economy 1

Which of the following is true regarding the principle of Comparative Advantage?

1. If two goods have a cross-price elasticity of demand of -0.8. This means that these goods are:

1. Suppose that engaging in free trade means we have to stop making cars, which will cause bankruptcies and will make people lose their jobs. Is it still worth having free trade?

1. An airline's plane from Los Angeles to New York is about to take off, but it still has a few seats empty. If the average cost per seat is $500, what price should the airline charge passengers in standby to fill in those remaining seats? (Consider that quantitative decisions are made at the margin)

1. Economic growth in the economy can be portrayed in the Production Possibilities Frontier model as a:

1. An increase in demand means that:

1. A market with only one firm is known as a:

1. The boy next door has offered to mow Tiger Woods' lawn. It will take this boy twice as long as Tiger Woods to mow the lawn. Would Tiger Woods let the boy mow his lawn, instead of doing it himself?

1. Economists tend to disagree with each because:

1. Which of the following is NOT a characteristic of a perfectly competitive market?

The principle of Comparative Advantage refers to the situation in which one producer

1. If the price in a market happens to be above equilibrium, there will be a ________ in the market, and the price will tend to ________.

1. All of the following are characteristics of the Circular Flow Model of the economy, EXCEPT:

1. Suppose that General Cars increases the price of its Cadiclap model from $13,500 to $16,500. As a result of this, the quantity demanded of the Cadiclap model decreases from 600,000 to 400,000 per year. Find the price elasticity of demand of the Cadiclap using the Mid-Point method.

1. Rapid and persistent inflation occurs mainly due to:

1. Which of the following is an example of a normative statement?

1. A new technology that helps firms reduce production costs will cause a:

1. Even though markets do a great job in organizing economic activity, governments are needed to do all of the following EXCEPT:

1. If a firm needs to increase its Total Revenue, the firm should ________ the price, if the demand for its product is ________.

1. The principle of Comparative Advantage argues all of the following, EXCEPT:

1. Microeconomics is the study of:

1. Suppose the price of corn syrup increases. Given that corn syrup is a major ingredient in the production of soft drinks, how will this affect the equilibrium price and quantity in the soda market?

1. What effect will an increase in the price have on Total Revenue, if demand is elastic?

1. A perfectly elastic demand is represented graphically by a:

1. When two persons trade goods:

1. A government that implements a policy designed to reduce inflation can expect unemployment to:

1. The Federal government enacted regulation in the 1960s requiring people to wear seatbelts in their cars. All of the following resulted from this regulation, EXCEPT:

1. Suppose that consumers' incomes rise by 3%, and that this causes the quantity demanded for a good to increase by 4.5%. What is the income elasticity of demand?

1. The principle of Absolute Advantage refers to the situation in which one producer:

1. Which of the following is FALSE, regarding economics as a science?

1. Which of the following is true regarding the Production Possibilities Frontier Model of the economy?

1. A good will tend to have an inelastic demand if:

1. Which of the following is true regarding the principle of Absolute Advantage?

1. Economists use assumptions in order to:

1. Suppose that a scientific study just published demonstrates that eating apples makes people much healthier. How will this affect the equilibrium price and quantity in the market?

1. In a market economy, the decisions of what and how much to produce are made by:

1. The price of good A increases from $4.50 to $5.50. This causes the quantity demanded of good B to increase from 900 to 1100 units per month. Find the cross price elasticity of demand using the Mid-Point method.

1. The production possibilities frontiers used to explain trade in the text are straight lines because:

1. When the price of a good increases:

If good B is a substitute for good A, and the price of good B increases:

1. Living standards in the United States have risen tremendously over the years, mainly due to:

1. Suppose that a good has an income elasticity of demand of -2.0. This means that the good is:

1. Suppose that Jill can type 10 pages per hour in the computer, while Jim can only type 8. Further suppose that Jill can review 5 articles per hour while Jim can only review 2. If they are working on a final project together, who should specialize in what task in order to be as productive as possible?

1. Government policies designed to promote efficiency:

1. Economic models are:

1. If the price in a market happens to be below equilibrium, there will be a ________ in the market, and the price will tend to ________.

1. The circular flow model of the economy demonstrates that:

1. Suppose that Jill can type 10 pages per hour in the computer, while Jim can only type 8. Further suppose that Jill can review 5 articles per hour while Jim can only review 2. Based on this, we can say that:

1. All of the following can be considered a student's costs of going to college, EXCEPT:

1. The price elasticity of demand tends to be more elastic: