than the opportunity cost in other countries.In a market economy:B. businesses design their plans to maximize their profit and the market is relied upon to see that individual self-interest is consistent with society's interest.Capitalism:A. is based on private property and the market.In the mercantilist system,D. governments distributed the rights to produce.In the goods market:C. business produces goods and services and sells them to households and government.Businesses are on the:B. demand side of factor markets and the supply side of goods markets.What is necessary for businesses to be profitable?D. Entrepreneurship must be present.A firm's profits equal $100 if:the difference between its total revenue and its total cost is $100.One advantage of a partnership over a corporation is:A. greater accountability.One advantage of a corporation over a sole proprietorship is:D. greater ability to obtain funds.In the United States, government performs all of the following functions except: A. redistributing income. B. purchasing goods and services. C. regulating the economy. D. determining production levels.D. Determining Production LevelsThe law of demand states that the quantity demanded of a good is inversely related to the price of that good. Therefore, as the price of a good goes:B. up, the quantity demanded goes down.Suppose that college tuition is higher this year than last year and that more students are enrolled in college this year than last year. Based on this information, we can best conclude that:B. despite the increase in price, quantity demanded rose due to some other factor changing.If the price of movies on VHS rises while the price of movies on DVD remains the same, the law of demand predicts that consumers will:B. substitute movies on DVD for movies on VHS.Refer to the graph above. If consumers began purchasing more of this product due to a decrease in price, this would be shown by arrow:CAssume the graph above reflects demand in the automobile market. Which arrow best captures the impact of increased consumer income on the automobile market?D.When applied to labor markets, the law of supply suggests that:an increase in the wages earned by nurses will cause the quantity of nurses supplied to increase.Refer to the graph above. The arrow that best shows an increase in supply is:YThe more the current price exceeds the equilibrium price, the:Greater the resulting Surplus will beSuppose a market has an excess demand and price starts to rise. What will the rise in price cause?C. A rise in quantity supplied and a fall in quantity demanded.If demand and supply both increase, this will causeA. an increase in equilibrium quantity, but an uncertain effect on the equilibrium price.The Katrina disaster in New Orleans decreased the ability of oil companies to purify crude oil into gasoline. This caused:A. the supply curve for gasoline to shift inward.In the fall of 2004 the price of tomatoes dramatically increased. Which of the following could have caused this change?A. Hurricanes during the late summer damaged the Florida crop, shifting supply left.A decrease in quantity and price are consistent with a:A. leftward shift in demand keeping supply constant.Honus Wagner, a major league baseball player from 1897 to 1917 and one of the first five men inducted into the Baseball Hall of fame, had his baseball card pulled from cigarette packs because he wasn't being paid for their distribution. What best describes the effect of his action on the market for his baseball card?A. Supply shifted to the left, price rose, and quantity demanded fellSuppose a scientific report states that fish contain dangerously high levels of mercury (toxic to humans). At the same time, the price of diesel fuel, used by fishermen to fuel their boats, falls. What is the effect on the market for fish?C. A decrease in demand and an increase in supply; price falls but the change in quantity is ambiguous.To keep the price of gas from rising quickly after Katrina, the government instituted price ceilings on the price of gasoline in some states. These price ceilings caused ______ in the gasoline market.D. shortagesRefer to the graph above. A price ceiling would be binding, resulting in a market shortage if it is set at.C. $1.50Which of the following is the best example of an excise tax?C. A tax collected on each gallon of gasoline sold.Demand for single occupancy apartments is Qd = 400,000 - 250 P. Supply is given by Qs = 200,000 + 250 P. Price of an apartment is measured in hundreds of dollars and quantity is measured in thousands of apartments. What is equilibrium rent and quantity of apartments rented?A. $400 and 300,000 apartments respectively.The supply and demand equations for Nantucket Nectar's Kiwi-berry juice are given by Qs = -4 + 5P and Qd = 18 - 6P respectively, where price is dollars per quart and quantity is thousands of quarts. The equilibrium market price and quantity isA. P = $2, Q = 6 thousand quarts.