finalll

A pizza business has the cost structure described in the table. The firm's fixed costs are $20 per day. What are the firm's average total costs at an output of 10 pizzas?

$12

Using the following table, calculate the total consumer surplus for Ron, Leslie, and Tom if the price of the textbook is $110.

$130

In the example presented by this graph, what is total output when the fifth worker is added?

52 meals served per hour

If there is a $60 price ceiling imposed on a textbook, what will be the amount of shortage?

800,000

What is the quantity demanded when the price floor is $0.75 in the market for public transportation?

86,000

Which region represents the consumer surplus in the monopoly outcome?

A

If competitive firms experience a loss, over the long run there will be

a decrease in market supply to increase the market price.

When a student is explaining to her academic advisor why she needs to take a semester break from school, which of the following would be an exogenous factor?

a family member's serious illness

(Q003) Which of the following firms participates in a competitive market?

a farmer selling corn at a farmer's market

For which of the following goods is demand perfectly inelastic?

a life-saving medication available from just one supplier

(Q005) Which of the following firms operates as a monopoly?

a local cable company

Which of the following statements is consistent with Jonathan having a comparative advantage in producing apples?

Jonathan's opportunity cost for producing apples is lower than anyone else's.

Monopolies choose their profit maximizing

Output level and Price

In the graph below, what price will a monopolist charge?

P2

Use the graph to answer the following question. .At what price is the firm experiencing an economics loss?

P3

Use the graph to answer the following question.At what price is the firm breaking even?

P4

Use the graph to answer the following question. At what price is the firm making an economic profit?

P6

Which good has well-defined property rights?

a country club golf course

A carbon tax would be an efficient method of addressing the problem of global warming because

it forces firms to internalize the external cost of emissions.

Over the long run, a monopolist

can continue to make economic profits if it can maintain a monopoly and keep competitors from entering the market.

Suppose that at the current level of production, the price of a monopolist's product is equal to $15 per unit. Marginal revenue is equal to $10 per unit, and marginal cost is equal to $15 per unit. This monopoly

can increase its profit by producing and selling fewer units of its product.

The Coase theorem suggests that private parties

can negotiate to correct a negative externality if there are no barriers to negotiation.

Which of the following is a factor of production?

capital

Which rule would NOT protect fish populations?

catching any fish except males

Demand for a good is elastic if quantity demanded __________ in response to a small price change.

changes significantly

A physician who hires a plumber to fix a broken toilet is an example of

comparative advantage

A natural monopoly exists when a single seller experiences __________ average total costs compared with any potential competitor.

lower

Suppose there is a country where factory production creates a lot of the air pollution. What could be a possible trade-off if the country wanted to lower the levels of pollution?

lower national income

For which of the following goods is demand perfectly elastic?

mailing envelopes available from two vendors both selling through Amazon

Alison goes to an all-you-can-eat restaurant. She has eaten three slices of pizza and is considering having another, but she is quite full from the first three slices. Alison's consideration is an example of

marginal thinking

A price ceiling is a legally imposed __________ price.

maximum

The field of economics that studies the decisions of individuals and firms is called

microeconomics

Which of the following statements is normative?

microeconomics is a great class

A price floor is a legally imposed __________ price.

minimum

(Q011) According to the law of supply, what is the relationship between price and quantity supplied?

direct

Which of the following is a type of incentive?

direct

When a firm increased its output by 25%, the cost of its inputs increased by 40%. This firm experienced

diseconomies of scale

What is the minimum wage that employees can receive in Nevada?

more than 7.25 per hour

Laronda went into the business of producing and selling greeting cards. For this business, which of the following is likely to be a fixed cost?

the 6 month lease for the factory

Suppose Rodale Press sets the price for Prevention magazine as elastic. How would an increase in price affect revenues?

they would decrease

What is the surplus when the price floor is $0.75 in the market for public transportation?

0

Suppose that the market equilibrium price for a good is $1. A nonbinding price ceiling in this market will result in a price set at what amount?

$1

The following table lists costs for producing Big Macs, a product of McDonald's. Based on the table, what are total fixed costs associated with Big Mac production?

$100

Andrew paid $30 to buy a potato cannon, a cylinder that shoots potatoes hundreds of feet. He was willing to pay $45. When Andrew's friend Nick learns that Andrew bought a potato cannon, he asks Andrew if he will sell it for $60, and Andrew agrees, since he would have sold it for $45. Nick is thrilled, since he would have paid Andrew up to $80 for the cannon. Andrew is also delighted.What is Andrew's producer surplus from the resale?

$15

Andrew paid $30 to buy a potato cannon, a cylinder that shoots potatoes hundreds of feet. He was willing to pay $45. When Andrew's friend Nick learns that Andrew bought a potato cannon, he asks Andrew if he will sell it for $60, and Andrew agrees, since he would have sold it for $45. Nick is thrilled, since he would have paid Andrew up to $80 for the cannon. Andrew is also delighted.What is the total surplus generated from Andrew's sale to Nick?

$35

A pizza business has the cost structure described in the table. The firm's fixed costs are $20 per day. What are the firm's average fixed costs at an output of five pizzas?

$4

Refer to the accompanying table, where Q represents the quantity produced, internal cost and social cost are given for various quantities, and P represents the price consumers are willing to pay for various quantities, to answer the following questions. The market equilibrium occurs where price is ________ and quantity is ________.

$60;300

Austin and Erin are willing to pay $10 and $9, respectively, for a ticket to a screening of a new movie. What is the total consumer surplus for both Austin and Erin if the market price of a ticket is $6?

$7

Refer to the accompanying table, where Q represents the quantity produced, internal cost and social cost are given for various quantities, and P represents the price consumers are willing to pay for various quantities, to answer the following questions. The social optimum occurs where price is ________ and quantity is ________.

$70;200

Suppose the government decides the Big Mac is an American tradition. To recognize the value of the Big Mac, the government passes legislation making it illegal to sell a Big Mac for less than $8. The equilibrium price of a Big Mac is $4. As a result of the government legislation, and in the absence of a black market, the price of a Big Mac will be

$8

College logo water bottles priced at $12 sell at a rate of 30 per week, but when the bookstore marks them down to $8, it finds that it can sell 45 water bottles per week. What is the price elasticity of demand for the water bottles?

-1.00

The price of peanut butter increases from $2.50 to $3.00 and the quantity of jelly demanded falls from 30 jars to 24 jars. Calculate the cross-price elasticity of demand.

-11/9

Suppose the price of IBM computers falls from $2,500 to $2,000 and the quantity demanded increases from 10,000 to 20,000. Calculate the price elasticity of demand.

-3

If rent control is established at $1,750, what would be the amount of disequilibrium in the apartment market?

0

The figure above represents demand and supply in the market for gasoline. What portion of the per-unit tax is paid by producers (in dollars)?

0.2

The figure above represents demand and supply in the market for gasoline. What portion of the per-unit tax is paid by consumers (in dollars)?

0.4

The figure above represents demand and supply in the market for gasoline. How much is the government tax on each gallon of gasoline (in dollars)?

0.6

Use the following scenario to answer the following questions: Kareem owns a bike store. His total costs are $1.2 million per year, his variable costs are $750,000, and his fixed costs are $450,000 per year. Last year, Kareem sold 1,200 bikes. Kareem's average total cost was ________ per bike.

1,000

At what price level does the apartment market experience its largest shortage?

1,500

At what price level does the apartment market reach equilibrium?

1,700

At what price level does the apartment market experience its largest surplus?

1,800

Suppose that demand for sports cars increases by 25% when consumer income increases by 20%. What is the income elasticity of demand for sports cars?

1.25

What is the equilibrium price in the market for public transportation?

1.25

At a price of $150, a cell phone company manufactures 200,000 units. At a price of $250, the company manufactures 400,000 units. What is the price elasticity of supply?

1.33

The figure above represents demand and supply in the market for gasoline. What is the deadweight loss of the tax (in billions of dollars)?

1.5

The cookie company in the mall hires workers to produce cookies. The workers are paid $75 per day, and the cost of renting the space in the mall is $250 per day. If two workers are hired, the variable costs are

150

Ralph owns a pool store. His total costs are $225,000 per year, and his variable costs are $75,000 per year. This means that his fixed costs are

150,000

What would be the equilibrium quantity in the market for corn?

169,000

The figure above represents demand and supply in the market for gasoline. What is the total tax revenue collected by the government (in billions of dollars)?

18

Assume the market price for lemon grass is $4.00 per pound, but most buyers are willing to pay more than the market price. At the market price of $4.00, the quantity of lemon grass demanded is 1,500 pounds per month, and quantity demanded does not reach zero until the price reaches $30.00 per pound. Construct a graph showing this data and calculate the total consumer surplus in the market for lemon grass. Your demand curve should be a straight line. The consumer surplus is $____________.

19,500

If rent control is established at $1,550, what would be the amount of disequilibrium in the apartment market?

28,990

Lester owns a candy store that produces, among other things, chocolate fountains. He currently has 5 employees; with 5 employees, his candy store can produce 7 chocolate fountains per day. If he hired a sixth employee, he'd be able to produce 9 chocolate fountains per day. Therefore, the marginal product of the sixth employee is ________ chocolate fountain(s).

2

The table above lists the highest prices five consumers are willing to pay for a theater ticket. How many people will buy a ticket if the price is $18?

2

The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specializes in producing western wear. How many hats will be sold if the price is $30?

2

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. What is Bo's opportunity cost of making 1 pizza?

2 stomboli

Assume that a monopolist faces the demand schedule given below, and a constant marginal cost of $2 for each unit of output. To maximize profits, this monopolist would produce what number of units of output and charge what price per unit?

2 units; $5

Refer to the accompanying table, where Q represents the quantity produced, internal cost and social cost are given for various quantities, and P represents the price consumers are willing to pay for various quantities, to answer the following questions. The external cost is equal to ________ per unit.

20

Suppose the firm whose demand and cost curves are represented in the following table operates in a perfectly competitive market. What is the profit-maximizing output?

25

The cookie company in the mall hires workers to produce cookies. The workers are paid $75 per day, and the cost of renting the space in the mall is $250 per day. The fixed costs of production are

250

The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specializes in producing western wear. What will be the producer surplus if the price is $40?

28

Fathima owns a car shop that repairs, among other things, spoilers. She currently has 6 employees; with 6 employees, her repair shop can repair 9 spoilers per day. If she hired a seventh employee, she'd be able to repair 12 spoilers per day. Therefore, the marginal product of the seventh employee is ________ car spoiler(s).

3

Refer to the following scenario to answer the following questions. Five fishermen live in a village and have no other employment or income-earning possibilities besides fishing. They each own a boat that is suitable for fishing but does not have any resale value. Fish are worth $5 per pound, and the marginal cost of operating the boat is $500 per month. They all fish a river next to the village. According to the following schedule, they have determined that when there are more of them out on the river fishing, they each catch fewer fish per month. What is the optimal number of boats that should operate?

3

The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specializes in producing western wear. How many hats will be sold if the price is $40?

3

The figure above represents demand and supply in the market for gasoline. What is the after tax price received by producers (in dollars)?

3.2

The figure above represents demand and supply in the market for gasoline. What is the quantity sold after the imposition of the tax (in billions)?

30

Billy Bob runs a seafood restaurant. Last year he earned $50,000 in revenue. He had explicit costs of $20,000. Billy Bob could have made $30,000 working for the county and could have received an additional $20,000 if he rented out his building and equipment. Calculate Billy Bob's accounting profit.

30,000

If there is a binding price floor of P3, how many units will be sold?

37,500

What is the surplus when the price floor is $1.75 in the market for public transportation?

40,000

A semiprofessional baseball team near your town plays two home games each month at the local baseball park. They split the concessions 50/50 with the city, but keep revenue from ticket sales for themselves. The city charges the team $100 each month for the 3-month season. The team pays the players and manager a total of $1,000 a month. The team charges $10 for each ticket, and the average customer spends $7 at the concession stand. Attendance averages 30 people at each home game.In order to break even, how many tickets does the team need to sell for each game?

41

The cookie company in the mall hires workers to produce cookies. The workers are paid $75 per day, and the cost of renting the space in the mall is $250 per day. The total costs when three workers are hired is

475

At what price level does the labor market experience its largest shortage?

5

Refer to the following table. What is the average variable cost of producing two units of the good?

50

Billy Bob runs a seafood restaurant. Last year he earned $50,000 in revenue. He had explicit costs of $20,000. Billy Bob could have made $30,000 working for the county and could have received an additional $20,000 if he rented out his building and equipment. Calculate Billy Bob's implicit costs.

50,000

Sam has two options this weekend. He could work at his job and earn $9/hour for three hours, or he could go to a show at the theater for that three hours. A ticket to the theater costs $30. What is the opportunity cost of going to the theater? .

57

At what price level does the labor market reach equilibrium?

6

The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specializes in producing western wear. What will be the producer surplus if the price is $30?

6

Based on the figure here, what is the opportunity cost in terms of wings when producing 20 more pizzas if the economy is efficiently producing 150 wings and 50 pizzas?

60 wings

Use the following scenario to answer the following questions: Kareem owns a bike store. His total costs are $1.2 million per year, his variable costs are $750,000, and his fixed costs are $450,000 per year. Last year, Kareem sold 1,200 bikes. Kareem's average variable cost was ________ per bike.

625

Lisette owns a bakery. Her total costs are $150,000 per year, and her variable costs are $85,000. This means that her fixed costs are

65,000

Remi owns a small pizza restaurant, where he works full-time in the kitchen. His total revenue last year was $100,000, and his rent was $3,000 per month. He pays his one employee $2,000 per month, and the cost of ingredients and overhead averages $500 per month. Remi could earn $35,000 per year as the manager of a competing pizza restaurant nearby. His total explicit costs last year were

66,000

A pizza business has the cost structure described in the table. The firm's fixed costs are $20 per day. What are the firm's average variable costs at an output of 25 pizzas?

7.00

Where would you plot full employment in relation to a production possibilities frontier, if all other resources are being used efficiently?

A point on the PPF

Firms producing an identical product in a perfectly competitive market are producing at a quantity that maximizes profit. The current market price is $4.50 per unit, and the firms are producing at a long-run average cost of $3.50 per unit. Click to view larger image.Firms in this market experience

A profit

Suppose that the equilibrium price of a bike is $250. The government passes a law setting a maximum price of $150 for a bike. As a result of the legislation, what will happen?

A smaller number of mountain bikes will be sold than before the legislation.

Which region or regions represent the total surplus in the monopoly outcome?

A+B+C+D

Look at the provided figure. Which area represents consumer surplus before the tax?

A+B+E

Which areas represent consumer surplus before the tax is imposed? Check all that apply.

A,B,F

Look at the provided figure. Which area represents the tax revenue after the tax?

B+C

Which region or regions represent the producer surplus in the monopoly outcome?

B+C+D

The following graph depicts a market where a tax has been imposed. Pe was the equilibrium price before the tax was imposed, and Qe was the equilibrium quantity. After the tax, PC is the price that consumers pay, and PS is the price that producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and C are rectangles that are divided by the supply curve ST. Include both sections of those rectangles when choosing your answers. Which areas represent the revenue collected from this tax? Check all that apply.

B,C

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Based on the figure, which statement about comparative advantage is true?

Bo has a comparative advantage in the production of stromboli because her opportunity cost is lower.

Look at the provided figure. Which area represents producer surplus before the tax?

C+D+F

The local city council passes a law that establishes a maximum rent for apartments in your city. Which of the following is likely to happen?

Current renters will sublet to others at prices above the legal maximum.

Look at the provided figure. Which area represents producer surplus after the tax?

D

The following graph depicts a market where a tax has been imposed. Pe was the equilibrium price before the tax was imposed, and Qe was the equilibrium quantity. After the tax, PC is the price that consumers pay, and PS is the price that producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and C are rectangles that are divided by the supply curve ST. Include both sections of those rectangles when choosing your answers. Which areas represent producer surplus after the tax is imposed? Check all that apply.

E

Look at the provided figure. Which area represents the deadweight loss after the tax?

E+F

What region or regions of the graph represent deadweight loss in the monopoly outcome?

E+F

Examine the two figures below. Which of these figures will experience a higher long-run growth rate, assuming their ratio of consumer goods to capital goods produced remains constant over time?

Economy B, because it produces more capital goods relative to consumer goods.

Suppose the government decides the Big Mac is an American tradition. To recognize the value of the Big Mac, the government passes legislation making it illegal sell a Big Mac for less than $8. The equilibrium price of a Big Mac is $4. As a result of the government legislation, what will happen?

Fewer Big Macs will be bought and sold than before.

As a waiter you earn $60,000 per year, including tips. Someone offers you a new job as an economic consultant, which pays $100,000 per year. In order to be a consultant, you'll need to rent an office and purchase supplies and new computer equipment. We can conclude which of the following?

If the explicit cost for the consulting job is $25,000 per year, your economic profit is equal to $15,000.

Suppose that government officials want to promote national population growth, so they offer a $1,000 payment to the parents of each child born. Which of the five foundations of economics best describes the thinking of these government officials?

Incentives

What does a market do, by definition?

It brings buyers and sellers together to exchange goods and services.

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Which statement best describes the absolute advantage as shown in the graphs?

Kenzi has an absolute advantage in the production of pizzas, and Bo has an absolute advantage in the production of stromboli.

Use the following graph to answer the following questions. Which of the curves depicts economies of scale?

LRATC1

To maximize profits, firms expand output until

MR=MC

Mike has a linear production possibilities frontier that shows maximum production of trucks or computers of 10 million each. Debra also has a linear production possibilities curve that shows maximum production of 9 million trucks or 3 million computers.

Mike has a comparative advantage in the production of computers.

Why do economists use models?

Models allow us to study a simplified version of a complex world.

DeShawn's Detailing is a service that details cars at the customers' homes or places of work. DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service. For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package. Should DeShawn continue to offer the engine detailing service?

No, his marginal benefit is less than his marginal cost.

The firm is experiencing diminishing marginal product beyond what level of output along the marginal cost curve?

Q1

The firm is experiencing gains from specialization up to what level of output along the marginal cost curve?

Q1

In the graph below, what quantity will a monopolist produce?

Q2

The average total cost of production is minimized at what level of output?

Q4

(Q016) Refer to the following graph. When a market is in equilibrium, which of the following is true?

Quantity supplied is equal to quantity demanded.

Which of the following statements is true?

The AFC curve can never rise.

Which of the following is an example of a positive economic statement?

The average rainfall in August 2016 was 5 inches nationwide.

A city spent $2 million to build a pedestrian bridge that has proved unsafe. The city can repair this bridge or demolish it and build a new one. If the resulting bridge would be equally attractive and useful either way, how should the $2 million already spent factor into the city's decision?

The city should ignore the $2 million, since either way it has already been spent.

(Q007) There are a number of goods that, over time for a variety of reasons, transition from being a normal good to being an inferior good or from being an inferior good to being a normal good. One example is the flip phone. Prior to about 2010, more income for a household usually resulted in more flip phones being purchased. However, today flip phones are liable to be purchased by households that have experienced a reduction in income.How could this happen?

The flip phone becomes an inferior good because the good is now perceived as lower in quality than a smartphone.

What does it mean for a good to be excludable?

The good must be paid for before it is used.

Based on the infographic, what are the minimum wages in Nebraska and Colorado in relation to the federal minimum wage?

The minimum wage in both Colorado and Nebraska is higher than the federal minimum wage.

(Q003) You're an entrepreneur and had a great idea to sell shoes that have springs installed in them to make walking easier. However, the development costs were so high that the shoes are priced 15 times higher than shoes without springs. As a result, many of the shoes have gone unsold.What possible event could eliminate the disequilibrium in the market for shoes?

There is an increase in income and "spring shoes" are a normal good.

Two of the bizarre taxes mentioned in this chapter's Snapshot were the Flush Tax and the Window Tax. Which of the following statements is true based on the description of these taxes shown here?

There is no way to calculate the deadweight loss for both taxes given the information provided.

If the price floor for corn is set at $5.00, what amount and type of disequilibrium will be present in the market for corn?

There will be a surplus of 103,000.

What role do funds (money) play in the circular flow model?

They are what households or firms pay for products or resources.

Suppose your friend can obtain concert tickets for $100 each, but you can't get one for less than $300. Your friend sells a ticket to you for $200. Which of the five foundations of economics best describes this activity?

Trade creates value

Austin, Jensen, Matthew, and Walker can all produce matches, brushes, cans, and shirts. The table below identifies how many of each good they can make in a day if they devote themselves to producing only that good. Who has the absolute advantage in producing brushes?

Walker

Is this firm earning positive, negative, or zero economic profits?

We cannot determine the firm's level of profit because we do not know about its revenues.

(Q004) You are a producer of tortillas. In the market for tortillas, two events happen simultaneously: there is a decrease in the price of corn used to make your tortillas, and there are news headlines that promote the link between eating tortillas and reducing heart attacks.Which of the following is a consequence?

We know the quantity will increase, but we don't know what will happen to the price unless we know the size of the shifts.

Which of the following is a normative statement?

We should strive to push the production possibilities frontier (PPF) outward.

Which of the following is a microeconomic question?

What are the variables that determine the price of a specific good?

(Q010) You find out that the local Walmart is having a huge sale on Mountain Dew. You rush down with the intent of buying as much Mountain Dew as you can. In a graph of supply and demand, your action would be shown as

a movement along the demand curve for Mountain Dew.

Suppose there were only one producer of an expensive heart medication. The source of that producer's monopoly would MOST likely come from

a patent to produce the drug

Which activity is most likely to create a positive externality?

a person receives a flu shot

Where is unemployment, such that employment is below the full-employment level, plotted in relation to a production possibilities frontier?

a point inside the PPF

Lila shares a house with two other people. She is a concert pianist and often practices at home. One roommate enjoys listening to her practice, but the other does not. For the roommate who enjoys listening to Lila play, this is an example of ________; for the other roommate, it is an example of ________.

a positive externality; a negative externality

Rent control is an example of

a price ceiling

(Q018) Refer to the following figure. At a price of $5, this market is experiencing

a shortage

A production possibilities frontier with constant opportunity cost is

a straight downward-sloping line

(Q017) Refer to the following figure. At a price of $15, this market is experiencing

a surplus

Refer to the figure. At a price floor of $6, this market is experiencing

a surplus

Suppose that the demand for low-skill labor, QD, is represented by the equation QD = 56,000,000 - 3,000,000 ?0× W, where W is the wage rate. The supply of low-skill labor, QS, is represented by the equation QS = -8,000,000 + 5,000,000 ?0× W. If the minimum wage is $9, there will be __________ of labor in the market.

a surplus

Farm price supports are an example of price floors in the market for farm products. A binding price support will cause

a surplus of farm products

Which of the following is an explicit cost for a business owner?

a worker's salary

In order for a price floor to be binding, it must be set

above the equilibrium price

Dasenbrock and Gauss, a farming company, is able to achieve huge cost savings as it increases its acreage. This would be referred to in economics as

achieving economies of scale

Discuss whether the following points are along, inside or outside the PPF. A combination of 24 pizzas and 30 calzones would appear

along Tomaso's PPF.

Suppose that the equilibrium price of a bike is $250. The government passes a law setting a maximum price of $150 for a bike. As a result of the legislation, there will be

an excess demand for bikes

Suppose the government decides the Big Mac is an American tradition. To recognize the value of the Big Mac, the government passes legislation making it illegal to sell a Big Mac for less than $8. The equilibrium price of a Big Mac is $4. As a result of the government legislation, there will be

an excess suppy of Big Macs

Which of the following would lead to the situation shown in the figure?

an improvement in technology for production of both pizza and wings

(Q014) Which of the following will cause a shift rightward in the supply curve for tobacco?

an improvement in the technology used in the production of tobacco

(Q008) Which of the following will cause an increase in the supply of yogurt?

an increase in the number of sellers in the marker for yogurt

If income for tuna increases by 10% and the demand decreases by 20%, tuna is

an inferior good

Which scenario represents economic contraction?

an inward shift of the PPF

Which of the factors listed contributes to making street performances a public good?

any passerby can enjoy the show

(Q004) In an imperfect market, individual firms

are able to influence the price of their product

In the market portrayed in this graph, a nonbinding price floor of $2 will result in a price set

at 3

A producer would decide to produce in a competitive market in which she will earn zero profit in the long run because

at zero profit, her revenue will cover all her costs, both explicit and implicit (opportunity cost).

The average total cost (ATC) and average variable cost (AVC) converge as the level of output produced increases because

average fixed cost decreases as output increases.

If the firm depicted in the graph had to pay higher rent to its landlord, we would expect its ________ curve to shift ________.

average total cost (ATC); up

Based on the following graph, at a price __________/hr neither Ann, April, nor Andy will tutor, but at a price __________/hr, all three of them will tutor.

below $10; above $30

In order for a price ceiling to be binding, it must be set

below the equilibrium price

Which of the following would be consistent with taking the short-run approach to decision-making?

buying an expensive new leather jacket instead of saving for retirement

Specialization and trade allow individuals to

consume outside their own production possibilities frontiers (PPFs).

If you were willing to pay $3.05 for a gallon of milk purchased at the grocery store but bought the milk for only $2.05, you have gained a

consumer surplus amounting to $1.00

Profits when a competitive firm shuts down are -$7,250, and profits are -$250 when the firm continues to produce. This firm will minimize losses by

continuing to produce

Which of the following types of firm MOST closely fits the description of a competitive firm?

corn farmers

Suppose that the equilibrium price of a bike is $250. The government passes a law setting a maximum price of $150 for a bike. As a result of the legislation, the quality of bikes available for purchase will MOST likely

decline

Microsoft likely has to spend billions of dollars building and developing an operating system, but once it is produced, the cost to get the software to each customer is almost zero. Therefore, when Microsoft sells more units, their average total costs steadily decrease. This means Microsoft is said to have __________.

economies of scale

Which good is excludable?

education at a community college

Suppose a student has three hours of time to spend at her apartment before afternoon classes. She has the option of doing laundry, studying for a test, or watching television. If she decides to do laundry, then her opportunity cost is

either watching television or studying for the test, whichever would have been her second choice after doing laundry.

If a 20% increase in price causes a 30% drop in quantity demanded, the demand for this good is

elastic

If the government wants to minimize the deadweight loss of taxation, which of the following items is a good candidate for an excise tax?

emergency plumbing service

Firms producing an identical product in a competitive market are producing at a level of output that maximizes profit. The current market price is $4.50 per unit, and the firms are producing at a long-run average cost of $3.50 per unit. Over the long run one should expect

entry of new firms into this market

For a perfectly competitive firm, marginal revenue is

equal to price

The costs of a market activity paid for by an individual NOT engaged in the market activity are ________ costs.

external

The costs or benefits of a market activity that affect a third party are called

externalities

Suppose the cross-price elasticity of demand between hot dogs and mustard is -3.00. This implies that a 30% increase in the price of hot dogs will cause the quantity of mustard to

fall by 90%

Compared to perfect competition, monopoly results in

fewer units produced and sold

Imagine that local suburban leaders decide to enact a minimum wage, and soon after, a nearby city votes to increase the minimum wage to the same rate. As a result,

firms will not have an incentive to move to the nearby city, and the suburb may or may not lose jobs, depending on whether the minimum wage is binding.

External costs are the result of the actions of

firms, consumers, and the government

A supply curve with what type of slope represents a more elastic supply curve?

flatter slope

The following table shows a short-run production function for laptop computers. Use the data to determine where diminishing product begins. Diminishing product begins after you hire worker number

four

Judy spent eight hours studying for an exam. Normally, she would have spent that time watching TV instead of studying. She figures she could have gotten a "B" after only studying four hours, but she really wanted an "A." What is Judy's marginal cost in terms of TV viewing to improve her grade from a "B" to an "A"?

four hours

In the example presented by this graph, at what number of workers does the point of diminishing marginal product occur?

fourth worker

Which of the following is a common-resource good?

free public parking spaces

A major reason why public goods are NOT supplied by the market is the

free-rider problem

The tragedy of the commons

gives rise to a negative externality.

(Q009) In order to ensure that as many individuals as possible install smoke detectors, the government recently decided to subsidize the production of smoke detectors.Which of the following graphs demonstrates the change in the market for smoke detectors?

graph B

(Q010) Suppose that Coca-Cola and Pepsi are substitutes in consumption. If the price of Coca-Cola decreases, then which of the following graphs would show what happens with Pepsi?

graph C

(Q011) Candy makers face high prices for cocoa butter, the special ingredient that gives chocolate its melt-in-the-mouth texture. Which graph depicts this event?

graph D

The income elasticity of demand is __________ for normal goods.

greater than 0

The table below shows the daily production potential of two workers if they devote all their time to making either pizza or wings. Who has the absolute advantage at producing pizzas?

gwen

The costs of a market activity paid for by an individual engaged in the market activity are ________ costs.

internal

Suppose that the equilibrium wage for teachers in Minnesota is $15/hour. Also suppose that the state of Minnesota raises its minimum wage to $10/hour. Since the equilibrium wage for teachers is __________ the new minimum wage, we would expect the number of teachers employed to __________ and the equilibrium wage for teachers to __________.

higher than; stay the same; stay the same

Opportunity cost is the __________ alternative that must be sacrificed in order to get something else.

highest-valued

Suppose an employer can hire four low-skilled workers to move dirt with shovels at $5/hour, or can hire one skilled worker at $24/hour to move the same amount of dirt with a skid loader. What will the employer do if the minimum wage increases from $5/hour to $6.50/hour?

hire the one skilled worker

In a perfectly competitive market, the long-run market supply curve is

horizontal at the market price

For which of the following goods is supply the MOST rapidly responsive to a change in price?

hot dog vendor

The circular flow diagram shows how resources and final goods and services flow through the economy. There are two groups of entities exchanging goods and services in the circular flow. Which of the following make up the two groups?

households and firms

You order a $20 sweatshirt online for a Father's Day gift. The shipping charge is $10. You can get free shipping if your order totals $25 or more. Consequently, you order a $5 bobble head doll, even though neither you nor your father really likes bobble head dolls. This is an example of

incentives

The personal decisions of consumers and firms are based on ________ cost(s).

internal

A car rental agency lowers its rates by 15%. If the agency wants to recoup the income lost by lowering the prices and have total revenues be at least as high as before, it needs sales to __________ by at least __________.

increase; 20%

If government regulation forces firms in an industry to internalize the externality, then we can expect the equilibrium price of the good to ________ and the equilibrium quantity to ________.

increase; decrease

In order to sell more units, a monopolist must lower its prices. As shown in the table, total revenue will initially __________ and then __________.

increase; decrease

Suppose that government officials in Arkansas decide to repeal the Tattoo Tax described here. If this tax was eliminated, we would expect total consumer surplus in the tattoo market to __________ because the deadweight loss in the tattoo market __________.

increase; decreases

If the government decides to adopt a carbon tax, the price of goods whose production generates carbon emissions will ________ and the quantity produced will ________.

increase;decrease

The price of a competitive firm's product is $50 per unit. The firm currently has marginal cost equal to $40. To maximize profits, what should this firm do?

increases its output

Diminishing marginal product refers to marginal product that often initially __________ but eventually __________.

increases; decreases

The difference between microeconomics and macroeconomics is a difference between

individual economic units and the economy as a whole.

Suppose that a politician wants to build more production facilities for solar power and wind power. At the same time, the politician is unwilling to cut any other programs. If the resources that would be used to produce the solar and wind power facilities are already being efficiently used in other programs, where is the point the politician is trying to reach located, in relation to the production possibilities frontier?

it lies outside the frontier

Suppose that the federal government places a binding price floor on chocolate. To help support the price floor, the government decides to purchase all chocolate that consumers do not buy. What do you expect will happen to the quantity of chocolate demanded by consumers compared to the quantity of chocolate demanded before the price floor?

it will decrease

Suppose that the federal government places a binding price floor on chocolate. To help support the price floor, the government decides to purchase all chocolate that consumers do not buy. What do you expect will happen to the quantity of chocolate supplied by producers compared to the quantity of chocolate supplied before the price floor?

it will increase

Suppose that the federal government places a binding price floor on chocolate. To help support the price floor, the government purchases all chocolate that consumers do not buy. If the price floor remains in place for a number of years, what do you expect to happen to the quantity of chocolate purchased by the government compared to the quantity of chocolate purchased by the government when the price floor is first imposed?

it will increase

When a supplier has only a limited ability to make quick adjustments to quantity supplied, the elasticity of supply is

less than 1

Examine the graph. Sellers who are unable to sell their good at a price floor of $6 may still be able to sell their good on the black market at a price

less than 3

Which of the following is considered a government-created barrier?

licensing

Scarcity refers to the __________ nature of society's resources.

limited

The concept of scarcity in economics refers to

limited resources and unlimited wants

Economics is the study of how people allocate their __________ resources to satisfy their practically __________ wants.

limited; unlimited

Which good is nonrival?

listening to public radio

Which is the best example of economies of scale?

local power company

In which time period is demand MOST elastic?

long run

A camera takes pictures of drivers who do not stop at a red light, and this practice is used to issue traffic tickets. These red light cameras can be understood as serving a(n)

negative incentive to discourage individuals from driving through a red light.

Deadweight loss can be thought of as surplus that is transferred from producers or consumers and given to whom?

no individual or group

Clean air becomes polluted because

no one owns the air

If the cross-price elasticity of demand for two goods is zero, the two goods are

not related

At full employment, a society produces

on its PPF

Economists use the concept of ceteris paribus to examine a change in __________ in a model, while assuming that all other variables remain constant.

one variable

Which of the following is NOT a characteristic of an efficient market?

only consumer surplus is maximized

The market overproduces common-resource goods because private decision makers consider ________ costs but society experiences ________ costs.

only internal; internal and external

A firm is experiencing a loss of $5,000 per year when operating. The firm has fixed costs of $8,000 per year. The firm should __________ in the short run and should __________ in the long run.

operate; shut down

Explicit costs are called __________ costs, and implicit costs are __________ costs.

out-of-pocket; opportunity

Discuss whether the following points are along, inside or outside the PPF. A combination of 36 pizzas and 30 calzones would appear

outside Tomaso's PPF.

(Q009) Suppose that burgers and fries are complements in consumption. If the price of fries increases,

overall demand for burgers will decrease

(Q015) Flour is a factor of the production of cupcakes. How will an increase in the price of flour affect the market for cupcakes?

overall supply will decrease

A free-rider problem exists when

people receive a benefit for which they do not need to pay.

Price elasticity of supply is always positive, except when supply is

perfectly inelastic

Which of the new stadiums has seen the biggest increase in attendance?

philidelphia

Which point on the graph below is unattainable because the economy does NOT have enough resources to produce it?

point E

Which point on the graph here represents an inefficient use of society's resources?

point F

Laws that prohibit price gouging are often politically

popular, because consumers do not like having to pay more for a good in times of emergency, but the laws result in product shortages.

Monopoly power measures the ability to set a good's

price

Many local governments use parking meters on crowded downtown streets. However, the parking spaces along the street are typically hard to find, because the metered price is often set below the market price. This represents a __________, which results in a __________ of parking spots.

price ceiling; shortage

(Q007) Refer to the following graph. The demand curve slopes downward because

prices and quantity demanded move in opposite directions.

(Q012) Refer to the following graph. The supply curve is upward sloping because

prices and quantity supplied move in the same direction.

A good that is rival and excludable is defined as a ________ good.

private

The graph here illustrates the effect on the production possibilities frontier if the population grows, making more workers available. This new production possibilities frontier reflects the ability of society to

produce more wings and more pizza

A positive externality exists whenever

production of a good creates an external benefit

In 1911, the U.S. government sued Standard Oil, a U.S. company, for violation of antitrust laws. The company broke up into 34 smaller companies. This is an example of

promoting competition

Externalities exist because

property rights are not clearly defined

A good that is nonrival and nonexcludable is defined as a ________ good.

public

________ goods can be jointly consumed by more than one person, and nonpayers are difficult to exclude.

public

An online advertising company sells small page ads or full page ads. The elasticity of demand for small page ads is -0.8, and the elasticity of demand for full page ads is -1.3. To increase total revenue, the company should

raise the price for small page ads and lower the price for full page ads

The Water and Electric Board in Eugene, Oregon, is a monopolist in the supply of electricity. The city government must approve the rates the company charges for its electricity. This is an example of

regulating markets

Congestion charges cause the price of driving to ________. Therefore, the number of cars on the road will ________.

rise; fall

The tragedy of the commons occurs because the good being produced is

rival and nonexcludable

Which of the following characteristics best defines a common-resource good?

rival and nonexcludable

When consumers discard their gasoline-powered automobiles for electric-powered ones, this partially reflects the ________ of gasoline.

scarcity

The local ice cream shop is trying to figure out how many workers to hire, and part of the decision will be based on the marginal product of labor. The following table shows a short-run production function for quantity of ice cream tubs produced. Diminishing marginal returns begins after hiring which worker?

second

(Q002) In a competitive market, the price of the product is

set by market supply and demand

In a perfectly competitive market, the price of the product is

set by market supply and demand

The owner of a John Deere dealership hires you to maximize the revenue from the DL007 model. Your advice would be to

set the price in the region of unitary elasticity.

(Q012) According to the Food and Drug Administration, "...the ultraviolet (UV) radiation from these devices [sunlamps and tanning beds] poses serious health risks." As a result of reading this, a local mayor decides to introduce legislation that will put a 10% excise tax on purchases of these tanning products. From an economic point of view, this will

shift the demand curve for tanning leftward

(Q001) Which of the following is NOT a characteristic of a market economy?

significant government intervension

Which of the following is true of a negative externality?

some costs are borne by a third party

For which of the following goods would you expect demand to be the MOST responsive to a rise in price?

spaghetti

The increasing returns to hiring the first workers exist because of

specialization

The limiting of one's work to a particular area is referred to as

specialization

Converse, an apparel company, has been fairly successful selling denim-colored college sportswear. Lydia sees an opportunity for profit and enters the market. After producing her profit maximizing level of output, she finds that her average total cost per unit is $40, her average variable cost per unit is $30, and the market price is $35. In the short run, Lydia should

stay in buisiness though she is suffering a loss

Profits and losses are determined by

subtracting total costs from total revenue

Over a longer period of time,

supply becomes relatively more elastic.

If government regulation forces firms in an industry to internalize the externality, then the

supply curve shifts to the left

You have been hired as an economic consultant to the mayor. He is considering putting a tax on several products. You are worried about the impact of deadweight loss on the market for these products. You tell the mayor that the deadweight loss will be lower when

supply is inelastic and demand is inelastic

(Q001) The market for breakfast cereal is currently in equilibrium. Suddenly there is a storm that destroys the wheat that farmers had been growing for the cereal manufacturer. What will happen to the cereal market after the storm?

supply will decrease

The difference between the willingness to pay for a good and the price that is paid to get it is

the consumer surplus

Which of the following is a decision an Italian restaurant owner makes only in the long run?

the decision to stay in buisness

Suppose workers attend several skill-building workshops, increasing their labor productivity. How is this represented by a production possibilities frontier?

the entire PPF shifts out

(Q013) Businesses across the country are starting to install extra insulation in their buildings and warehouses. Households are now deciding to install more insulation as well. Which of the following outcomes would you predict for the market for oil?

the equilibrium price and quantity of oil will decrease

If the average total costs is falling,

the marginal cost curve must be below the average total cost curve.

Which of the following statements refers to a macroeconomic issue?

the national unemployement rate is currently 7.7%

For any given good that is produced, the law of increasing opportunity costs states that

the opportunity costs rise as more of the good is produced.

Which of the following is true regarding monopolies?

they tend to engage in rent seeking

(Q019) What must happen to the market price in order for a shortage to be eliminated?

the price must rise

(Q008) A change in which of the following will cause a change in the quantity demanded of coffee, without shifting the demand curve?

the price of coffee

(Q013) A change in which of the following will cause a change in the quantity supplied of coffee, without shifting the supply curve?

the price of coffee

The difference between the willingness to sell a good and the price that the seller receives for it is

the producer surplus

A firm that makes high-tech athletic shoes is looking to enter the shoe market in a developing nation where the economy has been growing rapidly. Which factor would MOST naturally be considered a signal in this context?

the profitability of firms already operating in the market in question

Suppose university officials felt that football tickets at your school are too expensive and decide to limit the price the athletic department can charge for a ticket to a single game. What will result from this decision if resale is NOT permitted and this rule is enforceable?

the quality of facilities will decrease

A friend of yours has an interview with an economics consulting firm and has been asked to discuss a microeconomics topic. Which of the following topics would you recommend that your friend discuss?

the study of how prices are determined in the baseball card industry

Elijah's neighbor likes to mow his grass each Saturday at 7 A.M. and the noise invariably wakes Elijah up. This is an example of

the third-party problem

Global warming is an example of

the tragedy of the commons.

What is the term for the voluntary exchange of goods and services between two or more parties?

trade

Consider a market with a positive externality. The market will tend to ________ the good because the market participants tend to ignore the ________ of their decision.

under produce; external benefit

In the long run, costs are

variable only

Which of the following is a macroeconomic question?

what is the rate of unemployement?

The opportunity cost of attending college is likely to be highest for a high school graduate

who is capable of playing a well-paid professional sport

The opportunity cost of attending college is likely to be highest for a high school graduate

who is capable of playing a well-paid professional sport.

Which of these is an exogenous factor, relative to a model of the economy?

yearly rainfall

Using the table below, determine the quantity at which a monopolist will produce.

4

In the long run with regard to price ceilings, we can expect

a more elastic demand curve and a more elastic supply curve.

Looking at the following graph, consider a law that caps the quantity at 70. The deadweight loss from the imposition of this quantity ceiling is

$105

Andrew paid $30 to buy a potato cannon, a cylinder that shoots potatoes hundreds of feet. He was willing to pay $45. When Andrew's friend Nick learns that Andrew bought a potato cannon, he asks Andrew if he will sell it for $60, and Andrew agrees, since he would have sold it for $45. Nick is thrilled, since he would have paid Andrew up to $80 for the cannon. Andrew is also delighted.What is Andrew's original consumer surplus?

$15

Suppose that the equilibrium price of a bike is $250. The government passes a law setting a maximum price of $150 for a bike. As a result of the legislation, and in the absence of a black market, the price of a mountain bike will be what?

$150

Andrew paid $30 to buy a potato cannon, a cylinder that shoots potatoes hundreds of feet. He was willing to pay $45. When Andrew's friend Nick learns that Andrew bought a potato cannon, he asks Andrew if he will sell it for $60, and Andrew agrees, since he would have sold it for $45. Nick is thrilled, since he would have paid Andrew up to $80 for the cannon. Andrew is also delighted.What is Nick's consumer surplus from the resale?

$20

DeShawn's Detailing is a service that details cars at the customers' homes or places of work. DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service. For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package. What is the marginal cost of adding the engine detailing to the basic detailing package?

$20

Billy Bob runs a seafood restaurant. Last year he earned $50,000 in revenue. He had explicit costs of $20,000. Billy Bob could have made $30,000 working for the county and could have received an additional $20,000 if he rented out his building and equipment. Calculate Billy Bob's economic profit.

-20,000

(Q002) Government officials have hired your consulting firm to increase the demand for public transportation. They come to you with three of their suggestions. Suggestion 1. Reduce the price of public transportation. Suggestion 2. Increase the price of private transportation by increasing tolls. Suggestion 3. Offer monthly and yearly passes that reduce the price paid per ride of public transportation.Which suggestion(s) does your firm recommend?

2

Assume that a monopolist faces the demand schedule given in columns (1) and (2) of the table, and a constant marginal cost of $50 for each additional customer. To maximize profits, the monopolist would serve __________ customers at a price of __________ per head.

3000; $70

If a firm has total costs of $535,000 and its implicit costs are $165,000, how much are its explicit costs?

370,000

Use the following scenario to answer the following questions: Kareem owns a bike store. His total costs are $1.2 million per year, his variable costs are $750,000, and his fixed costs are $450,000 per year. Last year, Kareem sold 1,200 bikes. Kareem's average fixed cost was ________ per bike.

375

The opportunity cost of increasing the production of apple pies from 12 to 14 pies is ________ pies.

4 blueberry

A pizza business has the cost structure described in the table. The firm's fixed costs are $20 per day. What are the firm's marginal costs at an output of 35 pizzas?

4.00

A local snow cone business sells snow cones in one size for $5. It has the following cost and output structure per hour. To maximize profit, the firm should produce how many snow cones per hour?

40

Refer to the following scenario to answer the following questions. Five fishermen live in a village and have no other employment or income-earning possibilities besides fishing. They each own a boat that is suitable for fishing but does not have any resale value. Fish are worth $5 per pound, and the marginal cost of operating the boat is $500 per month. They all fish a river next to the village. According to the following schedule, they have determined that when there are more of them out on the river fishing, they each catch fewer fish per month. How many fishermen will choose to operate their boats?

5

When output is 100 units, the firm's total fixed cost is $500. What will this firm's total fixed cost be if output doubles to 200 units?

500

Luciana is the owner of a nail salon. Last year, her total revenue was $145,000, her rent was $12,000, her labor costs were $65,000, and her overhead expenses were $15,000. From this information, we know that her accounting profit was

53,000

Suppose that this year, 500 million pounds of blueberries are grown, handled, produced, sold, or bought in Maine. How much revenue will Maine expect to collect from the Blueberry Tax described here?

7.5 million

At what price level does the labor market experience its largest surplus?

8

The table above lists the highest prices five consumers are willing to pay for a theater ticket. What will be the consumer surplus for price = $18?

8

The following table shows the willingness of three people to sell their tutoring services. Calculate the producer surplus for Ann if the going rate for tutoring is $18 per hour.

8/hr

Lisette is the owner of a bakery that earns zero economic profit. Last year, her total revenue was $145,000, her rent was $12,000, her labor costs were $65,000, and her overhead expenses were $15,000. From this information, we know that her total explicit costs were

92,000

Refer to the following table. What is the total cost of producing six units of the good?

950

Look at the provided figure. Which area represents consumer surplus after the tax?

A

A competitive firm maximizes profit at an output level of 500 units, the market price is $24, and the ATC is $24.50. At what range of AVC values for an output level of 500 would the firm choose NOT to shut down?

AVC<$24

Examine the graph. Many consumers will be unable to buy the good at a price ceiling of $0.50 because of a shortage. However, black market purchases of the good will occur at a price

Above $1.00

For which of the following goods is demand relatively elastic but NOT perfectly elastic?

a meal from a fast-food restaurant located in a shopping mall food court

A pizza can be divided among two or more people. Why is it nonetheless a rival good?

Any slice consumed by one person cannot also be consumed by another.

(Q005) As the owner of a hotel, you have decided to lower the price for all rooms in the month of October. What should you expect to happen?

As the price is lowered, the quantity of rooms demanded will increase.

The following graph depicts a market where a tax has been imposed. Pe was the equilibrium price before the tax was imposed, and Qe was the equilibrium quantity. After the tax, PC is the price that consumers pay, and PS is the price that producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and C are rectangles that are divided by the supply curve ST. Include both sections of those rectangles when choosing your answers. Which areas represent the total cost to society, in terms of lost social welfare, created as a result of the tax? Check all that apply.

F,G

Which of the following is a positive statement?

Legally requiring dogs to have rabies shots will reduce the number of rabid dogs.

Suppose that Marie is buying bananas. She decides she would like to purchase three bananas at the price of $0.25/banana, but not a fourth banana. Which of the five foundations of economics best describes Marie's thinking?

Marginal Thinking

Which of the following statements is correct?

Price floors and price ceilings are typically imposed by the government.

Given an eight-hour workday, which statement best describes the absolute advantage evident in the table?

Solange has an absolute advantage in the production of both foods.

Given an eight-hour workday, to experience gains from trade,

Solange should make pizzas and Jay-Z should make cheesesteaks.

Assume that all fast-food restaurants employ many minimum wage workers. Suppose 20,000 people in Pennsylvania work in fast-food restaurants for the federal minimum wage of $7.25/hour. If the state of Pennsylvania increases its minimum wage to $9.00/hour, who will be better off? Who will be worse off?

Some minimum wage workers will be better off, some minimum wage workers will be worse off, and all fast-food restaurant owners will be worse off.

Based on the graph below, how does the monopolist's profit-maximizing price and output compare to the efficient price and output?

The monopolist charges more and produces less.

The table below shows the daily production potential of two workers if they devote all their time to making either pizza or wings. Who has the absolute advantage at producing wings?

gwen

(Q020) For a firm to have market power, it must

have some control over price

Compared to perfect competition, monopolies charge

higher price

The amount an individual pays for insurance on his or her car is an example of a(n) ________ cost.

internal

Consider a market where production of the good is creating a negative externality. In the market equilibrium, there is a deadweight loss because the

internal cost of production is less than the social cost.

Which of the following can be considered a competitive market?

international market for coffee beans

The marginal cost curve

intersects the ATC at its minimum point.

(Q006) According to the law of demand, what is the relationship between price and quantity demanded?

inverse

A large group of fans are upset about the high price of tickets to many events. As a result of their lobbying efforts, a new law caps the maximum ticket price to any sporting event at $50. Assume there are a fixed amount of seats in the stadium, all seats are available to be sold, and the price of tickets before the ceiling was at an equilibrium point above $50. The price ceiling will create a __________ of tickets, which will be greater if demand is more __________, and __________ people will attend the events.

shortage; elastic; the same number of

Deadweight loss may occur in a market because

taxes increase the purchase price of a good, causing consumers to buy less and producers to supply less.

Suppose that Tegan is good at cooking but not very good at cleaning up the kitchen afterward, and that Sara is good at cleaning kitchens but not very good at cooking. Which of the following statements is true with regard to Tegan and Sara?

tegan should cook and sarah should clean up the kitchen

Which of the following is an assumption that underlies the construction of a production possibilities frontier?

that the technology available for use in production remains constant

Instead of taking an economics course, Adam could have taken a history course that meets at the exact same time. The total cost of taking the economics course would be

the tuition cost, the cost of the textbook and notebook, and the fact that Adam could not take the history course at the same time.

(Q006) You advise the owner of a local restaurant to lower the prices of his burgers. Which of the following is a consequence of this price change?

there is an increase in the demand for fries

If there is a $180 price ceiling imposed on a textbook, what will be the disequilibrium amount?

there will not be a shortage

If a minimum wage is set at $5.50, what is the amount of disequilibrium in the labor market?

there would be neither a shortage nor a surplus

Refer to the graph. Some buyers will offer sellers $10 per unit instead of the $6 price ceiling, because

they want to increase their chances of buying a good that is in shortage.