Terms in this set (21)
Which of the following decisions illustrates marginal analysis?xxxxx
A decision to use gasoline instead of diesel
A decision to save more and spend less in response to a change in interest rates
A decision to declare war on a foreign country
A decision to quit a job and start a new business
Which of the following could NOT be considered an opportunity cost of taking a course in economics?
Knowledge about scarcity and tradeoffs
Utility refers to
The satisfaction people gain from a good or service
Which of the following is an example of a normative statement?
A country should focus on infrastructure spending instead of defense spending
A production possibilities frontier can be used to illustrate which of the following:xxxxxxxxxx
A tradeoff between the goods that can be produced using a fixed amount of resources
The tradeoff between inflation and unemployment
The tradeoff between free goods and scarce goods
The underlying causes of economic growth
The bowed-out shape of a typical PPF graph illustrates
The law of increasing opportunity cost
If an economy is operating at a point inside instead of on its PPF, the economy
is productively inefficient
Allocative efficiency refers to
producing the combination of goods and services that society wants
Which of the following is the reason for increasing opportunity costs?xxxxxxxxxxxxxxx
International trade prevents opportunity costs from being constant
Taxes increases with production levels
Human capital is unevenly distributed
Some resources are better suited for the production of one good than another
If two countries produce the same two goods, how can you determine which good they should specialize in to export to the other?
they should specialize where they have comparative advantage
How could an economy achieve a production combination at a point that was previously outside its PPF?xxxxxxxxxxxxxx
A reduction in the availability of the factors of production
An increase in demand for one or both goods
Movement along the original PPF to a new combination of the two goods
An increase in unemployed resources
The self-correcting mechanism refers to
The tendency of a market to reach equilibrium without outside intervention
The law of supply states that
an increase in price results in an increase in quantity supplied
Which of the following statements is true?
an increase in price results in a decrease in quantity demanded
Which of the following is not a demand shifter?xxxxx
prices of related goods and services
Assume average wage rates fall in the hotel industry. Everything else held equal, what will be the effect on the equilibrium price and quantity in the market for overnight stays in hotels?xxxxxxxxx
price decreases, quantity increases
price increases, quantity decreases
price increases, quantity increases
price stays the same, quantity decreases
Assume laptops and tablets are substitute goods and the price of tablets decreases. Everything else held constant, what will be the effect on the equilibrium price and quantity in the market for laptops?
price decreases, quantity decreases
A new study outlines the health risks of drinking coffee, resulting in reduced consumer preference for coffee. At the same time, coffee farmers expect that coffee prices will rise in a few months. What is the effect on the equilibrium price and quantity in the market for coffee?xxxxxxxxxxxxxxx
price is indeterminate, quantity decreases
price increases, quantity increases
price is indeterminate, quantity increases
both price and quantity are indeterminate
A surplus in a market means that
the price will rise in order to reach equilibrium
at the current price level, the quantity supplied is less than the quantity demanded
at the current price level, the quantity supplied is greater than the quantity demanded
demand is greater than supply
decrease in demand when income rises
Part 2 :
1. When average income level rise, normal good's demand is increase. Because the normal goods are any goods for which demand increases when income increases, and falls when income decreases(but price remains constant).
2. The steel is important part of car. Since Demand of car increase, price of steel would be increase. then car's
3. If producing airline instead of car become more profitable, then demand od car will decrease.
4. If prospective car buyer think that cars will be cheaper in the future, then they will delay thier purchase because they think they can buy a car more cheaper if they wait a little. so, demand would be decrease.
5. New car is selled, consequently, supply of car would be increase. While, population is significantly increased too. then demand would be increased too.