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ECON 201 Review Flashcards | StudBud
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ECON 201 Review
ECON 201 Review
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1
You live next to a paper factory, and the smell makes you sick. The company charges $10 for a ream of paper. The MSC is
there is not enough information
to the right of MPC
the same as MPC
to the left of MPC
2
The minimum wage is a ______ and will cause ______ of unskilled workers.
price ceiling, surplus
price floor, shortage
price ceiling, shortage
price floor, surplus
3
Which of the following tells us about the shutdown point?
AVC
AFC
TC
ATC
4
Which of the following is not a condition for a monopoly?
Demand is perfectly inelastic
No close substitutes
Barriers to entry/ exist
5
Usury Laws are a form of _____ and create _______ of loanable funds.
price floor, surplus
price ceiling, shortage
price ceiling, surplus
price floor, shortage
6
Black markets sells illegal goods at an illegal price.
True
False
7
If elasticity of demand is -3.7 and you raise prices, then....
total revenue will decrease
total revenue will remain unchanged
total revenue will increase
8
If Bodos increases the prices of their bagels, the Law of Demand would say that:
demand would shift back
quantity demanded of bagels will decrease
demand for bagels will decrease
the Law of Demand does not apply to bagels
9
Which of the following is not one of the three types of economic systems?
Central Planning
Feudalism
Tradition
Market System
10
When elasticity of demand is between 0 and 1, then the demand is inelastic.
False
True
11
The equilibrium is where the quantity bought equals the quantity sold.
True
False
12
Economics is a normative science.
False
True
13
If the price of peanut butter goes up and you demand less jelly, then peanut butter and jelly must be:
Substitutes
Complements
14
In a Dutch auction,
the price starts low and increases
the price starts high and decreases
15
There are no costs to income inequality.
True
False
16
The only condition we need to meet to maximize utility is: MUx/Px = MUy/Py = MUz/P
False
True
17
What is meant by point U?
This society should produce fewer guns.
This society is opperating at an effieicent point.
This society should produce less butter.
This society is opperating at an inefficient point.
18
Corn is plentiful in the summer. You buy up the corn in the summer and plan to resell it in the winter. You are:
an arbitrageur
creating a concurrent shift in supply
being greedy
engaging in a reverse boycott
19
The slope of the PPF is a measure of opportunity cost.
False
True
20
What measures the responsiveness of quantity demanded to spending on advertising?
market share elasticity
advertising elasticity
income elasticity
cross-price elasticity
21
The long-run is a long period of time.
False
True
22
What is happening to supply and demand?
price and quantity are ambiguous
price will decrease, quantity will increase
price goes up, quantity is ambiguous
price and quantity will go up
23
A price ceiling will:
create a shortage
have no effect
create a surplus
24
The economic approach to getting rid of pollution would be to tax our way to MSC= MSB.
False
True
25
In perfect competition, the firms are price makers.
True
False
26
In order to be effective, a price floor should be above the equlibrium.
True
False
27
Monoplists don't have incentives to lower their cost curves.
True
False
28
Unions cause the average cost curve to decrease.
False
True
29
If your income increases and you demand more chocolates, then chocolate is a:
Regular Good
Normal Good
Inferior Good
30
In which part of the demand curve do monopolies produce?
Inelastic
it doesn't matter
Unit elastic
Elastic
31
Cartel freeriders behave _____, according to US law.
legally
illegally
32
For the highest quintile, the highest percent of their income comes from _____.
wages
dividends
interest
33
Which of the follow companies has the largest market share of beer?
Anheuser-Busch
Pabst
Miller-Coors
Heineken USA
34
Private property is a precondition to a market economy.
False
True
35
Steve watches TV at work instead of doing the work that his boss assigned. Then,
Steve is Gold Plating
This is a principal agent problem
His boss should fire him
Steve is a bad employee
36
Catergorize the following: "Salsa now outsells ketchup in the United States"
Economic Story
Economic Fact
Economic Theory
Economic Metaphor
37
Price affects demand.
True
False
38
If a country has perfect income equality, the Lorenz curve will be______
on the x-axis only
a 45 degree line
sloping below the 45 degree line (parabolic)
on the x and y axis (like two sides of a triangle)
39
In the long-run in perfect competition, there are no economic profits.
False
True
40
Your income can be zero, and you can have high wealth.
False
True
41
According to Mr. Elzinga, there is a Law of Supply.
False
True
42
If the LDMU holds, then the satistifaction you get from your 5th slice of pizza will be ____ than your 1st slice.
the same
less
greater
43
A market where the top income recipient makes many times what a a regular worker makes is called ______.
a monopoly market
a unionized market
a tournament market
the free market
44
Which of the following is NOT one of the three core questions every society must answer?
How should we produce these goods and services?
For whom do we produce these goods and services?
Why do we produce these goods and services?
What goods and services should be produced?
