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77 Cards in this Set

  • Front
  • Back

In part, microeconomics is concerned with...

How a business firm decides upon the amount it produces and the price it sets.

The study of decisions of individual units in the economy is known as...

microeconomics

Which of the following questions is a topic that would be studied by microeconomics?

How will a lower price of digital cameras affect the quantity of cameras sold?

The branch of economics that deals with the analysis of the whole economy is called...

macroeconomics

The loss of the highest-valued alternative defines the concept of...

opportunity cost

On Saturday morning, you rank your choices for activities in the following order: go to the library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the library. Your opportunity cost is?

working out at the gym

The production possibilities frontier is the boundary between...

those combinations of goods and services that can be produced and those that cannot.

The production possibilities frontier is...

downward sloping and reflects tradeoffs in choices

The production possibilities frontier itself shows...

the maximum levels of production that can be attained.

Harry produces 2 balloon rides and 4 boat rides an hour. Harry could produce more balloon rides but to do so he must produce fewer boat rides. Harry is ______ his production possibilities frontier.

producing on

A point outside a production possibilities frontier indicates...

an output combination that society cannot attain given its current level of resources and technology.

On the vertical axis, the production possibilities frontier shows ______; on the horizontal axis, the production possibilities frontier shows ___________.

the quantity of one good; the quantity of another good

The figure shows Roger's production possibilities frontier. Point a is an _______ point and at the point production is ________.

The figure shows Roger's production possibilities frontier. Point a is an _______ point and at the point production is ________.

attainable; inefficient

A country that must decrease production of one good in order to increase the production of another...

must be producing on its production possibilities frontier.

A point inside a production possibilities frontier...

could indicate that resources are misallocated.

When operating on its PPF, a country can produce 2 tons of butter and 200 cars OR 3 tons of butter and 150 cars. The opportunity cost of 1 ton of butter is ________ cars per ton of butter.

50

At one point along a PPF, 10 pizzas and 7 sandwiches can be produced. At anotehr point along the same PPF, 9 pizzas and 10 sandwiches can be produced. The opportunity cost of a pizza between these points is _____ per pizza.

3 sandwiches

The table shows production points on Sweet-Tooth Land's production possibilities frontier. What is true?

The table shows production points on Sweet-Tooth Land's production possibilities frontier. What is true?

Producing 0 chocolate bars and 100 cans of cola is both attainable and efficient.

The table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following would be inefficient: 0 chocolate bars &100 cans of soda, 20 chocolate bars and 80 cans of cola, 32 chocolate bars and 40 cans of col...

The table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following would be inefficient: 0 chocolate bars &100 cans of soda, 20 chocolate bars and 80 cans of cola, 32 chocolate bars and 40 cans of cola, 38 chocolate bars and 0 cans of cola

38 chocolate bars and 0 cans of cola

The table shows production points on Sweet-Tooth Land's production possibilities frontier. What is the opportunity cost of one can of cola if Sweet-Tooth Land moves from point C to point B?

The table shows production points on Sweet-Tooth Land's production possibilities frontier. What is the opportunity cost of one can of cola if Sweet-Tooth Land moves from point C to point B?

1/2 chocolate bars per can of cola

The bowed outward shape of the production possibilities frontier in the above figure indicates that...

The bowed outward shape of the production possibilities frontier in the above figure indicates that...

some resources are better suited for producing computers.

According to the figure, the opportunity cost of producing another computer is...

According to the figure, the opportunity cost of producing another computer is...

higher at B.

When the production possibilities frontier is bower outwards, the opportunity cost of producing more of one good.

increases in terms of the amount forgone of the other good.

An expansion of the production possibilities frontier is...

called economic growth.

Economic growth comes from _______.

capital accumulation and technological advance

A person has a comparative advantage in producing a particular good if that person...

can produce it at lower opportunity cost than anyone else can.

An economy produces only food and shelter. There are two individuals in the economy: Bill and Mary. Mary's opportunity cost of producing 1 unit of shelter is 2 units of food. Bill's opportunity cost of producing 1 unit of shelter is 4 units of food.

Mary has a comparative advantage over Bill in the production of shelter.

In one week Alice can produce 5 pairs of shoes or 4 bookshelves while Roger can produce 10 pairs of shoes or 6 bookshelves. Alice should specialize in the production of...

bookshelves

The table shows the number of pencils or pens that could be produced by Don and Bob in an hour. This schedule shows that...

The table shows the number of pencils or pens that could be produced by Don and Bob in an hour. This schedule shows that...

Bob has a comparative advantage in the production of pencils.

The quantity demanded is...

The amount of a good that consumers plan to purchase at a particular price.

The law of demand states that, other things remaining the same, the higher the price of a good, the....

smaller is the quantity of the good demanded.

The "law of demand" predicts that, other things being equal,

an increase in the price of pizza decreases the quantity of pizza demanded.

The law of demand implies that demand curves...

slope down.

People buy more of good 1 when the price of good 2 rises. These goods are...

substitutes.

Ham and eggs are complements. If the price of ham rises, the demand for eggs will...

decrease and the demand curve for eggs will shift leftward.

Sweatshirts and tee-shirts are complements in consumption and the price of a sweatshirt increases. As a result, the demand for,

tee-shirts will decrease, that is, the demand curve will shift leftward.

If the price of an Xbox player falls, then in the market for Xbox games...

the demand curve for Xbox games shifts rightward.

Consumers expect that the price of a gallon of gasoline will rise next week. As a result...

today's demand for gasoline increases.

The demand curve for a normal good shifts leftward if income ____ or the expected future price _____.

decreases; falls

Normal goods are those for which demand decreases as...

the price of a substitute falls.

A change in which of the following shifts the demand curve?

the tastes and preferences of consumers.

If the price of chocolate chip cookies rises, then...

there is a movement upward along the demand curve for chocolate chip cookies.

The figure shows the demand for fruit snacks. Which movement reflects an increase in demand?

The figure shows the demand for fruit snacks. Which movement reflects an increase in demand?

from point A to point D.

The figure shows the demand for fruit snacks. Which movement reflects a decrease in demand?

The figure shows the demand for fruit snacks. Which movement reflects a decrease in demand?

from point A to point C.

The figure shows the demand for fruit snacks. Which movement reflects a decrease in quantity demanded but not a decrease in demand?

The figure shows the demand for fruit snacks. Which movement reflects a decrease in quantity demanded but not a decrease in demand?

from point A to point E.

The figure shows the demand for fruit snacks. Which movement reflects how consumers would react to an increase in the price of a fruit snack that is expected to occur in the future?

The figure shows the demand for fruit snacks. Which movement reflects how consumers would react to an increase in the price of a fruit snack that is expected to occur in the future?

from point A to point D.

The figure shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are an inferior good?

The figure shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are an inferior good?

from point A to point C.

The figure shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are a normal good?

The figure shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are a normal good?

from point A to point D.

The figure shows the demand for fruit snacks. Which movement reflects a decrease in population?

The figure shows the demand for fruit snacks. Which movement reflects a decrease in population?

from point A to point C.

A fall in the price of a good causes producers to reduce the quantity of the good they are willing to produce. This fact illustrates...

the law of supply.

Which of the following decreases the supply of restaurant meals?


Waiters get a pay raise, consumers' incomes increase and restaurant meals are a normal good, consumers' incomes decrease and restaurant meals are a normal good, the price of movies, a complement to restaurant meals, falls.

Waiters get a pay raise.

Which of the following shifts the supply curve rightward?


an increase in population, a positive change in preferences for the good, a decrease in the price of the good, a decrease in the price of a factor of production used to produce the good

a decrease in the price of a factor of production used to produce the good.

Good A and good B are substitutes in production. The demand for good A increases so that the price of good A rises. The increase in the price of good A shifts the....

supply curve of good B leftward.

An increase in the number of suppliers in a market results in a...

rightward shift in the supply curve.

The figure shows the market for candy. People become more concerned that eating candy causes them to gain weight, which they do not like. As a result, the...

The figure shows the market for candy. People become more concerned that eating candy causes them to gain weight, which they do not like. As a result, the...

demand curve shifts from D2 to D1 and the supply curve does not shift.

The figure shows the market for oil. Because of the development of a new deep sea drilling technology, the...

The figure shows the market for oil. Because of the development of a new deep sea drilling technology, the...

demand curve does not shift, and the supply curve shifts from S1 to S2.

The figure shows the market for french fries at fast food joints. If the price of potatoes rises and simultaneously people become concerned that french fries can cause heart attacks, the...

The figure shows the market for french fries at fast food joints. If the price of potatoes rises and simultaneously people become concerned that french fries can cause heart attacks, the...

demand curve for french fries shifts from D2 to D1 and the supply curve of french fries shifts from S2 to S1.

A rise in the price of a good causes producers to supply more of the good. This statement illustrates...

the law of supply.

In a supply and demand figure, the equilibrium price and quantity are found at the...

point where quantity supplied equals quantity demanded.

In the figure, if the demand curve is D2, then....

In the figure, if the demand curve is D2, then....

the equilibrium price will be P1 and the equilibrium quantity will be Q2.

If the price of a CD is equal to the equilibrium price, there will be _______ of CDs and the price will _________.

neither a shortage nor surplus; not change

When the price is below the equilibrium price, the quantity demanded...

exceeds the equilibrium quantity but the quantity supplied is less than the equilibrium quantity.

A price below the equilibrium price results in...

a shortage.

If the quantity supplied exceeds the quantity demanded, then there is...

a surplus and the price is above the equilibrium price.

If the price is above the equilibrium price, then there is a...

surplus, and market forces will operate to lower price.

When the demand for a good decreases, its equilibrium price _____ and equilibrium quantity ______.

falls; decreases.

When demand increases, the equilibrium price ______ and the equilibrium quantity _______.

rises; increases.

If good A is a normal good and income increases, the equilibrium price of A _______ and the equilibrium quantity of A _______.

rises; increases.

Suppose that people find out that eating more fish improves their health, leading them to increase their demand for fish. As a result, the equilibrium price of fish _____ and the equilibrium quantity _____.

rises; increases

As a result of an increase in the supply of a good, the equilibrium quantity ______ and the equilibrium price ______.

increases; falls

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will ______ and the equilibrium quantity will ______.

fall; increase

Suppose the price of burgers increases from $2 to $3 each. The degree to which quantity demanded responds to this price increase depends on the...

price elasticity of demand

The price elasticity of demand measures...

the responsiveness of the quantity demanded to changes in price.

If a 6% decreases in the price leads to a 5% increase in the quantity demanded, the price elasticity of demand is...

0.83

A 10% increase in the quantity of spinach demanded results from a 20% decline in its price. The price elasticity of demand for spinach is...

0.5

The price elasticity of demand for DVDs is 2. IF the price of a DVD increased by 2%, the quantity demanded will _______.

decrease by 4%

If the demand for a good is elastic, the price elasticity of demand is _________.

greater than 1