EPF - Unit 02

Jean has $20.00 to buy either a ticket to see a new movie or a ticket to the fair in town. She decides to buy the ticket to the movie. What is Jean’s opportunity cost?

• deciding how to spend the $20.00

• spending the $20.00

• giving up the fair

• getting to watch the movie

When the price of gasoline goes up, what will the airlines do to continue to earn a profit?

• increase the prices of tickets

• increase the pay of their employees

• decrease the prices of tickets

• decrease the number of seats on the airplanes

What is the formula to determine Total Cost (TC)?

***Note: Fixed Cost (FC), Variable Costs (VC), Average Total Cost (ATC), Marginal Cost (MC)***

• TC = FC plus VC

• TC = MC minus FC

• TC = VC minus FC

• TC = ATC minus FC plus MC

The combining of two or more firms competing in the same market with the same good or service such as Coke merging with Pepsi is a(n)...

• Horizontal Merger

• Vertical Merger

• Conglomerate Merger

• Principle Merger

All of the alternatives when we have to choose one course of action over another; like a choice between “this or that”

• Trade-Off

•  

  Substitution

• Equilibrium

• Complement

In which circumstance would a shoe store reduce the price of shoes?

• surplus

• specialization

• shortage

• equilibrium

How would U.S. consumers most likely react to a large increase in the excise tax on luxury cars imported from Japan? Note: This would cause the price of cars from Japan to increase.

• U.S. consumers would buy more domestic or European luxury cars.

• U.S. consumers would continue to buy Japanese luxury cars.

• U.S. consumers who usually purchase Japanese luxury cars would demand greater fuel efficiency in those cars.

• U.S. consumers who usually purchase Japanese luxury cars would buy non-luxury Japanese cars instead.

The combining of two or more firms involved in different stages of producing the same good or service such as McDonalds owning cattle farms to raise beef for hamburgers is a(n)...

• Vertical Merger

• Horizontal Merger

• Conglomerate Merger

• Hamburglar

Why is monthly rent a fixed cost for a business owner who makes a product to sell?

• The monthly rent can be expected to stay the same for the term of the lease.

• The landlord may change the cost of the rent at any time during the lease.

• A limited number of work on the property under the terms of the lease.

• Business owners pay their leases in advance for the entire rental period.

In a market economic system, what happens to the price of a good when its supply increases and its demand decreases?

• The price typically decreases.

• The price fluctuates wildly.

• Usually nothing.

• The price typically increases.