void

gas prices increase

1

Due to an increase in accidents caused by inebriated scooter drivers, the city of East Lansing makes itillegal to ride a rental scooter between 1:00 a.m. and 7:00 a.m

2

Electric scooters need to be regularly charged in order to work. The scooter companies do this bypaying people to pick up scooters at night, take them home to charge them, and return them the nextday. The people who do this sort of "gig" work are often also Uber drivers. Suppose Uber raises the pay of their drivers. How would this affect the market forscooter rentals?

4

Suppose instead that the three buyers were picked from a total market of 9000. What is the total market quantity demanded if the price is $5? A 6 B 6000 c 9000 d 18000

D

A tax on sellers shifts the _______ curve to the _______: A) Supply; left B) Supply; right C) Demand; left D) Demand; right

a

According to what we learned in class, the reason that LeBron James shouldn't own and operate a bakery, even if that bakery is profitable, is because: A) His opportunity costs are high because he will have to forego his NBA salary B) The fixed costs of opening a new business are too high C) Opening a bakery is a sunk cost

a

Alexandra's income increases by 10%. As a result, her consumption of lemonade increases by5%. Which of the following statements is true: A) Income elasticity of demand is positive, so lemonade is a normal good B) Income elasticity of demand is negative, so lemonade is an inferior good C) Income elasticity of demand is positive but less than one, so lemonade is an inferior good D) Price elasticity of demand is -0.5

a

An increase in demand would be illustrated by a change from A) 𝐷1 to 𝐷2 B) 𝐷2 to 𝐷1 C) Point 1 to Point 2 D) Point 2 to Point 1

a

Before the tax, the "price on the price tag" was $6. After the tax, the price on the price tag is_____. (As we did in class, assume the price on the price tag does not include tax. This is similar to how prices shown at the grocery store or Target are pre-tax prices) A) $4 B) $6 C) $8 D) $9

a

Conrad's restaurant is featured on Diners, Drive-Ins, and Dives (a show on the Food Network). Asa result, more people buy Conrad's wraps. This is an example of: A) An increase in demand B) A decrease in demand C) An increase in quantity demanded D) A decrease in quantity demanded

a

Diego Martin, owner of Hudson Valley Tattoo Company in Wappinger Falls, N.Y., estimated thatthe proportion of customers in their 60s and 70s has doubled in the past year to about 10% ofsome 3,000 men and women served. One of them, a 75-year-old man, is covering an entire armin what is known as a sleeve.How would we expect this increased interest from older people to affect the tattoo market? A) Price and quantity will increase B) Price and quantity will decrease C) Price will increase and quantity will decrease D) Price will decrease and quantity will increase

a

Dimensional lumber (wooden boards) and paper are complements in production because thesawdust produced by cutting trees into lumber can be used to make paper. Paper and pencils arecomplements in consumption.Suppose that demand for dimensional lumber increases and the price of pencils increases. How willthis affect the price and quantity of paper?A) Price decreases. The effect on quantity is ambiguous B) Price increases. Quantity decreases C) The effect on price is ambiguous. Quantity increases D) Price decreases. Quantity decreases

a

If Starbucks is able to reduce the time it takes to make complicated drinks (and therefore reduce the amount of time people have to spend in line), how would that directly affect demand? A) Increase demand B) Decrease demand C) Increase quantity demanded D) Decrease quantity demanded

a

Supply slopes up because A) Marginal costs are increasing B) Marginal benefits are decreasing C) Demand slopes down D) Price and quantity are inversely related

a

Suppose Michigan passes a law which will outlaw the sale of gasoline-powered cars starting in2024. Note that, even after the ban goes into effect, existing gasoline-powered cars can still bedriven in the state. How will that affect the demand for gasoline-powered cars today? A) Demand will increase B) Demand will decrease C) Demand will be unaffected

a

Suppose a new technology is invented that allows for beer to be produced at a lower marginal cost. This could be illustrated by A) A shift from S1 to S2 B) A shift from 𝑆2 to 𝑆1 C) Movement from point 1 to point 2 D) Movement from point 2 to point 1

a

Suppose seeing the shirt on television and in the New York Times causes many people to become aware that it exists and can be purchased at the Nike website. While lots of these people hate the shirt when they see it, some people like it, and as a result, Nike sells more of these shirts. This is an example of A) An increase in demand due to an increase in the number of buyers B) A decrease in demand due to shifts in income C) An increase in demand due to network effects D) A decrease in demand due to changes in tastes and preferences

a

Suppose that cans of CELSIUS energy drink have unit elastic demand. Initially, the price is $2 per can and quantity demanded is 100. Price increases to $3 per can. What is the new quantity demanded? A) 50 B) 66.7 C) 100 D) 150

a

Suppose the price of roses decreases. Assume that roses and oranges tend to have similar growingclimates, and that farmland that currently grows one of them can easily grow the other crop instead.Which of the following responses is likely? (Note: that we are looking for what happens after theprice changes, not for what caused the price change) A) The price of oranges decreases B) Quantity of roses demanded decreases C) The quantity of oranges sold decreases

a

Suppose the regular price of the buffet is $10 and the discounted price is $5. Once acustomer has paid for the buffet, what is the marginal cost of eating another slice of pizza?(Assume the only costs are monetary costs.) A) $0 B) $5 C) $10 D) It depends on whether the customer is getting a discount.

a

Suppose the school district finds that high school attendance drops dramatically. They are willing toincrease the amount of their gas cards, but doing so is expensive. They are willing to pay anyamount as long as it increases attendance, but they don't want to waste money on gas cards if theydon't increase attendance. So, they increase the amount of money on the gas cards by a few dollarsper week. As long as attendance keeps increasing, they will continue increasing the amount on the gas cards. Once the attendance stops increasing, they will stop increasing the amount. This is anexample of the A) Marginal principle B) Interdependence principle C) Opportunity cost principle

a

The Rational Rule says that, if something is worth doing, keep doing it until A) Marginal benefits are equal to marginal costs B) Marginal benefits are greater than marginal costs C) The opportunity cost is zero D) Your willingness to pay is zero

a

The demand for pickup trucks shifts left. At the same time, the supply curve for pickup trucks shiftsright. What are the net effects on price and quantity? A) Price decreases. The effect on quantity is ambiguous. B) Price decreases. Quantity increases C) The effect on price is ambiguous. Quantity decreases D) Price increases and quantity decreases

a

Trombone Champ is a computer game in which the user plays the role of a trombone player. The current price of the game is $15. The makers of Trombone Champ determine that price elasticity of demand for their product is -1.5. If the makers of Trombone Champ wish to maximize revenue, what should the price of their product be? A) Less than $15 B) Exactly $15 C) More than $15

a

What is the marginal benefit (in terms of XP) that Ray gets from the third hour of playing Valorant? A) 250 B) 667 C) 1000 D) 2,000 1 hour- 1000 xp 2 hour- 1750 xp 3- 2000 4- 22000

a

When Karl gets a raise, his demand for Twix bars shifts to the right. This means that, for Karl, Twix bars are: A) A normal good B) An inferior good C) A network good D) A good with no marginal benefits

a

When you hang out with your friends, you often accidentally grab the wrong cell phone because you all have the same model of iPhone and black phone cases. You decide that you want to purchase a different colored cell phone case to prevent this from happening. This means that you consider a specific color of cell phone case to be a ________. A) Congestion good B) Network good C) Normal good D) Substitute for a cell phone

a

Which of the following is an example of a shortage? A) It is illegal to sell cigarettes for more than $8 per pack. This leads to long lines outside stores that sell cigarettes B) A tax on beer increases the price and reduces consumption C) There are not many Super Bowl tickets available, and lots of people want to go. As a result,Super Bowl tickets are very expensive. D) A subsidy on electric cars increases the demand for electric cars

a

A decrease in quantity demanded would be illustrated by a change from A) Point 1 to Point 2 B) Point 2 to Point 1 C) 𝐷1 to 𝐷2 D) 𝐷2 to 𝐷1

b

According to the Wikipedia article, Dvorak has not replaced QWERTY as the most commonkeyboard layout because QWERTY was introduced 60 years earlier. This sentence suggeststhat a computer keyboard layout is a ________. A) good with zero marginal benefits B) network good C) congestion good D) normal good

b

According to the law of demand, when the price of a good increases A) Marginal cost decreases B) The quantity demanded decreases C) Opportunity costs are zero D) Quantity demanded is unaffected

b

After the researchers conducted this part of the experiment, they did another analysis. Theysurveyed the customers after they ate and asked them to rate the taste of the pizza. Basedon what we have learned about diminishing marginal benefits, who would we expect to givethe pizza a higher rating? A) Customers who paid the higher price, because the pizza is worth more to them B) Customers who paid the lower price, because they didn't eat as many slices andtherefore avoided the slices that gave a lower marginal utility

b

Apple juice and apple sauce are substitutes in production. How would an increase in the price of apple juice affect the supply curve for apple sauce? A) A shift from 𝑆1 to 𝑆2 B) A shift from 𝑺𝟐 to 𝑺𝟏 C) Movement from point 1 to point 2 D) Movement from point 2 to point 1

b

How much revenue is raised by the tax?A) $8 B) $12 C) $16 D) $36

b

If the price elasticity of demand for a product is equal to -0.4, then a 25 percent decrease in price will increase quantity demanded by A) 0.1% B) 10% C) 2.5% D) 62.5%

b

In class, we discussed possible reasons why small increases in the minimum wage do not seemto have significant effects on employment rates. One explanation we discussed is that thedemand for labor may be A) Elastic B) Inelastic C) Unit elastic

b

In class, we said that to find the opportunity cost of an action, ask yourself A) "One more?" B) "Or what?" C) "How many?" D) "What are the benefits?"

b

Jane enjoys streaming The Office, but she finds that, because she has seen every episode severaltimes, she gets bored of them quickly. In fact, in a given binge-watch session, she enjoys eachepisode less than the one before it. Jane uses her parent's logins for streaming services, so it doesn'tcost her any money to watch the episodes. For Jane, watching The Office on has _____ marginalbenefits and _____ marginal costs. (Assume the only costs are monetary costs.) A) Decreasing; Increasing B) Decreasing: Constant C) Constant; Increasing D) Increasing; Decreasing

b

Maria is deciding how big of a house to build. She gets decreasing marginal benefits from house size (so, the marginal benefit of the first square foot is greater than the marginal benefit of the second square foot and so on). The builder charges $100 per square foot. Maria decides to build a 1,700 square foot house. What if, instead, the builder offered a discount, where the first 1,000 square feet were half price ($50 per square foot)? How big of a house would Maria choose to build: A) Less than 1,700 square feet B) Still 1,700 square feet C) More than 1,700 square feet

b

On a per-unit basis, how is the economic burden shared between the buyer and the seller? A) Buyer pays $0, seller pays $3 B) Buyer pays $1, seller pays $2 C) Buyer pays $2, seller pays $1 D) Buyer pays $3, seller pays $0

b

Samantha likes to eat Skittles. The grocery store has a sale on Skittles, so Samantha decides tobuy more skittles. This would be illustrated by a change from A) Point 2 to Point 1 B) Point 1 to Point 2 C) 𝐷1 to 𝐷2 D) 𝐷2 to 𝐷1

b

Suppose the price of crude oil increases, and as a result, the marginal cost of producing gasolineincreases by $1 per gallon. According to the equilibrium model discussed in class, how would thisaffect the market price of gasoline? A) The price of gasoline will be unaffected B) It will increase by less than $1 per gallon C) It will increase by more than $1 per gallon D) It will increase by exactly $1 per gallon

b

Surya is hoping to buy tickets for the MSU-Ohio State football game. He looks at some onlinemessage boards and it appears that everyone is charging $200 for a ticket. However, he notices thatthe listings have been active for several days, and from what he has heard, most of these peoplehaven't been able to find a buyer. This is an example of a A) Shortage B) Surplus C) Equilibrium

b

The cross-price elasticity of milk and apple juice cookies is 2. What happens to the quantity of apple juice if the price of milk goes up by 10% A) Decreases 20% B) Increases 20% C) Decreases by 0.4% D) Increases by 0.4%

b

The school district is concerned that removing bus services could affect school attendance. This is an example of the A) Marginal principle B) Interdependence principle C) Sunk cost fallacy

b

This actually does not fit with what we have learned about rational decision making andhow people make decisions on the margins. Why? A) The customers are not accounting for the opportunity cost of eating pizza instead ofanother meal B) The marginal cost of a slice of pizza is zero for all customers, so all customers(whether or not they are receiving a discount) should consume until the pointwhere the marginal benefit of the last slice of pizza is zero. This means that the pricepaid should not affect consumption C) The marginal cost of a slice of pizza is greater for customers paying the higher price.This means that marginal benefit will equal marginal cost at a lower quantity, soconsumers paying a higher price should eat less pizza. D) All-you-can-eat pizza restaurants have bad pizza, and rational people would nevergo to that type of restaurant

b

This is an old economics joke: A hundred-dollar bill is lying on the ground. An economist walks past it. A friend asks: "Didn't you see the money there?" The economist replies: "I thought I saw something, but I must've imagined it. If there had been $100 on the ground, someone would've picked it up."1 Which of the following would best explain why the economist doesn't believe that there is a $100 bill on the ground? A) He believes that supply slopes up B) He believes that most situations quickly move toward equilibrium C) He believes that picking up a $100 bill would not be rational behavior D) He believes that the marginal benefit of picking up a $100 bill is negative

b

Which of the following statements is true? A) If price increases from $2 to $3, the supply curve will shift to the right B) If price increases from $2 to $3, the quantity supplied will increase, but the supply curve will not move C) The eighth unit supplied has a marginal cost of $0

b

suppose the three buyers in the table are the only buyers in the market. If the price decreases for $6 to 4 the quantity of burgers demanded will A Increase from 3 to 6 B increase from 3 to 8 C decrease from 6 to 3 D increase from 0 to 2

b

A 2015 report by the Congressional Budget Office stated that a 10% increase in the price ofcigarettes would decrease smoking by up to 15% among people under 18 and by up to 7%among adults. This suggests that the demand for cigarettes by children is _____________ andthe demand for cigarettes by adults is ___________ A) elastic; elastic B) inelastic; elastic C) elastic; inelastic D) inelastic; inelastic

c

Alphatown is 10 miles from Bravoville. At first, everyone travelling from Alphatown to Bravovilletakes the highway. There is a lot of traffic on the highway, so it takes 30 minutes to get there. Thenpeople start using Waze, and Waze finds a non-highway route from Alphatown to Bravoville thatonly takes 20 minutes. Is this an equilibrium? Note: suppose everyone has easy access to Waze. A) Yes B) No, people will switch from the highway to the Waze-recommended route. Eventually,nobody will ever take the highway, even though the Waze-recommended route now takeslonger than the highway because of all the extra traffic C) No, some people will switch from the highway to the Waze-recommended route.Eventually, both routes will take less than 30 minutes D) No, some people will switch from the highway to the Waze recommended route. Eventually,both routes will take more than 30 minutes

c

Buyers bear a smaller incidence of the tax when: A) The tax is higher B) Supply is more elastic than demand C) Demand is more elastic than supply D) Demand is perfectly inelastic

c

Continuing with the example above, what would you recommend Surya do?A) Offer $200 for the tickets B) Buy as many tickets as he can for $200, then plan to sell them for more than $200 on theday of the game C) Wait for the price to come down

c

Due to improving technology, food prices have gone down over the past several decades.Americans are now spending less of their income on food than they used to. (Assume thedemand curve for food has not changed.) This suggests that: A) The supply of food is inelastic B) The supply of food is elastic C) The demand for food is inelastic D) The demand for food is elastic

c

Each hour that Ray studies will improve has score by 5 percentage points. Ray has decided he is indifferent between a 5 percentage point score increase and 500 points of XP. How should Ray spend his next 4 hours? A) Spend 4 hours studying B) Spend 1 hour playing Valorant and 3 hours studying C) Spend 2 hours playing Valorant and 2 hours studying D) Spend 3 hours playing Valorant and 1 hour studying 1- 1000 2-1750 3-2000 4-22000

c

Early in the Covid-19 pandemic, many places had a shortage of toilet paper. Jack is worried that that there will be a shortage of toilet paper in his neighborhood in a few days. How will this affect Jack's demand for toilet paper today? A) Movement up and to the left on the demand curve B) Movement down and to the right on the demand curve C) The demand curve shifts right D) The demand curve shifts left

c

How much is the tax? A) $1 per unit B) $2 per unit C) $3 per unit D) $6 per unit

c

In the graph shown here, the upward-sloping light gray line is the initial supply curve. The upward-sloping dark red line is the new supply curve. This graph shows the effect of a: A) $2 per unit tax on sellers B) $2 per unit tax on buyers C) $2 per unit subsidy to sellers D) $8 per unit tax on sellers

c

Julie's demand for Uber rides slopes down. This is because: A) Julie doesn't really like Uber rides B) If Uber rides get too expensive, she will never ride an Uber C) She has decreasing marginal benefits from Uber rides

c

Marco went to Buffalo Wild Wings to watch a football game. Chicken wings there cost $0.75each. Marco bought and ate 20 chicken wings. Afterwards, he regretted his decision and decided that next time he would buy fewer chicken wings. This means that A) Marco's marginal benefit from the 20th chicken wing was zero B) Marco's marginal benefit from the 20th chicken wing was negative C) Marco's marginal benefit from the 20th chicken wing was less than $0.75

c

Suppose Uber decided to implement "negative surge" pricing, where during certain times they would offer discounted rides while also cutting driver pay. When would we expect them to do this? A) When there are lots of drivers and lots of riders B) When there are very few drivers and lots of riders C) When there are lots of drivers and very few riders D) When there are very few drivers and very few riders

c

Suppose a law is passed increasing the jail sentences for people caught selling illegal drugs. Whatwould be the effect on the price and quantity of illegal drugs sold? A) Price would decrease and quantity would increase B) Price would decrease and quantity would increase C) Price would increase and quantity would decrease D) Price would increase and quantity would increase

c

Suppose that supply slopes up (as usual), and suppose that demand is perfectly elastic. Initially,the price is $12. Due to an increase in labor costs, the marginal cost of production increases by$1 per unit. What will the new equilibrium price be? A) $0 B) $11 C) $12 D) $13

c

The following is from the Wikipedia article on straw: Straw is an agricultural byproduct consisting of the dry stalks of cereal plants after the grain and chaff have been removed. It makes up about half of the yield of cereal crops such as barley, oats ,rice, rye and wheat. It has a number of different uses, including fuel, livestock bedding and fodder, thatching and basket making How would the supply of straw be affected by an increase in the price of wheat? A) Movement up and to the right on the supply curve B) Movement down and to the left on the supply curve C) Supply increases D) Supply decreases

c

The price of a good is originally 10 and decreases to 9. As a result, quantity increases from 20 to30. What is the price elasticity of demand? A) -0.1 B) -0.2 C) -5 D) -10

c

The price of mystery novels is $11 each, and Mara buys 5 novels per year. Which of the following is most likely to be true: A) Mara's total benefit from buying novels is $55 B) If the price of novels went down to $8 each, Mara would buy fewer novels C) Mara's marginal benefit from the fourth novel she buys is more than $11

c

The value of the British pound has fallen relative to the dollar. As a result, it has become moreexpensive for residents of the United Kingdom to vacation in the United States.2 Suppose this makespeople less eager to buy tickets on British Airways, so a quick search on Kayak reveals lots of unsoldtickets. What do we expect to happen to tickets next?A) There will be a persistent (long-lasting) surplus B) There will be a persistent (long-lasting) shortage C) Equilibrium price will decrease D) Equilibrium price will increase

c

What is the marginal cost of producing the ninth protein bar? A) $0 B) $2 C) $3 D) $4

c

Which of the following is an example of positive economics? A) East Lansing should widen Grand River Avenue to reduce traffic B) The United States spends too much money on national defense C) Reducing the gas tax by 50 cents per gallon will reduce gas prices by 30 cents per gallon

c

For the past several weeks, the price of ice cream has $4 per pint, and Aviv has bought 2pints per week. This week, the price has increased to $5 per pint, and Aviv only bought 1pint. This is best characterized as a A) Increase in demand B) Decrease in demand C) Increase in quantity demanded D) Decrease in quantity demanded.

d

How do we expect the introduction of Happy Meals for adults at McDonald's to affect the price and quantity of Burger King value meals? A) Price increases. The effect on quantity is ambiguous B) Price decreases and quantity increases C) Price increases and quantity decreases D) Price decreases and quantity decreases

d

Kevin likes to eat Skittles and Starburst. He considers them to be substitutes. The grocery storehas a sale on Skittles. The effect of this sale on the demand for Starburst would be illustrated bya change fromQP12𝐷1𝐷2 A) Point 2 to Point 1 B) Point 1 to Point 2 C) 𝐷1 to 𝐷2 D) 𝐷2 to 𝐷

d

Suppose the price of butter increases. Assume that butter and margarine are substitutes inconsumption. Which of the following responses is likely? (Note: that we are looking for what happensafter the price changes, not for what caused the price change) A) Quantity of margarine decreases B) Quantity of butter sold increases C) Price of margarine decreases D) Quantity of margarine increases

d

The cross-price demand elasticity of baseballs and fish sticks is equal to zero. The price ofbaseballs goes up. Which of the following statements accurately describes what happens: A) Consumption of fish sticks goes up, because the goods are compliments B) Consumption of fish sticks goes up, because the goods are substitutes C) Consumption of fish sticks goes down, because the goods are compliments D) Consumption of fish sticks is unchanged

d

The equilibrium apartment rental rate is $1000 per month. If a price ceiling is set at $800, weexpect the outcome to be ______. If a price ceiling is set at $1200, we expect the outcome to be_____. A) Equilibrium; equilibrium B) A shortage; a surplus C) Equilibrium; a shortage D) A shortage; equilibrium

d

The price of beer falls. As a result, Pabst sells less beer. This could be illustrated by A) A shift from 𝑆1 to 𝑆2 B) A shift from 𝑆2 to 𝑆1 C) Movement from point 1 to point 2 D) Movement from point 2 to point 1

d

When Greggs sold out of its merchandise, some people who wanted to buy their clothing wereunable to. What would we expect to happen? A) Supply will shift to the left B) Demand will shift to the right C) There will be a secondary market, where some people who bought the clothes when they were first available will resell them. The equilibrium price will be lower than the original retail price D) There will be a secondary market, where some people who bought the clothes when they were first available will resell them. The equilibrium price will be higher than the original retail price

d

Apple juice and apple sauce are substitutes in production. How would an increase in the price of apple juice affect the supply curve for apple juice? E) A shift from 𝑆1 to 𝑆2 F) A shift from 𝑆2 to 𝑆1 G) Movement from point 1 to point 2 H) Movement from point 2 to point 1

g