ECO 201 Final Exam part 2

0.333

Below is the production possibilities frontier (PPF) for Healthcare and Education. What is the opportunity cost of one more unit Healthcare at point B on the PPF (in terms of units of Education)?

.33

Below is the production possibilities frontier (PPF) for Healthcare and Education. What is the opportunity cost of one more unit Education at point A on the PPF (in terms of units of Healthcare)?

3,000

Bill goes to buy a car at the used car lot. He finds a 2 year old Toyota Camry that he likes. He is willing to pay up to $12,000 for this car. The dealer is willing to sell the car for as low as $9000. The agree upon price for the sale was $11,000. What is the economic surplus of the entire market (both buyer and seller)?

2,000

Bill goes to buy a car at the used car lot. He finds a 2 year old Toyota Camry that he likes. He is willing to pay up to $12,000 for this car. The dealer is willing to sell the car for as low as $9000. The agreed upon price for the sale was $11,000. What is the economic surplus of the car dealer?

lower his profitability by $5 per ton.

Frank is a barley farmer in a perfectly competitive market. The market price of barley is $250 per ton. If Frank charges $245 per ton, he will

The supply of clothing will decrease in the market today.

How will the supply of clothing change if the forecast is that clothing prices will rise in the next few months?

decreases the supply of furniture

If baseball bats and furniture are substitutes in production, then a rise in the price of baseball bats:

shift to the right; increase

If the economy booms and peoples' incomes rise, then the demand curve for a normal good like a new automobile will _____, and the equilibrium quantity of new automobiles produced will _____.

is in shortage; increase to clear the market

If the market price is below the equilibrium price, then the market _________ and market price will _________.

demand decreased

In the market for jeans, you see that equilibrium price decreased and equilibrium quantity decreased. This means that if only one curve shifted, then ...

yes

Lee purchased a snow blower for the winter storm season and he values it at $450. He is thinking about selling it on Oxford Yard Sale on Facebook and he asks for a price of $600 for it. Last snow season Lindsey paid a neighbor $700 to shovel her driveway and sidewalk. She saw the ad on Facebook and would be willing to pay up to $650 for the snow blower. Would Lee and Lindsey want to voluntarily engage in trade of the snow blower at the posted price?

whatever Ralph would have done had he not gone to the game

Ralph is offered a free ticket to a Yankees game—a ticket he cannot resell. His opportunity cost of going to the baseball game is:

the ski lift ticket her parents have already purchased for her.

Rose Riley's parents have booked and paid for a family trip to Aspen, Colorado, during her spring break. Rose's friends recently decided to drive to Destin, Florida, for spring break. Rose needs to decide whether to join her parents in Aspen or drive to the beach with her friends. The opportunity costs of joining her friends on the trip to Destin include each of the following EXCEPT

5

Sam runs a flower shop and is looking over the account books to try and decide what is the profit maximizing amount of flower arrangements to sell and how many employees to hire. The table below captures the relevant information. Using the Rational Rule from class, how many workers should Sam hire to maximize the company's profit (i.e. economic surplus)?

125

Sam runs a flower shop and is looking over the account books to try and decide what is the profit maximizing amount of flower arrangements to sell and how many employees to hire. The table below captures the relevant information. What is the marginal cost of the fifth worker?

Quantity decreases, and the Price change is unknown

Suppose demand decreases and supply decreases, then what happens to the equilibrium price and quantity when comparing the new equilibrium to the old equilibrium?

Quantity increases, and the Price change is unknown

Suppose demand increases and supply increases, then what happens to the equilibrium price and quantity when comparing the new equilibrium to the old equilibrium?

All of the answers fit (except None)

The graph below is consistent with (Pick one):

Expectation that future prices will decrease

The graph below is consistent with (Pick one):

Price of a substitute increased

The graph below is consistent with (Pick one):

an increase in the price of salmon, a substitute in consumption

The market for lobster is in equilibrium. Which factor is most likely to INCREASE the equilibrium price of lobster?

a free lunch (no trade-off) no free lunch (a trade-off)

Use the graph below for the Production Possibilities Frontier (PPF) for the production of Burgers and Pizza. At point C there is [ Select ] ["", "no free lunch (a trade-off)", "", "a free lunch (no trade-off)"] to get more Burgers, and at point B there is [ Select ] ["no free lunch (a trade-off)", "a free lunch (no trade-off)"] to get more Pizza.

The lower cost of production will lead to an increase in supply and a fall in the price of clothing.

What will happen in the market for clothing when a major department store shifts its production of clothing to a low-labor-cost country?

graph d

Which of the following graphs shows what will happen in the market for printing paper if the price of printing paper rises?

fall in the quantity demanded of vanilla lattes.

You go to Starbucks and see that the price of your favorite tall vanilla latte has gone up by 25 cents. All sizes of the vanilla lattes are now more expensive. As a result of this price increase, you would expect to see a

supply; left

You notice that the price of computers has risen and that the quantity of computers sold has decreased. These observations suggest that the _____ curve for computers has shifted to the _____.

there would be a shortage of 400 units.

graph- At a price of $15,

$25 and 400 units

graph- Equilibrium price and quantity in this market are, respectively:

Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.

graph- Suppose that, next period, demand for this good decreases and, at the same time, supply of the good decreases. What would happen in the market for the good?

A

graph- The figure shows how supply and demand might shift in response to specific events. Suppose the Surgeon General announces that eating potato chips causes heart disease. Which panel BEST illustrates how this announcement will affect the market for potato chips?

an excess supply would exist and the price would tend to fall from $35 to a lower price.

graph- at a price of $35

Quantity supplied decreased

graph-Because of the shift in demand graphed in the figure below, did...

The marginal cost equals the marginal benefit and Harry is producing the profit maximizing quantity of sandwiches

graph-Harry is looking at the accounting books from his sandwich shop and trying to decide how much to sell. He makes the following graph. For the 150th sandwich, ...

surplus; 8,000

graph-If the price of quinoa is $10 per bushel, a _____ of _____ bushels per period will result.

a surplus

graph-In the graph below, if the price stayed at the initial equilibrium price after the shift in the demand curve, will there be ...?

375

graph-Sam runs a flower shop and is looking over the account books to try and decide what is the profit maximizing amount of flower arrangements to sell and how many employees to hire. The table below captures the relevant information. What is the marginal benefit of the second worker?

A

graph-The figure shows how supply and demand might shift in response to specific events. Suppose vast new oilfields are discovered offshore of Washington state, so that gasoline prices fall. Which panel BEST illustrates how this development will affect the market for luxury sport utility vehicles?