Liberty University ECON 213 quiz 2 complete solutions correct answers A+ work

Liberty University ECON 213 quiz 2 complete solutions correct answers A+ work

More than 6 different versions

Question 1

Refer to the following figure for the questions that follow.

The opportunity cost of increasing production of apple pies from 14 to 16 pies is:

Question 2

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the questions that follow.

What is Gibbs’s opportunity cost of solving a crime?

Question 3

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Does either one have a comparative advantage?

Question 4

The opportunity cost of every investment in capital goods is:

Question 5

Refer to the following table to answer the questions that follow.

Given the same quantity of resources, what is Alicia Keys’s opportunity cost of producing a New York pizza?

Question 6

Economic growth is represented on a production possibilities frontier (PPF) by the PPF:

Question 7

The _________ illustrates the various combinations of output that a society can produce if all of its resources are being used efficiently.

Question 8

The accompanying figures depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. If Jim and Pam were to specialize and trade, at what exchange rate would they find some quantity of trade to be mutually beneficial?

Question 9

Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the questions that follow.

Suppose a great plague wipes out half of the society’s population. Which of the following graphs best depicts how this would affect the PPF?

Question 10

Consider the following scenario to answer the questions that follow: Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie.

What is Rachel’s opportunity cost of baking 1 loaf of bread?

Question 11

When the opportunity cost of producing a good rises as you produce more of it, you experience:

Question 12

When one producer can create more of a good than another producer using the same quantity of resources, the first producer has:

Question 13

If Elaine can produce more output from a set amount of resources than Jerry can, you know that:

Question 14

A model without any simplifying assumptions:

Question 15

When one producer has a comparative advantage in production, she:

Question 16

Refer to the following figure for the questions that follow.

According to the figure, a new technology that makes it easier to peel, core, and prepare apples will cause:

Question 17

Refer to the following table to answer the questions that follow.

Given an eighthour workday, which statement best describes the absolute advantage evident in the table?

Question 18

Consider the production possibilities frontier (PPF) shown in the figure below to answer the questions that follow.

The set of efficient points is best described as:

Question 19

Refer to the following figure to answer the questions that follow.

What is the most preferred consumption point for a pieappreciating society?

Question 20

Which of the following is a positive statement?

Question 1 The area inside (within) the production possibilities frontier (PPF) contains:

Question 2 Michael and Angelo are both artists who can create sculptures or paint paintings each day. The following table describes their maximum outputs per day. Does either person have an absolute advantage?

Question 3 The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the questions that follow. What is Gibbs’s opportunity cost of making a wooden boat?

Question 4 The ability of one producer to create more of a good than another producer using the same quantity of resources is called:

Question 5 The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the questions that follow. Which statement best describes absolute advantage?

Question 6 You have a comparative advantage in producing a good whenever:

Question 7 Mrs. Abel has a comparative advantage in producing cabbage if, in comparison to Mrs. Bee, Mrs. Abel can grow cabbage:

Question 8 The important act of holding all other variables constant while examining a particular variable is known as:

Question 9 An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an:

Question 10 Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the questions that follow. Suppose the plow is invented and agricultural productivity greatly increases. Which of the following graphs best depicts how this would affect the PPF?

Question 11 Suppose you find a production possibilities frontier (PPF) that is shaped like a straight line. What can you determine about the production of the two goods?

Question 12 A town on the Gulf Coast is battered by a massive hurricane that destroys most of its productive resources. The community’s production possibilities frontier (PPF) would show an:

Question 13 Think of the production possibilities frontier (PPF) model. When society is producing the largest possible output from its resources, it is operating:

Question 14 Which of the following is a positive statement?

Question 15 When the opportunity cost of producing a good rises as you produce more of it, you experience:

Question 16 Which of the following is a normative statement?

Question 17 Refer to the following figure to answer the questions that follow. In the figure, point E is:

Question 18 An economist’s use of experiments and real­world data to test a theory is an example of:

Question 19 Consider the production possibilities frontier (PPF) shown in the figure below to answer the questions that follow. Given current resources and technology, the unattainable range is best described as:

Question 20 Refer to the following figure to answer the questions that follow. Which point in the corresponding figure represents a combination of smoothies and milk shakes that society cannot currently produce?

Question 1 Economists use the scientific method and the tools of economics to study:

Question 2 Ceteris paribus, if a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by:

Question 3 Goods that are produced today in order to make other valuable goods and services in the future are called:

Question 4 Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the questions that follow. Suppose the printing press is invented. Which graph best depicts how this would affect the PPF?

Question 5 Refer to the following table to answer the questions that follow. Given the same quantity of resources, what is Jay­Z’s opportunity cost of producing a New York pizza?

Question 6 Refer to the following figure to answer the questions that follow. Which point in the corresponding figure represents a combination of smoothies and milk shakes that society cannot currently produce?

Question 7 Which of the following is a normative statement?

Question 8 Refer to the following figure for the questions that follow. The opportunity cost of increasing production of apple pies from 14 to 16 pies is:

Question 9 Which of the following is a positive statement? Selected Answer: e. Increases in the minimum wage cause unemployment. Question 10 Refer to the following figure to answer the questions that follow. In the figure, point E is:

Question 11 The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the questions that follow. What is DiNozzo’s opportunity cost for solving a crime?

Question 12 Greater investment in capital goods today leads to:

Question 13 Suppose that Sheldon and Leonard can either run errands or wash dishes. Their maximum output per hour is listed in the following table. Given the same quantity of resources, at what terms of trade (relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontier (PPF)?

Question 14 For both parties to benefit from specialization and trade, the trading parties must agree on:

Question 15 Which of the following is NOT an assumption that economists make when developing a production possibilities frontier (PPF)?

Question 16 Which of the following is a positive statement?

Question 17 The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the questions that follow. What is Jim’s opportunity cost of making 1 stromboli?

Question 18 Consider the following scenario to answer the questions that follow: Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie. What is Rachel’s opportunity cost of baking 1 loaf of bread?

Question 19 The _________ illustrates the various combinations of output that a society can produce if all of its resources are being used efficiently.

Question 20 A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

Question 1 When one producer has a comparative advantage in production, she:

Question 2 The process of using current resources to create or buy new capital is called:

Question 3 A positive statement:

Question 4 An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an:

Question 5 Refer to the following table to answer the questions that follow. Given the same quantity of resources, what is Jay­Z’s opportunity cost of producing a New York pizza?

Question 6 Refer to the following figure for the questions that follow. According to the figure, a new technology that makes it easier to peel, core, and prepare apples will cause:

Question 7 To determine which of two producers has a comparative advantage, you would need to know their:

Question 8 Consider the following scenario. Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake one loaf of bread and one hour to make one pie. Joey takes four hours to bake one loaf of bread and four hours to make one pie. If Rachel and Joey decide to specialize in order to maximize their combined output, who should produce what?

Question 9 Refer to the accompanying figure to answer the questions that follow. Unemployed resources are evident at:

Question 10 Refer to the following table to answer the questions that follow. Suppose that Alicia Keys and Jay­Z could each make either New York–style pizza or Philly cheesesteaks. Given an eight­hour workday, which of the following would permit them to consume outside their respective production possibilities frontiers (PPFs)?

Question 11 When the opportunity cost of producing a good rises as you produce more of it, you experience:

Question 12 The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the questions that follow. What is Jim’s opportunity cost of making 1 stromboli?

Question 13 Ceteris paribus means:

Question 14 The ability of one producer to create more of a good than another producer using the same quantity of resources is called:

Question 15 Which of the following is a positive statement?

Question 16 Refer to the following table to answer the questions that follow. Given an eight­hour workday, and to experience gains from trade,

Question 17 Consider the production possibilities frontier (PPF) shown in the figure below to answer the questions that follow. Given current resources and technology, the attainable range is best described as:

Question 18 Which of the following is a normative statement?

Question 19 Consider the following scenario to answer the questions that follow: Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie. What is Joey’s opportunity cost of baking 1 pie?

Question 20 Suppose you are studying a production possibilities frontier (PPF) that has a bowed­out shape relative to the origin. What causes this shape?

The process of using current resources to create or buy new capital is called

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier—Private Ryan. The movie is predominantly about how much was given up in an effort to save this one particular soldier. The main economic theme of the movie is

An increase in the labor force would be reflected in a society’s production possibilities frontier (PPF) by an

Refer to the following figure for the questions that follow According to the figure, a new technology that makes it easier to peel, core, and prepare apples will cause.

The ability of one producer to produce a good at a lower opportunity cost than another producer is called

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the questions that follow. Which statement best describes absolute advantage?

Refer to the following table to answer the questions that follow. Given the same quantity of resources, what is Alicia Keys’s opportunity cost of producing a New York pizza?

If Jim can sell paper at a lower opportunity cost than Dwight can, then

Greater investment in capital goods today leads to

Consider the following scenario to answer the questions that follow: Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie. What is Rachel’s opportunity cost of baking 1 loaf of bread?

One reason that economists make assumptions when designing models is to

Suppose you are studying a production possibilities frontier (PPF) that has a bowed-out shape relative to the origin. What causes this shape?

Ceteris paribus means

The important act of holding all other variables constant while examining a particular variable is known as:

Variables that are controlled for in a model are called

Refer to the following figures to answer the questions that follow. Which allocation point in the short-run production possibilities frontier (PPF) will lead to the most significant growth in the long-run PPF?

You have a comparative advantage in producing a good whenever

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the questions that follow. What is Gibbs’s opportunity cost of solving a crime?

When testing a paper airplane on your campus quad, which of the following would be an exogenous factor?

Consider the following scenario to answer the questions that follow: Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie. What is Joey’s opportunity cost of baking 1 pie?

When the price is the equilibrium price, we would expect there to be a causing the market to put pressure on the price until it went back to the equilibrium price.

Suppose that Dwight and Jim can either make salads or grill steaks. Their maximum output per hour is listed in the following table. Given the same quantity of resources, at what terms of trade (relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontier (PPF)?

What would you expect to happen to the price of bagels if the price of flour decreased and the price of cream cheese decreased?

To determine which of two producers has a comparative advantage, you would need to know their

The area inside (within) the production possibilities frontier (PPF) contains

Economics professors are well aware of the importance of incentives. Which of the following situations shows the use of a positive incentive

Which one of the following pairs of goods is likely to have a negative cross-price elasticity of demand

The accompanying figures depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. If Jim and Pam were to specialize and trade, at what exchange rate would they find some quantity of trade to be mutually beneficial?

Use the following table to answer the questions that follow. What is the surplus when the price floor is $0.75 in the market for public transportation?

Why are binding price ceiling laws passed?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the questions that follow. Which statement best describes absolute advantage?

Which of the following will cause a movement along a good’s supply curve?

What would happen in the market for SUVs if the government started to subsidize the production of SUVs that get very few miles per gallon and the price of gasoline went up?

If the percentage change in the quantity consumed of pizza is 8% and the percentage change in income is 2%, what is the income elasticity of demand for pizza?

If the price and quantity for a normal good, Good X, is $8 and 6 units at the original equilibrium, what is one possibility for the new equilibrium of Good X if we see income increase and all other factors stay constant?

Chris runs a sporting goods store and knows that the price elasticity of demand for his sports clothing line is –1.5. He is planning to lower prices by 10%. The percentage change in quantity demanded will be

If the cross-price elasticity of demand for two goods is zero, the two goods are

The price of peanut butter increases from $2.50 to $3.00 and the quantity of jelly demanded falls from 30 jars to 24 jars. Calculate the cross-price elasticity of demand

During the winter months, many elderly persons leave their homes in northern New York and travel south to Florida or Arizona. What would you expect to happen to the equilibrium price and quantity of items most used by the elderly in northern New York?

When Heavenly Cookies prices its sugar cookies at $1.00, they sell 75 cookies. They lowered the price to $0.50 and sold 200 cookies. Their total revenue because the price elasticity of demand for sugar cookies is

For a market to be competitive

If a good is subject to a binding price ceiling and you purchase it on the black market, what do you expect to happen to the price over time?

Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the questions that follow. Suppose a great plague wipes out half of the society’s population. Which of the following graphs best depicts how this would affect the PPF?

In the first few months of 2012, the price of gasoline increased by approximately 15%. Because of this increase, we would expect the curve in the market for hybrid cars to

An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an

Use the following scenario to answer the questions that follow: Dairy Dream, a local ice cream store, finds that it sells out of ice cream sandwiches at the current price of $1. It raises the price to increase its revenues and finds that no one buys ice cream sandwiches anymore.

While there are many pizza places in Curtisville, Pappy’s Pizza is known for its distinctive deep-dish pizza with an almost pie-like crust, whereas Momma’s Pizza Pizzazz is comparable to many other restaurants. Pappy’s is likely to find that it can prices to increase total revenue, and Mommas must              prices to increase total revenue.

The scientific method and the tools of economics are useful in examining

A positive statement

When the price of a basketball is $15, the quantity supplied is 5,000. When the price increases to $20, the quantity supplied is 10,000. The price elasticity of supply is

Which of the following will cause the demand curve for burgers to shift the right?

You have an absolute advantage in producing something whenever

From the accompanying table, we would expect that, for recreational skaters, the price elasticity of demand for ice skates between $10 and $20 to be than that of hockey players because

Refer to the accompanying figure. What event would cause the supply curve to shift out?

The production possibilities frontier (PPF) shows

With no barriers to entry or exit and when firms in a market are operating at a loss, you can expect other firms to exit, causing the curve to shift to the and making the equilibrium price and the equilibrium quantity

Google has started a project to scan all books and make those that are not copyrighted available to people free of charge. Why is it important that only books without a copyright are available?

According to economists, one reason few professional athletes have PhD’s is that the

What will happen in a market where a binding price floor is removed?

What would you expect to happen to the price and quantity of Pepsi if the price of Coke increases and Pepsi develops a new technology that makes its production process more efficient?

Which statement best describes the absolute advantage as shown in the graphs?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the questions that follow. What is DiNozzo’s opportunity cost for solving a crime?

Ceteris paribus, if a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by

In the accompanying table, assume that the price of ice skates increases from $10 to $20 per pair. Using the midpoint method, calculate the price elasticity of demand for ice skates for hockey players.

Refer to the following figure for the questions that follow. As you move from points N to M to L, the opportunity cost of additional apple pie

Assume that the market for pencils is in equilibrium and that demand is very price elastic. The popularity of digital tablets and electronic pens increases and demand for pencils declines. The equilibrium change in quantity demanded is

Refer to the accompanying figure. When the price changes from P1 to P2, we will see a(n)

Use the following scenario to answer the questions that follow. Dairy Dream, a local ice cream store, finds that it sells out of ice cream sandwiches at the current price of $1. It raises the price to increase its revenues and finds that no one buys ice cream sandwiches anymore. The owners raised the price because they believed that the demand for ice cream sandwiches is

Spam is considered an inferior good. What would happen to the equilibrium price and quantity of Spam if income decreased and more firms started producing Spam?

Refer to the accompanying table to answer the questions that follow. The price of erasers increases from $0.50 to $1.00 per eraser. Use the midpoint method to calculate the cross-price elasticity of demand between pencils and erasers.

Question 1

Economics is the study of:

Select one:

a. markets

b. How to make workers more productive and firms more profitable.

c. How to allocate resources to satisfy wants and needs.

d. How to make money.

e. Capitalism

Question 2

An example of a direct positive incentive is:

Select one:

a. Threatening to fire those who do not perform well.

b. Unemployment insurance for those who are laid off.

c. A prison sentence for committing a crime.

d. Providing a workplace safety program.

e. Providing a commission for sales.

Question 3

A health insurance company may offer its policyholders a discount on their premiums if they prove that

they have stopped smoking. What type of incentive is the health insurance company offering?

Select one:

a. an unintended incentive.

b. A neutral incentive.

c. complementary incentive.

d. A direct incentive.

e. An indirect incentive.

Question 4

The cost of a trade-off is known as the ________ of that decision.

Select one:

a. opportunity cost

b. marginal cost

c. net cost

d. comparative cost

e. explicit cost

Question 5

Instead of taking an economics course, you could have taken a history course that meets at the exact

same time. The total cost of taking the economics course would be:

Select one:

a. the fact that you could not take the history course at the same time.

b. the tuition cost, the cost of the textbook and notebook, and the fact that you could not take the history

course at the same time.

c. the tuition cost for the economics course plus the price of the textbook and a notebook for the

economics course.

d. the price of the textbook and a notebook for the economics course.

e. the tuition cost for the economics course.

Feedback

Question 6

The opportunity cost of working rather than going to school is:

Select one:

a. zero because the person is earning an income by working.

b. the cost of clothing and transportation.

c. the higher wages that come with additional education.

d. the cost of food and housing.

e. the annual wages earned by working.

Question 7

On the television show “MythBusters,” the hosts design experiments, collect data, and test theories based

on popular myths. This is an example of:

Select one:

a. the scientific method as used in economics.

b. economic growth.

c. absolute advantage.

d. gains from trade.

e. production possibilities.

Question 8

The area inside (within) the production possibilities frontier (PPF) contains:

Select one:

a. normative points.

b. inefficient points.

c. efficient points.

d. positive points.

e. high opportunity cost points.

Question 9

How will a reduction in the national unemployment rate affect a nation’s production possibilities frontier

(PPF)?

Select one:

a. It will move society to a point farther inside the PPF.

b. It will cause the PPF to shift inward.

c. It will move society outward to a point closer to or on the PPF.

d. It will push society to a point outside its PPF.

e. It will cause the PPF to shift outward.

Question 12

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier—

Private Ryan. The movie is predominantly about how much was given up in an effort to save this one

particular soldier. The main economic theme of the movie is:

Select one:

a. opportunity cost.

b. comparative advantage.

c. positive advantage.

d. normative analysis.

e. absolute advantage.

Question 15

Consider the following scenario to answer the questions that follow: Two friends, Rachel and Joey, enjoy

baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to

make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie.

What is Joey’s opportunity cost of baking 1 loaf of bread?

Select one:

a. 1 loaf of bread

b. 1/2 loaf of bread.

c. 1 pie

d. 2 pies

e. 4 pies

Question 16

Consider the following scenario to answer the questions that follow: Two friends, Rachel and Joey, enjoy

baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to

make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie.

What is Rachel’s opportunity cost of baking 1 pie?

Select one:

a. 1 pie

b. 2 pies

c. 2 loaves of bread.

d. 1 loaf of bread

e. 1/2 loaf of bread

Question 17

The ability of one producer to create more of a good than another producer using the same quantity of

resources is called:

Select one:

a. a positive-sum game.

b. absolute advantage.

c. gains from trade

d. the law of increasing relative cost.

e. comparative advantage.

Question 18

The ability of one producer to produce a good at a lower opportunity cost than another producer is called:

Select one:

a. absolute advantage.

b. a zero-sum game.

c. comparative advantage.

d. a normative statement.

e. the law of increasing relative cost.

Question 19

For both parties to benefit from specialization and trade, the trading parties must agree on:

Select one:

a. the appropriate level of investment for the future.

b. the source of comparative advantage.

c. who has the absolute advantage in production.

d. a plan not to trade with other parties.

e. a price somewhere between their opportunity costs of production.

Question 20

Why do economists use models?

Select one:

a. Models allow us to control exogenous factors.

b. Models allow us to study a simplified version of a complex world.

c. Models make the world harder to understand.

d. Models allow us to examine more factors than what actually exists in our world.

e. Models are used to add complexity to a simple world.

The basic goal of economics is:

The patent system acts as:

Economics is concerned with the trade-offs that emerge because of scarcity. The term "trade-offs" refers to:

An opportunity cost is the:

How are changes in opportunity cost related to decision-making behavior?

Why would economists find it surprising if the CEP of a large company does his or her own housework?

Economists believe that optimal decisions are made up to the point where:

One way to promote a new business is to offer free items. If you were to open a new restaurant and offer free food, you likely would have a line out the door. How would economists understand the behavior of those standing in line?

Many stores are open 24 hours a day. When store managers make the decision to stay open 24 hours, it must be the case that:

More oranges are grown in Florida than North Dakota because Florida's warm climate gives it a ___________ in growing organges

Which of the following is a normative statement?
a) you should wear a helmet when cycling
b) the sky is blue
c) a bicycle has two wheels
d) a unicycle has five wheels
e) electricity follows the path of least resistance

The area inside (within) the production possibilities frontier (PPF) contains:

Think of the production possibilities frontier (PPF) model. When society is producing the largest possible output from its resources, it is operating:
a) inefficiently
b) efficiently
c) with no opportunity cost
d) inside (within) the PPF
e) beyond its opportunity cost

Suppose you find a production possibilities frontier (PPF) that is shaped like a straight-line. What can you determine about the production of the two goods?

A monopoly:

Imperfect markets: 
a) do not exist in democracies
b) always result in supply exceeding demand
c) always result in demand exceeding supply
d) occur when the buyer or seller has an influence on the price
e) can't occur if there are many buyers and many sellers

Two goods that are used together are called:

When the price of ground beef increases and all else is held constant, we would expect the supply of hamburgers to ________, causing the price to ________

If the number of buyers in a market increases from 50 to 100, you would expect the equilibrium price to ________ and the equilibrium quantity to _________, holding all else constant

Why does surplus exist under a binding price floor?

Suppose you live in a community with no price controls. What do you expect will happen if your town borders a community where there is a binding price ceiling on most products?

Suppose you live in a community with no price controls. What do you expect to happen if your town borders a community where there is a binding price floor on most products?

What will happen in a market where a nonbinding price floor is removed?

A tax on consumers of a good would shift the _______ curve down and cause the price paid by consumers to ________

The net cost to society from the imposition of a tax is also known as:

If a tax is imposed on a good with a perfectly inelastic demand, the burden of the tax will be borne:
a) by both consumers and producers equally
b) by consumers alone
c) by producers alone
d) mostly by consumers but partially by producers
e) mostly y producers but partially by consumers

To evaluate the change in average living standards over time, it is best to use:

When John buys new tires for his car it ________, and when Ford buys tires to put on new cars it _________

Net exports can be defined as:

Real GDP is equal to:

Real GDP is GDP measured in:
a) current prices
b) base year prices
c) average prices
d) marginal prices
e) nominal prices

Real GDP can be calculated as:

GDP increases if prices decrease by _______ and quantities produced increase by ________

Between two given years, if real GDP and nominal GDP grow at the same rate, then:

If real GDP grew by 2% and the inflation rate was 2%, then nominal GDP grew by:

Real GDP would be better measure of economic well-being if it included the value of:

Official unemployment is identified as when:

Jamal works in a factory in Lake Zurich, Illinois, assembling toy trains. The factory owner updates the current equipment and installs new robots that can do Jamal's job. As a result, Jamal is laid off and is now unemployed. Jamal would be considered:

Unemployment caused by delays in matching available jobs and workers is called:

Government policies such as unemployment compensation and government regulations related to hiring and firing employees results in:

An unemployment rate that is above the natural rate indicates _________, and we say that economy is producing at ___________

A member of the labor force is defined as:

The unemployment rate is:

Discouraged workers are defined as:

One shortcoming of the official unemployment rate is that:

Inflation occurs when:

Typically the largest percentage category in the consumer price index (CPI) is:

If 51% of all goods in the consumer price index (CPI) became more expensive and 49% became chapter:

How do you convert a price of a good from an earlier time into today's price?

Typically if real wages fall, the quantity demand of labor rises. If workers agree to 3% wage increases for a four-year period and inflation is more than 3% then, based on this information alone:

A price confusion problem is best described as:

The notion of the loanable funds market is:

Borrowers in the loanable funds market consist of:

The demand for loanable funds is:

Gross domestic product requires:

A bond is an instrument that allows the bearer to earn interest. The bearer would be best described as:

If interest rates rise:

If real wages were higher than nominal rates in 2009, the implication is that:

Typically a college degree is "worth it", but it requires:
a) high time preferences
b) low time preferences
c) smoothed consumption
d) variable correlated consumption
e) the supply of loanable funds to be large

One would correctly argue that higher capital productivity:

The demand for loanable funds decreases while the supply simultaneously increases. This would cause:

Firms that help to channel funds from savers to borrowers are known as:

The sellers (or lenders) in financial markets are:

The two different paths through the loanable funds market are:

A security is:

A bond is:

The maturity date of a bond is:

The par value of a bond is:

Bonds contain three important pieces of information. These three pieces are:

The interest rate of a bond is equal to:

The risk that the borrower will not pay the face value of a bond at the maturity date is called the:

All else equal, the greater the default risk:

Typical individuals have difficulty judging the default risk of any one company, let alone the thousands of firms that sell bonds in a developed economy. To address this problem:

Stocks are:

A shareholder who owns more than 50% of the shares of the firm is called the:

A majority shareholder:

Which of the following is a secondary stock market?
a) North American Stock Exchange
b) The S&P 500
c) New York Stock Exchange
d) The Dow Jones Industrial Average
e) The United States Stock Exchange

The two largest foreign holders of U.S. Treasury securities are:

A home mortgage loan is:

Economic growth is defined as:

Real per capita gross domestic product (GDP) is defined as:

Average world income began to increase rapidly during:

Which of the following are the three major categories of resources?

All countries have some resources and technology available to them. The ones that grow faster are the ones that:

Which of the following is an example of an institution that promotes economic growth?
a) private property
b) bartering as a means of trade
c) high barriers to international trade
d) constant war and conflict
e) collective property ownership

According to modern growth theory, the key to economic growth is:

Economic growth is determined by:

A restaurant's production function would show the relationship between:

If capital is increasing, then:
a) the production function will shift upward
b) the production function will shift downward
c) there is an upward movement along the production function
d) there is a downward movement along the production function
e) there is an upward shift of the production function and an upward movement along the production function

If net investment is positive then:

If a country experiences an epidemic that reduces human capital, then:

Consider a country that improves its educational system such that a greater percentage of workers become college educated. It is reasonable to expect:

If more natural resources are discovered, then:

There are diminishing returns to:

According to the Solow growth model, growth will eventually:

Modern growth theory views technological innovation as __________, whereas Solow growth theory views technological change as ________

Consider a country that suffered through five years of civil war, but now has a stable government that has the support of the majority of the people. In this country, we are likely to observe:

A type of policy that would be advocated by modern growth theory would be to:

The term ________ is a popular way to describe the recession-expansion pattern followed by the economy

Aggregate demand is determined by adding up the spending of:

Consider the wealth effect, interest rate effect, and international trade effect. Of these, the ________ effect is the most significant and the _______ effects is the least significant

The aggregate demand curve slopes downward because:

An increase in the price level that reduces the real value of wealth is likely to _______ consumption and _______ saving

Suppose that an increase in the price level reduces the value of real wealth, which then causes a reduction in consumption but no change in saving. In this case:

A rise in the price level that leads to a change in the interest rate, and therefore to a change in the quantity of aggregate demand, will cause:

If people expect higher income in the future, then spending today ___________ and aggregate demand _________

When foreign income rises, U.S. aggregate:

The long run is best defined as a period of time such that:

When prices in the economy have not fully adjusted, we say that:

When inflation pushes up prices in the economy, input prices are _________ and revenues _________ in the short run

Suppose new drilling techniques increase the world oil supply. In the long run, output will ______ and the price level will _______

An increase in the general price level will lead to:

An upward movement along the short-run aggregate supply

If inflation turns out to be higher than expected, this will:

The economy is in short-run equilibrium when:

An economist's use of experiments and real-world data to test a theory is an example of:
a. the scientific method in economics.
b. macroeconomics.
c. economic growth.
d. normative analysis.
e. comparative advantage.

Economists use the scientific method and the tools of economics to study:
a. only the decisions of individuals.
b. only the decisions of business firms.
c. only economic growth and gross domestic product (GDP).
d. only the production possibilities curve.
e. anything around them; the world is the economist's laboratory.

A positive statement:
a. is a claim that can be tested.
b. is a statement about what ought to be.
c. is a declaration of opinion.
d. is a claim that cannot be tested.
e. cannot be evaluated using the scientific method.

Which of the following is a normative statement?
a. The sky is blue.
b. The sky is green with pink polka dots.
c. Points on the production possibilities frontier (PPF) are efficient.
d. Points outside the PPF are unattainable with current resources.
e. We should strive to push the PPF outward.

Which of the following is a normative statement?
a. You should wear a helmet when cycling.
b. The sky is blue.
c. A bicycle has two wheels.
d. A unicycle has five wheels.
e. Electricity follows the path of least resistance.

Which of the following is a positive statement?
a. Winters in Arkansas are too cold.
b. Everyone should work in a bank to understand the true value of money.
c. Harvard University is the top education institution in the country.
d. On average, people save 15% when they switch to GEICO.
e. Everyone ought to have a life insurance policy.

The important act of holding all other variables constant while examining a particular variable is known as:
a. endogeneity.
b. a normative statement.
c. a positive statement.
d. macroeconomics.
e. ceteris paribus.

Which of the following is necessary to build a good economic model?
a. normative statements
b. assumptions
c. opinions
d. complex math
e. realism

Why do economists use models?
a. Models are used to add complexity to a simple world.
b. Models allow us to study a simplified version of a complex world.
c. Models allow us to control exogenous factors.
d. Models make the world harder to understand.
e. Models allow us to examine more factors than what actually exists in our world.

Variables that are controlled for in a model are called:
a. normative statements.
b. positive statements.
c. endogenous factors.
d. exogenous factors.
e. the scientific method.

When testing a paper airplane on your campus quad, which of the following would be an exogenous factor?
a. the weight of the paper used in making the plane
b. the ratio of wingspan to plane length
c. the height of the body of the plane
d. the level of wind encountered
e. the number of folds in the wings

Car companies build wind tunnels to test the aerodynamics and the handling capabilities of their car designs. The many variables that can be precisely controlled inside the wind tunnel are considered:
a. normative factors.
b. positive factors.
c. comparative factors.
d. endogenous factors.
e. exogenous factors.

A model without any simplifying assumptions:
a. is highly complex and likely unworkable.
b. excludes important predictive variables.
c. is very helpful for solving tough, real-world problems.
d. does not look like the real-world problem it is meant to address.
e. provides simplified solutions to complex problems.

A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:
a. a production possibilities frontier (PPF).
b. a supply curve.
c. opportunity cost.
d. a consumer de