Microeconomics Exam 1 Chapter 1-6

What do points inside of the PPF represent?

Inefficient

If income elasticity is negative, this good must be

Inferior good

Absolute advantage is found by comparing different producers'

Input requirement per unit of output

Another word for "factors of production" is

Inputs

Something that induces a person to act is called

Incentive

What's the opportunity of Fish in Peru?

3/5 corn

What is the amount of tax revenue collected by government?

420

What is the opportunity cost moving rom point A to B?

50 dryers

What is the opportunity cost to Footlocker of increase the production of shoes from 400 to 800?

700 socks

Which economist coined the term "invisible hand"

Adam Smith

Which of the following economy is operating under the centrally planned economy?

Cuba

A movement downward and to the right along the demand curve is called

Decrease in quantity demanded

Demand is unit elastic if the price elasticity of demand is

Equal to 1

A legal minimum price a good can be charged is called price

Floor

Demand is elastic if the price elasticity of demand is

Greater than 1

In the circular-flow diagram, who buys the good and services?

Households

What do points outside of the production possibility curve represent?

Impossible

If tax is levied on sellers of the product, the supply curve will

Shift up

Which of the following would cause price to rise?

Shortage of the good

For a good that is narrowly defined, demand

Tends to be elastic

What factor decides between buyers and sellers who pay a bigger portion of the tax?

Whoever is more inelastic

Suppose the cost of driving a 20 seat bus is $500 and there are 5 empty seats on a bus. The marginal cost of one additional passenger is

$0

What is the amount of tax per unit?

$4

Consider Jack's decision to go to college. If he goes to college, he will spend $19,000 on tuition, $9,000 on room and board, and $1,000 on books. If he does not go to college, he will earn $20,000 working in a store and spend $7,500 on room and board. Jack's cost of going to college is

$41,500

Consider Jason's decision to go to college. If he goes to college, he will spend $25,000 on tuition, $10,000 on room and board, and $3,000 on books. If he does not go to college, he will earn $22,000 working in a store and spend $9,000 on room and board. Jason's cost of going to college is

$51,000

Using the midpoint method, what is the price elasticity of demand when price rises from $8 to $12

1

What's the opportunity cost Bread in Spain?

1/2 bread

What's the opportunity of corn in Argentina?

2/3 fish

Which one of the following is an example of perfectly competitive market?

Bananas

A price ceiling is binding when it is set

Below the equilibrium price, cause a shortage

Market consists of

Both buyers and sellers

Which one of the following is not part of the factors of production?

Money

If income elasticity is positive, this good must be

Normal good

If the income increase lead to demand increase, this implies that the good is

Normal goods

Which of the following economy is under the centrally planned economy?

North Korea

A government imposed price floor at $6, it's

Not binding, and nothing happens

At which point is the economy producing efficiently?

Point R

At which point is the economy producing the maximum number of windows?

Point R

At which point is the economy producing inefficiently?

Point T

Minimum wage is an example of

Price floor

When supply and demand both decrease, equilibrium

Price may increase, decrease, or remain unchanged

Which one of the following is not a supply shifter

Price of the good

Which one of the following is an example of perfectly competitive market?

Printer papers

The price elasticity of demand measures how much

Quantity demanded changes due to a change in price

The cross price elasticity of demand measures how much

Quantity demanded changes due to a change in price of other good

When countries realize their comparative advantage and specialize in their advantage, the total production in the world will

Rise

It is possible for this economy to produce a. 60 dryers and 50 washer b. 40 dryers and 70 washers c. 40 dryers and 50 washers d. all of the above

d. all of the above

The principle of trade can benefit everybody refer to a.consumers b. business c. countries d. all of the above

d. all of the above

What do points on the PPF represent?

efficient

Which one of the following is an example of substitute goods

iPhone and Samsung Galaxy