Economics BM Review

Front

Based on the information provided in the graph above, what would likely occur if milk were priced at $2 per gallon?

Back

there would be a shortage of 20 million gallons

Front

The gains from trade are due primarily to the fact that

Back

total world output increases when each country specializes.

Front

Free trade can result in growing trade imbalances between countries. Which occurs when a country exports more than it imports?

Back

Trade surplus

Front

What are some possible reasons why the production possibilities curve might shift from the original curve (BB) to the new curve (BD)?

Back

New technology for consumer goods

Front

If government fiscal policy is intended to stop spiraling inflation rates, which action would Congress be MOST likely to take?

Back

Decrease government spending or increase taxes

Front

Through open market operations directed by the Federal Open Market Committee (FOMC), the Federal Reserve buys and sells government securities to influence the money supply. If the FOMC intends to increase the money supply in the economy, what would it recommend?

Back

Buy government bonds.

Front

When the determinants of supply change, there is a shift in supply. All things being equal, which of the following does NOT shift the supply of goods in the market? A change in input cost, An increase in number of consumers, An increase of taxes by the government, Changes in supply

Back

An increase in number of consumers

Front

According the market for widgets represented by the graph, what situation would exist if the price was moved from p3 to p2?

Back

There would be no supply of widgets left over

Front

In the graph above, lines D and S1 show the demand and supply curves for the Great Smoothie Company for the last month. Great Smoothie Company recently upgraded its capital equipment when it purchased a machine that makes smoothies faster and cheaper than the original machine. Based on this change, which of the following descriptions best reflects the change in supply?

Back

A shift in supply from S1 to S2

Front

At which price does quantity demanded equal quantity supplied? Options: .64 cents per pound, $1.05 per pound, 800 pounds, .30 per pound

Back

.64 cents per pound