Microeconomics
What is the quantity of umbrellas supplied if the market price is $60?
2,000 umbrellas
Which of the following can best be characterized as a subject of microeconomics?
an examination of consumer behavior
Pam sees that the price of bananas has risen in the grocery store. All else equal, she decides to buy more tangerines than she normally purchases. From the information given, you might conclude that:
bananas and tangerines are substitutes
$0.80 107 63 103 103 Correct 0.90 104 71 111 111 Correct 1.00 101 79 119 119 Correct 1.10 98 87 127 127 Correct 1.20 95 95 135 135 Correct 1.30 92 103 143 143 Correct 1.40 89 111 151 151 Correct 1.50 86 119 159 159 Correct 1.60 83 127 167 167 Correct 1.70 80 135 175 175 Correct 1.80 77 143 183 183 Correct
c. Fill in the new supply schedule given the change in the cost of feeding cows.
Jack offers Victoria a plate of a dozen chicken wings. Victoria enjoys the first wing the best, the second wing a little bit less, and by the seventh wing, she has had enough and chooses not to eat the remaining five wings.
diminishing marginal utility
The price of chicken nuggets rises from $3 to $3.50 for a box of six. The price of hamburgers stays the same. Mateo used to eat chicken nuggets three times a week. All else equal, he now eats them twice a week.
substitution effect
If the market price for peaches is $8 per pound, what is the quantity of peaches demanded in Hoboken?
26 pounds
Which of the following scenarios most accurately reflects the concept of scarcity? Brett is a farmer with an open field on which he can plant either soybeans or corn. The steak Henry did not buy because he is a vegetarian. Terry received a paycheck of $1,000 for helping build a house this week. Johnny purchased a skinny vanilla latte from Starbucks.
Brett is a farmer with an open field on which he can plant either soybeans or corn
The table below compares the marginal benefit Lucinda gets from Kewpie dolls and Beanie Babies. Kewpie Dolls Beanie Babies 1 $15.00 1 $12.00 2 12.00 2 10.00 3 9.00 3 8.00 4 6.00 4 6.00 5 3.00 5 4.00 6 0.00 6 2.00 a. If the price of Kewpie dolls and the price of Beanie Babies are both $6, how many of each would Lucinda buy if she were rational? 6 Kewpie dolls and 6 Beanie Babies 4 Kewpie dolls and 4 Beanie Babies 0 Kewpie dolls and 6 Beanie Babies 1 Kewpie doll and 1 Beanie Baby b. If Lucinda has only $18 to spend and the price of Kewpie dolls and the price of Beanie Babies are both $6, how many of each would Lucinda buy if she were rational? 2 Kewpie dolls and 1 Beanie Baby 3 Kewpie dolls and 0 Beanie Babies 1 Kewpie doll and 2 Beanie Babies 0 Kewpie dolls and 3 Beanie Babies
a) 4 Kewpie dolls and 4 Beanie babies b) 2 Kewpie dolls and 1 Beanie baby
a. What is the equilibrium quantity and price per pack of cigarettes if there is no excise tax on cigarettes? b. What is the equilibrium quantity and price per pack of cigarettes if there is a $2.50 excise tax per pack on cigarettes? c. How much tax revenue does the $2.50 per pack excise tax on cigarettes generate each year? d. By how many packs of cigarettes does quantity demanded decrease due to the excise tax on cigarettes? e. By how much did the price paid by consumers change due to the tax on cigarettes?
a)35 billion packs; $7.00 per pack b) 22.5 billion packs; $8.25 per pack c) $56.25 billion d) By how many packs of cigarettes does quantity demanded decrease due to the excise tax on cigarettes? e) $1.25 per pack
Marcus budgets $120 a week for groceries. When the price of all food goes up by 10% he buys less salmon. This can best be explained by:
income effect
A market price:
is a price at which buyers and sellers agree to exchange money for a good or service.
a. Fill in the new supply schedule in the table in the "New Quantity of Steel Supplied" column.
$650 1.1 2.1 1.9 1.9 Correct 640 1.2 2.0 1.8 1.8 Correct 630 1.3 1.9 1.7 1.7 Correct 620 1.4 1.8 1.6 1.6 Correct 610 1.5 1.7 1.5 1.5 Correct 600 1.6 1.6 1.4 1.4 Correct 590 1.7 1.5 1.3 1.3 Correct 580 1.8 1.4 1.2 1.2 Correct 570 1.9 1.3 1.1 1.1 Correct 560 2.0 1.2 1 1 Correct
What is the opportunity cost of producing the 5th terracotta statues 10 porcelain vases 20 porcelain vases 5 porcelain vases 30 porcelain vases
10 porcelain vases
c. If the market price for a dozen roses is $11.00 in February, the quantity supplied of roses in the market will be
450.0 dozen
Fill in the market quantity of rice demanded (column "Market") for each given price.
600 6 0 1 7 Correct 500 7 0.5 3 10.5 Correct 400 8 1 5 14 Correct 300 9 1.5 7 17.5 Correct 200 10 2 9 21 Correct
Samantha needs to purchase something that economists would label as "labor" to help her produce court documents for her law firm. Which of the following is an example of labor? The ability to see that organizing courtroom documents is an unfilled market need A stenography machine to type courtroom proceedings A stenographer who can type courtroom proceedings Filing cabinets to store the typed courtroom documents
A stenographer who can type courtroom proceedings
An infestation of banana spiders makes it extremely difficult to harvest Indian bananas. The U.S. Surgeon General has stated that there are numerous health benefits from eating bananas.
Because bananas are more difficult and expensive to harvest, supply will decrease and the supply curve for bananas will shift to the left. The news about the health benefits of bananas will cause demand to increase, which moves the demand curve for bananas to the right. The two new curves will intersect above the initial equilibrium, which will cause the equilibrium price to increase. The change in equilibrium quantity is indeterminate because the two new curves could create an increased, decreased, or the same equilibrium quantity. Without knowing the exact size of the shifts in the curves, we cannot definitively know whether the new equilibrium quantity will increase, decrease, or remain the same.
Due to an influx of tourists, the quantity of bathing suits demanded increases by 15 bathing suits at every price. Complete the column in the table below.
Price (dollars) Quantity of Bathing Suits Demanded $45 75 Correct 40 85 Correct 35 95 Correct 30 105 Correct 25 115 Correct 20 125 Correct 15 135 Correct
Identify which of the following scenarios is likely to shift the demand for wheat bread to the right.
The population of Arizona grows by 20%. A drought in Kansas makes people believe that the price of wheat bread will increase in a couple of months. As people become more health conscious, they discover the benefits of whole wheat as a part of their diet.
Bob, the owner of a deli in his town, needs to purchase something that economists would label as "capital" to help him produce sandwiches. Which of the following is an example of capital? A new idea that automates the making of sandwiches Ham for the sandwiches A meat slicer to cut ham for sandwiches An additional worker
a meat slicer to cut ham sandwiches
b. Which of the following combinations of fishing lures and duck decoys is unobtainable to Big Lake Bob in one week's worth of carving? 50 fishing lures and 10 duck decoys 80 fishing lures and 5 duck decoys 40 fishing lures and 20 duck decoys 20 fishing lures and 24 duck decoys c. Which of the following combinations of fishing lures and duck decoys is an efficient combination? 20 fishing lures and 24 duck decoys 50 fishing lures and 0 duck decoys 10 fishing lures and 40 duck decoys 16 fishing lures and 30 duck decoys
b)40 fishing lures and 20 duck decoys c)20 fishing lures and 24 duck decoys
The marginal benefit of an additional beach towel is $12. The marginal cost of producing an additional beach towel is $8. If producers are minimizing the average costs of production, then we can conclude:
beach towel production is not allocatively efficient but is productively efficient.
a. When there are no hurricanes threatening Florida and without the "price gouging" law, the equilibrium price is $ 17 17 Correct and the equilibrium quantity is 5,000 5,000 Correct sheets. b. When hurricanes threaten Florida but without the "price gouging" law, the equilibrium price is $ 19 19 Correct and the equilibrium quantity is 5,400 5,400 Correct sheets. c. When hurricanes threaten Florida with the "price gouging" law in place, the price is $ 17 17 Correct , the quantity of plywood demanded is 5,600 5,600 Correct sheets, and the quantity of plywood supplied is 5,000 5,000 Correct in a month. d. If the "price gouging" law goes into effect, the result of the law during hurricane season will be:
d.) to create a shortage of 600 sheets of plywood
Which of the following best explains why people eventually stop eating when they dine at an "All You Can Eat" buffet?
diminishing marginal utility
The additional benefit of producing one more roast beef sandwich at a local deli is $2. The additional cost of producing one more roast beef sandwich is $3. To improve allocative efficiency:
producers should not produce one more roast beef sandwich because MC > MB.
A farmers' market sets a minimum price that farmers may charge for artichokes of $6 per pound. If the supply and demand for artichokes is described in the graph, what is the deadweight loss due to the organizers' policy
$100
a. If the two countries decided to put their resources together, what is the maximum amount (in tons) of potatoes the two countries could produce? 750 tons 1,000 tons 500 tons 250 tons b. If the two countries decided to put their resources together, what is the maximum amount (in tons) of sausages the two countries could produce? 750 tons 250 tons 350 tons 150 tons c. If the two countries each specialize, what is the maximum combination of potatoes and sausages that they can produce together 750 tons of potatoes and 350 tons of sausages 500 tons of potatoes and 200 tons of sausages 250 tons of potatoes and 150 tons of sausages 650 tons of potatoes and 450 tons of sausages
a)750 tons b) 350 tons c)500 tons of potatoes and 200 tons of sausages
The table below shows the quantity of birthday cakes supplied by two producers, Producer A and Producer B. Fill in the "market" column Graph the supply curves for Producer A and Producer B, then graph the market supply curve.
$14 160 440 600 600 Correct 12 120 360 480 480 Correct 10 80 280 360 360 Correct 8 40 200 240 240 Correct 6 0 120 120 120 Correct 4 0 40 40 40 Correct b. To create each of the supply curves, use the price and quantities in the table and plot a point for each set. For example, for Producer A plot a point at a price of $4 and a quantity of 0, then plot a point at a price of $6 and a quantity of 0, and then plot a point at a price of $8 and a quantity of 40. Continue to do this for each price and quantity listed in the table. Repeat this for Producer B and the Market.
Shade in the deadweight loss associated with the price ceiling imposed on the market for packages of AA batteries and calculate the deadweight loss.
$15
a. An increase in the cost of using water decreases production of lettuce heads by 30% at every price. Fill in the new quantity supplied at each price in the "New" column.
$2.00 300 210 210 Correct 1.50 200 140 140 Correct 1.00 100 70 70 Correct 0.50 0 0
What is the quantity of rice demanded in the market (in millions of metric tons) if the market price is $400 per metric ton?
14
d. Given the new supply for butter, what is the monthly surplus of butter created by the price support program?
18 million pounds
This table shows that the opportunity cost of increasing plow production from 4 plows to 8 plows is: 10 spears. 30 spears. 40 spears. 20 spears.
40 spears
Which of the following scenarios would likely shift the supply curve for potatoes to the right (increase in supply)?
A new harvester enables farmers to bring in ripe potatoes twice as fast as they did before.
Which of the following transactions would take place in the resource market? Jerry goes to a sporting goods store and purchases a dozen golf balls before meeting some friends at the golf course. George visits his favorite barbershop and gets a new haircut. Sally gets an airline ticket from an online travel website for her trip to the beach. Lyndsay worked 40 hours this week as a cashier at the local hardware store.
Lyndsay worked 40 hours this week as a cashier at the local hardware store.
Which of the following scenarios is an example of a person interacting outside of a market?
Melissa votes for her favorite performer at a local talent show.
a. What is Venice's opportunity cost of producing one pound of pasta? 2.5 bottles of wine 2 bottles of wine 0.5 bottle of wine 0.4 bottle of wine b. What is Venice's opportunity cost of producing one bottle of wine? 2 pound(s) of pasta c. What is Florence's opportunity cost of producing one pound of pasta? 2 bottles of wine 0.5 bottle of wine 2.5 bottles of wine 0.4 bottle of wine d. What is Florence's opportunity cost of producing one bottle of wine? Instructions: Round your answer to 1 decimal place. 2.5 2.5 Correct pound(s) of pasta e. _____ has the comparative advantage in producing pasta and_______ has the comparative advantage in producing wine.
a) 0.5 bottle of wine b) 2 pounds c)0.4 bottle of wine d) 2.5 pounds of pasta e)Florence; Venice
Lucinda collects Beanie Babies, and can afford to buy up to six of them. The table below describes the marginal benefit Lucinda gets for each additional Beanie Baby she adds to her collection. Lucinda's Beanie Baby Marginal Benefit Beanie Babies Marginal Benefit (dollars) 1 $12.00 2 10.00 3 8.00 4 6.00 5 4.00 6 2.00 a. If the price of Beanie Babies is $8.00 per Beanie Baby, how many Beanie Babies would Lucinda buy if she is rational? 3 Beanie Babies 1 Beanie Baby 4 Beanie Babies 2 Beanie Babies b. If the price of Beanie Babies rose to $10.00 per Beanie Baby, how many Beanie Babies would Lucinda buy if she is rational? 3 Beanie Babies 2 Beanie Babies 1 Beanie Baby 4 Beanie Babies
a) 3 beanie babies b)2 beanie babies
Which of the following can best be characterized as a subject of macroeconomics?
an examination of inflation
On average, about 3,500 new mobile homes are sold every month at an average price of $40,000. In 2013 average income in the United States rose and, all else equal, mobile home sales decreased. From the information given, it is reasonable to conclude that mobile homes:
are inferior goods
Sasha likes to treat herself to a small latte each afternoon. On Wednesdays, when the coffee shop decreases the price of lattes, Sasha buys a large latte instead.
income effect
If the market price rises from $60 per umbrella to $80 per umbrella, the quantity of umbrellas supplied will
increase by 1000 umbrellas
Markets can:
make buyers and sellers better off
a. If Mountain Mack splits his week evenly between carving fishing lures and duck decoys, what is the maximum number of fishing lures and duck decoys he could carve? 40 fishing lures and 50 duck decoys 24 fishing lures and 20 duck decoys 8 fishing lures and 10 duck decoys 20 fishing lures and 25 duck decoys b. If Big Lake Bob splits his week evenly between carving fishing lures and duck decoys, what is the maximum number of fishing lures and duck decoys he could carve? 100 fishing lures and 30 duck decoys 60 fishing lures and 12 duck decoys 20 fishing lures and 6 duck decoys 50 fishing lures and 15 duck decoys c. Combined, how many fishing lures and duck decoys could Mountain Mack and Big Lake Bob carve if each one split his week between the two products? 84 fishing lures and 32 duck decoys 70 fishing lures and 40 duck decoys 140 fishing lures and 80 duck decoys 28 fishing lures and 16 duck decoys d. Big Lake Bob Correct has the comparative advantage in carving fishing lures and Mountain Mack Correct has the comparative advantage in carving duck decoys. e. If both Mountain Mack and Big Lake Bob choose to specialize in the product in which he has a comparative advantage, how many of each product could they produce together? 84 fishing lures and 32 duck decoys 140 fishing lures and 80 duck decoys 100 fishing lures and 50 duck decoys 40 fishing lures and 30 duck decoys
a)20 fishing lures and 25 duck decoys b) 50 fishing lures and 15 duck decoys c)70 fishing lures and 40 duck decoys d)Big Lake Bob; Mountain Mack e)100 fishing lures and 50 duck decoys
a. Given the information above, what is Emmanuel's optimal amount of time spent gardening each week? 1 hour 4 hours 7 hours 0 hours b. If Emmanuel were to spend 2 hours each week gardening: marginal benefit would exceed marginal cost by $18. marginal benefit would equal marginal cost. marginal cost would exceed marginal benefit by $12. marginal benefit would exceed marginal cost by $12. c. If Emmanuel were to spend 6 hours each week gardening: marginal benefit would exceed marginal cost by $18. marginal benefit would equal marginal cost. marginal cost would exceed marginal benefit by $12. marginal benefit would exceed marginal cost by $12.
a) 4 hours b) marginal benefit would exceed marginal cost by $12. c)marginal cost would exceed marginal benefit by $12.
a. Fill in the supply schedule, in the column "Post-Tax" in the table, after the per-pack tax is imposed. c. After the tax is imposed, producers would be willing and able to supply 100 Correct packs of cigarettes to the market at a price of $2.50.
$1.00 100 0 0 Correct 1.50 150 0 0 Correct 2.00 200 50 50 Correct 2.50 250 100 100 Correct 3.00 300 150
The graph represents the market for artichokes (in pounds per week) at a Midwest farmers' market. If the equilibrium price is $3 per pound and the equilibrium quantity is 100 pounds per week, what is the consumer surplus created for consumers of artichokes each week?
$300
a. Fill in the values in the supply schedule for the quantity of roses supplied in February.
$7.00 200 300.0 300.0 Correct 8.00 225 337.5 337.5 Correct 9.00 250 375.0 375.0 Correct 10.00 275 412.5 412.5 Correct 11.00 300 450.0 450.0 Correct 12.00 325 487.5 487.5 Correct 13.00 350 525.0
Recent rains increase the demand for kayaks, as paddlers want to take advantage of the exciting river conditions on the Oconee River. New plastics technology makes kayaks less expensive to make. As a result, one should expect:
Equilibrium price to be indeterminate from the information given, but equilibrium quantity to rise.
Executives at an advertising agency want to increase the demand for the energy drink it promotes. What advice should they give the producer?
Hire a prominent athlete to demonstrate the benefits of the drink
Which of the following best describes the opportunity cost of attending a free concert at the local coffee shop? The amount of money a ticket would have cost if it were not free The chance to play the latest video game with your roommate while you were at the concert Hanging out with your friends at the coffee shop during the concert The coffee you buy while attending the concert
The chance to play the latest video game with your roommate while you were at the concert
Which of the following scenarios will most likely shift the supply of cars to the left (decrease in supply)?
The price of steel and aluminum increase
Graph the new demand curve for bathing suits.
To draw the new demand curve, use the new demand schedule. Start with the first price and quantity combination. Next find the price on the vertical axis (which determines the height of your point) and the quantity on the horizontal axis (which determines how far to the right the point is). Then place your point and use the same procedure for all other points. The new demand curve is located to the right of the initial demand curve: 15 units to the right, to be precise.
a. In the butter market, the monthly equilibrium quantity is 95 95 Correct million pounds and the equilibrium price is $ 1.2 1.2 Correct per pound. b. What is the monthly surplus created in the wholesale butter market due to the price support (price floor) program?
b) zero
a. Which state has the comparative advantage at producing cheese? California Correct b. Which state has the comparative advantage at producing cherries? Wisconsin Correct c. If both states decided to trade with each other, which of the following is a range of terms of trade that would benefit both Wisconsin and California (1 ton of cheese = x tons of cherries)? They would be willing to trade in the range of 0.5 ton of cherries per ton of cheese to 4 tons of cherries per ton of cheese. They would be willing to trade in the range of 0.5 ton of cherries per ton of cheese to 3 tons of cherries per ton of cheese. They would be willing to trade in the range of 1 ton of cherries per ton of cheese to 4 tons of cherries per ton of cheese. They would be willing to trade in the range of 2 tons of cherries per ton of cheese to 4 tons of cherries per ton of cheese.
c) They would be willing to trade in the range of 0.5 ton of cherries per ton of cheese to 3 tons of cherries per ton of cheese.
a. Which producer has the comparative advantage at producing puzzles? Geppetto Correct b. Which producer has the comparative advantage at producing puppets Lewis Correct c. If both producers decided to trade with each other to stock their toy stores, which of the following is a range of terms of trade that would benefit both Geppetto and Lewis (1 puppet = x puzzles)? They would be willing to trade in the range of 2 puzzles per puppet to 6 puzzles per puppet. They would be willing to trade in the range of 2 puzzles per puppet to 5 puzzles per puppet. They would be willing to trade in the range of 1 puzzle per puppet to 5 puzzles per puppet. They would be willing to trade in the range of 1 puzzle per puppet to 6 puzzles per puppet.
c) They would be willing to trade in the range of 2 puzzles per puppet to 5 puzzles per puppet
The ability to see a market need and to organize inputs to meet that need is what type of market resource?
entrepreneurial ability
c. Because of the increased number of bicycle lanes in rural Indiana, the equilibrium price of bicycles _____ and the equilibrium quantity of bicycles _____.
increases by $25; increases by 75 bicycles
_____________examines economies on a large scale, while ______________ examines economic activity on a relatively small scale.
macroeconomics; microeconomics
Managers at a local home improvement store see that new home sales in their area have increased. They order more refrigerators for their store. They likely do this because they assume that:
new homes and refrigerators are complements.
The opportunity cost of an action is always equal to: the things you could have done instead of the action you chose to undertake. the time you give up to undertake the action. the money you give up to undertake the action. the next-best alternative for the resources used to undertake the action.
the next best alternative for the resources used to undertake