Econ Exam 1
Price Quantity demanded | Quantity demanded | Quantity demanded by Michelle by Laura by Hillary $5 5 4 11 $4 6 6 13 $3 7 8 15 $2 8 10 17 $1 9 12 19 $0 10 14 21 If the market consists of Michelle and Laura only and the price falls by $1, the quantity demanded in the market increases by
3 Units
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate Labor Hrs. needed to make 1 Unit of \# of Units produced in 24 hrs Cheese - Bread \ Cheese - Bread ENGLAND 2 3 \ 12 8 SPAIN 3 6 \ 8 4 which of the following combinations of cheese and bread could Spain produce in 24 hours?
6 Units of cheese and 1 Unit of bread
$ per case | Alpine springs | Brook mtn | Cascade h20 | Dew Good $0.00 0 Cases + 0 Cases + 0 Cases + 0 Cases $3.00 100 cases + 40 cases + 60 Cases + 100 Cases $6.00 200 cases + 80 cases + 120 Cases + 200 Cases $9.00 300 Cases + 120 Cases + 180 Cases + 300 Cases If the 4 suppliers listed are the only suppliers in this market and the market demand schedule is Price | Quantity Demanded $0.00 1200 $3.00 900 $6.00 600 $9.00 300 The equilibrium price and quantity are
$6.00 and 600 cases
Mins needed to | # of cellular phones programmed or tested in a 40 hour week Program 1 Test 1 cellphone cellphone phone phone programmed tested Juanita ? 2 160 1200 Shantala 10 4 240 600 Which of the following points would be on Juanita's production possibilities frontier, based on a 40 hour week
( 130 cellular phones programmed, 225 cellular phones tested )
Mins needed to | # of cellular phones programmed or tested in a 40 hour week Program 1 Test 1 cellphone cellphone phone phone programmed tested Juanita ? 2 160 1200 Shantala 10 4 240 600 Which of the following points would be on Shantala's production possibilities frontier, based on a 40 hour week
( 180 phones programmed, 150 cellular phones tested )
Suppose the demand function for good X is given by Qdx= 15-0.5px-0.8py where Qdx is the quantity demanded of good X, Px is the price of good X, and Py is the price of good y, which is related to good X. Using the midpoint method, if the price of good X is constant at $10 and the price of good Y decreases from $10 to $8, the cross price elasticity of demand is about
-2.57, and X and Y are complements
PRICE | QUANTITY $250 0 $200 30 $150 70 $100 110 $50 150 $0 190 Using the midpoint method, if the price falls from $100 to $50, the absolute value of the price elascity of demand is change in Q /Avg Q E= ----------------------- change in P / Avg P
0.46
Price Quantity Demanded Quantity Demanded Quantity Demanded (Income=$5,000) (Income=$7,500) (Income=$10,000) $24 2 3 4 $20 4 6 8 $16 6 9 12 $12 8 12 16 $8 10 15 20 $4 12 18 24 Using the midpoint method, when income equals $5,000, what is the price elasticity of demand between $8 and $12
0.56
Machine Minutes needed to make 1 Toothbrush \\ Hairbrush ZIMBABWE 3 10 PORTUGAL 5 6 Which of the following combinations of toothbrushes and hairbrushes could Portugal produce in 30 minutes
1 Toothbrush and 4 Hairbrushes
Suppose that when the average college student's income is $10,000 per year, the annual quantity demanded of Patty's pizza is 50 and the annual quantity demanded of Sue's Subs is 8. Suppose that when the Price of Patty's pizza increases from $8 to $10 per pie, the quantity demanded of Sue's subs increases from 80 to 100. Suppose also that when the average student's income increases to $12,000 per year the annual quantity demanded of Patty's pizza increases from 50 to 60 . Using the midpoint method, the cross-price elasticity of demand is
1, and the two goods are substitutes
PRICE | QUANTITY $250 0 $200 30 $150 70 $100 110 $50 150 $0 190 Using the Midpoint method, if the price falls from $150 to $100, the absolute value of the price elascity of demand is change in Q /Avg Q E= ----------------------- change in P / Avg P 40/90 = ---------- = 40/90 x 125/50 = 5000/4500 = 1.1 50/125
1.1
The following table shows a portion of the demand schedule for a particular good at various levels of income Price Quantity Demanded Quantity Demanded Quantity Demanded (Income=$5,000) (Income=$7,500) (Income=$10,000) $24 2 3 4 $20 4 6 8 $16 6 9 12 $12 8 12 16 $8 10 15 20 $4 12 18 24 Using the Midpoint Method, when income equals $7,500, what is the price elasticity of demand between $16 and $20?
1.80
Assume that England and Spain each have 24 labor hours available. if each country divides its time equally between the production of cheese and bread then total production is Labor Hrs. needed to make 1 Unit of \# of Units produced in 24 hrs Cheese - Bread \ Cheese - Bread ENGLAND 2 3 \ 12 8 SPAIN 3 6 \ 8 4
10 Units of cheese and 6 Units of bread
Price Quantity demanded | Quantity demanded | Quantity demanded by Adam by Barb by Carl $10 10 8 22 $8 12 12 26 $6 14 16 30 $4 16 20 34 $2 18 24 38 $0 20 28 42 Suppose the market consists of Adam, Barb and Carl. If the price falls by $2, the quantity demanded in the market increases by
10 units
Which of the following combinations of wheat and beef could paul NOT produce in one 8-hour day? MINUTES NEEDED TO MAKE 1 BUSHEL OF WHEAT / POUND OF BEEF ANDREA { 30 | 15 } PAUL { 15 | 5 }
13 Bushels of wheat and 60 pounds of beef
Assume that Nick and Faldo can switch between producing wheat and producing cloth at a constant rate Quantity produced in 1 hour Bushels of Wheat ||| yards of Cloth NICK 8 12 FALDO 6 15 Assume that Nick and Faldo each have 2 hours available. If each person divides his time equally between the production of wheat and cloth, then total production is
14 bushels of wheat and 27 yards of cloth
Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing phones at a constant rate. The following table applies Mins needed to | # of cellular phones programmed or tested in a 40 hour week Program 1 Test 1 cellphone cellphone phone phone programmed tested Juanita ? 2 160 1200 Shantala 10 4 240 600 The number of minutes needed by Juanita to program a cellular phone is
15
PRICE | QUANTITY $250 0 $200 30 $150 70 $100 110 $50 150 $0 190 Using the midpoint method, if the price falls from $200 to $150, the absolute value of the price elasticity of demand is change in Q /Avg Q E= ----------------------- change in P / Avg P = 40/50 --------- = 24/5 x 7/2 = 4/5 = 2.8 50/75
2.8
$ per case | Alpine springs | Brook mtn | Cascade h20 | Dew Good $0.00 0 Cases + 0 Cases + 0 Cases + 0 Cases $3.00 100 cases + 40 cases + 60 Cases + 100 Cases $6.00 200 cases + 80 cases + 120 Cases + 200 Cases $9.00 300 Cases + 120 Cases + 180 Cases + 300 Cases If alpine springs and Dew good are the only two suppliers in this market, by how much does the market quantity supplied change with each $3 increase in price?
200 Cases
Abby's Brandi's Carrie's Dee Dee's Quantity Quantity Quantity Quantity Demanded Demanded Demanded Demanded PRICE $12 2 1 3 4 $10 4 4 4 5 $8 6 7 5 6 $6 8 8 4 7 $4 10 9 3 8 $2 12 10 2 9 Suppose Abby, Brandi, Carrie, and DeeDee are the 4 buyers in the market. If the price is $8, then the market quantity demanded is
24 units
production opportunities Hrs needed to make 1 unit of # of units produced in 40 hrs Cheese | Wine Cheese | Wine England 1 4 40 10 France 5 2 8 20 Assume that England and France each have 40 labor hours available. If each country divides its time equally between the production of cheese and wine, then total production is
24 units of cheese and 15 units of wine
production opportunities Hrs needed to make 1 unit of # of units produced in 40 hrs Cheese | Wine Cheese | Wine England 1 4 40 10 France 5 2 8 20 Which of the following combinations of cheese and wine could England NOT produce in 40 hours?
26 units of cheese and 4 units of wine
Price Quantity demanded | Quantity demanded | Quantity demanded by Michelle by Laura by Hillary $5 5 4 11 $4 6 6 13 $3 7 8 15 $2 8 10 17 $1 9 12 19 $0 10 14 21 If the market consists of Michelle and Hillary only and the price falls by $1, the quantity demanded in the market increases by
3 Units
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing Hairbrushes at a constant rate Machine Minutes needed to make 1 Toothbrush \\ Hairbrush ZIMBABWE 3 10 PORTUGAL 5 6 Assume that Zimbabwe and Portugal each have 180 machine minutes available. If each country divides its time equally between the production of toothbrushes and hairbrushes, then total production is
48 toothbrushes and 24 Hairbrushes
Machine Minutes needed to make 1 Toothbrush \\ Hairbrush ZIMBABWE 3 10 PORTUGAL 5 6 which of the following combinations could Zimbabwe NOT produce in 120 minutes?
5 Toothbrushes and 11 hairbrushes
Price Quantity demanded | Quantity demanded | Quantity demanded by Michelle by Laura by Hillary $5 5 4 11 $4 6 6 13 $3 7 8 15 $2 8 10 17 $1 9 12 19 $0 10 14 21 If the market consists of Michelle, Laura, and Hillary and the price falls by $1, the quantity demanded in the market increases by
5 Units
Price Quantity demanded | Quantity demanded | Quantity demanded by Adam by Barb by Carl $10 10 8 22 $8 12 12 26 $6 14 16 30 $4 16 20 34 $2 18 24 38 $0 20 28 42 Suppose the market consists of Adam and Barb only. If the price rises by $2, the quantity demanded in the market falls by
6 Units
production opportunities Hrs needed to make 1 unit of # of units produced in 40 hrs Cheese | Wine Cheese | Wine England 1 4 40 10 France 5 2 8 20 Which of the following combinations of cheese and wine could France produce in 40 hours?
6 Units of cheese and 5 Units of Wine
Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate Hrs needed to make 1 | Amount produced in 60 hrs Mixer || Toaster Mixer || Toaster Maya 6 3 10 20 Miguel 10 5 6 12 Which of the following combinations of mixers and toasters could Maya produce in 60 hours?
6 mixers and 4 toasters
Minutes needed to | # of computers set up or tested in 40 hr wk Set up 1 computer | Test 1 comp | Comp. set up | Comp. Tested BARB 48 ? 50 (3/4) 40 (5/4) JIM 30 40 80 (3/4) 60 (4/3) The number of minutes needed by Barb to test a computer is
60
Assume that Andrea and Paul can switch between producing wheat and producing beef at a constant rate MINUTES NEEDED TO MAKE 1 BUSHEL OF WHEAT / POUND OF BEEF ANDREA { 30 | 15 } PAUL { 15 | 5 } Which of the following combinations of wheat and beef could Andrea produce in one 8-hour day?
7 bushels of wheat and 15 pounds of beef
Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. Minutes needed to | # of computers set up or tested in 40 hr wk Set up 1 computer | Test 1 comp | Comp. set up | Comp. Tested BARB 48 ? 50 (3/4) 40 (5/4) JIM 30 40 80 (3/4) 60 (4/3) Which of the following points would NOT be on Barb's production possibilities frontier, based on a 40 hour week?
8 Computers set up, 32 computers tested
Hrs needed to make 1 | Amount produced in 60 hrs Mixer || Toaster Mixer || Toaster Maya 6 3 10 20 Miguel 10 5 6 12 Assume that Maya and Miguel each have 60 hours available. If each person divides his/her time equally between the production of mixers and toasters, then total production is
8 Mixers and 16 Toasters
Price Quantity demanded | Quantity demanded | Quantity demanded by Adam by Barb by Carl $10 10 8 22 $8 12 12 26 $6 14 16 30 $4 16 20 34 $2 18 24 38 $0 20 28 42 Suppose the market consists of Barb and Carl only. If the price falls by $2, the quantity demanded in the market increases by
8 Units
Which of the following combinations of cheese and bread could England NOT produce in 24 hours? Labor Hrs. needed to make 1 Unit of \# of Units produced in 24 hrs Cheese - Bread \ Cheese - Bread ENGLAND 2 3 \ 12 8 SPAIN 3 6 \ 8 4
8 Units of cheese and 3 units of bread
A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows: Price Quantity demanded Quantity demanded Quantity supplied by members by non-members $10 1000 500 600 $15 800 400 600 $20 600 300 600 $25 400 200 600 $30 200 100 600 If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament and the country club sets the ticket price at $20, then there will be
A shortage of 300 tickets
a leftward shift of a supply curve is called a
Decrease in supply
Abby's Brandi's Carrie's Dee Dee's Quantity Quantity Quantity Quantity Demanded Demanded Demanded Demanded PRICE $12 2 1 3 4 $10 4 4 4 5 $8 6 7 5 6 $6 8 8 4 7 $4 10 9 3 8 $2 12 10 2 9 Suppose Abby, Brandi, Carrie, and DeeDee are the only 4 buyers in the market. When the price decreases from $6 to $4, the market quantity demanded
Increases by 3 Units
PRICE | QUANTITY $250 0 $200 30 $150 70 $100 110 $50 150 $0 190 Using the midpoint method, if the price falls from $100 to $50, the price elascity of demand is
Inelastic
Suppose that when the average college student's income is $10,000 per year, the annual quantity demanded of Patty's pizza is 50 and the annual quantity demanded of Sue's Subs is 8. Suppose that when the Price of Patty's pizza increases from $8 to $10 per pie, the quantity demanded of Sue's subs increases from 80 to 100. Suppose also that when the average student's income increases to $12,000 per year the annual quantity demanded of Patty's pizza increases from 50 to 60 What can you deduce about the type of good Patty's Pizza is and about the relationship between Patty's Pizza and Sue's Subs
Patty's pizza is a normal good and Patty's Pizza and Sue's Subs are substitutes.
Suppose goods A and B are substitutes for each other. We would expect the cross-elasticity between these two goods to be
Positive
Suppose there is a decrease in the price for corn. If corn is an input into the production of ethanol, we would expect the supply curve for ethanol to
Shift rightward
Price | Quantity demanded | Quantity supplied $10 10 60 $8 20 45 $6 30 30 $4 40 15 $2 50 0 If the price were $4,
Shortage of 25 units would exist, and price would tend to rise
Price | Quantity demanded | Quantity supplied $10 10 60 $8 20 45 $6 30 30 $4 40 15 $2 50 0 If the price were $8, a
Surplus of 25 units would exist, and the price would tend to fall
Suppose chocolate-dipped strawberries are currently selling for $30 per dozen, but the equilibrium price of chocolate-dipped strawberries is $20 per dozen. We would expect a
Surplus to exist and the market price of chocolate dipped strawberries to decrease
Suppose that when the average college student's income is $10,000 per year, the annual quantity demanded of Patty's pizza is 50 and the annual quantity demanded of Sue's Subs is 8. Suppose that when the Price of Patty's pizza increases from $8 to $10 per pie, the quantity demanded of Sue's subs increases from 80 to 100. Suppose also that when the average student's income increases to $12,000 per year the annual quantity demanded of Patty's pizza increases from 50 to 60 Using the Midpoint Method what is the income elasticity of demand for pizza and what does the value indicate about the demand for pizza?
The income elasticity is 1 so pizza is a normal good
which of the following events would cause a movement upward and to the right along the supply curve for mango's?
The price of mangos rises
A movement along the supply curve might be caused by a change in
The price of the good or service that is being supplied
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate Labor Hrs. needed to make 1 Unit of \# of Units produced in 24 hrs Cheese - Bread \ Cheese - Bread ENGLAND 2 3 \ 12 8 SPAIN 3 6 \ 8 4 We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Spain. If we were to do this, measuring cheese along the horizontal axis, then
The slope of England's production possibilities frontier would be -0.67 and the slope of Spain's production possibilities frontier would be -.5
Which of the following would cause a movement along the supply curve for cupcakes
a decrease in the price of cupcakes
If mayo and miracle whip are substitutes, then which of the following would increase the demand for miracle whip?
an increase in the price of mayo
Suppose good X has a negative income elasticity of demand. This implies that good X is
an inferior good
In competitive markets, buyers
and sellers are price talkers
If an increase in income results in a decrease in the quantity demanded of a good, then for that good, the
income elasticity of demand is negative
If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in a(n)
increase in the demand for Kindles
Two goods are complements when a decrease in the price of one good
increases the demand for the other good
which of the following should be held constant when calculating an income elasticity of demand
the price of the good
cross-price elasticity of demand measures how
the quantity demanded of one good changes in response to a change in the price of another good.
Labor Hrs. needed to make 1 Unit of \# of Units produced in 24 hrs Cheese - Bread \ Cheese - Bread ENGLAND 2 3 \ 12 8 SPAIN 3 6 \ 8 4 We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Spain. If we were to do this, measuring bread along the horizontal axis, then
the slope of England's production possibilities frontier would be -1.5 and the slope of Spain's production possibilities frontier would be -2
Price | Quantity demanded | Quantity supplied $10 10 60 $8 20 45 $6 30 30 $4 40 15 $2 50 0 The equilibrium price and quantity, respectivley are
$6 and 30 units
The following table contains a demand schedule for a good PRICE || QUANTITY DEMANDED $30 A $50 300 If the law of demand applies to this good, then A could be
400
Which of the following would NOT shift the supply curve for mp3 players?
An increase in the price of mp3 players
An increase in the price of a good will
Decrease quantity demanded
To obtain the market demand curve for a product, sum the individual demand curves
Horizontally
If a surplus exists in a market, then we know that the actual price is
above the equilibrium price, and quantity supplied is greater than quantity demanded
PRICE | QUANTITY $250 0 $200 30 $150 70 $100 110 $50 150 $0 190 Using the midpoint method, if the price falls from $200 to $150, the price elascity of demand is
elastic
