microeconomics final

suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or one computer in an hour. The opportunity cost of 20 cameras in terms of computers in Germany is

1 computer

In the above figure, if the market price is $100 per ton, then the firm's producer surplus on the second ton of wheat is

25

In the nation of Transporta, the income elasticity of demand for used cars is -2.66. Thus, when incomes in this nation increase by 10 percent

26.6 percent fewer used cars will be purchased.

The above table shows production points on Sweet-Tooth Land's production possibility frontier. What is the opportunity cost of one chocolate bar if Sweet-tooth Land moves from point C to point D?

3 cans of cola

The above table shows production points on Sweet-Tooth Land's production possibility frontier. Which of the following is an example of a point that is inefficient?

38 chocolate bars and 0 cans of cola.

Which graph shows the impact of scientists developing a more powerful fertilizer?

A

Which of the following would increase the equilibrium price of a used car and also increase the equilibrium quantity sold?

A fall in income if used cars are an inferior good.

Which of the following could cause a movement along, but no shift in, the supply curve for shredded wheat breakfast cereal?

A report by the U.S. Surgeon General that increased wheat consumption increases nervousness and stress.

Based on the following pieces of information, which fast food product do consumers see as the closest substitute for Wendy's Hamburgers?

Kentucky Fried Chicken, which has a cross elasticity of 1.70 with Wendy's.

Which of the following would directly cause the supply curve of broccoli to shift?

The destruction of much of this year's broccoli crop by unexpected hurricanes.

All shredded wheat producers have decided to add a new ingredient to shredded wheat, the "crunch enhancer." Crunch enhancer keeps cereals crisper longer in milk and, as a result, consumers decide they like shredded wheat more than before. What happens to the equilibrium price and quantity of shredded wheat now that is costs more to produce but consumers like it better?

The equilibrium price will rise, but the effect on the equilibrium quantity is uncertain.

In 1973 and again in 1979, the Organization of Petroleum Exporting Countries (OPEC) raised the world price of crude oil and increased their revenue as well. Which of the following is a true statement regarding these OPEC price hikes?

Their revenue increased because the demand for oil was price inelastic.

Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements is true?

Washington has an absolute advantage in the production of both pecans and pears.

Consider the market for soft drinks shown in the figure above. Suppose the economy is at point a. What would cause a movement to point c?

a decrease in the price of a soft drink.

If the minimum wage is set above the equilibrium wage, a supply and demand diagram of the low-skilled labor market will show unemployment as

a horizontal distance.

Using the production possibility frontier model, labor unemployment is described as producing at

a point inside the PPF curve.

Ticket scalpers at the NCAA basketball tournament last year charged prices high above the printed ticket price. This observation is evidence of

a shortage at printed ticket prices.

The fundamental issue of economics is to

analyze choices that must be made because of the scarcity of resources.

Production efficiency is achieved

at the point of production at which producing one more unit of one good cannot occur without producing less of some other good.

A rent ceiling set above the equilibrium rent

has no effect.

According to the figure above, the opportunity cost of producing another computer is

higher at B.

25) In the above figure, the individual's consumer surplus will be highest when

ice cream is free.

About six months ago, Pat lost the job as vice president of a local bank. Since losing the job, Pat still has the Sunday newspaper delivered every week. For Pat, the Sunday newspaper is

income inelastic.

If University of Nebraska increased its season football ticket sales from 40,000 to 45,000 when it lowered price from $350.00 to $300.00, then its demand for season tickets must be

inelastic because total revenue decreased when the price was lowered.

Which of the following is a normative statement?

low rents are good because they make apartments more affordable.

Suppose that an economist tells you that people in the United States do not save enough out of their incomes. This is an example of a(n) ____ statement.

normative

The above table shows production points on Sweet-Tooth Land's production possibility frontier. A movement from ____ represents the greatest opportunity cost of increasing cola production.

point B to point A

The statement "The unemployment rate for teens is higher than that for adults" is

positive statement

Increasing opportunity cost occurs along a production possibility frontier because

resources are not equally productive in all activities.

The bowed outward shape of the production possibility frontier in the above figure indicates that

some resources are better suited for producing computers.

The above figure shows Dana's demand curve for ice cream. If the price of ice cream is $2 per gallon, then the gallon that gives Dana exactly zero consumer surplus is

the 12th gallon.

An important determinant of the price elasticity of supply is

the extent to which production requires the use of particularly scarce or specialized resources.

It is efficient to produce an additional shirt if

the marginal benefit of producing the shirt is greater than the marginal cost of producing it.

The production possibility frontier represents

the maximum levels of production that can be attained

If the price of salt increases and the quantity demanded does not change, then

the price elasticity of demand is equal to zero. & demand is perfectly inelastic.

Producer surplus is

the price paid for a good minus the opportunity cost of making it.

A decrease in the price of eggs from $1.10 to $1.00 per dozen caused an increase in egg purchases in two cities. In Philadelphia, daily egg purchases increased from 6000 to 8000 dozens; in nearby Dover, Delaware, daily egg purchases increased from 300 to 400 dozens. The price elasticity of demand is therefore

the same in Philadelphia as in Dover.

The best measure of the opportunity cost of any choice is

whatever you would have given up to make that choice, even if no monetary costs are involved.

In the above figure, if the price of good A increases from P2 to P1 and the demand for good B decreases from D1 to D2, then goods A and B

will have a negative cross elasticity of demand.