Exam One Flash Cards

 
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In economics, a firm earns a normal profit when its total revenue equals its total economic costs TRUE 0 carolinepender Thu, 29 Apr 2010 16:29:27 GMT view revision history
Economic profit is found by subtracting accounting costs from the total revenue FALSE: subtracting the economic costs from the total revenue 0 carolinepender Thu, 29 Apr 2010 16:28:47 GMT view revision history
A rational consumer will cease purchasing a product at that quantity where marginal utility begins to diminish. FALSE 0 carolinepender Thu, 29 Apr 2010 16:28:47 GMT view revision history
If price and total revenue are directly related, demand is inelastic TRUE 0 carolinepender Thu, 29 Apr 2010 16:28:47 GMT view revision history
Generally speaking, the demand for luxury goods is more price elastic than is the demand for necessities TRUE 0 carolinepender Thu, 29 Apr 2010 16:28:47 GMT view revision history
An example of a public good is cable television FALSE 0 carolinepender Thu, 29 Apr 2010 16:25:47 GMT view revision history
When there are negative externalities involved in the production of a good, fewer resources are allocated to its production than if all costs were internalized FALSE 0 carolinepender Thu, 29 Apr 2010 16:25:47 GMT view revision history
An increase in demand accompanied by an increase in supply will increase the equilibrium quantity but the effect on the equilibrium price will be indeterminate TRUE 0 carolinepender Thu, 29 Apr 2010 16:25:47 GMT view revision history
Consumers buy more of normal goods as their incomes fall FALSE 0 carolinepender Thu, 29 Apr 2010 16:25:47 GMT view revision history
Surpluses drive market prices down; Shortages drive market prices up TRUE 0 carolinepender Thu, 29 Apr 2010 16:20:07 GMT view revision history
Central planning in the Soviet Union and Prereform China emphasized the expansion of the production of consumer goods to raise the domestic standards of living FALSE 0 carolinepender Thu, 29 Apr 2010 16:20:07 GMT view revision history
Choices entail marginal costs because resources are scarce TRUE 0 carolinepender Thu, 29 Apr 2010 16:20:07 GMT view revision history
If economic theories are solidly based on relevant facts, then appropriate economic policy becomes obvious and uncontroversial FALSE 0 carolinepender Thu, 29 Apr 2010 16:20:07 GMT view revision history
Average fixed costs diminish continuously as output increases TRUE 0 carolinepender Thu, 29 Apr 2010 15:52:00 GMT view revision history
The law of diminishing returns explains dis-economies of scale FALSE 0 carolinepender Thu, 29 Apr 2010 15:52:00 GMT view revision history
The law of diminishing returns explains why short run marginal cost curves are upward sloping TRUE 0 carolinepender Thu, 29 Apr 2010 15:51:19 GMT view revision history
If the marginal cost curve lies below the average variable cost curve, the average variable cost curve must be falling TRUE 0 carolinepender Thu, 29 Apr 2010 15:51:19 GMT view revision history
At zero units of output a firm's variable costs are zero TRUE 0 carolinepender Thu, 29 Apr 2010 15:51:19 GMT view revision history
Dis-economies of scale stem primarily from the difficulties in managing and coordinating a large-scale business enterprise TRUE 0 carolinepender Thu, 29 Apr 2010 15:51:19 GMT view revision history
The law of diminishing returns explains why the long-run average total cost curve is u-shaped FALSE 0 carolinepender Thu, 29 Apr 2010 15:49:14 GMT view revision history
Variable costs are costs that vary directly with output TRUE 0 carolinepender Thu, 29 Apr 2010 15:49:14 GMT view revision history
The short run is a period of time during which all costs are fixed costs FALSE 0 carolinepender Thu, 29 Apr 2010 15:49:14 GMT view revision history
When total utility is at a maximum, marginal utility is zero TRUE 0 carolinepender Thu, 29 Apr 2010 15:49:14 GMT view revision history
When the price of a product falls, the income effect induces the consumer to purchase more of it while the substitution effect prompts her to buy less FALSE 0 carolinepender Thu, 29 Apr 2010 15:47:35 GMT view revision history
The substitution effect suggests that, when consumers judge product quality by price, they will substitute high-priced products for low-priced products FALSE 0 carolinepender Thu, 29 Apr 2010 15:47:35 GMT view revision history
If marginal utility is diminishing, total utility must also be declining FALSE 0 carolinepender Thu, 29 Apr 2010 15:47:35 GMT view revision history
If price changes and total revenue changes in the opposite direction, demand is relatively elastic TRUE 0 carolinepender Thu, 29 Apr 2010 15:47:35 GMT view revision history
The smaller the number of good substitutes for a product, the greater will be the price elasticity of demand for it. FALSE 0 carolinepender Thu, 29 Apr 2010 15:45:04 GMT view revision history
A linear demand curve has a constant elasticity over the full range of the curve FALSE 0 carolinepender Thu, 29 Apr 2010 15:45:04 GMT view revision history
Wages and salaries are the largest source of household income TRUE 0 carolinepender Thu, 29 Apr 2010 15:45:04 GMT view revision history
A ceiling price in a competitive market will result in persistent surpluses of a product FALSE 0 carolinepender Thu, 29 Apr 2010 15:45:04 GMT view revision history
A price floor in a competitive market will result in persistent shortages of a product FALSE 0 carolinepender Thu, 29 Apr 2010 15:43:02 GMT view revision history
If market demand increases and market supply decrease, the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes FALSE 0 carolinepender Thu, 29 Apr 2010 15:43:02 GMT view revision history
Toothpaste and toothbrushes are substitute goods FALSE 0 carolinepender Thu, 29 Apr 2010 15:43:02 GMT view revision history
A government subsidy per unity of output increases supply TRUE 0 carolinepender Thu, 29 Apr 2010 15:43:02 GMT view revision history
An increase in quantity supplied might be cause by an increase in production costs FALSE 0 carolinepender Thu, 29 Apr 2010 15:40:31 GMT view revision history
If demand increase and supply simultaneously decreases, equilibrium price will rise TRUE 0 carolinepender Thu, 29 Apr 2010 15:40:31 GMT view revision history
Surpluses drive market prices up; Shortages drive market prices down FALSE 0 carolinepender Thu, 29 Apr 2010 15:40:31 GMT view revision history
Central planning is plagued with a coordination problem and an incentive problem TRUE 0 carolinepender Thu, 29 Apr 2010 15:40:31 GMT view revision history
The wants of consumers are expressed in the product market with "dollar votes" TRUE 0 carolinepender Thu, 29 Apr 2010 15:38:38 GMT view revision history
Although sleeping in on a work day or school day has an opportunity cost, sleeping in on the weekend does not FALSE 0 carolinepender Thu, 29 Apr 2010 15:38:38 GMT view revision history
Choices entail marginal costs because resources are scarce TRUE 0 carolinepender Thu, 29 Apr 2010 15:38:38 GMT view revision history
The production possibilities curve shows various combinations of two products that an economy can produce when achieving full employment TRUE 0 carolinepender Thu, 29 Apr 2010 15:38:38 GMT view revision history
Certain inherently desirable products such as education and health care should be produced so long as resources are available FALSE 0 carolinepender Thu, 29 Apr 2010 15:36:15 GMT view revision history
Normative statements are expressions of facts FALSE 0 carolinepender Thu, 29 Apr 2010 15:36:15 GMT view revision history
Positive statements are expressions of value judgments FALSE 0 carolinepender Thu, 29 Apr 2010 15:36:14 GMT view revision history
An economic model is an ideal or Utopian type of economy that society should strive to obtain through economic policy FALSE 0 carolinepender Thu, 29 Apr 2010 15:36:14 GMT view revision history

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