past exams

assume that the fixed input, capital, is 10 acres of land a tractor, which have a combined cost of 150 per day. The cost of labor is 100 per worker per day. The fixed cost of producing 25 bushels of soybeans is...

150

if the market is originally in equilibrium and the government imposes an excise tax of .80 per unit of the good sold, consumer surplus will be reduced by:

175

Adam has a monthly income of $20 that can be spent on books (B) and pencils (P). The price of a book is $5 and the price of a pencil is $0.50. Which of the following bundles of books and pencils lies on Adam's budget line?

2 books and 20 pencils

use the graph to calculate consumer surplus when the market is at equilibrium

2000

assume that the fixed input, capital, is 10 acres of land a tractor, which have a combined cost of 150 per day. The cost of labor is 100 per worker per day. The total cost of producing 25 bushels of soybeans is...

250

if Liyun has $20 to spend on potatoes and clams, then the utility maximizing combination is .... lbs of clams and .... lbs of potatoes

2;6

the price of milk is $2 per gallon, and the price of honey is $4 per jar. Hal's income is 16. assuming Hal spends all of his income on honey and milk, if he buys 2 jars of honey, he can buy ..... gallons of milk

4

faruq spends all of his income on tacos and milkshakes. His income is 100, the price of tacos is 10, and the price of milkshakes is 2. if faruq spends all of his income, the opportunity cost of one taco equals .....

5 milkshakes

if the government wants to limit shrimp sales to 500 lbs, it can impose a .... excise tax on sellers and the total tax revenue generated will be .....

5, 2500

sed is deciding how many football games he wants to attend this year. If the games are free, how many will he attend?

7

in autarky, Jackson produces and consumes 30 head of cattle and 80 bushels of wheat, while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat. if both nations specialize completely in the good of their comparative and Jackson exports 120 bushels of wheat to Tahoe in exchange for 60 head of cattle, the new consumption point for Jackson after trade is .... bushels of wheat and .... head of cattle.

80;60

If they spend all night writing computer programs, Laurence can write 10 programs while Carrie Anne can write 5. If they spend all night making sunglasses, Laurence can make 6 while Carrie Anne can make 4. We know that ... has the comparative advantage in .....

Laurence, programs

the marginal cost of increasing production from 51 to 64 bushels of wheat is:

15.38

suppose the market for gasoline is in equilibrium. you have heard that the price of crude oil is falling because of new oil discoveries. You are also aware that the number of car and truck drivers is steadily raising. knowing this you predict that the price of gasoline will .... and the quantity of gasoline bought/sold will ....

rise or fall; rise

If a nation exports a good when the economy is opened to trade, relative to the autarky price, the domestic price of the good will _____ and domestic consumption will _____.

rise; fall

when the government imposes a tariff on imported oranges, the price of oranges in south africa rises from PW to PT and domestic producer surplus .... to .....

rises; G + H

assume both PB and ice cream are normal goods. She has just achieved the utility-maximizing solution in her consumption of the 2 to goods when the price of PB increased. as she adjusted to this event, the marginal utility PB ... and that of ice cream....

rose; fell

the total surplus in a market is:

the sum of consumer surplus and producer surplus

look at the table of the PPF for tractors and crude oil. the opportunity cost of ..... is .... in the US as than in Mexico:

tractors; lower

If the market for buffalo meat is in equilibrium, the price of buffalo meat will probably _____ in the near future.

not change

which of the following influences does NOT shift the supply curve?

people deciding that they want to buy more of a product

Austin's total fixed cost at the bakery is 3600 a month. Austin employs 20 workers and pays each worker 8 an hour. the marginal product of the 20th worker is 12 iced cupcakes an hour. what is the marginal cost of the last cupcake produced by the last worker Austin hired?

$0.67

Sasha buys a warm soda and a slice of cold pizza. The marginal utility from a soda is 40, and the price of the soda is $1. The marginal utility from a slice of pizza is 80. Since Sasha always chooses the utility-maximizing choice, we know the price of a slice of pizza must be

$2

if the price of a good increases by 20% and the quantity demanded changes by 15% then the price elasticity of demand is equal to:

.75

An announcement that smoking will harm your ability to think clearly will most likely result in...

A decrease in the demand for cigarettes

a quota is:

an upper limit on quantity

if the prices of inputs used to produce/transport coconuts increased, it would be represented in the figure as a movement from:

C to A

market failure refers to a situation in which:

markets fail to reach an efficient outcome

countries that engage in trade will tend to specialize in goods in which they have ... and will .... those goods

a comparative advantage; export

"unemployment of 5% is too high" is:

a normative statement

There are several close substitutes for Bayer aspirin but fewer substitutes for a complete medical examination. Therefore all other things equal, you would expect the demand for:

bayer aspirin to be more price-elastic

according to the .... principle, those who use public services should bear the burden of the tax that pays for them

benefits

part of the .... associated with the Chicago Cubs baseball team is their batting cages used in practice

capital

suppose the government sets a price floor of 2.85 per bushel on corn when the current price is 2.55, this price floor will...

cause a surplus of corn

look at the table tutoring. Sigmund faces:

constant marginal cost

If the demand for tires goes down when the price of gas goes up, then tires and gas are:

compliments

The market for salmon is in equilibrium. A price ceiling, a price floor, and a quota limit in this market would all cause:

deadweight loss arising from a quantity exchanged that is less than the equilibrium quandtity

The idea of diminishing returns to an input in production suggests that if a local college adds more custodians, the marginal product of labor for the custodial staff will ________.

decrease

When an increase in the firm's output reduces its long-run average total cost, it achieves ... scale:

economies of

suppose the economy now operates at point C, moving to point E would require the economy:

eliminate its production of strawberries

accountants use only ... costs in their computations

explicit

When marginal cost is below average variable cost, average variable cost must be:

falling

property rights are an important feature of an effective market because they:

give owners of goods/services the right to use and dispose of those goods and services as they choose.

to maximize her grade is economics, stacey should study until...

her marginal benefit of studying equals her marginal cost of studying

a direct restriction on the quantity of an import is called an

import quota

in autarky the price of oranges in south africa is P1. when the economy is opened to trade, the price falls to PW, south africa will ..... oranges and the volume of trade will equal

import, Ct-Qt

which is NOT an inefficiency caused by binding price ceilings

in efficient allocation of sales among sellers

peanut butter and jelly are complements in consumption. assuming that the supply curve of PB is upward-sloping, if there is a decrease in the price of jelly, producer surplus in the PB market will ...

increase

Along a given supply curve, an increase in the price of a good will:

increase producer surplus

the law of demand states that other things equal, as price...

increases, the the quantity demanded will decrease

excise taxes that raise the most revenue and cause the least deadweight loss are likely to be levied on goods for which demand is ... and supply is....

inelastic; inelastic

demand for the gala apples is relatively elastic compared to the supply of gala apples, so if a tax is imposed on the consumers of Gala apples, the tax incidence...

is typically on producers more than consumers

According to the infant industry​ argument, import protection is needed because:

it enables our protected industries to achieve technological efficiency and thus become competitive with mature foreign industries

An urbanized country has 100 million workers living on 100 square miles of land. A country that is principally rural has 1 million workers living on 10 square miles of land. From this information we know that the urbanized country is ________ relative to the rural country.

land-abundant

When milk prices increased in 2008, one milk consumer stated that the reason he cut down on milk consumption is so that he could drive his car. This action represents a:

movement along the demand curve for milk

Xavier notices that the marginal utility of working with a tutor seems to fall with each hour the tutor helps him study. If Xavier keeps the tutor until his grade actually begins to fall, his marginal utility for the last hour of tutoring will be:

negative

when the market is in equilibrium there is no outside intervention to change the equilibrium price:

no mutually beneficial trades are missed

Supply curves tend to be more ________ the more time producers have to adjust to price changes

price-elastic

the income effect of a price changes in the effect on consumption changes as a result of a change in...

purchasing power caused by a change in the price of the good

Rent controls set a price ceiling below the equilibrium price and therefore:

quantity demanded exceeds the quantity supplied

when the government removes a binding price floor....

quantity demanded will increase and quantity supplied will increase

in response to popular anger over the high price of fried twinkies and the extreme wealth of fried twinkies producers, the government imposes a price ceiling of 1.2 per fried twinkies, from this table the price ceiling causes a ..... of fried twinkies

shortage of 3000

when building a model, economists:

simplify reality to highlight what really maters

in the short tun:

some inputs are fixed and some are variable

The larger the output, the more output over which fixed cost is distributed. Called the _____ effect, this leads to a ______ average _____ cost.

spreading; lower; fixed

the government might impose a price floor if .... can make a strong moral/political argument for ... prices.

suppliers; higher

if an excise tax is imposed on beer and collected from the producers, the .... curve will shift .... by the amount of the tax

supply; upward

In a single year, the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, Belgium can raise 50 tons of beef or produce 750 boxes of tulips. From this information, we know that:

the Netherlands has a comparative advantage in raising beef

the quota rent is...

the difference between the demanded price and the supply price at the quota limit

a consumers willingness to pay reflects:

the maximum price at which he/she would buy a good/service

the deadweight loss from an excise tax coms about because:

the number of transactions in the market is reduced and some beneficial transactions do not take place

the demand for melas at a local applebee's will shift to the left if...

the olive garden offers a 10 percent discount coupon in the local newspaper

the market for apples is in equilibrium at a price of 0.50 per pound. if the government imposes a price floor in the market at a price of 0.40 per pound:

the price floor will not affect the market price or output

economists who are asked to choose between two government policies may disagree because:

they base their conclusions on models that make different assumptions

economists describe the satisfaction consumers relieve from consuming goods/services as

utiliy

the substitution effect of a price change is described by the statement that:

when the price of canning jars falls, consumers will substitute these lower priced canned jars for higher priced goods.

if a frost destroys much of the grapefruit crop, assuming a positively sloped supply curve and a negatively sloped demand curve, total surplus....

will decrease

if two firms are identical in all respects except that one has more of the fixed input capital than another, the total product curve for the firm with more capital;

will lie above the total product curve for the firm with less capital

if the demand curve for ice cream is downward sloping and the supply of it decreases there is a .... in consumer surplus

decrease