Midterm 2

( Table : Marginal Utility per Dollar of Twix ) Use Table Marginal Utility per Dollar of Twix . The price of Twix is $ 2 per bar . The marginal utility per dollar of the second bar of Twix is : a . 2 . b . 10 . C. 16 . d . 5 .

A

8. The demand for tacos is very inelastic compared to the supply of tacos , so if a tax is imposed on producers of tacos , the tax incidence : a . will fall on consumers more than producers . b . cannot be determined without more information . c . will fall equally on consumers and producers d . will fall on producers more than consumers

A

Costs for Buckwheat . The marginal cost of increasing production from 19 to 36 bushels of buckwheat is : 10. ( Figure and Table : Variable , Fixed , and Total Costs for Buckwheat ) Use Figure and Table : Variable , Fixed , and Total a . $ 11.76 . b . $ 22.22 . c . $ 23.53 . d . $ 11.11 .

A

Goods and services purchased from abroad are while goods and services sold abroad are a imports ; exports b . exports ; imports c . imports ; international supply d . exports ; international demand

A

John really enjoys eating Nathan's hot dogs in New York City . His marginal utilities from the first three hot dogs he consumes are 200 , 150 , and 125 , respectively . His total utility when he consumes three hot dogs is : a. 475 . b . 350 . C. 125 . d . 200 .

A

Josephine's budget line reflects the available to Josephine if she spends of her income . a. consumption bundles ; all b. utility ; all C. utility ; part d . consumption bundles ; part

A

Table : Optimal Choice of Yogurt and Cheese ) Use Table : Optimal Choice of Yogurt and Cheese . The price of yogurt is $ 2 per unit , and the price of cheese is $ 4 per pound . Hailey's income is $ 16 . her income on cheese and yogurt , the combination of yogurt and cheese that will maximize her total utility is Assuming that Hailey spends all of pounds of cheese and yogurt ( s ) . a. 2 : 4 b . 3 : 2 c . 1 : 6 d . 8 : 8

A

The Market for Grapes in California ) Use Figure : The Market for Grapes in California . When the government imposes a tariff on imported grapes , the price of grapes in California rises from PW to PT , and there's a net in total surplus of a . reduction ; D + F b. reduction ; D + E + F c . addition ; D + E + F d . addition ; D + F

A

The is a time period over which at least one input is fixed a. short run b . production run c . long run d . temporal run

A

The total product curve : a . will become flatter as output increases if there are diminishing returns to the variable input . b . will be downward sloping if there are diminishing returns to the variable input c. shows the relationship between output and the quantity of the variable input for varying levels of the fixed input d. will become horizontal when the marginal product of the variable input is constant .

A

marginal utility of the last bottle of port he bought is 60 , and the marginal utility of the last block of Swiss cheese he William spends all of his money on port and Swiss cheese Diminishing marginal utility applies to both goods . The bought is 30. The price of port is $ 3 , and the price of Swiss cheese is $ 2 . William : a should buy more port and less Swiss cheese . b . should buy more Swiss cheese and less port . C. is buying port and Swiss cheese in the utility - maximizing amounts . d . is spending too much money on port and Swiss cheese

A

( Table : Production Function for Quinoa ) Use Table : Production Function for Quinoa . Assume that the fixed input consists of 10 acres of land and 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 70 bushels of quinoa is : a . $ 400 . b . $ 550 . c . $ 1,024 . d . $ 250 .

B

20. The average total cost of producing wireless routers in a factory is $ 20 at the current output level of 100 routers per week . If the fixed cost is $ 1,200 per week : a variable cost is $ 2,000 . b . average variable cost is $ 8 . C. average fixed cost is $ 20 . d . total cost is $ 3,200 .

B

( Figure : Budget Lines for Bottled Water and Biscotti ) Use months now , Angela has had $ 20 per month to and each biscotti is $ 1 . Which chart shows what will happen to her budget line if her income increases to $ 25 ? spend on bottled water and biscotti . The price of each cup of bottled water Figure : Budget Lines for Bottled Water and Biscotti . For a . C B. A C. B d . D

B

( Figure The Market for Online Movie government imposes a tax of $ 3 in this market , the deadweight loss will equal ; Downloads ) Use Figure : The Market for Online Movie Downloads . If the a . $ 0 . b . $ 22.50 . c . $ 52.50 . d . $ 26.25 .

B

26. ( Table : The Production Possibilities for Electric Cars and Designer Boots ) Use Table : The Production Possibilities for Electric Cars and Designer Boots . Given the opportunity costs of production : a . the United States should specialize in both goods , and China should not produce either good . b . there is no basis for trade . c . China should specialize in designer boots . d . the United States should specialize in electric cars .

B

A progressive tax : a has no deadweight loss . b. brequires higher income earners to pay higher tax rates . c . requires lower income earners to pay no taxes . d . requires higher income earners to pay lower tax rates

B

If marginal cost is GREATER than average total cost : a . marginal cost is decreasing . b , average total cost is increasing c. average total cost is decreasing . d . average total cost is unchanged .

B

Prior to any taxes , the equilibrium price of bottled water is $ 5 per gallon . Then a $ 1 - per - gallon tax is levied . As a result , the demand price of bottled water rises to $ 5.75 per gallon . The incidence of the $ 1 tax is paid by consumers and paid by producers . a . $ 0.50 ; $ 0.50 b. $ 0.75 ; $ 0.25 c$ 0 ; $ 1.00 . d . $ 0.25 ; 0.75

B

Table : The Utility of California Rolls ) Use Table : The Utility of California Rolls . The marginal utility of the fourth roll is : a . 15 . b. 5 . c . 10 . d . 35 .

B

The Market for Summer Sandals ) Use Figure : The Market for Summer Sandals . The government recently levied a $ 10 tax on the producers of summer sandals . What area or areas in the graph identify the loss of consumer surplus due to the tax ? a . a + b + c b.b + c C. C d . b

B

The incidence of a tax : a . is a measure of the deadweight loss generated by the tax . b . refers to who really bears the burden of the tax . c . refers to who writes the check to the government . d . is a measure of the revenue the government receives from it .

B

The principle implies that people with should pay more taxes . a . benefits ; fewer benefits received b . benefits ; greater benefits received c . ability to pay ; fewer benefits received d . ability - to - pay ; lower incomes

B

The term diminishing returns refers to a : a . falling real rate of interest that can be expressed relative to the marginal product of labor . b . decrease in the extra output due to the use of an additional unit of a variable input when all other inputs are held constant c. reduction in profits from producing to the point where marginal revenue is less than marginal cost . d . decrease in total output due to the firm hiring unskilled workers .

B

Utility is the : a. difference between how much you are willing to pay for a good and what you actually pay . b satisfaction consumers derive from their consumption of goods and services . C. the amount you pay for a public good provided by the government . d . lowest price that sellers are willing to pay for a given quantity of a good .

B

27. If an excise tax is imposed on whiskey and collected from producers , the curve will shift by the amount of the tax . a . demand ; downward b . supply ; downward c . supply ; upward d . demand ; upward

C

31. ( Table : Labor and Output for Cappuccinos ) Use Table : Labor and Output for Cappuccinos . The marginal product of the sixth worker is : Table : Labor a . 9 . b . 10 . c . 3 . d . 6 .

C

32. Orville's Ocular Paradise produces 10 pairs of sunglasses . Its average variable cost is $ 30 , and its average fixed cost is $ 5 . The total cost of producing 10 pairs of sunglasses is : a . $ 50 . b . $ 35 . c. $ 350 . d . $ 300 .

C

36. In a single year , Germany can raise 100 tons of wheat or produce 1,000 boxes of daisies . In the same growing season , France can raise 50 tons of wheat or produce 750 boxes of daisies . In autarky , the opportunity cost of wheat : a . cannot be determined in either country . b . is the same in Germany as in France c . is lower in Germany than in France . d . is higher in Germany than in France .

C

AirPods . Assume that Sd represents the domestic supply curve and that Dd represents the domestic demand curve . If the The Market for Apple AirPods ) Use Figure : The Market for Apple world price equals $ 120 , and there is free trade , this country will : a . import 150,000 Apple AirPods . b . have a domestic demand equal to 250,000 Apple AirPods . c . export 150,000 Apple AirPods . d . have a domestic supply equal to 150,000 Apple AirPods .

C

An excise tax is levied on suppliers . The incidence of the tax : a . is shared between consumers and producers . b . falls more on the consumer than on the producer . c. cannot be determined without more information . d . falls more on the producer than the consumer .

C

Jill , a careful utility maximizer , consumes peanut brittle and frozen yogurt . Assume that both peanut brittle and frozen yogurt are normal goods . Right after she achieves the utility - maximizing level of consumption of the two goods , the price of peanut brittle increases . As she adjusts to this event , the marginal utility of peanut brittle and that of frozen yogurt a. falls ; rises b . falls ; falls . C. rises ; falls d . rises ; rises

C

One of the key differences between tariffs and import quotas is that : a. consumers are hurt by import quotas but not by tariffs . b , an import quota yields revenue to the government , whereas a tariff yields rents to importers c. a tariff yields revenue to the government , whereas an import quota yields rents to importers . d . consumers are hurt by but not by import quotas .

C

Table Long - Run Total Cost ) Use Table : Long - Run Total Cost . This quinoa grower has constant returns to scale over the range of output from bushels to bushels . a . 4 ; 5 b . 1 ; 2 c . 3 : 4 d . 5 ; 6

C

Which of the following is a common argument for trade protection ? a . the economies of scale and productive capacity argument b . the economic efficiency argument c. the national security argument . d . the diversification and profitability argument

C

Which statement does NOT describe a source of comparative advantage ? a . Hawaii has a more favorable climate for the cultivation of tropical fruit than England has . b . Canada has many more trees that can be used to produce lumber than Italy has . c . In general , France has an absolute advantage over Italy in the production of goods and services d . The United States ' airplane design technology is more advanced than India's .

C

( Figure : The Domestic Market for Apple Computers ) Use Figure : The Domestic Market for Apple Computers . Assume that PA is the autarky price and that PW is the world price . Consumer surplus after international trade is equal to the area : a . A. b . A + B. c . A + B + D + E - C . d. A + B + D + E .

D

The principle of diminishing marginal utility means that , when Justine eats tacos ( which she loves ) , her satisfaction from the second taco is probably that from the first . a greater than b . equal to c. not comparable to d. less than

D

supply and demand curves and that the world price is PW . Identify the area representing 16. ( Figure : The Market for Notebooks ) Use Figure : The Market for Notebooks . Assume that S and D are the domestic government tax revenue when a tariff raises the domestic price from the world price to PT . a . D + F b . D + E + F c . B d. E

D

Figure : The Market for Exercise Apps ) Use Figure : The Market for Exercise Apps . If the government imposes a tax of this market producers will receive less per app and sell fewer apps a. $ 0.50 ; 5 b . $ 1 : 5 c . $ 1 ; 25 d . $ 0.50 ; 20

a A