Which of the following countries is an example of a command and control economy?
a) North Korea
b) United States of America
c) All of the above
d) None of the above
If the marginal cost exceeds the marginal benefit, ________.
a) the price of the good is above the equilibrium price
b) consumers have an incentive to buy less of the good
c) producers should increase production of the good
d) the price is greater than the total cost of production
Which of the following must lead to an increase in the price for tomatoes?
a) The weather is optimal for growing tomatoes the entire growing season.
b) There is a successful advertising campaign for tomatoes and the wages fall for tomato farmers.
c) Researchers discover that tomatoes reduce cancer and the wages increase for tomato farmers.
d) A technology breakthrough allows farmers to produce more tomatoes with the same inputs
Which of the following is true in the water-diamond paradox?
a) Consumer surplus of water exceeds consumer surplus of diamonds.
b) Producer surplus of water exceeds producer surplus of diamonds.
c) People will always pay more for a diamond than they do for water.
d) Producer surplus exceeds consumer surplus for water.
As the minimum wage increases, ________.
a) incomes, especially of single parents, increase
b) employment increases
c) the competition for jobs increases
d) poverty is eliminated
The market clearing price is ________.
a) the lowest price that you are willing to pay
b) the price which creates an excess demand
c) the price which creates an excess supply
d) the price which eliminates all excess quantities supplied or excess quantities demanded
Suppose that you are evaluating the market for Kellogg's cereal. The prices of Post and General Mills cereals increase. What will happen to Kellogg's cereals?
a) The demand for Kellogg's cereals increases causing the price to rise.
b) The quantity supplied of Post cereals will decrease since General Mills prices rose.
c) The demand will increase and prices fall.
d) The quantity demanded of Post and General Mills cereals will increase.
Quantity demanded ________.
a) is the amount of a good a consumer is willing and able to purchase at a given price
b) is identical to the quantity supplied
c) is a downward sloping curve
d) is the amount equal to what producers are willing and able to produce at given prices
The market clearing price is ________.
a) the lowest price that you are willing to pay
b) the price which creates an excess demand
c) the price which creates an excess supply
d) the price which eliminates all excess quantities supplied or excess quantities demanded
Which of the following will cause the production possibilities frontier to shift outward?
a) an increase in the size of the labor force
b) a decrease in the unemployment rate
c) a decrease in the size of the capital stock
d) an inefficiency that has been corrected