Economics Study Guide
A Production Possibility Frontier Diagram Illustrates All of the Following Concepts Except
b. Unlimited wants
A Rightward Shift in the Supply of U.S. Cars Might Be Due to
c. The introduction of cost-saving robots
According to the Text, the Reason to Study Economics
d. All of the above
Along a Given Supply Curve for Eggs
c. Quantity supplied increases as price increases
Among a Given Demand Curve for Corn, Which of the Following Is Not Held Constant
a. The price of corn
Among the Fundamental Concepts in Economics Are
B. All of the above
An Efficient Market Is a Market
b. In which profit opportunities are eliminated almost instantaneously
An Increase in the Overall Price Level Is Known As
b. Inflation
An Undergraduate Student Pays $475 for a Three-Credit Course at Lehman College. After the Official Withdrawal Date Has Elapsed, He Drops the Course (and Cannot Get Back the $475). At This Time, the $475 Represents
c. A sunk cost
Any Transaction That Involves Exchanging One Good for Another Without Using Money Is Considered a
b. Barter transaction
Apples and Oranges Are Substitute Goods. A Freeze in Florida Destroyed a Good Portion of the Orange Crop. Ceteris Paribus.
C. The price of both apples and oranges will increase.
As Technology Advances
b. The PPF shifts outward
Because the Nation N Is Operating at a Point Inside Its PPF, It
b. Has unemployed or inefficiently employed resources
Carlo Discovers When He Studies for His Macroeconomics Tests at the Bar, He Earns Better Grades. He Advises All Students to Study at the Bar for Similar Results. Carlo Is Guilty of Committing
a. The fallacy of composition
Consider the Market for Turkeys. In the US, Because of Thanksgiving in the Month of November
b. There is an upward movement along the supply curve for turkeys
Consumers Expect Their Income to Rise. For a Normal Good, This Would Result in an Increase in
d. Demand and a rise in price
Depreciation Is
c. The amount of used-up machinery in a year
Each of the Following Is a Basic Concern of Any Economic System Except
d. The quality of resources allocated among customers
Economics Is the Study of How
a. Scarce resources are used to satisfy unlimited wants
Encouraging International Trade Will
d. Speed economic growth as workers specialize and trade with others
Encouraging International Trade Will
h. Speed economic growth as workers specialize and trade with others
For Jill to Have a Comparative Advantage in the Production of Pins Means That, Relative to Jack, with the Same Resources
a. Jill is relatively better at producing pins than at producing needles
Generic Aspirin Is an Inferior Good. As Julie’s Income Decreases, We Would Expect
c. An increase in Julie’s demand for generic aspirin
Households Are
a. Suppliers in the input market
If a Country Is Operating at a Point of Production Efficiency
b. It produces on its production possibility frontier curve
If the Government Increases Unemployment Benefits, Then Labor
d. Supply curve shifts leftward
If the Market Is in Equilibrium, a Technological Improvement Will Cause Price to __ and Quantity Demanded to __
c. Fall; rise
If There Is a Surplus in the Money Market, the Fed Can Eliminate It by
d. Decreasing money supply
Jean & Co. Has an Increasing Cost Production Possibility Frontier. Its Slope Must Be
c. Negative and increasing
Lower Ticket Prices Would Lead to More People Attending Ball Games. This Statement Is
c. A positive statement
That Which We Forgo, or Give Up, When We Make a Choice or Decision Is Called
d. Opportunity costs
The “Law of Demand” Implies That
c. As prices fall, quantity demanded increases
The Amount That Households Have Accumulated Out of Past Income Through Savings and Inheritance Is
b. Wealth
The Concept of Opportunity Cost Is Based on the Principle of
c. Scarcity
The Demand Curve Is Best Illustrated by
b. Increased purchases of Coke as the price of Coke decreases
The Four (4) Criteria That Are Frequently Used in Judging the Outcome of Economic Policy Are
A. Efficiency, equity, growth, and stability
The Opportunity Cost of Choice X Can Be Defined As
b. The most highly valued alternative to choice X
The Price of Good C Increases, and as a Result, the Demand for Good D Increases. The Two Goods Are
b. Substitutes
The Production Possibility Frontier Is Used to Illustrate the Concept of
b. Opportunity costs
The Study of Economics
b. Is a way of analyzing decision-making processes caused by scarcity
The Supply of Labor Is Defined as the Relationship Between the Real Wage and the
c. Quantity of labor supplied by households
To Help Unscramble Cause and Effect, Economists
a. Must use the ceteris paribus assumption
Unions Introduced New Costly Regulations in the Tuna Market to Protect Workers. We Would Expect the Equilibrium Cost of Tuna to __ and the Equilibrium Quantity of Tuna to __
b. Increase; decrease
When Hurricane Andrew Passed Through Louisiana in the Summer of 1992, Approximately a Quarter of the Sugar Cane Crop Was Destroyed. Ceteris Paribus
A. The supply of sugar decreased and the price of sugar increased.
When Two People Trade
d. They both expect to be made better off by the exchange
Which of the Following Is a Positive Statement?
b. Higher prices cause consumers to purchase less.
Which of the Following Is Not a Criterion for Judging the Result of an Economic Policy
b. Employment
Which of the Following Is NOT a Topic Studied in Macroeconomics?
b. Rapid increase in the general price level
Which of the Following Is Not One of the Basic Economic Questions?
c. Where would it be produced?
Which of the Following Would an Economist Classify as Capital?
d. A computer used by an accountant