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WorksheetsMacro Unit 1 Review
Total questions: 51
Worksheet time: 53mins
This item is demanded more when an income decreases, and demanded less when the income increases
capital good
inferior good
normal good
substitute
compliment
The next best choice to the decision that was made
marginal benefit
marginal cost
opportunity cost
trade off
comparative advantage
"A recession is three quarters of decreasing GDP" is an example of ___________________
normative economics
positive economics
allocative efficiency
production efficiency
scarcity
Land, Labor, Capital, and Entrepeneurship are the _________________
factors of production
human capital
physical capital
consumer goods
constant opportunity cost
The lowest per-unit opportunity cost is calculated to identify the _________________
trade off
marginal benefit
marginal cost
absolute advantage
comparative advantage
A Production Possibilites Curve with a straight curve from the x to y axis represents___________
capital goods
consumer goods
diminishing marginal utility
constant opportunity cost
increasing opportunity cost
Assuming Papa Johns' has a sale on their pizza and so Domino's orders decrease; then these two items represent an example of:
normal goods
inferior goods
production costs
substitutes
complements
When McDonalds' has their cheeseburgers on sale for $1 (instead of $3), which of the following will this cause?
Demand will increase
Supply will decrease
Quantity Demanded will increase
Demand will decrease
Quantity Demanded will decrease
Assume that the cost of batteries for cell phones increases X100 at the same time that the government requires 100 hours of training (and a certificate) to sell the cell phones, what will be the possible market equilibrium result?
Quantity decreases, Price decreases
Quantity decreases, Price increases
Quantity is indeterminate, Price decreases
Quantity decreases, Price is indeterminate
Quantity increases, Price is indeterminate
Which of the following illustrates the effect of a decrease in an economy’s resources using a production possibilities curve (PPC)?
The economy’s PPC will shift outward and to the right.
The economy’s PPC will shift inward and to the left.
The economy’s PPC will remain the same.
A city government received a $1 million grant to build swimming pools and skating rinks for youth. Based on the data provided in the graph, what is the opportunity cost of building one swimming pool?
0.50 skating rink
2 skating rinks
2 swimming pools
The shape of a PPC illustrates the type of opportunity costs involved in production. What type of costs do PPC1 and PPC2 illustrate?
PPC1 illustrates constant opportunity costs and PPC2 illustrates increasing opportunity costs.
PPC1 illustrates increasing opportunity costs and PPC2 illustrates decreasing opportunity costs.
PPC1 illustrates increasing opportunity costs and PPC2 illustrates constant opportunity costs.
Based on the data provided, which of the following terms of trade are mutually beneficial for the two countries?
1 ton of coffee for 3 trucks
1 ton of coffee for 4 trucks
1 ton of coffee for 5 trucks
Which of the following describes the relationship between price and quantity demanded according to the law of demand?
Negative relationship, illustrated by a horizontal demand curve
Positive relationship, illustrated by a downward-sloping demand curve
Negative relationship, illustrated by a downward-sloping demand curve
Which of the following will cause a movement along the demand curve for chicken, a normal good, resulting in an increase in the quantity demanded?
An increase in consumers' income
A decrease in the price of chicken
A decrease in the number of consumers of chicken
The diagram above shows two demand curves for video games identified as D1 and D2.
Which of the following changes will most likely cause a shift of the demand curve from D1 to D2 as shown in the diagram?
A decrease in the price of mobile games, a substitute good
Michael has a comparative advantage in changing tires.
Michael has an absolute and a comparative advantage in changing oil.
Which of the following changes will increase the demand for bicycles?
An increase in the price of bicycle helmets, a complementary good
An increase in the price of scooters, a substitute good
A decrease in the price of bicycles
Which of the following will increase the market supply for new automobiles?
An increase in subsidies to automobile manufacturers
An increase in the price of steel, an input in the production of automobiles
An increase in the price of gasoline, a complementary good
When the price of a candy bar is $6.00, which of the following is true?
The market does not clear because the price is lower than the equilibrium price and there will be a shortage in the market.
The market does not clear because the price is higher than the equilibrium price and there will be a surplus in the market.
The market does not clear because the price is higher than the equilibrium price and there will be a shortage in the market.
The supply (S) and demand (D) for a good are shown in the diagram above.
At a price of P2 in the diagram above which of the following will happen in the market?
There will be a shortage of 30 units and 90 units will be exchanged.
There will be a surplus of 30 units and 90 units will be exchanged.
There will be a surplus of 60 units and 30 units will be exchanged.
If there is a decrease in the price of the coffee beans used to make brewed coffee, how will this affect the equilibrium price and quantity of brewed coffee?
Equilibrium price will decrease and equilibrium quantity will increase
Equilibrium price will decrease and equilibrium quantity will decrease
Equilibrium price will increase and equilibrium quantity will decrease
Matcha green tea is primarily cultivated by Japanese farmers. Suppose that Matcha green tea grows in popularity as its health benefits, and at the same time the government reduces taxes imposed on Japanese tea farmers. What is the likely effect on the equilibrium price and quantity in the Japanese Matcha tea market?
Price decreases, and quantity decreases.
Price is indeterminate, and quantity decreases.
Price is indeterminate, and quantity increases.
Which country has the comparative advantage in producing trucks and what is their opportunity cost?
Refer to the above diagram. At which point will this economy NOT be able to produce, it is currently unattainable?
A
B
C
E
When the price of a product rises, consumers shift their purchases to other products whose prices are now relatively lower. This statement describes:
an inferior good.
the rationing function of prices.
the substitution effect.
the income effect.
An increase in demand means that:
given supply, the price of the product will decline.
the demand curve has shifted to the right.
price has declined and consumers therefore want to purchase more of the product.
the demand curve has shifted to the left.
Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market the indicated shift in supply may have been caused by:
an increase in the wages paid to workers producing this good.
the development of more efficient machinery for producing this commodity.
this product becoming less fashionable.
an increase in consumer incomes.
The economic problem is that
resources are limited and wants are limited.
resources are unlimited and wants are limited.
resources are limited and wants are unlimited.
resources are unlimited and wants are unlimited.
In the time period covered by the production possibilities curve, the company decides to make 4 gallons of red paint. How many gallons of blue paint can the company make with the available time and resources?
2
3
6
8
What would result if the price were set at $1.75
Surplus, Quantity Supplied is greater
Shortage, Quantity Demanded is greater
Quantity Supplied = Quantity Demanded
$1.75
If demand for golf balls decreases when the price of baseball gloves decreases, we can stay that baseball gloves and golf balls players are
normal goods
inferior goods
substitute goods
complementary goods
unrelated due to the substitution effect
If the price of cars significantly increases, then the
Supply of cars will increase
supply of auto repair shops will decrease
quantity supplied of cars will increase
The demand for cars will decrease
Car producers will find it more profitable to produce trucks
Which of the following will NOT cause the demand for video games to change?
a change in the price of a close substitute
a change in consumer incomes
a change in the price of video games
a change in consumer tastes
a change in consumer preferences
A leftward shift of the supply curve for avocados ( a normal good) might be caused by:
an improvement in avocado picking techniques
a decrease in the wages that must be paid to avocado pickers
an increase in consumer incomes
some avocado farmers leaving the market
a news report stating that avocados are associated with good health
Assuming Ramen is an inferior good, a decrease in income will shift the:
supply curve for Ramen to the left
supply curve for Ramen to the right
demand curve for ramen to the right
demand curve for ramen to the left
there is no shift
When the government establishes a binding price floor on a good or service then there will be:
An increase in demand for that good or service
a surplus because of the quantity demand will decrease
a shortage because the quantity supplied will decrease
no incentive to place a tax on the good or service
a decrease in the price once the market adjusts
Claire is an economist who can earn $150 per hour. She is also an excellent chef who can cook three times as fast as the best chef in the area, whose hourly wage is $20 per hour. Which of the following is a correct economic statement?
Claire has a comparative advantage in economics so she should specialize in econ and hire the chef to cook for her
Claire has an absolute and comparative advantage in both econ and cooking, so she should work as an economist and as a chef
claire is 3 times faster than any chef so she could give up econ and be a chef
when chefs work for economists, they should charge $150 per hour instead of $20 per hour
Because claire is an excellent chef, when the best chef works for claire, she should pay the chef only 1/3 the hourly rate.
Which country has the comparative advantage in producing trucks and what is their opportunity cost?
Which country has the comparative advantage in producing airplanes and what is their opportunity cost?
