Macroeconomics Practice Exam

factors that shift supply curve

1. input/resource prices 2. technology 3. taxes 4. expectations of future prices 5. number of sellers

factors that shift demand curve

1. income 2. price of related goods 3. expectations of future prices 4. number of buyers 5. tastes and preferences

complements-in-production

allows a business to produce goods together.

Joshua Murphy is planning on studying late into the night for his economics exam. How many cups of coffee should he buy tonight? Joshua should keep buying coffee throughout the evening until the marginal:

benefit of purchasing one more coffee is less than the marginal cost

the cost-benefit principle states that a decision should be pursued only if the

benefits are greater than the costs

Rational Rule for Buyers

compares the benefit of buying an additional unit of the item to the cost of that item

Amul Food Factory in India makes ice cream and produces processed and condensed milk. In the factory, the firm's employees use raw milk and sugar. The firm runs on electricity and purchases raw milk every day. Large robotic assembly lines fill and package the ice cream containers. Large industrial freezers store the ice cream. Based on this scenario, can you identify the fixed costs for Amul Food Factory? 1. cost of raw milk purchased from farmers 2. cost of sugar 3. cost of buying industrial freezers 4. cost of buying the robotic assembly line

cost of buying industrial freezers cost of buying the robotic assembly line

movement down of the supply curve

decrease in price of the item

Charles McCoy is a manager at a coffee shop and is making hiring decisions. with one worker, he can make 15 drinks that sell for $3 on average in a single hour. with a second worker, he can ,are an additional 12 drinks to a single hour. the marginal product of each additional worker decreases by three drinks with each additional hire. assuming that workers are paid $12 per hour and work eight hours, how many employees should Charles hire for each hour?

four

diminishing marginal benefit

is when buying an additional item yields a smaller marginal benefit than the previous item.

Nerida Kyle could either commute to work via Uber or purchase a new car. The average cost of her one-way Uber trip is $15. Nerida works five days a week for 50 weeks a year. Based solely on avoiding the cost of an Uber, Nerida should purchase a car if the cost of the car is _____ than _____ per week.

less; $100

Ivan has inherited his mother's 1963 Chevrolet Corvette, which he values at $45,000. He decides that he might be willing to sell it, so he posts it on Craigslist for $55,000. Samantha is interested and willing to pay up to $72,000 for one. a voluntary economics exchange ________occurs between Ivan and Samantha because __________ positive economic surplus from the transaction.

occurs; both Ivan and Samantha receives

when you calculate marginal costs for a seller, they should include

only variable costs

an upward shifting supply curve shows that

there is a positive relationship between price and quantity supplied

if a store runs a sale on a product to clear out its stock, we can conclude that

there was a surplus of the product in the store

King Taco charges the same price for everything on its menu: $5 will buy a taco, a burrito, or nachos. You buy the burrito and think that if you had not purchased the burrito, you would have purchased the taco. The opportunity cost of the burrito is:

your forgone enjoyment of the taco