Micro econ midterm 1

2

The price of coffee at a local coffee shop is $3. Cheryl is willing to pay $6 for her first cup of coffee each day. The marginal benefit to her of each additional cup of coffee falls by $2. How many cups of coffee should Cheryl purchase?

that the price of almonds is rising

The price of macadamia nuts falls. This conveys all of the following signals EXCEPT - that macadamia nuts are in plentiful supply, so consumers should buy more - that the price change will be understood in every language and helps coordinate the macadamia market - that the price of almonds is rising -the demand for macadamia nuts is low, so producers should produce less

0.4

The price of milk at the local grocery store is cut by 25%. In response to this price cut, the quantity of milk demanded increases by 10%. What is the absolute value of the price elasticity of demand for milk?

1,250,000(google docs)

According to the figure, if there is international trade in this market, and the world price of a pair of pants is $40, the value of the consumer surplus is:

decreased; an increase(google doc)

According to the figure, prior to 2018, the average tariff rate imposed by the United States has generally _____. This is associated with _____ in international trade.

reduce price, increase quantity

Allowing food trucks to enter the restaurant market will do what to equilibrium restaurant food price and quantity?

1,485 (google docs)

As a part of a market research project, you survey six food trucks across the city to gather data on how many meals they would plan to sale at various prices. The data you collect is in the accompanying table. What is the total supply of meals in your survey at $10 per meal?

all of these are true

At lunch time your marginal benefit from eating one taco is $4. Which of the following is not true? - you are willing to pay $3 for a taco -if the price of tacos is $3, you would buy at least one taco -your surplus increases if you buy a taco for $3 - all of these are true

Rusia because she has a lower opportunity cost

Barlow and Rusia own a nail salon. A manicure takes Barlow 60 minutes to complete and takes Rusia 45 minutes to complete. Completing a pedicure takes Barlow 45 minutes and takes Rusia 30 minutes. Who has a comparative advantage in pedicures?

200 (google docs)

Consider the market for furniture made from sustainable, man-made forests that is shown in the figure. The government wants to encourage buyers to buy such furniture and places a price ceiling of $250 on the market. After the implementation of the price ceiling, the market quantity sold falls by _____ thousand units.

perfectly inelastic

Each month, Hana buys 50 doughnuts. Hana's demand for doughnuts is

there is a shortage of beyonce concert tickets in the market

If Beyoncé concert tickets are sold out within five minutes of being released, we can conclude that

a fall in its equilibrium price

If there is a technological advance in the production of the Amazon Echo smart speaker, you would expect to see _____ overtime.

360,000(google doc)

If there is no international trade in this market, the value of the consumer surplus is:

buyers

In some US states, there is a sales tax on food. If demand for food is relatively inelastic and supply for food is relatively elastic, the burden of these taxes falls mostly on

Decrease in quantity supplied(Google doc)

In the graph, the movement from point H to point G represents

10

In the market for plastic bags shown here, the original equilibrium price is 50 cents per bag. In an effort to reduce plastics usage, a tax is then placed on the buyers of plastic bags. The economic burden of this tax on the seller is _____ cents.

walk; less

It is a rainy day, and you are considering taking an Uber one mile to meet some friends. You have decided you are willing to pay $20 to avoid getting wet from the rain. The trip would normally cost you $8, but due to the weather the surcharge is triple the regular cost. You should _____ because the benefit to you of taking the Uber is _____ than the cost.

Nerida has already spent a lot of time studying for the class

Nerida scored a 55% on her first midterm exam and is trying to decide whether to drop the class. Based upon economic principles, which argument is NOT a good reason to stay in the class?

none of these

Non-linear (curved) supply curves are: - none of these - a violation of the law of supply - a reflection of diminishing marginal benefit on the demand side - unrealistic in practice

facts; relationships

Positive analysis is based on identifying _____ and _____.

Graph C

Producers of hand-made leather wallets have made manufacturing changes that have improved quality but reduced efficiency. Which graph shows this change in the market?

an increase in the price of the item

Refer to the graph to answer the question. The movement from point V to point W is caused by

increases from 25 to 50

Refer to the graph. Suppose that a binding price floor of $35 is removed. The number of consumers who are able to purchase the product will:

Surplus: 12,000

Refer to the labor market shown here. A minimum wage of $18 per hour is introduced. The implementation of the minimum wage leads to a _____ of _____ workers.

surplus decreases

Suppose that currently, only 5% of US households eat kale (a green-leafy vegetable) on a monthly basis. Suppose the US federal government requires that all individuals consume kale at least once per month. What is the effect on total economic surplus?

increase: $120,000

Suppose that the world price of engines is $1,000. According to the figure, the domestic total surplus will _____ by _____ in the free-trade equilibrium relative to the no international trade equilibrium.

The marginal benefit of Prof brewer's last doughnut s equal to the marginal benefit of the last doughnut you consume

Suppose the market for doughnuts efficiently allocates the production and consumption of glazed doughnuts. Prof Brewer loves doughnuts more than any living person. Which is true?

infinity; perfectly elastic

Suppose the percentage change in newspapers demanded for any price change is infinite. The absolute value of the elasticity of demand for newspapers is _____, and demand is _____.

Us producers of single-malt whisky

The US is an importer of single-malt whisky (Scotch) from Scotland. Which of the following groups is not hurt by a tariff on single malt whisky?

Len, ren, and jen

The accompanying table provides data for five different oatmeal cookie sellers. Out of the sellers listed, who all are following the law of supply?

graph d (GOOGLE DOC)

The fidget spinner toy fad is over, and children are not buying them with the same enthusiasm as they did earlier. Which graph depicts the situation in the market for fidget spinners?

-$18,000

The figure shows the market for movie tickets. If the movie theater changes the price per ticket from $12 to $13.50, the change in total revenue is:

At a price of 149$, the total market demand for ATV tours in June in 933(google docs)

The table below shows data on quantity demanded for ATV tours at an ATV excursion company in Bali. In June, many new tourists arrive in Bali and the additional demand from these tourists is indicated in the table. Which of the following is true about the market for ATV tours in June?

two tax returns; 1.25 tax returns

The table provides data on how long it takes Fazio and Gabriella to learn to play a particular new song on the piano and to complete a given person's tax return. Use the data to answer the question.

the quantity supplied in the market rises by 152,000

There are four suppliers in the packed meals market. The quantity of packed meals that each one is willing to supply per week at various prices is provided in the accompanying table. What is the change in the market supply for packed meals when the price rises from $6.25 per meal to $6.50 per meal?

there is a shortage of cool club space at current prices

To get into the coolest clubs, you have to wait in line for a long time. Which of the following is likely true?

cannot tell from this information

Uber advertises using Google ads and using Facebook ads. The average cost per acquisition (average cost per new user) on Google is $10 and the average cost per acquisition on Facebook is $15. The expected marginal revenue of a new user is $100. On the margin, Uber should: - buy more facebook ads -buy more ads on both platforms -buy more google ads -cannot tell from this information

3

Uber cuts the price of a ride in Los Angeles by 15%. Thereafter, the quantity of rides demanded rises by 45%. What is the absolute value of the price elasticity of demand for Uber rides?

60$ (GOOGLE DOC)

Use the bath towel market graph to answer the question.

12.50 (google doc)

Use the watermelon market graph to answer the question. What is the value of the total surplus at the quantity of melons with economic efficiency?

He will produce six tables at a cost of $8,250

Vincent makes dining tables, and he is trying to decide how many tables to produce. He can sell each dining table for $2,000. The cost of the first table is $750, and for the second it's $1,000. For each additional table he produces, the marginal cost of each table increases by $250. How many dining tables should Vincent produce, and what is the total cost of his production?

both the buyer and the seller will gain from the trade

Voluntary exchange occurs when:

Graph A

What will happen to the demand for upscale restaurants, if an economy goes into recession and unemployment rises?

to the left of the quantity of two

When the actual pounds produced and sold is two, economic surplus in the market is represented by the area between the demand and supply curves:

the quantity at which marginal benefit intersects the x-axis

When the marginal cost of a good is zero, at what quantity of consumption would a person maximize their surplus?

assign the person who is fastest or best at a task to do that task

Which of the following is a FALSE statement about assigning work based on comparative advantage? - the person who has absolute advantage in the task will sometimes be assigned to do it - the person with the lowest opportunity cost at a task should perform it - assign the person who is fastest or best at a task to do that task

a rise in the price of a product that is a substitute-in-production(google docs)

Which of the following market changes would NOT lead to a shift of the supply curve from Old supply to New supply?

lay off workers

You manage a firm that produces electric vehicles and employs 500 workers. You expect the market price of labor (wages) to increase next year. If no other prices change, which of the following production decisions next year will increase your surplus?

none of these

Your willingness to pay for a clean kitchen and for a clean bathroom is higher than your roommate's willingness to pay for each. Which of the following is necessarily true? - you have an absolute advantage in both cleaning the kitchen and cleaning the bathroom -neither you nor your roommate has a comparative advantage in cleaning the kitchen or cleaning the bathroom - none of these - you have a comparative advantage in both cleaning the kitchen and cleaning the bathroom