Micro Final

37. Staci's Sign Shoppe makes signs for businesses. Staci is currently producing 210 signs per week with three employees. She hires an additional worker and total output per week rises to 328 signs. The marginal product of the last worker is _____ signs.

118

23. Suppose that the quantity demanded for a product falls by 9% as people's incomes fall by 3%. What is the income elasticity for this good?

3.00

33. A grocery store announced a 50% decrease in the price of local honey. Sales increased by 200%. Based on the information, the price elasticity of honey is:

4

3. Which question is NOT an example involving marginal analysis?

Should K-Mart rebrand all its stores to using the Sears name?

17. Which item is NOT a determinant of supply?

Technology, expectations, taxes and substitutes, # sellers, price of related commodities, cost of resources

25. If hot dogs and relish are complements, their cross elasticity of demand is:

less than 0

19. The price of automobiles is rising because more people want to purchase cars. As a result,

quantity demanded decreases

36. Most economists assume that firms behave _____ and that their objective is _____.

rationally; profit maximization

16. The law of supply states that as prices _____, the quantity _____.

rise; rise

29. If a product's price rises by 6% and its quantity demanded falls by 8%, then we can say that demand for this product is:

1.33

31. Walmart is thinking about offering a 25% discount on a brand of shoes. If the elasticity of demand is two, then the discount would increase sales by:

50%

40. The Wonderful Gadget Company produces 500 gadgets per week with 50 employees. It hires an additional worker and output rises to 507 gadgets. The marginal product of the last worker hired is _____ gadget(s).

7

18. Which event will NOT lead to a decrease in supply?

A decrease in the number of sellers will decrease supply.

6. Marginal analysis would put an emphasis on:

Additional costs and benefits

27. If the cross elasticity of demand for two goods is negative, that means that they are:

Complements

14. A decrease in demand causes the equilibrium price to _____ and the equilibrium quantity to _____.

Decrease; decreases

10. What economic term is how well resources are used and allocated?

Efficiency

41. Economic costs are the sum of _____ and _____.

Implicit; explicit

20. A shift to the right of the supply curve could be caused by a(n):

Improvement in production technology

9. Paying a salesperson more for increased sales is an example of:

Incentive

15. A shift to the right of the demand curve could be caused by a(n):

Increase in income if the good is normal

44. Which characteristic is found in a perfectly competitive market?

Many buyers and sellers Homogeneous (standardized) products No barriers to market entry or exit No long-run economic profit No control over price (no market power)

Why is this company considered to be eco-friendly?

Many of their products that they sell are eco-friendly. For example, they have some products that are biodegradable which helps reduce waste. They also have a team that is dedicated to help the environment. REI has a strong commitment to environment stewardship .

47. _____ is the change in total revenue that results from the sale of one added unit of product.

Marginal revenue

12. When quantity demanded in a market equals quantity supplied, then the:

Market is in equilibrium

50. A market situation in which large numbers of firms produce similar but not identical products is:

Monopolistic Competition

22. In general, the flatter the supply curve is, the:

More elastic is supply

30. Which of these would result in a higher price elasticity?

More substitutes

24. If the income elasticity of demand for tea is 0.50, tea is a:

Normal good

49. A(n) _____ market is a market in which just a few firms control a large market share.

Oligopoly

48. Which of the following is a characteristic of a monopoly firm?

One firm No close substitutes for product Nearly insuperable barriers to entry Potential for long-run economic profit Substantial market power and control over price

1. The highest valued alternative that is forgone when you choose an action is called its:

Opportunity cost

Why do employees enjoy working for the company?

The people who work there are very dedicated and have good intentions with the outdoors. They listen to and respect each others opinion. They have very good leaders which allows them to engage in good conversation. Also, there are many benefits for the workers.

43. The calculation for economic profit is total revenue minus:

Total cost

46. Price per unit times the total quantity sold is:

Total revenues

28. If the percentage change in quantity demanded is equal to the percentage change in price, then demand is:

Unitary elastic

35. (Table) Based on the table, diminishing returns occur when hiring the _____ worker.

added worker but marginal product decreases

21. In the graph, an increase in quantity demanded would be represented by a change from point a to point _____, while a decrease in demand would be represented by a change from point d to point _____.

c; c

42. Marginal product is defined as the:

change in output that results from a change in labor (ΔQ/ΔL).

5. Economics is a social science that involves the study of how individuals, firms, and societies:

choose among alternatives to satisfy their unlimited wants

13. When a large factory closed in the town of Greenville, income fell for many residents. As a result, demand for normal goods would _____ and demand for inferior goods would _____.

decrease; increase

45. For all firms, regardless of the market structure, the profit-maximizing rule is to produce at the point at which marginal revenue:

equals marginal cost

4. What economic term is the fairness of various issues and policies?

equity

38. Money that a firm spends on health care for employees is a(n):

explicit cost

39. (Table) Based on the table, the marginal cost of the fourth unit produced is:

find difference on TC column

34. Total costs are a combination of:

fixed costs

26. The greater the percentage of the budget spent on a good, the:

higher is the elasticity of demand

32. A firm increases its price for a good and total revenues increase. From this, we can conclude that its demand:

inelastic

11. There is a(n) _____ relationship between price and quantity demanded.

inverse

7. The opportunity cost of undertaking an activity is defined as the:

the benefit forgone by not undertaking the next-best activity.

2. Scarcity is BEST defined as when:

unlimited wants exceed limited resources

8. Thinking at the margin involves:

weighing the impact of one additional activity