Using the economic way of thinking what does a pencil, stick of gum, and a balloon have in common?
Their production requires the voluntary cooperation of millions of producers and traders.
Suppose scientists discover that eating soybeans prevents cancer and heart disease. Other things constant,
Demand and prices of soybeans will increase.
If the price of insulin is currently above the market clearing level, then
There is a surplus of insulin.
The cost to a cab driver of taking a day off increases when
It rains
If the government were to remove rent controls from New York City rental market, then
The price received by sellers would increase and the quantity of rental units will increase
If 80,000 people want tickets to the World Series at the current price and there are only 55,000 tickets available,
The price of obtaining a ticket for someone who doesn't yet have one will be greater than the price stamped on its face.
The more time gasoline consumers have to adjust to a price change
The greater their price elasticity of demand
Since millions of people now use email instead of snail mail, the price elasticity of demand for the Post Office's first class letter service tends to
Increase
According to the text book, the belief that economizing implies greedy behavior is
Common but mistaken
Consumers are often somewhat insensitive to changes in the price of table salt because
The proportion of their budget spent on salt is very low
If the market demand for oranges is relatively inelastic with respect to price, orange consumers
Will buy fewer oranges at any higher price but will spend more money on oranges
Legislation setting high minimum wage rates benefits
Many people receiving wages far above the minimum by reducing competition from unskilled workers
According to opportunity cost theory, the cost to an airline of letting its employees fly at no charge
Is greater around the holidays
If ranchers in Texas fear a sharp drop in cattle prices next year, they will probably
Bring more cattle to market this year
A reduced demand for lawyers' services to prosecute damage suits
Lowers the cost of hiring a lawyer to draw up a will
Why do fortune 500 companies typically pay vastly different wage rates for the same work in different countries?
Prospective employees have better alternative opportunities in some countries than in others
Suppose you observe people buying more of a good even though its price has risen. What would an economist conclude?
The demand curve has shifted to the right
If the market clearing price of LCD televisions rises from $2000 to $3000, and the market clearing output increases from 5 million to 7 million units
Demand increased and supply remained unchanged
The ____ proportion of one's budget spent on a good, the _____ elasticity of demand.
Greater, greater
Land suitable for growing corn is usually suitable for growing soybeans. From the farmer's perspective an increase in the price of corn will therefore tend to
Raise the cost of growing soybeans
If a large scale war in the Middle East reduced the quantity of crude petroleum available for export to Japan and the U.S. by 40% and the U.S. Government responded by imposing price ceilings below the market price on petroleum
More petroleum would be available for Japanese users
If freezing weather in Florida destroys a large portion of the current orange crop
Prices of Florida oranges will rise and quantity demanded will fall
According to the law of demand consumers will
Change their consumption pans when the price of a good changes
Other things constant a higher price for corn tends to increase
The quantity supplied of corn
When federal regulations protect birds such as spotted owls, lumber prices rise because
There is less supply of available timber
Which of the following would be most likely to cause an increase in the demand for gold?
The expectation of future increase in the price of gold
The long run effect of successful advertising campaigns for products is the make their demand
Elastic
The U of A Rutgers football game is a sellout. 74,000 tickets have been sold. What as an economics student should you conclude about this information?
The quantity supplied is 74,000
The quantity demanded is 74,000
If Fayetteville imposes a new "rent control"(price Ceiling) at $500 per month for a 1 bedroom apartment, but the market clearing price is currently at $400 per month, which of the following would tend to occur?
None of the above
When the market clearing price of gas after a natural disaster is $4.25 and legislators step in and enact "anti-gouging" legislation to keep the price at $3.50,
Gas producers will have less incentive to bring gas to the areas where gas is most highly valued
What will be the principal and most immediate effect on the supply or demand for corn grown in the United States because of the drought in the Midwest (where most of our corn comes from) this summer?
Decreased supply of corn
An upward sloping supply curve suggests that producers
Plan to sell more at a given higher price
With price on the vertical axis and quantity on the horizontal axis, you as an economics student should draw and increase supply as
A shift to the right
If technology advances for a business and as a result production costs decrease, supply
Increases which is a shift right of the supply curve
If auto workers go on strike at many of the "Big 3" plants in the United States , the supply of an American car
Decreases, which is a left shift of the supply curve
Rank the following goods from least elastic to most elastic: gasoline, Shell gasoline, gasoline at Georges Shell gas station
Gasoline, Shell gasoline, gasoline at Georges gas station
Is the following statement correct? "Here is the law of supply in a nutshell: The higher the price, the higher the supply.
No, because if confuses supply with quantity supplied
Suppose a university refunds students 75% of their tuition if the drop out before the third week of class, 50% if they drop out between the third and the fifth, and 25% if they drop out between their sixth and eighth week, and 0% after the eighth week. Yo
$1000
Suppose a student is attending the university on an athletic scholarship, and doesn't pay anything for tuition. According to the economic way of thinking, the students cost of attending the university is:
Positive, because the student sacrificed some other opportunity to attend the university
What is the error in the following statement? An increased sales tax on gasoline won't reduce consumption, because while the higher price will at first reduce demand, the reduced demand will eventually bring the price back down again, and consumption will
A higher price doesn't reduce demand
If total consumer expenditures in dollars for bus transportation were to increase when the price of bus tickets were raised, the demand for bus transportation probably
Was inelastic
An increase in ___ tends to increase ___ and therefore increase ___.
Demand, price, cost
Water should not be called a necessity because
There are many uses for water for which good substitutes exist
Other things constant the demand for an inferior good will decrease if
Income increases
If the University of Arkansas absorbs NWACC a local community college this would be considered a ___ merger
Horizontal
What effect would an increase in chicken prices have on the demand for turkey?
It would increase the demand for turkey
The basic rule for maximizing net revenue is: Charge a price, or set of prices, so that
Expected marginal revenue exceeds expected marginal costs.
Firms in a so called perfectly competitive market (a price taking firms)would face a(n)___ demand curve for their product
Horizontal
A merger between a tv and pencil company is a
Conglomerate
A merger between a car manufacturer and an engine manufacturer is
Vertical
While you and your roommate are eating Hamburger Helper one night, your roommate says, "I'll never eat this
again once I graduate and start making some real money!" In your roommates eyes Hamburger Helper is
Inferior good
When a law freezes residential rents at their existing level for as long as the vacancy rate remains below some target level
Rents will be frozen indefinitely or at least until the law is changed
Comparatively speaking, buildings are more likely to be physically _______ in regions where land prices are ______ .
Taller, higher
Professor Gay returns to campus in the spring to find that the bookstore is charging 10% more for the Economics
text that he uses in class. On the basis of this information and using the economic way of thinking, what can Dr. Gay clearly conclude?
The bookstore is charging 10% more for the text book this year
Suppose that Bic ink pen company merges with Warehouser paper company what type of merger would this be classified as?
Conglomerate
In the Standard Oil case the market price of oil had ___ and output had ____ and the Supreme Court had ____ found them to have been acting as a monopolist (as detailed in class)
Fallen, risen, incorrectly
What was the main problem with the Sherman Anti-Trust Act of 1890?
Too short
Too broadly defined
What type of business is said to have the quality of 1 man as the "owner, manager, clerk
Proprietorship
Total costs include what?
Fixed costs and labor rates
What is Marginal Revenue by definition
Revenue to sell one more