On the BUTTER market, an increase in advertising + an increase in the number of farmers causes:

Not enough information is provided to determine changes in P

If prices were not allowed to fluctuate

There would be surpluses and shortages

The price mechanism does NOT:

Minimize the price paid by consumers

Productive efficiency is :

Producing with the fewest possible resources

Which statement is NOT correct?

Productive efficiency implies allocative efficiency

What is the definition of demand

The willingness to buy different quantities at different P

A change in which of the following will NOT cause the demand curve to shift outward?

The price of a substitute going down

Represented by the triangle between the MC-curve and P

The law of supply can be EXPLAINED by:

Higher P = higher profits = stronger incentives

The difference between price & consumers' willingness to pay

Marginal in economics means

One additional unit of something

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IB economics Ch 2

20 termsStudBud Administration13 plays

Supply and demand

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Questions 20

Answers

1
On the BUTTER market, an increase in advertising + an increase in the number of farmers causes:
P to decrease
P to remain the same
Not enough information is provided to determine changes in P
P to increase
2
If prices were not allowed to fluctuate
Equilibrium would be easier to reach
Social surplus would be higher
There would be surpluses and shortages
There would be allocative efficiency
3
The price mechanism does NOT:
Lead to an equilibrium
Minimize the price paid by consumers
Help markets avoid a shortage or surplus
Allow markets to achieve allocative efficiency
4
allocative efficiency is:
Producing what society desires
Producing with the least amount of resources
Sustainable production
Producing with zero waste
5
We do NOT have allocative efficiency when
social surplus is maximized
The market is in equilibrium
consumer surplus is maximized
MC=MB
6
Productive efficiency is :
Producing the goods most wanted by people
Producing with the least amount of energy
Maximizing capital use, while minimizing use of labour
Producing with the fewest possible resources
7
Which statement is NOT correct?
Productive inefficiency implies being inside the PPC
Productive efficiency implies allocative efficiency
Allocative efficiency implies productive efficiency
Allocative efficiency implies being on the PPC
8
The law of demand does NOT state that the relation between P and Qdemanded is:
causal
a correlation
Positive
negative
9
What is the definition of demand
The quantities bought on a market
To order someone to hand over something
The willingness to buy different quantities at different P
The wants of consumers
10
Adam Smith's "invisible hand" illustrates what concept?
Productive efficiency
Allocative efficiency
The necessity of government regulation
Inefficiency of free markets
11
A change in which of the following will NOT cause the demand curve to shift outward?
Advertising
The price of a substitute going down
An increase in incomes
The price of a complimentary good decreasing
12
On the market for BUTTER,an increase in the P of bread + an increase in the P of hay will cause
Q to decrease
No change in Q
Q to increase
Not enough information is provided
13
Producer surplus is
The stock of inventory not sold by producers
Market P minus the highest acceptable P for producers.
Represented by the triangle between the MC-curve and P
Another term for profit
14
The good pictured is NOT:
Antiques
The supply of jumbojets in the short run
Wheat
Tickets to a sold out concert
15
The law of supply can be EXPLAINED by:
Economists can't explain it
The negative correlation between P and Qsupplied
Higher P = higher profits = stronger incentives
The upward slope of the supply curve
16
On the market for BUTTER, new milking machines + a lower P for margarine will lead to
Not enough information is provided to determine the effect
A higher price
No change in price
A lower price
17
Consumer surplus is
When not all produced consumer goods are being sold
Minimized when the market is at equilibrium
The difference between price & consumers' willingness to pay
Represented by the area between the supply curve and P
18
Marginal in economics means
One additional unit of something
Something written to the side of the main text
Insignificant
Something that has a small effect
19
A change in which of the following will NOT cause the supply curve to shift?
Taxes on the sale of the good
The number of firms producing the good
Production technology
The price of the good
20
The law of demand can be EXPLAINED by:
The equilibrium model
The positive correlation between P and Qdemanded
The slope of the demand curve
Decreasing marginal utility

IB economics Ch 2 Flashcards | StudBud