stud
bud
Sign up
Log in
Home
Library
Explore
SAT
More
Exam 1 Review Flashcards | StudBud
Explore
/
Exam 1 Review
Exam 1 Review
30 terms
·
StudBud Administration
·
42 plays
Test your knowledge on basic concepts and principles of economics
Flashcards
30 cards
F
Practice quiz
P
Host live
L
Questions
30
Answers
1
in the circular flow model, consumers supply things like labor and capital to the resource markets
False
True
2
Which of the following is an example of capital?
an oven in a pizza restaurant
stocks
bank loans
3
An increase in price for Good X leads to a decrease in the demand for Good Y. These goods are substitutes.
False
True
4
A 10% decrease in the price of a good results in a 5% increase in Quantity Demanded, price elasticity of demand is:
1/2
1
2
5
Law of supply states:
price and quantity supply are positively (directly) related
price and supply are positively (directly) related
price and quantity supply are negatively (inversely) related
6
Assume Eve and Mel both produce cat toys. Eve can produce cat toys faster than Mel.
Eve has the absolute advantage
Mel has the absolute advantage
Mel has the comparative advantage
Eve has the comparative advantage
7
If price elasticity of demand is 3, then sellers should ____ to increase total revenue.
increase price, because it is elastic
decrease price, because it is inelastic
increase price, because it is inelastic
decrease price, because it is elastic
8
Equilibrium P and Q is:
$20, 80
$20, 60
$40, 40
$30, 60
9
"the tax rate for family-businesses is too high" is a...
a normative statement
ceteris paribus assumption
a positive statement
10
the graph from this PP Schedule results in a PPF that is:
a curved line, with constant opportunity costs
a straight line, with increasing opportunity costs
a curved line, with increasing opportunity costs
a straight line, with constant opportunity costs
11
a combination of 30 good x and 8 good y is...
indicated fully employed resources
not currently attainable
possible and efficient
12
A price of 40 causes a:
surplus of 80
shortage of 80
surplus of 40
shortage of 40
13
ceteris paribus, a good will be more inelastic when:
there is a lot of time allowed for adjustment
the product is a luxury
spending on the product is large relative to income
there are no close substitutes available
14
Elisabeth can either make 10 shirts or 20 baskets. What is the opportunity cost of making 1 shirt?
1/2 baskets
2 baskets
4 baskets
15
the belief that you can regain time and money already spent is...
fallacy of division
fallacy of false cause
fallacy of sunk cost
fallacy of composition
16
the point that society values the most is:
a
b
unknown
e
17
According to the law of demand, a decrease in price leads to:
an increase in quantity demanded
a decrease in demand
an increase in demand
a decrease in quantity demanded
18
Foreign countries can gain from specialization and trade because of:
Absolute advantage
Comparative Advantage
tariffs
19
Which of these causes a decrease in supply?
A decrease in demand
an increase in the firm's taxes
a decrease in price
20
If there is a market shortage, we expect price to:
Rise
Fall
21
Assume the below graph represents an inferior good. An increase in income will cause:
an increase in demand
an increase in supply
a decrease in demand
a decrease in supply
22
If total revenue increases as price increases, then demand is elastic
True
False
23
Alex went to a free company dinner party instead of going to dinner with his friends. What is his opportunity cost?
the value of everything else Alex could have been doing instead
Nothing because the company event was free
the value/fun Alex could have had for going to dinner with his friends
24
If milk becomes more popular, and a disease kills half of the cow population:
both S and D increase
supply will increase, and demand will decrease
supply will decrease, and demand will increase
both supply and D decrease
25
The responsiveness of buyers to changes in the price of a product is called:
income elasticity of demand
price elasticity of demand
cross-elasticity
26
scarcity is...
when the government allocates resources where needed
when resources are limited and desires are unlimited
the forces of supply and demand
27
economic activity is guided by self interest and prices
True
False
28
Elisabeth's opportunity cost of making 1 shirt is 2 baskets, Rita: 1 shirt is 0.5 a basket. Comparative adv in shirts?
Elisabeth
Rita
29
"Cashiers make a lower wage than accountants" is...
a microeconomic normative statement
a macroeconomic positive statement
a macroeconomic normative statement
a microeconomic positive statement
30
moving from point D (inside) to point B (on the curve) represents economic growth
False
True
