Econ 11 final study guide 9

____ 1. Refer to Circular Flow. Which arrow shows the flow of goods and services?

____ 2. Which of the following is the most accurate statement about production possibilities?

____ 3. Which of the following statements is true about economic models and methods?

____ 4. For two people who are planning to trade, it is impossible to

____ 5. Suppose you like banana cream pie made with vanilla pudding. Assuming all other things are constant, you notice that the price of bananas is higher. How would your demand for vanilla pudding be affected by this?

____ 6. A higher price for batteries would tend to

____ 7. A demand schedule is a table showing the relationship between

____ 8. A dress manufacturer is expecting higher prices for dresses in the near future. We would expect

____ 9. Refer to Figure. The movement from point A to point B on the graph would be caused by

____ 10. Pens are normal goods. What will happen to the equilibrium price of pens if the price of pencils rises, consumers experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to rise in the near future, the population increases, fewer firms manufacture pens, and the wages of pen-makers increase?

____ 11. The price elasticity of demand measures

____ 12. The Winston/Calfee study determined that the toll they charged commuters of the Greenway toll road was

____ 13. Minimum wage laws dictate the

____ 14. Price controls imposed by policymakers

____ 15. The area below a demand curve and above the price measures

____ 16. Refer to Table. If the market price is $1,000, the total cost in the market would be

____ 17. Refer to Figure. Sellers whose costs are greater than price are represented by segment

____ 18. Refer to Figure. The efficient price-quantity combination is

____ 19. To fully understand how taxes affect economic well-being, we must

____ 20. The amount of tax revenue received by the government is equal to the area

____ 21. As the size of a tax increases the deadweight loss from the tax

____ 22. Which of the following would likely have the smallest deadweight loss?

____ 23. When two countries choose to engage in international trade,

____ 24. Refer to Figure. If this country allows free trade in wagons

____ 25. A tariff does what to the prices of imports, exports

____ 26. Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to

____ 27. Firms that are involved in different types of business could be evidence of an attempt to

____ 28. A local cafe which allowed patrons to smoke was recently forced to close its doors because it did not comply with local clean air standards. This decision is an example of

____ 29. Which of the following statements is most correct? About Pigovian taxes.

____ 30. All public goods are

____ 31. High marginal tax rates

____ 32. Refer to Table. A proportional tax is illustrated by tax

____ 33. When deciding whether to hire an additional worker, firms look at how the additional worker would affect

____ 34.For a competitive, profit-maximizing firm the labor demand curve is the same as the

____ 35. Refer to Figure 18-3. When the relevant labor supply curve is S1 and the labor market is in equilibrium,

____ 36. An increase in the supply of labor has the effect of decreasing the

____ 37. The rental price of capital is determined by

____ 38. If unskilled labor is relatively plentiful and cheap in many foreign countries, then as the United States expands its trade with these foreign countries, the domestic demand for

____ 39. Travis, a student at a community college, is trying to consider what he should do for summer employment. Two recruiters show up at his school in search of summer workers. Recruiter A is looking for workers to help a disaster relief agency distribute food aid in Africa. Recruiter B is looking for custodial help to clean motel rooms in a motel located near the entrance to a famous National Park.

Travis is carefully considering the options that each recruiter presents. On the basis of knowledge obtained in his economics class, Travis is likely to conclude that

____ 40. the Lorenz curve

____ 41. The women's movement has changed the behavior of

____ 42. According to utilitarians, the ultimate objective of private and public actions is to

____ 43. Which political philosophy believes in balancing the gains from greater equality against the losses from distorted incentives?

____ 44. If goods X and Y are perfect complements, then if the price of good Y falls, changes in the amount of goods X and Y purchased are due

____ 45. The temptation of imperfectly-monitored workers to shirk their responsibilities is

____ 46. "There is not such thing as the general will of the people" because

____ 47. Real interest rates are positive because

____ 48. George, Jerry, Elaine, and Kosmo are seated in a restaurant figuring out what to order. Carrot cakes cost $2 and pickles cost $1 each.

George declares he would like to get three carrot cakes and four pickles.

Jerry suggests, why not get two carrot cakes and six pickles, since the marginal utility of carrot cakes diminishes more rapidly.

Kosmo says George should order no carrot cakes and 10 pickles, or else 5 carrot cakes and no pickles. George responds that with 10 pickles or 5 cakes, the marginal utility of the last one would be very low. "But the total utility would be greater" says Kosmo.

Elaine says that George should get the quantities where the marginal utility of the next cake is double the marginal utility of the next pickle.

"You're wrong," says Jerry. "The marginal utility of the cake should equal the marginal utility of the pickle."

You are seated in the next table and they ask you what they should do. For rational consumer choice,

Bonus 12 pt. question: Is the concept of a pure free market an ethical concept? Explain.