econ test 2 - [1]. According to the theory of comparative...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
[1]. According to the theory of comparative advantage, specialization and trade will benefit a) all trading partners so long as neither has an absolute advantage in production. b) all trading partners who specialize in the production of goods in which they have a comparative advantage. c) only the trading partner who specializes the most. d) only the trading partner with the lowest wage rate. e) nobody. [2]. Which of the following would shift the demand curve for popcorn to the right? a) Good weather results in an unusually large harvest of popping corn. b) The price of popcorn falls. c) Nutritionists promote popcorn as a healthy snack. d) It is announced that popcorn prices are likely to fall in the near future. e) All of the above would shift the demand curve to the right. [3]. Effective minimum wages are welfare increasing (i.e., the overall benefits to society outweigh the costs)? a) True. b) False. [4]. A leftward shift in the supply curve will cause a) an increase in both the price and quantity of the good. b) an increase in the price with no change in the quantity of the good. c) an increase in the price and a decrease in the quantity of the good. d) a decrease in the price and an increase in the quantity of the good. e) a decrease in both the price and quantity of the good. [5]. An effective price ceiling, a) establishes a price above the equilibrium level. b) results in a decrease in the quantity supplied to the market. c) increases efficiency by increasing the difference between the marginal benefit and the marginal cost of an additional unit. d) results in a surplus in the market. e) None of the above. [6]. In general, a consumer’s price-responsiveness for a product will be more elastic when a) the product has few substitutes. b) the product's price is a large percentage of a consumer's budget. c) the product is generally considered to be a necessity. d) None of the above. [7]. The law of diminishing marginal value states that a) the total value of consumption increases as more of a good is consumed. b) people purchase goods as long as the marginal value exceeds the price. c) the marginal value of consumption decreases as more of a good is consumed. d) All of the above.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
[8]. According to the optimal purchase rule, a consumer will continue purchasing additional units of a good until a) she runs out of money. b) the marginal value of the next unit becomes less than the price. c) the total value of the units purchased becomes greater than the price. d) the marginal value of the next unit becomes negative. e) the total value of the units purchased becomes equal to the price. [9]. If exchange is voluntary, a) one party will always be made better off than the other. b) there can be mutual gain even if no new or additional goods are produced.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/07/2008 for the course ECON 201 taught by Professor Wadell during the Winter '08 term at University of Oregon.

Page1 / 7

econ test 2 - [1]. According to the theory of comparative...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online