Q&A Hero

Q: A change in which variable will change the market demand for a product? A) the price of the product B) population C) technology D) the prices of substitutes in production

Q: Holding everything else constant, a decrease in the price of bicycles will result in A) a decrease in the quantity of bicycles demanded. B) an increase in the demand for bicycles. C) a decrease in the supply of bicycles. D) an increase in the quantity of bicycles demanded.

Q: The phrase "demand has decreased" means that A) a demand curve has shifted to the left. B) there has been an upward movement along a demand curve. C) there has been a downward movement along a demand curve. D) a demand curve has shifted to the right.

Q: The law of demand implies, holding everything else constant, that as the price of gelato A) increases, the demand for gelato will increase. B) increases, the quantity of gelato demanded will increase. C) decreases, the quantity of gelato demanded will increase. D) decreases, the demand for gelato will increase.

Q: If, in response to a decrease in the price of grapes, the quantity of grapes demanded increases, economists would describe this as A) an increase in demand. B) an increase in quantity demanded. C) a change in consumer income. D) an increase in consumers' taste for coffee.

Q: A(n) ________ is represented by a leftward shift of the demand curve while a(n) ________ is represented by a movement along a given demand curve. A) decrease in demand; increase in demand B) decrease in demand; increase in quantity demanded C) increase in demand; decrease in quantity demanded D) decrease in quantity demanded; decrease in demand

Q: When deciding on which new products to develop, a firm must devote people, time, and money to designing a new product. Because any firm has only limited resources, it A) should wait until its competitors develop a similar product before deciding on devoting resources to its own product development. B) is not able to develop more than one new product at a time. C) must be certain that the product it chooses to develop will be successful or it will not be able to stay in business. D) faces a trade-off, because resources used to develop one product will not be available to develop another product.

Q: In the United States, consumption per-person of carbonated soft drinks ________ between 2005 and 2013. A) declined by more than 15 percent B) increased by approximately 22 percent C) fell by almost 80 percent D) remained virtually unchanged

Q: Which of the following has occurred as the baby-boom generation ages? A) The demand for soft drinks has increased in the U.S. market. B) The demand for soft drinks has decreased in the U.S. market. C) The global demand for soft drinks has decreased. D) The global demand for soft drinks has remained relatively low.

Q: If tablet computers are considered substitutes for e-readers, the decline in the price of tablet computers would, all else equal A) increase the demand for e-readers. B) decrease the demand for e-readers. C) increase the quantity demanded for e-readers. D) decrease the quantity demanded for e-readers.

Q: In January, buyers of gold expect that the price of gold will rise in February. What happens in the gold market in January, holding all else constant? A) The supply curve shifts to the right. B) The demand curve shifts to the left. C) The demand curve shifts to the right. D) The quantity demanded increases.

Q: In June, buyers of titanium expect that the price of titanium will fall in July. What happens in the titanium market in June, holding everything else constant? A) The demand curve shifts to the right. B) The quantity demanded increases. C) The quantity demanded decreases D) The demand curve shifts to the left.

Q: Tom Searchinger, a senior attorney at the Environmental Defense Fund, observed that generous farm subsidies have encouraged farmers to produce more corn and more wheat. How does this affect the market for fertilizer? A) The supply of fertilizer increases. B) The supply of fertilizer decreases C) The demand for fertilizer increases. D) The demand for fertilizer decreases.

Q: Buyers rush to purchase stocks in California vineyards following a forecast of a 30 percent decline in this year's grape harvest. What happens in the California wine market as a result of this announcement? A) The demand curve for California wine shifts to the left in anticipation of higher prices in the future. B) The demand curve for California wine shifts to the right in anticipation of higher prices in the future. C) The supply curve for California wine shifts to the right in anticipation of higher prices in the future. D) The supply curve for California wine shifts to the left in anticipation of lower quantities in the future.

Q: Technological advancements have led to lower prices and an increase in the sale of digital cameras. How does this affect the digital photo printing paper market? A) The demand curve for digital photo printing paper shifts to the right. B) The demand curve for digital photo printing paper shifts to the left. C) The supply curve for digital photo printing paper shifts to the right. D) The supply curve for digital photo printing paper shifts to the left.

Q: How does the increasing use of MP3 players affect the market for compact discs? A) The demand curve for compact discs shifts to the right. B) The supply curve for compact discs shifts to the left. C) The supply curve for compact discs shifts to the right. D) The demand curve for compact discs shifts to the left.

Q: Technological advances have resulted in lower prices for digital cameras. What is the impact of this on the market for traditional (non-digital) cameras? A) The demand curve for traditional cameras shifts to the right. B) The supply curve for traditional cameras shifts to the right. C) The demand curve for traditional cameras shifts to the left. D) The supply curve for traditional cameras shifts to the left.

Q: Studies have shown links between calcium consumption and a reduction in osteoporosis. How does this affect the market for calcium? A) The calcium supply curve shifts to the right because of a change in tastes in favor of calcium. B) The calcium demand curve shifts to the right because of a change in tastes in favor of calcium. C) The calcium demand curve shifts to the left because this new information will increase the price of calcium. D) The calcium supply curve shifts to the left because this new information will increase the price of calcium.

Q: Suppose that when the price of hamburgers decreases, the Ruiz family increases their purchases of ketchup. To the Ruiz family, A) hamburgers and ketchup are complements. B) hamburgers and ketchup and substitutes. C) hamburgers and ketchup are normal goods. D) hamburgers are normal goods and hot dogs are inferior goods.

Q: Suppose that when the price of raspberries increases, Lonnie increases his purchases of papayas. To Lonnie, A) raspberries and papayas are complements. B) raspberries and papayas are inferior goods. C) raspberries and papayas are normal goods. D) raspberries and papayas are substitutes.

Q: If the price of music downloads was to decrease, then A) the demand for MP3 players would decrease. B) the demand for MP3 players would increase. C) the supply of MP3 players would increase. D) the quantity demanded of MP3 players would decrease.

Q: If the price of automobiles was to increase, then A) the demand for gasoline would decrease. B) the demand for gasoline would increase. C) the supply of gasoline would increase. D) the quantity demanded of gasoline would decrease.

Q: Tomas increased his consumption of potato chips when the price of pistachios increased. For Tomas, potato chips and pistachios are A) substitutes in consumption. B) both inferior goods. C) complements in consumption. D) both luxury goods.

Q: Elvira decreased her consumption of bananas when the price of peanut butter increased. For Elvira, peanut butter and bananas are A) substitutes in consumption. B) both inferior goods. C) complements in consumption. D) both luxury goods.

Q: Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. Refer to Figure 2-4. Consider the following events: a. a decrease in the unemployment rate b. general technological advancement c. an increase in consumer wealth Which of the events listed above could cause a movement from V to W? A) a only B) a and b only C) b and c only D) a, b, and c

Q: Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. Refer to Figure 2-4. Consider the following movements: a. from point V to point W b. from point W to point Y c. from point Y to point Z Which of the movements listed above represents economic growth? A) a, b, and c B) b and c only C) a only D) b only

Q: Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. Refer to Figure 2-4. Consider the following events: a. an increase in the unemployment rate b. a decrease in a nation's money supply c. a war that kills a significant portion of a nation's population Which of the events listed above could cause a movement from Y to W? A) a, b and c B) a and b only C) a and c only D) a only E) c only

Q: Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. Refer to Figure 2-4. A movement from Y to Z A) represents an increase in the demand for plastic products. B) could occur because of general technological advancements. C) is the result of advancements in food production technology. D) is the result of advancements in plastic production technology.

Q: Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. Refer to Figure 2-4. A movement from X to Y A) could be due to a change in consumers' tastes and preferences. B) could occur because of an influx of immigrant labor. C) is the result of advancements in food production technology only, with no change in the technology for plastic production. D) is the result of advancements in plastic production technology only, with no change in food production technology.

Q: Which of the following would shift a nation's production possibilities frontier outward? A) discovering a cheap way to convert sunshine into electricity B) an increase in demand for the nation's products C) a decrease in the unemployment rate D) a law requiring workers to retire at age 50

Q: Without an increase in the supplies of factors of production, how can a nation achieve economic growth? A) by producing more high-value goods and less of low-value goods B) through technological advancement which enables more output with the same quantity of resources C) by lowering the prices of factors of production D) by increasing the prices of factors of production

Q: Economic decline (negative growth) is represented on a production possibilities frontier model by the production possibility frontier A) shifting outward. B) shifting inward. C) becoming steeper. D) becoming flatter.

Q: An outward shift of a nation's production possibilities frontier represents A) economic growth. B) rising prices of the two goods on the production possibilities frontier model. C) an impossible situation. D) a situation in which a country produces more of one good and less of another.

Q: An inward shift of a nation's production possibilities frontier can occur due to A) a reduction in unemployment. B) a natural disaster like a hurricane or bad earthquake. C) a change in the amounts of one good desired. D) an increase in the labor force.

Q: Table 2-2Production choices for Billie's Bedroom ShopChoiceQuantity of Pillows ProducedQuantity of Blankets ProducedA360B277C1814D921E028Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. Billie faces ________ opportunity costs in the production of pillows and blankets.A) increasingB) constantC) decreasingD) negative

Q: Table 2-2Production choices for Billie's Bedroom ShopChoiceQuantity of Pillows ProducedQuantity of Blankets ProducedA360B277C1814D921E028Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. A combination of 5 pillows and 21 blankets would appearA) along Billie's production possibilities frontier.B) inside Billie's production possibilities frontier.C) outside Billie's production possibilities frontier.D) at the vertical intercept of Billie's production possibilities frontier.

Q: Table 2-2Production choices for Billie's Bedroom ShopChoiceQuantity of Pillows ProducedQuantity of Blankets ProducedA360B277C1814D921E028Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. A combination of 9 pillows and 14 blankets would appearA) along Billie's production possibilities frontier.B) inside Billie's production possibilities frontier.C) outside Billie's production possibilities frontier.D) at the vertical intercept of Billie's production possibilities frontier.

Q: Table 2-2Production choices for Billie's Bedroom ShopChoiceQuantity of Pillows ProducedQuantity of Blankets ProducedA360B277C1814D921E028Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. A combination of 9 pillows and 21 blankets would appearA) along Billie's production possibilities frontier.B) inside Billie's production possibilities frontier.C) outside Billie's production possibilities frontier.D) at the vertical intercept of Billie's production possibilities frontier.

Q: Table 2-1Production choices for Tomaso's TrattoriaChoiceQuantity of Pizzas ProducedQuantity of Calzones ProducedA480B3615C2430D1245E060Refer to Table 2-1. Assume Tomaso's Trattoria only produces pizzas and calzones. Tomaso faces ________ opportunity costs in the production of pizzas and calzones.A) increasingB) decreasingC) constantD) negative

Q: Table 2-1Production choices for Tomaso's TrattoriaChoiceQuantity of Pizzas ProducedQuantity of Calzones ProducedA480B3615C2430D1245E060Refer to Table 2-1. Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 24 pizzas and 15 calzones would appearA) along Tomaso's production possibilities frontier.B) inside Tomaso's production possibilities frontier.C) outside Tomaso's production possibilities frontier.D) at the horizontal intercept of Tomaso's production possibilities frontier.

Q: Table 2-1Production choices for Tomaso's TrattoriaChoiceQuantity of Pizzas ProducedQuantity of Calzones ProducedA480B3615C2430D1245E060Refer to Table 2-1. Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 36 pizzas and 30 calzones would appearA) along Tomaso's production possibilities frontier.B) inside Tomaso's production possibilities frontier.C) outside Tomaso's production possibilities frontier.D) at the horizontal intercept of Tomaso's production possibilities frontier.

Q: Table 2-1Production choices for Tomaso's TrattoriaChoiceQuantity of Pizzas ProducedQuantity of Calzones ProducedA480B3615C2430D1245E060Refer to Table 2-1. Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 24 pizzas and 30 calzones would appearA) along Tomaso's production possibilities frontier.B) inside Tomaso's production possibilities frontier.C) outside Tomaso's production possibilities frontier.D) at the horizontal intercept of Tomaso's production possibilities frontier.

Q: Figure 2-3 Refer to Figure 2-3. Sergio Vignetto raises cattle and llamas on his land. A portion of his land is more suitable for raising cattle, and the other portion is better suited for raising llamas. Which of the graphs in Figure 2-3 represent his production possibilities frontier? A) Graph A B) Graph B C) Graph C D) either Graph A or Graph C E) either Graph B or Graph C

Q: Figure 2-3 Refer to Figure 2-3. Sergio Vignetto raises cattle and llamas on his land. His land is equally suitable for raising either animal. Which of the graphs in Figure 2-3 represent his production possibilities frontier? A) Graph A B) Graph B C) Graph C D) either Graph A or Graph C E) either Graph B or Graph C

Q: If opportunity costs are constant, the production possibilities frontier would be graphed as A) a ray from the origin. B) a positively sloped straight line. C) a negatively sloped curve bowed in toward the origin. D) a negatively sloped straight line.

Q: ________ marginal opportunity cost implies that the more resources already devoted to any activity, the payoff from allocating yet more resources to that activity increases by progressively smaller amounts. A) Increasing B) Decreasing C) Constant D) Negative

Q: The slope of a production possibilities frontier A) has no economic relevance or meaning. B) is always constant. C) is always varying. D) measures the opportunity cost of producing one more unit of a good.

Q: Increasing opportunity cost is represented by a ________ production possibilities frontier. A) linear B) bowed in C) bowed out D) vertical

Q: A production possibilities frontier with a bowed outward shape indicates A) the possibility of inefficient production. B) constant opportunity costs as more and more of one good is produced. C) increasing opportunity costs as more and more of one good is produced. D) decreasing opportunity costs as more and more of one good is produced.

Q: Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. Refer to Figure 2-2. The linear production possibilities frontier in the figure indicates that A) Mendonca has a comparative advantage in the production of vegetables. B) Mendonca has a comparative disadvantage in the production of meat. C) the tradeoff between meat and vegetables is constant. D) it is progressively more expensive to produce meat.

Q: Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. Refer to Figure 2-2. If Mendonca chooses to produce 120 pounds of meat, how much vegetables can it produce to maximize production? A) 0 pounds of vegetables B) 60 pounds of vegetables C) 100 pounds of vegetables D) 160 pounds of vegetables

Q: Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. Refer to Figure 2-2. If Mendonca chooses to produce 160 pounds of vegetables, how much meat can it produce to maximize production? A) 0 pounds of meat B) 30 pounds of meat C) 60 pounds of meat D) 120 pounds of meat

Q: Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. Refer to Figure 2-2. Suppose Mendonca is currently producing 60 pounds of vegetables per period. How much meat is it also producing, assuming that resources are fully utilized? A) 45 pounds of meat B) 75 pounds of meat C) 80 pounds of meat D) 100 pounds of meat

Q: Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. Refer to Figure 2-2. What is the opportunity cost of one pound of meat? A) pound of vegetables B) pounds of vegetables C) 1.6 pounds of vegetables D) 16 pounds of vegetables

Q: Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. Refer to Figure 2-2. What is the opportunity cost of one pound of vegetables? A) pound of meat B) 1.2 pounds of meat C) pounds of meat D) 12 pounds of meat

Q: If the production possibilities frontier is ________, then opportunity costs are constant as more of one good is produced. A) bowed out B) bowed in C) non-linear D) linear

Q: Pierre can produce either a combination of 20 bow ties and 30 neckties or a combination of 35 bow ties and 15 neckties. If he now produces 35 bow ties and 15 neckties, what is the opportunity cost of producing an additional 15 neckties? A) 2 bow ties B) 15 bow ties C) 20 bow ties D) 35 bow ties

Q: Bella can produce either a combination of 60 silk roses and 80 silk leaves or a combination of 70 silk roses and 55 silk leaves. If she now produces 60 silk roses and 80 silk leaves, what is the opportunity cost of producing an additional 10 silk roses? A) 2.5 silk leaves B) 10 silk leaves C) 25 silk leaves D) 55 silk leaves

Q: In a production possibilities frontier model, a point ________ the frontier is productively inefficient. A) along B) inside C) outside D) at either intercept of

Q: Figure 2-1 Refer to Figure 2-1. Point C is A) technically efficient. B) unattainable with current resources. C) inefficient in that not all resources are being used. D) is the equilibrium output combination.

Q: Figure 2-1 Refer to Figure 2-1. Point B is A) technically efficient. B) unattainable with current resources. C) inefficient in that not all resources are being used. D) the equilibrium output combination.

Q: Figure 2-1 Refer to Figure 2-1. Point A is A) technically efficient. B) unattainable with current resources. C) inefficient in that not all resources are being used. D) the equilibrium output combination.

Q: The points outside the production possibilities frontier are A) efficient. B) attainable. C) inefficient. D) unattainable.

Q: The attainable production points on a production possibility curve are A) the horizontal and vertical intercepts. B) the points along the production possibilities frontier. C) the points outside the area enclosed by the production possibilities frontier. D) the points along and inside the production possibility frontier.

Q: The production possibilities frontier model assumes which of the following? A) Labor, capital, land and natural resources are unlimited in quantity. B) The economy produces only two products. C) Any level of the two products that the economy produces is currently possible. D) The level of technology is variable.

Q: The production possibilities frontier model shows that A) if consumers decide to buy more of a product its price will increase. B) a market economy is more efficient in producing goods and services than is a centrally planned economy. C) economic growth can only be achieved by free market economies. D) if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.

Q: The production possibilities frontier shows the ________ combinations of two products that may be produced in a particular time period with available resources. A) minimum attainable B) maximum attainable C) only D) equitable

Q: Identify whether each of the following transactions will take place in the factor market or in the product market. a. Graciela buys a Tesla Motors Model X. b. Lashan works 60 hours a week at a law firm. c. Tito sells his family's farmland to a housing developer. d. Tesla Motors increases employment at its Fremont, California plant.

Q: The principle of opportunity cost is that A) in a market economy, taking advantage of profitable opportunities involves some money cost. B) the economic cost of using a factor of production is the alternative use of that factor that is given up. C) taking advantage of investment opportunities involves costs. D) the cost of production varies depending on the opportunity for technological application.

Q: What is an entrepreneur?

Q: Tesla Motors manufacturers its cars at a plant in Fremont, California. At this plant, Tesla is able to take advantage of the high level of technical training possessed by its American workers, but it also sacrifices the ability to pay lower wages had it chosen to open its plant in a low-wage country such as Mexico, India, or China. In deciding to open the Fremont plant, Tesla A) faced no trade-offs because employing more technically-skilled workers increased efficiency. B) faced a trade-off between higher cost and lower precision. C) adopted a negative technological change because it chose high-skilled workers over low-paid workers. D) eroded some of its competitiveness in the luxury electric car market because of its increased cost of production.

Q: What is a circular flow diagram and what does it demonstrate?

Q: Scarcity A) stems from the incompatibility between limited resources and unlimited wants. B) can be overcome by discovering new resources. C) can be eliminated by rationing products. D) is a bigger problem in market economies than in socialist economies.

Q: How does Adam Smith's idea of the "invisible hand" apply to the various parts, made by many different manufacturers in many different countries, that are used by Apple to produce an iPad?

Q: What is meant by the term "free market"?

Q: How do firms and households interact in markets?

Q: What is the difference between product markets and factor markets?

Q: A bed of oysters is not an example of a factor of production but the shucked oysters used to make oyster stew is a factor of production.

Q: In a free market there are significant restrictions on how a good or service can be produced or sold.

Q: In economics, the term "free market" refers to a market where products are traded but not sold.