Economics part 1

Economics is the study of...

• A) Why people are greedy

• B) Why the government us ruining our lives

• C) Why the Dow Jones Industrial Average moves around

• D) The choices people make when confronted with scarcity

What would not lead to an overall decrease in demand for air travel in the U.S.?

• A) The fear of future terrorist attacks

• B) News of lengthy security delays at airports

• C) An expected decrease in airfares

• D) A substantial increase in bus and passenger train fares

3) Goods, such as L.A. Lakers tickets and parking spaces around the stadium, are sometimes consumed together. Which of the following would decrease the demand for parking spaces around the stadium?

• A) An increase in the price of Lakers tickets

• B) A higher parking fee

• C) A decrease in the price of Lakers tickets

• D) A substantial increase in the price of local cab services

Skis and snowboards are close substitute goods. Fill in the blanks: A rise in the price of snowboards would tend to _________ the demand for _________

The opportunity cost of an action is

• A) everything that makes an action possible

• B) the monetary payments that make an action possible

• C) the sum of the human efforts that contribute to an action

• D) the value of the next-best alternative that must be sacrificed to take the action

A surplus is said to exist when, at prevailing prices,

• A) demand is greater than supply.

• B) quantity supplied is greater than quantity demanded.

• C) scarcity is eliminated.

• D) supply and demand are in harmonic equilibrium.

In the lecture 8 video clip, if the UK government decided to help the farmers with lowering energy costs, it would have resulted in one of the following:

• A) AVC would have decreased, and the market price would have increased.

• B) AVC would have increased, and the market price would have decreased.

• C) AVC would have increased, and the market price would not have changed.

• D) AVC would have decreased, and market price would not have changed.

Suppose a successful advertising campaign increases the demand for Nike shoes. Which would tend to occur?

• A) The demand curve for Nikes would shift to the right.

• B) The quantity supplied of Nikes would increase.

• C) The price of Nikes would rise.

• D) All of the above.

If the market clearing price of computer tablets falls from $400 to $300, and the market clearing output decreases from 5 million to 4 million units,

• A) demand decreased and supply remained unchanged.

• B) supply increased and demand remained unchanged.

• C) demand increased and supply remained unchanged.

• D) supply decreased and demand remained unchanged.

"Total revenue (TR) minus total cost (TC)" is

• A) an incorrect definition of profit.

• B) the correct definition of profit.

• C) the economist's definition of profit.

• D) the most common definition of profit.