Question 1

Oil is used to produce rubber boots. When the price of oil falls,

Accepted Answer

A)  both the demand and supply of rubber boots increase. 
B)  the supply of rubber boots decreases. 
C)  the supply of rubber boots increases. 
D)  the demand for rubber boots increases. 
E)  the demand for rubber boots decreases. 
A)  both the demand and supply of rubber boots increase. 
B)  the supply of rubber boots decreases. 
C)  the supply of rubber boots increases. 
D)  the demand for rubber boots increases. 
E)  the demand for rubber boots decreases. C

Question 2

A technological change that lowers the cost of producing pencils

Accepted Answer

A)  increases the quantity supplied of pencils. 
B)  shifts the supply curve of pencils rightward. 
C)  shifts the supply curve of pencils leftward. 
D)  decreases the quantity supplied of pencils. 
E)  shifts the demand curve for pencils rightward. 
A)  increases the quantity supplied of pencils. 
B)  shifts the supply curve of pencils rightward. 
C)  shifts the supply curve of pencils leftward. 
D)  decreases the quantity supplied of pencils. 
E)  shifts the demand curve for pencils rightward. B

Question 3

Turnips are an inferior good. A rise in the price of turnips, all other factors remaining the same,

Accepted Answer

A)  increases the quantity demanded of turnips. 
B)  decreases the demand for turnips. 
C)  decreases the quantity supplied of turnips. 
D)  increases the supply of turnips. 
E)  increases the quantity supplied of turnips. 
A)  increases the quantity demanded of turnips. 
B)  decreases the demand for turnips. 
C)  decreases the quantity supplied of turnips. 
D)  increases the supply of turnips. 
E)  increases the quantity supplied of turnips. E

Question 4

Examples of sunk costs include

Accepted Answer

A)  unanticipated future costs. 
B)  pay-as-you-go phone service. 
C)  marginal benefits. 
D)  opportunity costs. 
E)  long-term leases. 
A)  unanticipated future costs. 
B)  pay-as-you-go phone service. 
C)  marginal benefits. 
D)  opportunity costs. 
E)  long-term leases.

Question 5

To hire or purchase inputs, a business must pay a price that matches the lowest opportunity cost of the input owner.

Accepted Answer

A) True 
 B)False

Question 6

Corn and bacon are related products; you can't grow corn and raise pigs on the same land. If the price of corn rises, smart farmers supply less bacon.

Accepted Answer

A) True 
 B)False

Question 7

When inputs are equally productive in all activities, marginal opportunity costs are constant.

Accepted Answer

A) True 
 B)False

Question 8

Electric utilities offer discounts to businesses who produce their product or service during off-peak times of the day. This fall in input prices increases supply by these businesses.

Accepted Answer

A) True 
 B)False

Question 9

Popeye's Parlour supplies both piercing and tattoo services. Higher prices for piercings causes Popeye's to increase the quantity supplied of piercings.

Accepted Answer

A) True 
 B)False

Question 10

Heather earns $15 an hour as a server at the Snug Harbor Restaurant. If her manager offers her $20 an hour, it would be a smart decision to spend more time working.

Accepted Answer

A) True 
 B)False

Question 11

An improvement in technology increases quantity supplied.

Accepted Answer

A) True 
 B)False

Question 12

Komal paid $800 for a night school class. She can still get a 75% refund of $600. The opportunity cost of dropping out of school includes the $200 in tuition that she can't get back.

Accepted Answer

A) True 
 B)False

Question 13

A decrease in the wages of farm workers who harvest coffee beans

Accepted Answer

A)  increases the quantity supplied of coffee. 
B)  increases the supply of coffee. 
C)  decreases the supply of coffee. 
D)  decreases the quantity supplied of coffee. 
E)  increases the demand for coffee. 
A)  increases the quantity supplied of coffee. 
B)  increases the supply of coffee. 
C)  decreases the supply of coffee. 
D)  decreases the quantity supplied of coffee. 
E)  increases the demand for coffee.

Question 14

The law of supply states that when price rises, supply increases.

Accepted Answer

A) True 
 B)False

Question 15

Some producers are chatting over a beer. Which quotation refers to a movement along a supply curve?

Accepted Answer

A)  "Wage increases have forced us to raise our prices." 
B)  "Our new, sophisticated equipment will enable us to undercut our competitors." 
C)  "Raw material prices have sky-rocketed; we will have to pass the cost on to our customers." 
D)  "We anticipate a big increase in demand. Our product price should rise, so we are planning for an increase in output." 
E)  "New competitors in the industry are causing prices to fall." 
A)  "Wage increases have forced us to raise our prices." 
B)  "Our new, sophisticated equipment will enable us to undercut our competitors." 
C)  "Raw material prices have sky-rocketed; we will have to pass the cost on to our customers." 
D)  "We anticipate a big increase in demand. Our product price should rise, so we are planning for an increase in output." 
E)  "New competitors in the industry are causing prices to fall."

Question 16

Economists use the term supply to summarize all of the influences on a business's willingness to sell a particular product or service.

Accepted Answer

A) True 
 B)False

Question 17

Buying a photo ID bus pass creates a sunk cost.

Accepted Answer

A) True 
 B)False

Question 18

People who cannot find work during a recession often enroll in school. An economic explanation is that attending school during a recession has a

Accepted Answer

A)  lower marginal benefit. 
B)  higher marginal opportunity cost. 
C)  marginal benefit equal to zero. 
D)  marginal benefit that is less than the marginal opportunity cost. 
E)  lower marginal opportunity cost. 
A)  lower marginal benefit. 
B)  higher marginal opportunity cost. 
C)  marginal benefit equal to zero. 
D)  marginal benefit that is less than the marginal opportunity cost. 
E)  lower marginal opportunity cost.

Question 19

You miss the flight to Hawaii, and the airline only gives you a credit for a future flight. The cost of your original ticket is not a sunk cost because you can use the credit in the future.

Accepted Answer

A) True 
 B)False

Question 20

Aluminum producers use large amounts of electricity. When the price of electricity rises,

Accepted Answer

A)  the supply curve of aluminum shifts rightward. 
B)  the supply curve of aluminum shifts leftward. 
C)  both the demand and supply curves shift rightward. 
D)  the demand curve for aluminum shifts rightward. 
E)  the demand curve for aluminum shifts leftward. 
A)  the supply curve of aluminum shifts rightward. 
B)  the supply curve of aluminum shifts leftward. 
C)  both the demand and supply curves shift rightward. 
D)  the demand curve for aluminum shifts rightward. 
E)  the demand curve for aluminum shifts leftward.

Oil is used to produce rubber boots. When the price of oil falls,

A technological change that lowers the cost of producing pencils

Turnips are an inferior good. A rise in the price of turnips, all other factors remaining the same,

Examples of sunk costs include

To hire or purchase inputs, a business must pay a price that matches the lowest opportunity cost of the input owner.

Corn and bacon are related products; you can't grow corn and raise pigs on the same land. If the price of corn rises, smart farmers supply less bacon.

When inputs are equally productive in all activities, marginal opportunity costs are constant.

Electric utilities offer discounts to businesses who produce their product or service during off-peak times of the day. This fall in input prices increases supply by these businesses.

Popeye's Parlour supplies both piercing and tattoo services. Higher prices for piercings causes Popeye's to increase the quantity supplied of piercings.

Heather earns $15 an hour as a server at the Snug Harbor Restaurant. If her manager offers her $20 an hour, it would be a smart decision to spend more time working.

An improvement in technology increases quantity supplied.

Komal paid $800 for a night school class. She can still get a 75% refund of $600. The opportunity cost of dropping out of school includes the $200 in tuition that she can't get back.

A decrease in the wages of farm workers who harvest coffee beans

The law of supply states that when price rises, supply increases.

Some producers are chatting over a beer. Which quotation refers to a movement along a supply curve?

Economists use the term supply to summarize all of the influences on a business's willingness to sell a particular product or service.

Buying a photo ID bus pass creates a sunk cost.

People who cannot find work during a recession often enroll in school. An economic explanation is that attending school during a recession has a

You miss the flight to Hawaii, and the airline only gives you a credit for a future flight. The cost of your original ticket is not a sunk cost because you can use the credit in the future.

Aluminum producers use large amounts of electricity. When the price of electricity rises,

Whats in Economics for You Scarcity, Opportunity Cost, Trade, and Models

Making Smart Choices: the Law of Demand

Coordinating Smart Choices: Demand and Supply

Are Your Smart Choices Smart for All Macroeconomics and Microeconomics

Up Around the Circular Flow: Gdp, Economic Growth, and Business Cycles

Costs of Not Working and Living: Unemployment and Inflation

Skating to Where the Puck Is Going: Aggregate Supply and Aggregate Demand

Money Is for Lunatics: Demanders and Suppliers of Money

Trading Dollars for Dollars Exchange Rates and Payments With the Rest of the World

Steering Blindly Monetary Policy and the Bank of Canada

Spending Others Money: Fiscal Policy, Deficits, and National Debt

Are Sweatshops All Bad Globalization and Trade Policy

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Exam 3: Show Me the Money: the Law of Supply

Oil is used to produce rubber boots. When the price of oil falls,

A technological change that lowers the cost of producing pencils

Turnips are an inferior good. A rise in the price of turnips, all other factors remaining the same,

Examples of sunk costs include

To hire or purchase inputs, a business must pay a price that matches the lowest opportunity cost of the input owner.

Corn and bacon are related products; you can't grow corn and raise pigs on the same land. If the price of corn rises, smart farmers supply less bacon.

When inputs are equally productive in all activities, marginal opportunity costs are constant.

Electric utilities offer discounts to businesses who produce their product or service during off-peak times of the day. This fall in input prices increases supply by these businesses.

Popeye's Parlour supplies both piercing and tattoo services. Higher prices for piercings causes Popeye's to increase the quantity supplied of piercings.

Heather earns $15 an hour as a server at the Snug Harbor Restaurant. If her manager offers her $20 an hour, it would be a smart decision to spend more time working.

An improvement in technology increases quantity supplied.

Komal paid $800 for a night school class. She can still get a 75% refund of $600. The opportunity cost of dropping out of school includes the $200 in tuition that she can't get back.

A decrease in the wages of farm workers who harvest coffee beans

The law of supply states that when price rises, supply increases.

Some producers are chatting over a beer. Which quotation refers to a movement along a supply curve?

Economists use the term supply to summarize all of the influences on a business's willingness to sell a particular product or service.

Buying a photo ID bus pass creates a sunk cost.

People who cannot find work during a recession often enroll in school. An economic explanation is that attending school during a recession has a

You miss the flight to Hawaii, and the airline only gives you a credit for a future flight. The cost of your original ticket is not a sunk cost because you can use the credit in the future.

Aluminum producers use large amounts of electricity. When the price of electricity rises,

Whats in Economics for You Scarcity, Opportunity Cost, Trade, and Models

Making Smart Choices: the Law of Demand

Coordinating Smart Choices: Demand and Supply

Are Your Smart Choices Smart for All Macroeconomics and Microeconomics

Up Around the Circular Flow: Gdp, Economic Growth, and Business Cycles

Costs of Not Working and Living: Unemployment and Inflation

Skating to Where the Puck Is Going: Aggregate Supply and Aggregate Demand

Money Is for Lunatics: Demanders and Suppliers of Money

Trading Dollars for Dollars Exchange Rates and Payments With the Rest of the World

Steering Blindly Monetary Policy and the Bank of Canada

Spending Others Money: Fiscal Policy, Deficits, and National Debt

Are Sweatshops All Bad Globalization and Trade Policy

Filters