Econ Studying PT 2

Economists assume that rational people do all of the following except

Economists assume that rational people do all of the following except

Undertake activities that benefit others and hurt themselves

The prime minister of the tiny island nation of Wowza has proposed the speed limit on their highway will be reduced by 10 mph on Thursdays, implementing this will be optimal

As long as the marginal benefit of reducing the speed limit is equal to or greater than the marginal cost of reducing the speed limit

The town of Harmonia gives away all 500 tickets to its annual founders day concert to local residents, each year more than 500 people want to attend the concert, so people who get them for free sell them for $75 each.  Is this transaction making things more economically efficient?

Yes, it was a voluntary exchange that benefited both parties

Which of the following is true about profit?:

Profit is the difference between revenue and cost. 

If a nation changes it laws to more actively enforce intellectual property rights, all of the following will most likely take place except

The black market for intellectual property will become more prosperous in that country.

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except

Produce a combination of goods that lies outside of its own production possibilities frontier

What is the difference between an “Increase in demand” and an “increase in quantity demanded”?

An increase in demand is a shift in the whole demand curve while an increase in quantity demanded is just movement along the demand curve

Holding everything else constant, an increase in the price of MP3 players will results in:

A decrease in the quantity of MP3 players demanded

Elvira decreased her consumption of bananas when the price of peanut butter increased, so peanut butter and bananas are

Complements

Which of the following would shift the supply curve for MP3 players to the right?

A decrease in the price of an input used to produce MP3 players.

Assuming that cotton is a normal good, which of the following would cause both the equilibrium price and equilibrium quantity of cotton to increase?

An increase in consumer income.

A decrease in the equilibrium quantity for a product will result

when there is a decrease in supply and a decrease in demand for the product

Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon:

An increase in supply

Select the phrase that correctly completes the following statement, “An increase in input prices caused a decrease in the supply of baseballs, as a result _____”:

The price of baseballs increased and the quantity demanded of baseballs decreased.

Suppose the value of the price elasticity of demand is -3, what does this mean?:

A 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent

Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09, this means that:

an increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good

The more elastic the supply curve,

The smaller the price decrease

As a consumer consumes more and more of a product, eventually marginal utility:

Declines

Economists rober and nolan reasoned that to be a Giffen good, with an income effect larger than its substitution effect, a good must be _____ and make up a ______ portion of a consumers budget:

An inferior good, very large

Why do indifference curves have a negative slope?:

To keep utility constant, a consumer must get more of one good if she is to give up some of the other.