Chapters 1,2&3 quiz

Suppose the most you would be willing to pay to have a freshly washed car before going out on a date is $6.00. The smallest amount for which you would be willing to wash someone else's car is $3.50. You are going out this evening and your car is dirty. How much economic surplus would you receive from washing it?

$2.50

Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below. cals/hour comp/hour smith. 100. 10 jones 120 6 Suppose Smith and Jones begin by producing 16 computers and 0 calculators per hour. If they wish to produce 14 computers and 40 calculators per hour efficiently, then Smith should spend ______, and Jones should spend ______.

1 hour on computers; 40 min on computers and 20 min on calculators

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: cars sold trucks sold Larry 10 5 Joe 9 9 Ralph 3 12 Based on last month's data, Ralph's opportunity cost of selling a truck is selling:

1/4 of a car

To earn extra money in the summer, you grow tomatoes and sell them at the local farmers' market for 30 cents per pound. By adding compost to your garden, you can increase your yield as shown in the table below. Pounds of compost Pounds of tomatoes 0 100 1 120 2 125 3 128 4 130 5 131 6 131.5 If compost costs 60 cents per pound and your goal is to make as much profit as possible, how many pounds of compost should you add?

4

Suppose the current issue of the New York Times reports an outbreak of mad cow disease in Nebraska, as well as the discovery of a new breed of chicken that gains more weight than existing breeds that consume the same amount of food. How will these developments affect the equilibrium price and quantity of chickens sold in the United States?

Equilibrium quantity will increase, bu the effect on the price is unknown

Suppose that in the last few seconds you devoted to question 1 on your physics exam you earned 4 extra points, while in the last few seconds you devoted to question 2 you earned 10 extra points. You earned a total of 48 and 12 points, respectively, on the two questions, and the total time you spent on each was the same. If you could take the exam again, how—if at all—should you reallocate your time between these questions?

Spend more time on question 2. You'll get more extra points on question 2 than you'll lose on question 1.

What will happen to the equilibrium price and quantity of beef, if the price of chicken feed increases (assume that chicken and beef are substitutes)?

both will increase

what will happen to the equilibrium price and quantity of beef if the price of chicken feed increases

both will increase

Martha and Sarah have the same preferences and incomes. Just as Martha arrived at the theater to see a play, she discovered that she had lost the $10 ticket she had purchased earlier. Sarah also just arrived at the theater planning to buy a ticket to see the same play when she discovered that she had lost a $10 bill from her wallet. If both Martha and Sarah are rational and both still have enough money to pay for a ticket, is one of them more likely than the other to go ahead and see the play anyway?

both will make the same choice

Residents of your city are charged a fixed weekly fee of $6 for garbage collection. They are allowed to put out as many cans as they wish. The average household disposes of three cans of garbage per week under this plan. Now suppose that your city changes to a "tag" system. Each can of garbage to be collected must have a tag affixed to it. The tags cost $2 each and are not reusable. What effect do you think the introduction of the tag system will have on the total quantity of garbage collected in your city? Under the "tag" system, the total quantity of garbage collected in the city will what

decrease

How will a new law mandating an increase in required levels of automobile insurance affect the equilibrium price and equilibrium quantity in the market for new automobiles?

equilibrium price will fall; equilibrium quantity will fall

For each long-distance call anywhere in the continental United States, a new phone service will charge users 30 cents per minute for the first 2 minutes and 2 cents per minute for additional minutes in each call. Tom's current phone service charges 10 cents per minute for all calls, and his calls are never shorter than 7 minutes. If Tom's dorm switches to the new phone service, the average length of his calls would

increase

Tom is a mushroom farmer. He invests all his spare cash in additional mushrooms, which grow on otherwise useless land behind his barn. The mushrooms double in weight during their first year, after which time they are harvested and sold at a constant price per pound. Tom's friend Dick asks Tom for a loan of $100, which he promises to repay after 1 year. How much interest will Dick have to pay Tom in order for Tom to recover his opportunity cost of making the loan?

interest paid to tom: $100

on a graph of a production possibilities curve, if a point is attainable, is it efficient??

it may or may not be efficient

if les can produce two pairs of pants per hour while Eva can produce one pair per hour then what must be true

les has the absolute advantage in producing pants

Once a week, Smith purchases a six-pack of cola and puts it in his refrigerator for his two children. He invariably discovers that all 6 cans are gone on the first day. Jones also purchases a six-pack of cola once a week for his two children, but unlike Smith, he tells them that each may drink no more than three cans. At both houses, the cost of drinking a cola is that it's not available to drink later, but, at Smith's house, there's always a chance your sibling will drink the cola. Thus, the cost of drinking a cola is

lower at smiths house than at jones

assume that supply of land is fixed. how will an increase in birth rate affect the equilibrium price of the land

the equilibrium price will increase because the demand for land will shift to the right

suppose that the price of doughnuts decreases and that doughnut-holes are a by-product of producing doughnuts. what would one expect

the supply of doughnut holes to decrease

The meal plan at University A lets students eat as much as they like for a fixed fee of $500 per semester. The average student there eats 250 pounds of food per semester. University B charges $500 for a book of meal tickets that entitles the student to eat 250 pounds of food per semester. If the student eats more than 250 pounds, he or she pays $2 for each additional pound; if the student eats less, he or she gets a $2 per pound refund. If students are rational, at which university will average food consumption be higher?

university A

a regulated max price that is above the equilibrium price

will have no effect on the market

You and your friend Joe have identical tastes. At 2 p.m., you go to the local Ticketmaster outlet and buy a $30 ticket to a basketball game to be played that night in Syracuse, 50 miles north of your home in Ithaca. Joe plans to attend the same game, but because he cannot get to the Ticketmaster outlet, he plans to buys his tickets at the game. Tickets sold at the game cost only $25 because they carry no Ticketmaster surcharge. (Many people nonetheless pay the higher price at Ticketmaster, to be sure of getting good seats.) At 4 p.m., an unexpected snowstorm begins, making the prospect of the drive to Syracuse much less attractive than before (but assuring the availability of good seats.) If both you and Joe are rational, is one of you more likely to attend the game than the other?

you are more likely to go to the game