Micro midterm...

An automobile gets 40 miles per gallon, and a gallon of fuel costs $4.00. What is the marginal fuel cost for a typical mile of driving with this vehicle?

$0.10

(Figure: Effects of Price Ceilings) Refer to the figure. Suppose that the data represent the retail gasoline market. At a price ceiling of $2, the total value of wasted time from waiting in line is:

$10.

(Figure: Labor Market 1) If there is a price floor set at $9, how much deadweight loss is created, if any?

$30 million

Refer to the figure. Calculate the total dollar amount of producer surplus earned in this market if the market price is $60.

$800

According to this week's podcast, what is the number of total bitcoins?

21 million

(Figure: Minimum Wage) Refer to the figure. At a minimum wage of $8, firms are willing to hire ________ workers. Correct!

25

(Figure: Price Ceiling) Refer to the figure. When a price ceiling of $10 is instituted by the government, consumers are able to buy how many units of the product?

270 units

(Figure: Good X) From the figure, which statement is TRUE?

At a price of $6 per unit, consumers are willing and able to purchase 26 units of Good X

(Figure: Deadweight Loss) Which of the areas represent the area of government revenue resulting from a $2 tax?

B + C

If the government places a tax on sellers of $0.67 per unit in this market, who will bear the burden of the tax?

Buyers will pay the majority of the tax.

Which combination of demand and supply curves results in the greatest tax burden to buyers?

D0 and S0

David sells his car, which he considers worthless, to Cameron for $200. Which of the following statements is true?

David and Cameron must have different preferences for the car.

how are wealth and economic growth related?

Economic growth causes increases in wealth.

A higher opportunity cost of producing a good increases the supply of that good.

False

According to this week's podcast: Blake did not want to lose Burger King. They were a big employer. They were a big company, a point of pride for the state of Kansas.

False

According to this week's video: "There are four things that can increase the energy use: first, population growth; second, economic growth; third, economic conflict; and four, the use of technologies like Bitcoin."

False

Advances in technology such as personal computers and cellular telecommunications are indicated in the supply graph by a movement along the supply curve.

False

Greater emphasis on self-sufficiency and trading less with foreign countries would increase incomes and living standards in the United States.

False

The Venezuelan state does not own oil companies, and that is the root of Venezuela problems.

False

Figure A: Supply Right Shift Figure B: Supply Left Shift

Figure A depicts the expectation that the future price will decrease.

According to one of our lectures this country was, at one point in time, the richest colony in the Western Hemisphere:

Haiti

This man in Ecuador came up with an answer to the global cocoa shortage...

Homero Castro

According to this week's podcast Applebee's ended up moving to:

None of these

(Figure: Elasticity of Supply) Refer to the figure. Which supply curve is the most inelastic?

S1

(Figure: Demand, Supply Shifts) In the figure, the initial demand curve is D1 and the initial supply curve is S1. Resource prices in this market increase; at the same time, the consumer population declines as migration causes an outflow of population to other regions. What happens to the supply curve and/or demand curve?

S1 shifts to S2 and D1 shifts to D2.

If North Korea and South Korea were both equally poor in 1950, why has South Korea developed so much faster since then?

South Korea has maintained a more market-based economic system

Refer to the figure. Which one of the four supply curves has the greatest responsiveness to price changes?

Supply Curve B

(Figure: Comparative Advantage) The figure illustrates both the U.S. and Japanese production possibilities frontiers for TVs and wheat. Based on this information, which of the following is TRUE?

The United States has the comparative advantage in the production of wheat.

An increase in supply and a decrease in demand occur in a market. What happens to the equilibrium price and quantity?

The equilibrium price decreases; the change in the equilibrium quantity is uncertain.

(Figure: Basic Supply and Demand) In the diagram, which of the following statements is TRUE?

The equilibrium price is $3, and the equilibrium quantity is 50 units.

Figure: Comparative Advantage) The figure illustrates both the U.S. and Japanese production possibilities frontiers for TVs and wheat. Based on this information, which of the following is TRUE?

The opportunity cost of producing a TV in Japan is 2 bushels of wheat.

According to one of our lectures, this is an informal institution for street-soccer:

The team that scores last wins the game.

A change in quantity supplied is reflected by a movement along the same supply curve while a change in supply refers to a shift in the entire supply curve.

True

A period marked by falling wages, falling national output, and rising unemployment is called a recession.

True

Drug prohibition is likely to increase drug-industry revenue because the demand for drugs is inelastic.

True

Evidence from history shows that when the extent of trade expands, the result is prosperity. Correct!

True

High inflation in Zimbabwe in 2009 was a result of the Zimbabwean government's printing too much money.

True

Fluctuations in graduate school enrollment correlate positively with fluctuations in unemployment. What is the most likely reason why?

When jobs are difficult to find, the opportunity cost of going to grad school is high.

(Figure: Losses from Price Ceilings) Refer to the figure. At a price ceiling of $1, the area representing the total value of wasted time is ________, and the area of the deadweight loss is ________.

bd; ce

Ceteris paribus, the total subsidy is largest when:

both demand and supply are elastic.

Refer to the figure. The deadweight loss from the $8 minimum wage is area:

ce.

According to one of our lectures "high order goods" refers to:

complementary goods

A market with price ceilings fails to maximize all of the following EXCEPT:

excess supply.

After a hurricane, the prices of many items rise. How BEST might the government help poor people be able to afford to buy goods and services?

give poor people debit cards for use in purchasing essential items, while leaving prices unregulated

Absolute advantage is the ability to produce a:

good with fewer inputs than others.

Allocating products with long lines, using a first-come, first-served system, is:

inefficient, because waiting wastes time.

A 4 percent increase in the price of beer will cause a 1 percent decline in the quantity of beer demanded. The demand for beer is:

inelastic.

A policymaker wants to reduce inflation. In order to make an intelligent decision about how to do so, the policymaker:

needs to know the causes of inflation, for example, the government's printing of too much money.

A dependable legal system and competitive, open markets help to:

shape incentives that induce economic growth.

(Figure: PPF Mexico & United States) Use the above figure in which both Mexico and the United States each have 24 units of labor. Mexico has a comparative advantage in ______ and the United States has a comparative advantage in ______.

shirts; computers

A binding price ceiling leads to a(n):

shortage

Table: Equilibrium Adjustment) Refer to the table. If the price in the free market is $2, then a:

shortage of 50 units would exist, and price would rise.

Joe Gebbia, the co-founder of Airbnb, asked people in the audience to do the following experiment...

to unlock their phones and pass them to another person.

An increase in the minimum wage would likely increase unemployment among which group of workers?

unskilled workers