Q1) A Wall Street Journal headline reads: \"Cigar Shortage Draws New Brands into
ID: 1223671 • Letter: Q
Question
Q1) A Wall Street Journal headline reads: "Cigar Shortage Draws New Brands into Market." The shortage resulted from a renewed interest in smoking cigars. Given the shortage, it is most likely price was __________ and ___________________________. A. too high; supply exceeds demand B. too high; quantity supplied exceeds quantity demanded C. too low; quantity demanded exceeds quantity supplied D. too low; demand exceeds supply
Q2) Say when you produce guns, it is relatively inexpensive to produce initially (in terms of what must be sacrificed to produce it), but then per unit costs tend to increase as more is produced. The production of guns exhibits: A. increasing marginal opportunity costs. B. decreasing marginal opportunity costs. C. constant marginal opportunity costs. D. decreasing marginal benefit costs.
Q3) An increase in price and quantity of a good is most likely caused by ___________ shift in demand and ______________ shift in supply. A. a rightward; no B. no; a leftward C. a leftward; no D. a leftward; a rightward
Q4) A decrease in demand along with an increase in supply will likely cause equilibrium price for a good to: A. increase. B. decrease. C. stay exactly the same. D. fall to zero ($0).
Q5) Simple Supply and Demand models are not appropriate when analyzing markets which comprise a large percentage of the economy because: A. a relative price cannot be measured. B. the market will no longer equilibrate. C. interdependencies exist and the "other things constant" qualification no longer holds. D. those markets are not important.
Q6) Say when you produce guns, it is relatively inexpensive to produce initially (in terms of what must be sacrificed to produce it), but then per unit costs tend to increase as more is produced. The production of guns exhibits: A. increasing marginal opportunity costs. B. decreasing marginal opportunity costs. C. constant marginal opportunity costs. D. decreasing marginal benefit costs.
Q7) Which of the following statements is true? A. Because wages are lower in developed countries, they have a comparative advantage in all goods. B. Because technology is more advanced in developed countries, they have a comparative advantage in all goods. C. Both developing and developed countries have comparative advantages in different goods. D. Comparative advantages cannot be compared across countries.
Q8) The production possibility curve represents the concept that a nation must sacrifice the output of some goods in order to produce other goods during a given period of time unless: A. resources are currently being efficiently employed. B. resources are currently being inefficiently employed. C. the nation relies on capital goods production. D. there is currently full employment of resources.
Q9) The opportunity cost of obtaining more of a scarce good is: A. measured by what must be sacrificed to obtain it. B. not likely to influence the amount of it purchased. C. always measured accurately by the dollar sum necessary to purchase it. D. zero.
Q10) A Wall Street Journal headline reads: "Cigar Shortage Draws New Brands into Market." The shortage resulted from a renewed interest in smoking cigars. Given the shortage, it is most likely price was __________ and ___________________________. A. too high; supply exceeds demand B. too high; quantity supplied exceeds quantity demanded C. too low; quantity demanded exceeds quantity supplied D. too low; demand exceeds supply
Q11) Say when you produce guns, it is relatively inexpensive to produce initially (in terms of what must be sacrificed to produce it), but then per unit costs tend to increase as more is produced. The production of guns exhibits: A. increasing marginal opportunity costs. B. decreasing marginal opportunity costs. C. constant marginal opportunity costs. D. decreasing marginal benefit costs.
Explanation / Answer
1. C. too low; quantity demanded exceeds quantity supplied
As its shown that teh demand is not geeting met as there is shortage. so demand exceeds supply
2. A. increasing marginal opportunity costs.
As the cost of each unit produced in increased with same. Its increasing marginal cost.
3. A. a rightward; no
When teh demand curve moves righward teh price increases and there is no change in supply and dmenad also has increased.
4.A. increase
Increse in both demand and supply will increase the equilibrium price curve.
5. C. interdependencies exist and the "other things constant" qualification no longer holds.
As the the economy is a large enough and many things have to be considered. interdependency rises.
6. A. increasing marginal opportunity costs.
As the cost of each unit produced in increased with same. Its increasing marginal cost.
7. C. Both developing and developed countries have comparative advantages in different goods.
Its true as all the countries have somehow someother advantages.
8. B. resources are currently being inefficiently employed
The resoursed are to be eployed efficiently to get maximum out put the best possible production of goods choosen.
9. A. measured by what must be sacrificed to obtain it.
Opportunity cost means the cost incurred to sacrifice other best alternatives.
10. C. too low; quantity demanded exceeds quantity supplied
As its shown that the demand is not geeting met as there is shortage. so demand exceeds supply
11.A. increasing marginal opportunity costs.
As the cost of each unit produced in increased with same. Its increasing marginal cost.
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