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ECON REVIEW Study online at https://quizlet.com/_eh5iv5 1. 1. Using a PPC, an economy that produces an output combination less than the maximum possible is de- picted by a point located: inside the curve 2. Economics is defined as the study of the efficient allocation of ____ ____ among the ____ ____. limited resources ; unlimited wants 3. If the value of an independent variable (x) decreases resulting in a decrease of a dependent variable (y), the relationship between x and y is: direct 4. Given the PV = $5000, i = 8%, n = 40. Calculate the FV of the $5,000 40-year from today. $108,662.60 5. Using the following PPC information on the table: Good 1 Good 2 A 0 30B 1 27 What is the opportunity of a unit of Good 1 moving from A to B? 3 units of Good 2 6. Using the information in Question #5 above. What is the opportunity of a unit of Good 2 moving from B to A? 0.333 unit of Good 1 7. A bowed-out, concave PPC illustrates the law of ___ opportunity cost; whereas a straight-line down- ward-sloping PPC illustrates the law of _____ oppor- tunity cost. increasing ; con- stant 8. An economic growth would usually shift the country's PPC outward 9. A straight-line downward sloping PPC illustrates the law of ____ opportunity cost. constant 10. The intersecting point between a demand and supply curve is called the ____ point. market equilibrum 11. Given an interest rate at 5%, how long does it take for an investor's money to be doubled? 14.4 years 1 / 7

ECON REVIEW Study online at https://quizlet.com/_eh5iv5 12. In general, the higher the risk, the higher the rate of return. True or False? True 13. Ceteris Paribus means that all other important factors are held constant and that the relationship between a dependent and an independent variables must be negative at all times. True or False? False 14. A firm's decision to use a combination of labor and / or capital to produce is making a determination of: How to Produce 15. The four limiited resources are land, entrepreneur- ial skills, government spending, and capital. True or False? False 16. The opportunity cost of an economic decision is: Correct! the next best alter- native that is scar- ificed 17. the study of GDP, unemployment or inflation is within the realm of _______; whereas the analysis of a par- ticular product is part of ______. Macroeconomics ; Microeconomics 18. Chapter 3 Which one of the following factors would shift the supply curve to the direction as indicated in the diagram? any one of the an- swers is correct. 19. Which of the following will cause an increase in the demand for gasoline? an increase in the incomes of con- sumers (assuming gasoline is a nor- mal good) 20. A rise in the price of a good causes a decrease in its: quantity demand- ed 21. If the economy is in a recession and the number of used baby clothing stores increases, then: used baby clothing stores are an infe- rior good 2 / 7

ECON REVIEW Study online at https://quizlet.com/_eh5iv5 22. When quantity supplied is greater than quantity de- manded, it results in ____ and there is a tendency for the price level to ____. excess supply ; de- crease 23. Assuming coffee and tea are substitute goods, an increase in the price of coffee would ____ the ____ for tea. increase ; demand 24. Government would impose a price ceiling regulation if it believes that, if left alone, the market equilibrium price would have been too ____ and a good example of that is ____. high ; rent control 25. Government, on the other hand, would impose a price floor regulation if it believes that, if left alone, the market equilibrium price would have been too ____ and a good example of that is ____. low ; minimum wage 26. If actual market price is below the equilibrium price, a ____ exists and there is a tendency for the market price to ____. shortage ; in- crease 27. You have just received a government's stimulus check in the amount of $1,200 and you decided to save it all up in an investment account getting an average of 9% return yearly in the next 35 years and that is the time you plan to close up the account and retire comfortably and happily - hopefully! Compute the future value of $1,200 some 35 years from today. $24,496 28. Assuming that clothing is a normal good, an increase in consumer income, other things being equal, would: increase the de- mand for clothing 29. Refer to the diagram as shown above. The shift of the demand curve could have been caused by which of the following? increase in expect- ed future price lev- el of the goods 30. price ; up 3 / 7

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ECON REVIEW Study online at https://quizlet.com/_eh5iv5 A simultaneous increase in the demand curve and a decrease in the supply curve would definitely cause the ____ to go ____. 31. The price of a good will fall if: there is an excess supply of the good 32. The opportunity cost of watching television is: the alternative use of the time fore- gone by watching the television pro- grams 33. If the actual market price is above the equilibrium price, ____ exists and there is a tendency for the mar- ket price to ____, assuming there is no government or political intervention. excess supply ; de- crease 34. If the government believes that the current equilibri- um price is too high, it would attempt to implement a ____, which would result in a ____. A good example of such intervention is ____. price ceiling ; shortage ; rent control 35. If the government believes that the current equilibri- um price is too low, it would attempt to implement a ____, which would result in a ____. A good example of such intervention is ____. price floor ; surplus ; minimum wage 36. Which one of the following factors would shift the demand curve from D to D1? any one of the answers is correct. 37. If the government believes that the current equilibri- um price is too low for Chocolate Bars, it would im- plement a ____ program and set the price ____ $1.20, which would result in ____. price floor ; above ; excess supply 38. Chapter 6 A firm lowers its price from $15 to $7.5 and, as a result, its quantity demanded rises from 500 -0.62 4 / 7

ECON REVIEW Study online at https://quizlet.com/_eh5iv5 to 760 units. Compute the price elasticity of demand using the midpoint formula. 39. Based on the answer obtained in #1 above: The firm's price elasticity of demand is ____ and it should ____ its price in order to raise total revenue. inelastic ; riase 40. Length of period of adjustments is one of the factors determining price elasticity of demand. True or False? True 41. The shorter the time period, the ___ the price elasticity of demand. smaller (more in- elastic) 42. One of the determinants of price elasticity of supply is the availability of close input substitutes. True or False? True 43. If a decrease in the price of movie tickets increases the total revenue of movie ticket sales, this is evidence that demand is: price elastic 44. There is no change in total revenue when the demand curve for a good is: unitary elastic 45. If the percentage change in the quantity demanded of a good is less than the percentage change in price, price elasticity of demand is: inelastic 46. If the price elasticity of demand for a product mea- sures -0.45, this good is price inelastic 47. The price level increases from $65 to $80 and, conse- quently, quantity demanded decreases from 110 to 50 units. Price elasticity of demand is _____ and the firm should _____ in order to increase total revenue. -3.625 ; decrease 48. Over time and in the long run, price elasticity of de- mand of a particular good or service tends to become: a. more elastic b. more inelastic a and c 5 / 7

ECON REVIEW Study online at https://quizlet.com/_eh5iv5 c. a number that is larger than a 1 (assuming absolute value) d. a number that is smaller than a 1 (assuming ab- solute value)e. none of the above 49. SMC lowers the tuition per unit by 5% and conse- quently experiences an increase of enrollment by ap- proximately 12%. SMC's price elasticity of demand is ____ and its total revenue will ____ by its new tuition strategy. elastic ; increase 50. Starbucks decided to raise the average price of its coffee by 3% and consequently experiences a de- crease in quantity demanded by approximately 2%. Starbucks' price elasticity of demand is ____ and its total revenue will ____ by its new pricing strategy. inelastic ; increase 51. As one moves down a straight-line, downward-slop- ing demand curve, price elasticity will ____. change from elas- tic to unit elastic to inelastic 52. A local coffee shop sold 6000 cups of coffee in the first half of 2020 and its price elasticity of demand is -2.5. In response to rising cost of inputs (such as coffee beans, cups, sugar, creamer, etc.), the owner has no choice but to raise the overall price of all its products by approximately 5%. As the owner's newly-hired fi- nancial analyst, you expect sales and unit sold to go down by ____% and to ____ units by the end of the year. 12.5% ; 5250 53. An elastic demand exists when the percentage change in quantity demanded of a product is ____ than the percentage change in its price level; there- fore, the business should ____ the price level to in- crease total revenue. less than ; raise 54. An inelastic demand is when the percentage change in quantity demanded is ____ than the percentage less ; raise 6 / 7

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ECON REVIEW Study online at https://quizlet.com/_eh5iv5 change in the price level; therefore, the business should ____ the price level to increase total revenue. 55. Which one of the following conditions would result in the maximization of total revenue? a. when the midpoint of a firm's demand curve corre- sponds to the peak point of its total revenue b.when price elasticity of demand is -1 c. any one of the answers is correct. d. a percentage change in price and a percentage change in quantity demanded is the same any one of the an- swers is correct. 56. A firm comes up with a product that has no substitute whatsoever would face a demand curve: a. any one of the answers is correct. b. whose price elasticity of demand is 0 c. that is perfectly inelastic d. whose percentage change in quantity demanded is 0 any one of the an- swers is correct. 57. If demand is price elastic, a decrease in price causes: an increase in total revenue 7 / 7

Related Questions

Consider an economy that produces two goods: X and Y. The following two graphs (A and B) each depict a scenario where the economy starts on the green production possibilities frontier (PPF 1). Each scenario depicts a shift from the first PPF to the second PPF in blue (PPF 2). Use the graphs to answer the question that follows. Graph A PPF PPF 1 2 Graph B ? Y Which graph depicts a technological breakthrough in the production of good Y only? ○ Graph A ○ Graph B PPF2 PPF 1 ?

Consider an economy than only produces two goods - Blueberries and Batteries. Step 1: Draw a production possibilities frontier (PPF) for this economy. Label blueberries on the vertical axis and batteries on the horizontal axis. Label one point that is "efficient", one point that is "inefficient", and one point that is "unattainable". Step 2. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a technological change that increased the production of batteries only. (Hint: The intercept for blueberries will not change.) Clearly label the new PPF. Step 3. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a drought that destroyed some of the blueberry harvest. (Hint: The intercept for batteries will not change.) Clearly label the new PPF. Step 4: Draw another PPF of the economy with the axes labeled. Grab…

Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have 10 hours of time available. They can use thier their time to do one of 2 things: make pancakes or make hamburgers. Bob can make 2 hamburgers in an hour or 1 pancake in an hour. Jake can make 3 pancakes in an hour and 2 hamburgers in an hour. Use this information to answer the following questions: a) Who has absolute advantage in the production of hamburgers? Who has absolute advantage in the production of pancakes? b) Who has comparative advantage in the production of hamburgers? Who has comparative advantage in the production of pancakes? c) Can Bob and Jake both benefit from trade if the terms of trade are one pancake per hamburger? Why or why not?

Question 2 A NEED HELP PLEASE

Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have 10 hours of time available. They can use their time to do one of 2 things: make pancakes or make hamburgers. Bob can make 2 hamburgers in an hour or 1 pancake in an hour. Jake can make 3 pancakes in an hour and 2 hamburgers in an hour. Use this information to answer the following question: Who has absolute advantage in the production of hamburgers and who has absolute advantage in the production of pancakes?

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A production possibilities curve (PPC) represents the maximum amount of two goods or services produced by manufacturers in an economy. Draw a correctly labeled PPC for U.S. production of consumer and capital goods. 2. Policymakers enact an investment tax credit for firms that finance technological research and development. Assuming producers of both consumer and capital goods are affected, illustrate on your PPC the long-term effects of this tax credit. 3. Using a correctly labeled graph of the long-run aggregate supply curve, show how the natural rate of output would respond to the tax credit in the long run. Explain.

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Table 3-23 Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. Labor Hours Needed to Make 1 Pound of Pounds Produced in 24 Hours Pork Tomatoes Pork Tomatoes Farmer 16 3 14 18 Rancher 14 16 16 Refer to Table 3-23. Assume that the farmer and the rancher each has 24 labor hours available. If each person spends all his time producing the good in which he has a comparative advantage, then total production is a. 4 pounds of pork and 6 pounds of tomatoes. b. 6 pounds of pork and 8 pounds of tomatoes. c. 4 pounds of pork and 8 pounds of tomatoes. d. 6 pounds of pork and 6 pounds of tomatoes.