Questions and Answers
Allocating dorm rooms is:
an economic problem
If supply and demand both shift to the right, equilibrium quantity:
rises, but the equilibrium price may rise, fall, or stay the same
What idea from Chapter 1 does the illegal cockfighting in New Jersey illustrate?
Social and political forces sometimes rein in market forces
When applied to labor markets, the law of supply suggests that:
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The use of the phrase 'other things constant' in supply and demand analysis indicates that:
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What could cause the price of tomatoes to dramatically increase?
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Laissez-faire is an economic:
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The distinction between supply and the quantity supplied is best made by saying that:
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Charging for use of a road is shifting from:
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What is Mary’s marginal cost per minute of making two more calls lasting 10 minutes each?
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The minimum wage is an example of a price floor.
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Entrepreneurship is defined as the ability to:
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The explanation for the law of demand involves:
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What does any economic system provide?
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The effect of higher gasoline prices is most likely to:
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Which of the following is not an economic institution?
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What are the equilibrium price and quantity of wheat given (Qd = 1750-130 P) and (Qs = 1000+170 P)?
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A defining difference in what makes a firm a sole proprietorship, partnerships, or a corporation is the:
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The distinction between demand and the quantity demanded is made by saying that:
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Why was the Industrial Revolution important to the history of economic systems?
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Trade sanctions imposed on Iraq that limited Iraq's production of oil after the 1990 Gulf War are best shown graphically with a price ceiling below equilibrium price.
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Describe the events of world petroleum demand in the 1990s.
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If Chuck is following the economic decision rule, the marginal benefit of the house to:
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A basic difference between microeconomics and macroeconomics is that microeconomics examines the choices made by individual participants in an economy and macro considers the economy's overall performance.
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Which of the following would cause quantity demanded to change without changing the demand curve?
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From a purely economic perspective, the death penalty for computer hackers is:
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What does it suggest when price cuts cause consumers to wait for deeper discounts?
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Given the production capabilities in Colombia and Brazil, which of the following statements is true?
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The supply of leather jackets would be expected to increase as a result of:
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A socialist economy in theory expects people to be:
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Alexandra should study for the quiz as long as her hourly wage rate is:
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The difference between an L3C and other types of businesses is that:
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Say a pill existed that made people selfless. Under the coordination definition of economics:
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An increase in price and decrease in quantity are consistent with a:
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Study Notes
Economic Problems and Concepts
- Allocating dorm rooms presents an economic problem due to non-market-based allocation.
- Equilibrium quantity rises when both supply and demand shift right, while equilibrium price can fluctuate.
- Social and political forces can restrict market forces, exemplified by illegal cockfighting in New Jersey.
Supply and Demand Dynamics
- In labor markets, higher wages for nurses result in an increase in the quantity of nurses supplied.
- "Other things constant" in supply and demand indicates equilibrium quantity has been achieved.
- Natural disasters, like hurricanes, can shift supply left, leading to price increases, such as seen with tomatoes.
Economic Theories and Models
- Laissez-faire represents an economic precept based on normative judgments relevant to the real world.
- The relationship between supply and quantity supplied is distinguished; supply is a curve, while quantity supplied is a point on that curve.
Pricing and Consumer Behavior
- Electronic Road Pricing in Singapore exemplifies moving from third-party payment to direct consumer costs to manage demand.
- Marginal cost for Mary, regarding phone calls exceeding her plan, is zero for calls within her free limit.
Economic Systems and Institutions
- The minimum wage is not classified as a price floor; it is instead a direct wage intervention.
- Any economic system aims to meet the goods and services desired by society.
Market Reactions and Shifts
- Higher gasoline prices typically drive demand for hybrid cars while decreasing demand for high-consumption vehicles.
- The total demand equation for wheat indicates the equilibrium price and quantity can be calculated as $2.50/ton and 1,425 thousand tons, respectively.
Business Structures and Economics
- The distinguishing factor between business types (sole proprietorship, partnership, corporation) is ownership and accountability.
- Demand versus quantity demanded: Demand is a curve while quantity demanded is a point on that curve.
Historical Economic Developments
- The Industrial Revolution led to a significant power shift towards capitalists and established capitalism as a dominant force in economic systems.
Trade and Economic Relationships
- Price ceilings below equilibrium price do not accurately represent trade sanctions, as indicated in Iraq post-1990 Gulf War.
- Rapid global demand for petroleum increased in the 1990s, influenced by OPEC’s inability to control output.
Economic Decision-Making
- Chuck’s behavior towards a house offer reflects that his marginal benefit from the house is less than the seller's asking price.
- Microeconomics studies individual economic choices, whereas macroeconomics evaluates overall economic performance.
Demand Curve Insights
- Changes to quantity demanded occur based solely on price changes, not shifts in the demand curve itself.
- Price cuts may lead to consumer expectations that can shift the demand curve left, as consumers wait for better discounts.
Trade and Comparative Advantage
- Colombia demonstrates an opportunity for trade; however, the response indicates D: no gains from trade under the provided circumstances.
Market Supply Changes
- A decrease in production costs typically increases supply, such as with leather jackets.
Economic Ideals and Practicality
- A socialist economy theoretically relies on altruism from its citizens to operate effectively.
- Alexandra's decision to study over working hinges on a comparison of benefits measured against her opportunity costs.
Special Business Models
- An L3C distinguishes itself by prioritizing social missions alongside profit objectives.
Economic Behavior and Self-interest
- The coordination definition of economics suggests that even with selfless behavior, economic problems persist.
- An increase in price along with a decrease in quantity typically indicates a leftward shift in supply, showcasing supply-demand interactions.
Studying That Suits You
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Description
Test your understanding of economic principles covered in chapters 1 to 5 of this course. This quiz will challenge your knowledge on topics such as market allocation, equilibrium, and law impacts on supply and demand. Perfect for students at Santa Ana College.