ECON 315

The CPI in 1970 was 38.8 and in 1998 the CPI was 163.0. If the real value of a 1970 gallon of milk in terms of 1998 dollars is $0.70, what was the nominal price of milk in 1970?

$.17

The price elasticity of gasoline supply in the U.S. is 0.4. If the price of gasoline rises by 8%, what is the expected change in the quantity of gasoline supplied in the U.S.?

+3.2%

The demand for a bushel of wheat in 1981 was given by the equation QD = 3550 - 266P. At a price of $3.46 per bushel, what is the price elasticity of demand?

-.035

The demand for packs of Pokemon cards is given by the equation QD = 500,000 - 45,000P. At a price of $2.50 per pack, what is the quantity demanded? At $5.00 per pack, what is the price elasticity of demand?

-0.818

The derivative of f(q) = 10/q2 + ln(q) with respect to q is

-20/q3 + 1/q

The integral of f(q) ∫(10/q2 + 20/q2)dq between 10 and 20

1.5

The derivative of f(q,x) = 10/q2 + 2ln(x) with respect to x is

2/x

From 1970 to 2010, the real price of a college education increased, and total enrollment increased. Which of the following could have caused this increase in price and enrollment?

A shift to the left in the supply curve for college...

From 1970 to 2010, the real price of eggs decreased. Which of the following would cause an unambiguous decrease in the real price of eggs?

A shift to the right in the supply curve for eggs and a shift to the left in the demand curve for eggs.

Suppose there is currently a surplus of wheat on the world market. The problem of excess supply may be removed from the market by:

A) lowering the market price. B) shifting the supply curve leftward. Both A and B are plausible actions.

Microeconomics is the branch of economics that deals with which of the following topics?

A.The behavior of individual consumers C. The behavior of individual firms and investors E). both A and C

Which of the following is an example of a market?

a. a gas station b. a garage sale c. a barber shop d. All of the above are examples of markets.

A curve that represents all combinations of market baskets that provide the same level of utility to a consumer is called

an indifference curve

In a market economy, supply and demand are important because they

can be used to predict the impact on the economy of various events and policies.

The price of good A goes up. As a result, the demand for good B shifts to the left. From this we can infer that:

goods A and B are complements.

Economics is the study of

how society manages its scarce resources

The price elasticity of demand for a demand curve that has a zero slope is

infinity.

"Other things equal, when the price of a good rises, the quantity supplied of the good also rises, and when the price falls, the quantity supplied falls as well." This relationship between price and quantity supplied

is referred to as the law of supply

The assumption of transitive preferences implies that indifference curves must:

not cross one another

The income elasticity of demand is the

percent change in quantity demanded resulting from a one percent increase in income.

For economists, statements about the world are of two types:

positive statements and normative statements

Which of the following is NOT an assumption regarding people's preferences in the theory of consumer behavior?

preferences are complete. preferences are transitive. consumers prefer more of a good to less. d. none of the above.

Normative statements are

prescriptive, whereas positive statements are descriptive.

The phenomenon of scarcity stems from the fact that

resources are limited.

The income elasticity of demand is the

resulting from a one percent increase in income.

The law of supply states that, other things equal, when the price of a good

rises, the quantity supplied of the good rises.

In most societies, resources are allocated by

the combined actions of millions of households and firms