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Flashcards in Chapter 1 Deck (29):
1

Point A: 10 apples and 20 pairs
Point B: 7 apples and 21 pears, whats the opportunity cost of moving from point A to point B?

3 Apples

2

Where on a graph would a point that is productive inefficient be?

Under the ppf

3

Where would a point that's unattainable be?

Above the ppf

4

What is a person who is waiting to be called back from a job which they were laid off consider?

Unemployed

5

Where would a point that illustrates productive efficiency be?

On the ppf

6

What would happen to a ppf if there is a significant loss of resources?

It would move a left (smaller)

7

What is the opportunity cost to move from a point inside the ppf to one on the ppf?

Zero

8

What does a bowed out ppf mean?

Increasing opportunity cost

9

If an economy is operating on its ppf, are they any unemployed resources in the economy?

No, bc if they were if they were any unemployed resources it would be producing below its ppf

10

As the price of good A rises, the demand for good B rises. what kind of goods are these?

Substitutes

11

Oil producers expect that oil prices next year will be lower than this year, what are they most likely to do?

Place more oil on the market this year, shifting the supply curve of oil rightward

12

What's an inferior good?

Income goes up, demand goes down

13

X is an inferior good and Y is a substitute for X

Income rises, the demand for X falls, the price of X falls and the demand of Y falls

14

If the demand for a good falls by less than the supply of the good rises, then the equilibrium price will _______ and the equilibrium quantity will ______.

Fall ; rise

15

Quantity and demand are ______ related

Inversely

16

If more people begin to favor science fiction novels, the demand curve will

Shift rightward

17

Resource X is necessary to the production of good Y. If the price of resource X rises,

The supply curve shifts leftward

18

At a price below the equilibrium price, there is a

Shortage

19

If the supply of and demand for a product both decrease, then equilibrium

Quantity must decline, but equilibrium prices may either rise, fall or remain the same

20

A vertical curve represents..

An independent relationship between price and quantity supplied

21

If a demand for a good increases by more than the supply of the good increase, then the price will ____ and the quantity will ____

Rise and rise

22

The space on the freeway is fixe at any instant. A supply curve that shows this would be...

Perfectly vertical

23

The higher the price of medical care in general, the lower ________ medical care and the ________ specific items that make up medical care

Quantity demanded of, lower the demand for

24

A toll of $1 per car is imposed on a road regardless the time of the day, if the toll creates equilibrium travel flows at the busiest time of the day, it will create a _______ at all other times

Surplus of space

25

Good weather in San Diego

Imposes indirect payments for the residents of that city

26

To an economist, freeway congestion is a sign that the price to drive on the freeway is

Below equilibrium

27

If the govt sets out to make home buyer easier for more people by forcing lenders to accept ______ down payments and ________ interest rates, the result will likely be an ________ in housing prices

Lower, lower, increase

28

The unemployment due to the changes in the type of skills employers required is called

Structural

29

Unemployment that rises as a result of the time it takes for unemployed people to locate a job utilizing their transferable skills is called ________ unemployment

Frictional