Econ Midterm 1

When society requires that firms reduce pollution, there is

a tradeoff because of reduced incomes to the firms' owners and workers

Refer to Table 4-4. If these are the only four sellers in the market, then when the price increases from $6 to $8, the market quantity supplied

increases by 12 units

Which of the following do economists not generally regard as a legitimate reason for the government to intervene in a market?

To protect an industry from foreign competition

If Korea is capable of producing either shoes or soccer balls or some combination of the two, then

Korea's opportunity cost of shoes is the inverse of its opportunity cost of soccer balls.

Refer to Figure 4-10. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children

Point A to Point D

Refer to Figure 2-4, Graph (a) and Graph (b) . Which of the following is not a result of the shift of the economy's production possibilities frontier from Graph (a) to Graph (b) ?

Production of one donut and four cups of coffee becomes efficient.

If the government were to intervene in a market economy and fix the price of visiting a health care provider below the market price, then we would expect, relative to the market outcome,

an increase in the number of visits people want to make and a decrease in the number of visits health care providers want to provide

Equilibrium quantity must decrease when demand

decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.

A farmer has the ability to grow either corn or cotton or some combination of the two. Given no other information, it follows that the farmer's opportunity cost of a bushel of corn multiplied by his opportunity cost of a bushel of cotton

is equal to 1

In the circular-flow diagram,

labor flows from households to firms

Suppose there are six bait and tackle shops that sell worms in a lakeside resort town in Minnesota. If we add the respective quantities that each shop would produce and sell at each of the six bait and tackle shops when the price of worms is $2 per bucket, $2.50 per bucket, and $3 per bucket, and so forth, we have found the

market supply curve

In a market economy, economic activity is guided by

self-interest and prices

Consider Luis's decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in a store and spend $7,200 on room and board. Luis's cost of going to college is

$42,600

Refer to Table 4-6 . The equilibrium price and quantity, respectively, are

$6 and 30 units

Refer to Table 3-7. 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)

Refer to Figure 4-2. If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is

0 units

Suppose that a worker in Radioland can produce either 4 radios or 1 television per year, and a worker in Teeveeland can produce either 2 radios or 4 televisions per year. Each nation has 100 workers. Also, suppose that each country completely specializes in producing the good in which it has a comparative advantage. If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each year, then each country's maximum consumption of new radios and televisions per year will be

300 radios, 100 televisions in Radioland and 100 radios, 300 televisions in Teeveeland.

Refer to Table 2-2 . What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

300 socks

Refer to Figure 2-3 . If this economy devotes all of its resources to the production of dryers, then it will produce

80 dryers and 0 washers

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

A decrease in the price of wool shirts and a decrease in the price of raw cotton

For which of the following individuals would the opportunity cost of going to college be highest?

A famous, highly paid actor who wants to take time away from show business to finish college and earn a degree

Refer to Table 3-9. The values in the table represent the amounts of lemonade and pizzas that Alice and Betty can produce in one week without and with specialization and trade. What are Alice and Betty's gains from specialization and trade?

Alice gains 7 pitchers of lemonade and 10 pizzas, while Betty gains 13 pitchers of lemonade and 10 pizzas.

Refer to Figure 3-4. If point A represents Alice's production and point B represents Betty's production,

Alice produces 200 pitchers of lemonade and 100 pizzas while Betty produces 180 pitchers of lemonade and 180 pizzas

Refer to Figure 2-3 . I t is not possible for this economy to produce at point

C

You go to the movieplex where movies ordinarily cost $9. You are intending to see a movie for which you have a $3-off coupon good for only that movie at that time. However, when you get there you see a friend who asks if you would rather see a new release. Both movies start and end at the same time. If you decide to see the new release with your friend, what is your opportunity cost?

The amount you value the first movie + $3