Principles of Economics
Economic Models
Trade
Supply and Demand
Equilibrium Price and Quantity
100
What are the causes of market failure?
Externalities and Market Power
100
In the Circular-Flow Diagram, income payments flow from...
Firms to Households
100
Trade Surplus occurs when
Exports are greater than Imports. NX > 0
100
Dave buys more donuts at $0.25 per donut than at $0.50 per donut, other things equal. This is an example of
The Law of Demand
100
When Supply increases what happens to Eq'm Price and Eq'm Quantity?
Eq'm Price decreases
Eq'm Quantity increases
200
Rebecca received a 50% off coupon for any Apple product. Although she's a Samsung User, she goes and buys an iPhone with the coupon. This is an example of...
Responding to an Incentive
200
If this PPF is shown for 40 hours of production, how long does it take for Peru to make 1 Ruby?
1/6 hours
200
True or False
Absolute Advantage is necessary for Comparative Advantage
False
200
If the price is $4, the market is experiencing a...
Shortage
200
An increase in the prices of Honda SUVs would cause what to happen to the Eq'm Quantity for Toyota SUVs.
Eq'm Quantity would increase
300
The signals that guide the allocation of resources in a market economy are
prices
300
How do you find the opportunity cost of the PPF graph? What is the equation?
Slope
(y2 -y1)/(x2-x1)
300
How many pounds of oranges or tons of rice can Fred make in 30 minutes?
Fred can make 10 pounds of oranges or 3 tons of rice.
300
After Joel received a job promotion, he bought more streaming subscriptions. This is an example of which Demand curve shifter?
Income. Streaming Subscriptions are a Normal Good for Joel.
300
After the 2020 boom, more parents are searching for daycare for their toddlers. However, COVID-19 a lot of daycares to close. What is happening to Eq'm P and Q?
Eq'm Price increase. Eq'm Quantity is unknown.
400
Rob is deciding how to spend his Friday night. His options are (from most favorable to least favorable) 1) studying 2) going to the movies 3) having a family dinner 4) getting some sleep. What is the opportunity cost of Rob going to the movies?
Having a family dinner
400
Points on the PPF represent
the combination of two goods an economy can make by maximizing their resources.
400
Andia has a comparative advantage in the production of ____ and Zaria has comparative advantage in the production of ______
Beef and Zardia has a comparative advantage in the production of wheat
400
If CDs and CD players are complements, what would be an example of an event that increases the demand for CD players?
Prices of CDs goes down
400
Suppose that income decrease. At the same time, the price of aluminum that's used in making canned beans decreases. What happens to Eq'm P and Eq'm Q?
Eq'm Quantity Increase
Eq'm Price is Ambiguous
500
After much consideration, you have chosen Cancun over Ft. Lauderdale as your Spring Break destination this year. However, Spring Break is still months away, and you may reverse this decision. Which event would make you reverse the decision? A) The marginal cost of going to Cancun decreases. B)
The marginal benefit of going to Ft. Lauderdale decreases. C) The marginal cost of going to Ft. Lauderdale decreases.
C) The marginal cost of going to Ft. Lauderdale decreases.
500
The PPF is a straight line when
The opportunity cost remains constant.
500
Which country has comparative advantage in apples?
Canada
500
The table below represents the supply schedule for pepperoni pizzas per week. A decrease in the cost of tomato sauce shifts the supply curve to the right by 25 pizzas at every price. Quantity supplied at $11 is?
2075 pizzas
500
If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?
Both the equilibrium price and quantity would decrease.