p.32
Demand and Supply Dynamics
What happens to supply when input costs decrease?
Supply shifts to the right.
p.28
Demand and Supply Dynamics
How does population size affect demand?
A larger population means demand shifts.
p.40
Demand and Supply Dynamics
What happens to equilibrium price when demand decreases?
Equilibrium price decreases.
p.38
Demand and Supply Dynamics
How do you determine the quantity traded at a specific price?
By referring to the demand and supply schedules at that price point.
p.35
Demand and Supply Dynamics
How do you find the equilibrium price and quantity?
By setting the demand function equal to the supply function.
p.27
Demand and Supply Dynamics
What is the implication of rising future prices on current consumer behavior?
Consumers may increase their current demand to avoid higher prices later.
p.20
Economic vs Accounting Costs and Profit
How does Economic Profit compare to Accounting Profit?
Economic Profit is always less than or equal to Accounting Profit.
What does marginal cost refer to in the context of a book?
The additional cost of making one more book.
p.28
Demand and Supply Dynamics
What factors can shift demand?
Population size and tastes/preferences.
p.35
Demand and Supply Dynamics
What is market equilibrium?
When the quantity supplied equals the quantity demanded for a product.
p.11
Positive and Normative Economics
What is prohibited regarding the Wizedemy Inc. publication?
Reproduction, transmission, or storage in a database without permission.
p.30
Demand and Supply Dynamics
If product X and Y are substitutes, what is the effect of an increase in the price of X?
Demand for X will shift left and demand for Y will shift right.
p.40
Demand and Supply Dynamics
What are the two factors affecting equilibrium in this scenario?
Decrease in demand and increase in supply.
p.24
Demand and Supply Dynamics
What does the demand curve represent?
The entire curve showing how much consumers want to buy at every price level.
What is opportunity cost?
The value of the next best alternative that is forgone when a choice is made.
p.39
Demand and Supply Dynamics
What is the significance of the price being set at $6?
It determines the quantity traded in the market.
p.39
Demand and Supply Dynamics
What factors influence whether there is a shortage or surplus at a price of $6?
The levels of demand and supply at that price.
p.41
Demand and Supply Dynamics
Which option describes the potential outcomes for equilibrium price and quantity in the cellphone market given the conditions?
D. Equilibrium price may rise or fall and equilibrium quantity will rise.
p.3
Market Structures: Market, Command, and Mixed Economies
Is there any country that operates purely as a Market Economy?
No, no country is actually like this in the real world.
p.25
Demand and Supply Dynamics
What does a change in price cause in terms of consumer behavior?
A change in Quantity Demanded (movement along the curve).
p.36
Demand and Supply Dynamics
What occurs when the price is below equilibrium?
There is a shortage, also called excess demand.
p.41
Demand and Supply Dynamics
What happens in the market for cellphones when there is a technological advancement and consumers' income rises?
Equilibrium price may rise or fall and equilibrium quantity will rise.
p.26
Demand and Supply Dynamics
What are inferior goods?
Goods for which demand decreases as income increases.
p.26
Demand and Supply Dynamics
How do complements affect demand?
When the price of one product increases, the demand for the other product decreases.
p.38
Demand and Supply Dynamics
What is the equilibrium quantity?
The quantity at which the market clears, meaning there is no shortage or surplus.
p.14
Positive and Normative Economics
What rights are reserved by Wizedemy Inc. regarding the publication?
No part may be reproduced or transmitted without prior written permission.
p.30
Demand and Supply Dynamics
What is the correct option if the price of product X increases?
A) Demand for X will shift left and demand for Y will shift right.
p.41
Demand and Supply Dynamics
What is the effect of technological advancement on the supply of cellphones?
It typically increases supply, leading to potential changes in equilibrium price and quantity.
p.16
Production Possibility Frontier (PPF) and Opportunity Cost
What does it mean to produce inside the production possibilities frontier?
It indicates that resources are not being used to their full potential.
p.24
Demand and Supply Dynamics
In the example provided, what happens to quantity demanded when the price increases from $40 to $50?
Quantity demanded falls from 30 units to 25 units.
p.33
Demand and Supply Dynamics
What is the effect of an increase in the price of complements in production?
The supply of the related product will shift.
What does the term 'next best alternative' refer to?
The second most preferred option that is sacrificed when making a decision.
p.5
Inflation and Consumer Price Index (CPI)
What types of goods are included in the Consumer Price Index?
Goods like cellphones, vegetables, and microwaves.
p.43
Demand and Supply Dynamics
Which option correctly describes the changes in equilibrium prices for Goods A and B?
A. equilibrium price of B will fall and price of A will fall.
p.44
Demand and Supply Dynamics
Which statement is correct regarding the price of $1?
At a price of $1, there is a surplus of 4000 burgers.
p.1
Microeconomics vs Macroeconomics
What is the focus of macroeconomics?
The study of the economy as a whole, including inflation, unemployment, and economic growth.
p.4
Invisible Hand and Market Failure
Give an example of market failure.
If there was no tax on cigarettes, too many people would be smoking and working in the cigarette industry.
p.17
Production Possibility Frontier (PPF) and Opportunity Cost
What does PPF stand for in economics?
Production Possibility Frontier.
p.27
Demand and Supply Dynamics
What happens to demand if prices are expected to rise in the future?
Today, the demand will shift to the right.
p.20
Economic vs Accounting Costs and Profit
What is the formula for Accounting Profit?
Accounting Profit = Total Revenue - Accounting Costs.
What is meant by marginal benefit?
The additional benefit you will feel from reading one more book.
p.20
Economic vs Accounting Costs and Profit
What is the formula for Economic Profit?
Economic Profit = Total Revenue - Economic Costs.
p.25
Demand and Supply Dynamics
Does a change in price shift the demand curve?
No, it does not shift demand.
p.15
Production Possibility Frontier (PPF) and Opportunity Cost
What does the principle of increasing opportunity cost lead to in terms of the production possibilities frontier (PPF)?
A production possibilities frontier (PPF) that is bowed outward from the origin.
p.38
Demand and Supply Dynamics
What is the equilibrium price?
The price at which the quantity demanded equals the quantity supplied.
p.12
Production Possibility Frontier (PPF) and Opportunity Cost
What happens to the opportunity cost of making cars as production increases?
The opportunity cost increases.
p.11
Positive and Normative Economics
Can any part of the Wizedemy Inc. publication be reproduced without permission?
No, prior written permission is required.
p.7
Demand and Supply Dynamics
What does the statement 'If the price of a good rises, the quantity demanded for that good will fall' illustrate?
It illustrates a theory in economics.
p.30
Demand and Supply Dynamics
What happens to the demand for product Y if the price of its substitute product X increases?
The demand for Y will shift right.
p.38
Demand and Supply Dynamics
What happens if the price is set at $9?
There may be a resulting shortage or surplus depending on the demand and supply schedules.
p.10
Production Possibility Frontier (PPF) and Opportunity Cost
What effect does high unemployment have on the Production Possibility Frontier (PPF)?
Unemployment does not shift the PPF; it leads to a point inside the PPF (inefficient).
p.40
Demand and Supply Dynamics
What happens to equilibrium quantity when demand decreases and supply increases?
Equilibrium quantity may increase or decrease depending on the magnitude of the changes.
p.7
Demand and Supply Dynamics
What is the consequence of a price increase for a good?
The quantity demanded for that good will fall.
p.40
Demand and Supply Dynamics
What is the effect of an increase in supply on equilibrium price?
Equilibrium price tends to decrease.
p.6
Positive and Normative Economics
What is a theory in economics?
A logical view of how things work, often based on observation.
p.10
Production Possibility Frontier (PPF) and Opportunity Cost
What is the impact of technological improvement on the PPF?
It can shift the PPF outward, indicating increased production capacity.
p.30
Demand and Supply Dynamics
What happens to the quantity demanded for product X when its price increases?
Quantity demanded for X will decrease.
What is the purpose of the video tutorial on wizeprep.com?
To provide a lesson related to economics.
p.29
Demand and Supply Dynamics
What is the effect of an increase in the price of a product on demand?
It would cause the demand to shift left.
p.6
Positive and Normative Economics
What is an example of a theory in economics?
The belief that less developed countries grow at a faster rate than developed countries.
p.31
Demand and Supply Dynamics
What does the supply curve represent?
It shows how much firms are willing to produce at every price.
p.37
Demand and Supply Dynamics
What is the expected outcome when analyzing price in relation to supply and demand?
To find the resulting shortage or surplus.
p.29
Demand and Supply Dynamics
What happens to demand when there is a decrease in the price of a product?
It typically does not shift left; demand may increase.
p.28
Demand and Supply Dynamics
What happens to the demand for basketball jerseys during basketball season?
The demand shifts due to increased interest.
p.10
Production Possibility Frontier (PPF) and Opportunity Cost
What does a point inside the PPF represent?
Inefficiency in resource utilization.
p.36
Demand and Supply Dynamics
What happens when the price is above equilibrium?
There is a surplus, also called excess supply.
p.21
Economic vs Accounting Costs and Profit
What is Sarah's economic cost for the week?
$600 (accounting cost + opportunity cost of $200).
p.29
Demand and Supply Dynamics
How does a decrease in income affect demand for an inferior good?
It would cause the demand to shift left.
What economic concept does the PPF highlight regarding the two goods?
The trade-off between the two goods.
p.33
Demand and Supply Dynamics
How does the number of firms affect supply?
More firms entering the industry will cause supply to shift.
p.5
Inflation and Consumer Price Index (CPI)
What does inflation refer to in an economy?
An increase in the overall level of prices.
p.43
Demand and Supply Dynamics
If the cost of a resource used in the production of Good A decreases, what is the expected effect on the equilibrium price of Good B?
The equilibrium price of B will fall.
p.13
Production Possibility Frontier (PPF) and Opportunity Cost
What does a Straight Line PPF (Linear PPF) represent?
The trade-off between two goods, such as cars and bikes.
p.4
Invisible Hand and Market Failure
What does the Invisible Hand concept refer to?
The idea that supply and demand determine the equilibrium price and quantity of products.
p.9
Production Possibility Frontier (PPF) and Opportunity Cost
What is one factor that can shift the PPF outward?
An increase in resources, such as more immigration or land.
Give an example of scarcity.
The limited amount of metals available in each country for construction and manufacturing.
p.19
Economic vs Accounting Costs and Profit
What is the economic cost in the vacation example?
$1500 (accounting cost + opportunity cost).
p.26
Demand and Supply Dynamics
What happens to the demand for normal goods when income increases?
Demand shifts to the right (increases).
p.39
Demand and Supply Dynamics
What happens if the price is currently $6 in terms of market equilibrium?
It would result in either a shortage or surplus, depending on demand and supply.
p.29
Demand and Supply Dynamics
What is the impact of an increase in the price of a complementary good on demand?
It would cause the demand to shift left.
p.42
Demand and Supply Dynamics
What occurs when supply shifts left and demand shifts right?
The price will rise, but the equilibrium quantity might increase, decrease, or stay the same.
p.16
Production Possibility Frontier (PPF) and Opportunity Cost
What happens when the economy produces beyond the PPF boundary?
It indicates that the economy cannot sustain that level of production with current resources.
p.42
Demand and Supply Dynamics
What happens when both supply and demand shift left?
The price will rise, but the equilibrium quantity might increase, decrease, or stay the same.
p.22
Positive and Normative Economics
Give an example of a positive statement.
Students in North America on average pay $9000 in tuition fees.
p.9
Production Possibility Frontier (PPF) and Opportunity Cost
What does a concave Production Possibility Frontier (PPF) indicate?
It shows increasing opportunity costs.
What does scarcity refer to in economics?
The lack of enough resources to meet everyone's desires.
p.4
Invisible Hand and Market Failure
What is market failure?
A situation where a market fails to allocate resources efficiently.
p.17
Production Possibility Frontier (PPF) and Opportunity Cost
Which factor would not cause the PPF for Canada to shift outward?
A decrease in unemployment as the economy moves out of a recession.
p.17
Production Possibility Frontier (PPF) and Opportunity Cost
How does an increase in immigration affect the PPF?
It causes the PPF to shift outward.
p.8
Production Possibility Frontier (PPF) and Opportunity Cost
What does a Production Possibility Frontier (PPF) illustrate?
The maximum quantities of two goods an economy can produce, given its technology, labor, and capital.
p.24
Demand and Supply Dynamics
What is the difference between demand and quantity demanded?
Demand refers to the entire curve, while quantity demanded is a specific point on that curve.
If you choose to go to the library, what is your opportunity cost?
Working out at the gym, having breakfast with friends, and sleeping late.
p.21
Economic vs Accounting Costs and Profit
What is Sarah's economic profit for the week?
$-100 (total revenue of $500 - economic cost of $600).
p.39
Demand and Supply Dynamics
What does a surplus indicate in a market?
That the quantity supplied exceeds the quantity demanded at a given price.
p.33
Demand and Supply Dynamics
What happens to the supply of a substitute in production if its price increases?
The supply of the related product will shift.
p.43
Demand and Supply Dynamics
What is the expected effect on the price of Good A if the cost of a resource used in its production decreases?
The price of A will fall.
p.44
Demand and Supply Dynamics
What happens at a price of $1 in terms of burger supply and demand?
There is a surplus of 4000 burgers.
p.9
Production Possibility Frontier (PPF) and Opportunity Cost
What do points on the PPF itself represent?
Efficient use of resources.
p.9
Production Possibility Frontier (PPF) and Opportunity Cost
What can cause the PPF to shift inward?
A reduction in resources, such as hurricanes or floods.
p.32
Demand and Supply Dynamics
How does an improvement in technology affect supply?
It causes the supply to shift to the right.
p.32
Demand and Supply Dynamics
What is the effect of expectations on the supply curve?
When supply increases, the curve shifts right or downward, indicating an increase.
Which option represents the correct understanding of opportunity cost in the given scenario?
Option a) working out at the gym, having breakfast with friends, and sleeping late.
p.31
Demand and Supply Dynamics
Does a change in price cause a shift in supply?
No, a change in price only causes a change in Quantity Supplied, not a shift in supply.
p.5
Inflation and Consumer Price Index (CPI)
How is inflation usually measured?
Using the Consumer Price Index (CPI).
What is the definition of economics?
The study of unlimited human wants and limited resources.
p.9
Production Possibility Frontier (PPF) and Opportunity Cost
What do points inside the PPF represent?
Inefficient use of resources.
p.9
Production Possibility Frontier (PPF) and Opportunity Cost
What is another factor that can shift the PPF outward?
Improvements in technology or better education.
p.41
Demand and Supply Dynamics
What are normal goods in the context of market changes?
Goods for which demand increases as consumer income rises.
What does the PPF demonstrate about resources?
It shows the scarcity of resources (limited resources).
p.24
Demand and Supply Dynamics
What does the Law of Demand state?
As price rises, quantity demanded will fall.
p.31
Demand and Supply Dynamics
What happens to Quantity Supplied when the price increases from $40 to $50?
Quantity Supplied increases from 80 to 90 units.
p.26
Demand and Supply Dynamics
What happens to the demand for substitutes when the price of one increases?
The demand for the other substitute increases.
p.39
Demand and Supply Dynamics
What does a shortage indicate in a market?
That the quantity demanded exceeds the quantity supplied at a given price.
p.42
Demand and Supply Dynamics
What is the outcome if none of the provided scenarios occur?
The price and equilibrium quantity will not change in a predictable manner.
p.34
Demand and Supply Dynamics
What effect does an improvement in technology have on the supply of books?
It would typically shift supply upward, making production more efficient.
p.34
Demand and Supply Dynamics
What impact does a decrease in the salary of workers in the book industry have on supply?
It would shift supply upward due to lower labor costs.
p.19
Economic vs Accounting Costs and Profit
In the vacation example, what is the opportunity cost?
$500 (earnings from the part-time job that could have been worked).
p.17
Production Possibility Frontier (PPF) and Opportunity Cost
What effect does an improvement in technology have on the PPF?
It causes the PPF to shift outward.
p.6
Positive and Normative Economics
What is a model in economics?
A formalization of theory that facilitates scientific inquiry and simplifies complex real-world concepts.
p.21
Economic vs Accounting Costs and Profit
What is Sarah's accounting profit for the week?
$100 (total revenue of $500 - accounting cost of $400).
p.16
Production Possibility Frontier (PPF) and Opportunity Cost
What is the significance of the production possibilities frontier (PPF)?
It illustrates the maximum possible output combinations of two goods that can be produced with available resources.
p.24
Demand and Supply Dynamics
Does the demand change when the price increases in the example given?
No, the demand does not change; there is no shift in the demand curve.
p.22
Positive and Normative Economics
Give an example of a normative statement.
Canadians should pay less in tuition.
p.9
Production Possibility Frontier (PPF) and Opportunity Cost
What do points outside the PPF represent?
Unattainable production levels with current resources.
p.31
Demand and Supply Dynamics
What is the difference between Supply and Quantity Supplied?
Supply refers to the entire curve, while Quantity Supplied is a specific point on the supply curve.
p.6
Production Possibility Frontier (PPF) and Opportunity Cost
What is the Production Possibility Frontier (PPF)?
A model that simplifies the production of millions of goods to two goods to help understand concepts like opportunity cost.
p.22
Positive and Normative Economics
What is the main difference between positive and normative economics?
Positive economics deals with factual evidence, while normative economics involves value judgments and opinions.
p.42
Demand and Supply Dynamics
What is the effect on price and equilibrium quantity when supply shifts right and demand shifts left?
The price will decrease, and the equilibrium quantity might increase, decrease, or stay the same.
p.3
Market Structures: Market, Command, and Mixed Economies
What defines a Command Economy?
The government determines what, how, and for whom to produce goods.
p.3
Market Structures: Market, Command, and Mixed Economies
What is a Mixed Economy?
A mix of command and market economies.
p.34
Demand and Supply Dynamics
What would shift the supply of books upward?
C) an increase in the cost of ink.
p.1
Microeconomics vs Macroeconomics
What does microeconomics focus on?
The study of how households and firms make decisions and interact in markets.
p.4
Invisible Hand and Market Failure
What do consumers aim to maximize according to the Invisible Hand theory?
Their utility (happiness).
p.19
Economic vs Accounting Costs and Profit
What are opportunity costs?
Costs associated with what is given up when making a choice, also known as implicit costs.
What is a positive externality?
An effect that benefits others, such as vaccination reducing the chance of others getting sick.
p.37
Demand and Supply Dynamics
What is required to determine the shortage or surplus in Example 3?
The same equations as above.
p.31
Demand and Supply Dynamics
What does the Law of Supply state?
As price rises, the quantity supplied will increase.
p.3
Market Structures: Market, Command, and Mixed Economies
What is a Market Economy?
An economy where the government does not intervene.
p.22
Positive and Normative Economics
What are normative statements?
Value judgments that include an opinion and are subjective.
p.5
Inflation and Consumer Price Index (CPI)
What is the Consumer Price Index (CPI)?
The price of a fixed basket of goods that consumers use regularly.
p.5
Inflation and Consumer Price Index (CPI)
What does the CPI measure?
The average price level in the economy.
p.19
Economic vs Accounting Costs and Profit
What are accounting costs?
Measured financial costs for the firm, also known as explicit costs.
What is an externality?
The impact of one person’s actions on the well-being of a bystander.
p.16
Production Possibility Frontier (PPF) and Opportunity Cost
What is production efficiency?
Production efficiency is achieved when producing one more unit of one good cannot occur without producing less of some other good.
p.33
Demand and Supply Dynamics
What happens to supply if prices are expected to rise in the future?
The supply will shift today.
p.6
Production Possibility Frontier (PPF) and Opportunity Cost
Why are models like the PPF useful in economics?
They simplify complex real-world concepts for easier understanding.
p.21
Economic vs Accounting Costs and Profit
How much did Sarah earn from selling her paintings?
$500 (5 paintings at $100 each).
p.43
Demand and Supply Dynamics
What are Goods A and B classified as?
Complementary goods (in consumption).
p.22
Positive and Normative Economics
What are positive statements?
Statements that describe the world as it is and do not include opinions; they are objective.
p.22
Positive and Normative Economics
What words typically indicate a normative statement?
Words like 'should' or 'ought.'
p.19
Economic vs Accounting Costs and Profit
How do economic costs compare to accounting costs?
Economic costs are always greater than or equal to accounting costs.
p.42
Demand and Supply Dynamics
What happens to price and equilibrium quantity when both supply and demand shift right?
The price will rise and the equilibrium quantity will increase.
p.8
Production Possibility Frontier (PPF) and Opportunity Cost
What is opportunity cost in the context of the PPF?
The cost of forgoing the next best alternative when making a decision.
Why is option c) incorrect regarding opportunity cost?
Because opportunity cost is not about monetary payment but about the value of the next best alternative.
p.16
Production Possibility Frontier (PPF) and Opportunity Cost
Which option describes a scenario where all goods and services desired by consumers can be produced?
This scenario does not represent production efficiency as it does not consider resource limitations.
p.34
Demand and Supply Dynamics
How does a decrease in the cost of paper affect the supply of books?
It would likely shift supply upward, as production costs decrease.
p.19
Economic vs Accounting Costs and Profit
Give examples of accounting costs.
Wages paid to employees, rent for office/factory, cost of raw materials.
p.19
Economic vs Accounting Costs and Profit
In the vacation example, what is the accounting cost?
$1000 (total costs of tickets and hotel reservation).
What is a negative externality?
An effect that harms others, such as secondhand smoke from cigarettes.
p.44
Demand and Supply Dynamics
What is the correct answer to the quiz options provided?
C) at a price of $1, there is a surplus of 4000 burgers.
p.19
Economic vs Accounting Costs and Profit
What is the formula for economic costs?
Economic Costs = Accounting Costs + Opportunity (Implicit) Costs.
p.17
Production Possibility Frontier (PPF) and Opportunity Cost
What impact does the discovery of a new oil reserve have on the PPF?
It causes the PPF to shift outward.
