EC 101 Problem Sets

A demand curve normally shifts when

. the consumer's income changes.

f an economist has sufficient data on supply and demand for widgets in a competitive market, she can predict

. the quantity of widgets that will be purchased.

If Julie and Sarah buy rice for the same price, but Julie is willing to pay more for rice than Sarah is, then

. Julie will get more consumer surplus from rice than Sarah will.

If the price elasticity of supply for cell phone service is 3, a 20% price increase will cause the quantity supplied to increase by

60%

When you calculate your (opportunity) costs of going to college, what portion of your room-and-board expenses should be included?

The excess of your room-and-board expenses over room-and-board expenses you would have had if you weren't in college

Which of the Following comes closest to perfect competition

The market for wheat

A perfectly inelastic supply curve is

Vertical

Relative to a person who earns $7 per hour, a person who earns $30 per hour has

a higher opportunity cost of taking a day off

An inward shift in the demand for lettuce could be caused by

a report that Barack Obama throws his lettuce in the trash when his kids aren't looking.

Capital formation requires

a sacrifice of consumption.

Suppose the total value of US stocks drops by $100 billion because Donald Trump announces that a black cat is bringing him bad luck. Then,

factories would be able to produce the same amount as earlier.

e exchange of goods or services in a free market is likely to increase the welfare of both sides because

in free markets exchange is voluntary.

The cross price elasticity of demand for two goods that are complements is

negative

In a complex economy, selling and buying is a more effective procedure for exchange than barter is, because

with barter it is difficult to find an appropriate trading partner.