UNIT 1 Jeopardy

Fundamentals

100

Macroeconomics is the study of economics in local markets, while microeconomics is the study of economics on a nationwide and global level.  

TRUE/FALSE

FALSE

200

Scarcity is ________

Limited availability of resources

300

A rational decision maker will  follow the rule which states ____________ must be greater than or equal to _____________

Marginal Benefit; marginal cost

400

Economics is the study of how _______ and ________ allocate scarce resources among many competing uses

individuals; societies

500

The economic resources for production include:

Land. Labour. Capital. Entrepreneurship

Opportunity Cost and PPF

100

The next best alternative forgone is ...

Opportunity Cost

200

Refer to Figure 1.

The following image shows ______________ opportunity costs.

Hint(increasing/decreasing/constant)

Increasing

300

If Mark can produce 3kg of strawberries using 30 squared meters of land and 5kg of lemons using 30 squared meters of land. What is the opportunity cost of lemons?

3/5 or 0.6

400

The theory of comparative advantage suggests that a country should specialize in the good which they have the: 

Least opportunity cost

500

In one day, Joan can change the oil on 15 cars or the tires on 10 cars. In one day, Fred can change the oil on 12 cars or the tires on 10 cars. Joan and Fred can gain from trade if Joan changes the _______ and Fred changes the _______.

oil; tires.

Demand

100

According to the law of demand:

• As the price of good X increases, the quantity demanded of good X reduces and vice versa

200

All of these are determinants of demand except:

Tastes of Consumers, Income, Related Goods, Taxes, Number of buyers

Taxes

Supply

100

The supply curve is an ________ slope. This shows a ______ relationship between price and quantity

upward; positive/direct

200

_________ will cause a shift in the supply curve

Determinants of supply

Market Equilibrium

100

The market will constantly seek equilibrium. This means that:

• It will tend toward a price at which quantity supplied is equal to the quantity demanded

200

Suppose that due to a storm, a big part of watermelon crops was lost. Additionally, suppose that certain benefits of consumption of watermelon have made many consumers more willing to buy them for many different uses. Everything else remains constant. What will be the effects of all these circumstances in the market for watermelons?

Price will increase; quantity is indeterminate.

300

Refer to Figure 2.

The market originally had a demand curve labeled D and a supply curve labeled S. An event occurred, and the demand curve shifted left to the new demand curve labeled D1. Suppose nothing else happened. What is the new equilibrium price and quantity?

P = 12

Q = 20

400

Refer to Figure 9

If the government imposes a price ceiling of $39 for good E, how many units will the producers supply in the market?

9 units

500

Refer to figure 4.

Looking at the graphs , answer the following questions:

• In which market is the price ceiling binding?
• In that market, is there a shortage or surplus? If yes, by how much?

Market for Good A; 

Shortage of 60