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Econ 100 Review || 100% VERIFIED ANSWERS!!
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If costs of production increase, while prices of substitute goods increase, what happens to equilibrium price and quantity of this good? correct answers Price increases, quantity decreases An economy produces 2 categories of goods on its production possibilities frontier. There is a decrease in ...

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  • August 19, 2024
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  • 2024/2025
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Econ 100 Review || 100% VERIFIED ANSWERS!!
If costs of production increase, while prices of substitute goods increase, what happens to
equilibrium price and quantity of this good? correct answers Price increases, quantity
decreases

An economy produces 2 categories of goods on its production possibilities frontier. There is a
decrease in the amount of goods necessary in the production of one good but not the other.
What happens to the production of both goods? correct answers Production of both increase

You lost a ticket to a concert that cost $40. A new one is $50, and your time is worth $25.
What is the minimum level of benefits necessary for the decision to go to the concert now
rational? correct answers $75

What happens when you decrease an effective price floor? correct answers Surplus decreases

An economy is on their production possibilities frontier facing diminishing marginal returns.
What happens to opportunity cost if the cost of production of one category of goods
increases? correct answers Opportunity cost rises, because it takes more to produce the good

You have two goods, one that has elastic supply and one that has inelastic supply. A change
in demand occurs. Equilibrium price changes by _____ and equilibrium quantity changes by
_____ in the elastic good than in the inelastic correct answers Less, more

The government creates a new subsidy to producers of a good in a market. One equilibrium
has been reached, the amount produced in the market will be _____ than the allocatively
efficient amount correct answers Greater

What happens to the total amount spent on a service in a market with inelastic demand if the
supply decreases? correct answers Increases

What does an increase in an effective price ceiling do? correct answers If it is effective,
increases the amount sold in a market

A new law is implemented that prohibits any increase in prices in an equilibrium market.
What happens to the market if costs of production increase? correct answers Less than the
allocatively efficient amount is produced

Which is larger, the unemployment rate or the inflation rate? correct answers the
unemployment rate

You have an inferior good in a market. What happens to quantity and price when income
decreases? correct answers Increases quantity and decreases price

There is a decrease of 10% in taxes on goods sold in a market with normal supply and
demand. What happens to equilibrium quantity, and how and by how much does the price
change including tax? correct answers Equilibrium quantity increases, and price including tax
changes by less than the amount of reduction in tax

, Cotton is a substitute good for wool for both producers and consumers. The price of cotton
decreases. What happens to the price? correct answers Decreases

What does it mean when an economy is on its production possibilities frontier? correct
answers Fully employed and technically efficient

Expectations of future prices for a good change, and higher prices are expected. What
happens to equilibrium quantity? correct answers It could either be higher or lower depending
on the situation.

There are two markets, one with an inelastic supply and one with an elastic supply. Both have
the same amount of change in demand. How does equilibrium price and equilibrium quantity
change in the first market in relation to the second? correct answers Equilibrium price in the
first market changes by more than in the second, and equilibrium quantity changes by less
than in the second

What happens to the total amount spent on a product with inelastic demand when supply
decreases? correct answers Total amount spent increases

What happens to equilibrium price and quantity of a product when the price of a substitute
good decreases? correct answers Equilibrium price of good decreases, equilibrium quantity
decreases

In a market with effective price floor, what happens to the shortage or surplus in market if
demand increases? correct answers Surplus gets smaller

What happens to the equilibrium quantity and equilibrium price of a good when the
government pays the producer a subsidy? correct answers Equilibrium quantity rises,
equilibrium price decreases

What is the current rate of inflation? correct answers 3%

What is the current unemployment rate? correct answers 9%

What does an increase in income tax rates do to the spending multiplier? correct answers
Reduces

If the average family income goes from $30,000 to $40,000 and GDP price index goes from
200-400 in the same period of time, what has happened to real average income? correct
answers Increased

There are two countries. One has a low saving rate, one has a high saving rate. In which
country is GDP more affected if there is an increase in exports and no other change? correct
answers The one with the higher saving rate

What happens to US prices, exports, and imports if income decreases in Mexico? correct
answers No change in prices, decreased exports, no change in imports

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