Econ 200 exam 1

the study of the whole economy

shows the relationship between the price of a good and the quantity supplied

the ability to make a good at a lower cost than another producer

where would you plot unemployment on a production possibilities frontier?

For which of the following goods would you expect demand to be the most responsive to a rise in price?

the process of using resources to create or buy new capital

the opportunity cost of producing a good rises as a society produces more of it

the ability of one producer to make more than another producer with the same quantity of resources

can be tested and validated

model that illustrates the combinations of outputs that a society can produce if all of its resources are being used efficiently

are the variables that cannot be controlled for in a model

two goods that are used in place of each other

Let's say you get a 10% raise. As a result, you decide to buy steak twice as much as before and cut back on Top Ramen, a type of ramen noodles, from two nights a week to one night a week. From this we know that for you, steak is a(n) _____ good, and ramen noodles is a(n) _____ good

the sum of all the individual quantities demanded by each buyer in the market at each price

Which of the following will increase the supply of laptop computers?

which item is not scarce?

exists when a single company supplies the entire market for a particular good or service

Government officials have hired your consulting firm to encourage more people to use public transportation. In the initial meeting you discussed several options. In the initial meeting you discussed some ideas for increasing demand. Three suggestions are listed below.

Based on your knowledge of the law of demand, what is your recommendation for each suggestion?

Suggestion 2: Increase the prices of private transportation by increasing the price of parking and gasoline

the sum of the quantities supplied by each seller in the market at each price

the concept under which economists examine a change in one variable while holding everything else constant

If the government imposes a 50% tax on gray T-shirts, it will generate a _____ increase in revenues

an _____ _____ is purchased out of necessity rather than choice

states that, the market price of any good will adjust to bring the quantity supplied and the quantity demanded into balance

states that, all other things being equal, the quantity supplied of a good rises when the price of the good rises, and falls when the price of the good falls

Suppose that in a time of crisis, everyone pitches in and works much harder than usual. How is this represented by a production possibilities frontier?

In the market for desk lamps, which of the following will increase demand?

Where would you plot full employment on a production possibilities frontier?

shows the relationship between the price of a good and the quantity demanded

are the variables that can be controlled for in a model

Smoke detectors have been shown to reduce the death rate from fires. In order to ensure that as many individuals as possible install a smoke detector, the government recently decided to subsidize the production of smoke detectors.

Which of the following will happen as a result of this subsidy?

If a 20% increase in price causes a 30% drop in quantity demanded, then the demand for this good is

states that, all other things being equal, quantity demanded falls when prices rise, and rises when prices fall

the study of the individual parts of the economy

A local golf course is considering lowering its fees in order to increase the revenue coming in. This will work if the golf course faces _____ demand

consumers buy more of a _____ _____ as income rises, holding other things constant

Government officials have hired your consulting firm to encourage more people to use public transportation. In the initial meeting you discussed several options. In the initial meeting you discussed some ideas for increasing demand. Three suggestions are listed below.

Based on your knowledge of the law of demand, what is your recommendation for each suggestion?

Suggestion 1: Reduce the price of public transportation

shows the relationship between the prices in the supply schedule and the quantity supplied at those prices

an opinion that cannot be tested or validated

either the buyer or the seller has an influence on the market price

exists when there are so many buyers and sellers that each has only a small impact on the market and output

Government officials have hired your consulting firm to encourage more people to use public transportation. In the initial meeting you discussed several options. In the initial meeting you discussed some ideas for increasing demand. Three suggestions are listed below.

Based on your knowledge of the law of demand, what is your recommendation for each suggestion?

Suggestion 3: Offer monthly and yearly passes that reduce the price per ride

shows the relationship between the prices in the demand schedule and the quantity demanded at those prices

_____ _____ are produced for present consumption

from the list below, select all statements that are positive

The cross-price elasticity of demand between American Eagle and Hollister is 2.0. This tells us the merchandise from the two stores are _____

two goods that are used together

Customers who visit convenience stores at 3 a.m. have a price elasticity of demand that is _____ elastic than those who visit at 3 p.m.

_____ _____ help produce other valuable goods and services in the future

You are thinking about traveling to visit friends in Atlanta. You can fly or take the bus. A round-trip plane ticket costs $300, and it takes 3 hours one way to get from your house to your friend’s house if you fly. A round-trip bus ticket costs $150, and it takes 10 hours one way using the bus.

What is the value of your time necessary to induce you to buy the plane ticket instead of taking the bus?

resources are allocated among households and firms with little or no government interference