ECO2013: Midterm Practice 1

What is the wage rate that secretaries earn is ? an hour and the number of secretaries employed is ?. When the Administrative Union sets the minimum wage for secretaries at $17.50 an hour, ? secretaries are employed and they earn $? an hour. The number of secretaries unemployed is ?

$15.00; $300; 225; $17.50; 150

Which of the following is an example of a price floor? A. The government guarantees that potato farmers will receive at least $50 a ton. B. The lowest price of gasoline this year was $2 per gallon. C. Stock prices hit a floor last week. D. Safeway charges $1 more than Fred Meyer charges for a 5 pound bag of sugar.

A. The government guarantees that potato farmers will receive at least $50 a ton.

A supply schedule is a list of the ? at each different price when all other influences on selling plans remain the same. A supply curve is a graph of ? A. quantities supplied; a supply schedule B. quantities supplied; quantities supplied C. quantities actually sold; a supply schedule D. quantities actually sold; quantities supplied

A. quantities supplied; a supply schedule

The New York Times reports that cruise lines have been slashing prices and cruise sales are up. It says this surge of interest tells us that despite the uncertain economic climate, people clearly need more fun in their lives and view their vacations as a valuable and necessary part of it. You would expect a lower price to increase the number of poeple who decide to take a cruise because ? A. with a lower price more people will have a marginal benefit that exceeds the price B. a lower price will raise the marginal cost of taking a cruise C. lower prices suggest the cruise line is facing tough economic times and people cruise now before the cruise lines goes out of business D. a lower price means more time spent in port and less time cruising E. a lower price raises the marginal benefit from taking a cruise

A. with a lower price more people will have a marginal benefit that exceeds the price

When the price of a resource used in production rises, ? and the price ? A. supply and demand decrease; rises, falls, or remains unchanged B. supply decreases; rises C. demand decreases; falls D. supply increases; falls

B. supply decreases; rises

A rise in income increases the quantity demanded by 1,000 bags a day at each price. At the initial equilibrium price, there is a ? of pretzels. The price of a bag ? and the quantity of bags supplied ? as the market moves to its new equilibrium. A. shortage; rises; decreases B. surplus; falls; decreases C. shortage; falls; increases D. surplus; rises; decreases E. shortage; rises; increases The new equilibrium price is _ a bag and the new equilibrium quantity is _ bags a day.

E.; $4.00; 2,250

Factories that produce DVDs can also produce CDs. Which of the following events in the market for DVDs illustrates the law of supply? 1. The price of a CD falls. 2. A new robot technology lowers the cost of producing DVDs. 3. The price of a DVD falls. 4. The price of a DVD is expected to rise next year. 5. The wage rate paid to DVD factor workers increases.

Event #3 only

The graph illustrates the market for tea. The initial equilibrium is at point A. After one or more changes, the new equilibrium moves to point B. You predict that the market for tea was influenced by ? A. a fall in household income and an increase in the number of plantations B. a rise in household income and an increase in the wage rate paid to tea pickers C. a rise in household income and an increase in the number of plantations D. a fall in the wage rate paid to tea pickers and a fall in household income

a rise in household income and an increase in the number of plantations.

A substitute is a good that is ? another good, and a complement is a good that is ? another good.

consumed in place of; consumed together with

The opportunity cost of skates is best defined as the:

value of the highest-valued alternative given up to get skates