mic ch 5-8

Harrison is willing to buy the last ticket to the Billy Elliot play for $15, while Stefania is willing to pay $25. Harrison isfirst in line and buys a ticket for $15. He then resells his ticket to Stefania for $20. By reselling the ticket instead of going tothe play himself, Harrison caused: 1, the sum of the consumer and producer surplus to increase 2. the sum of the consumer and producer surplus to decrease 3. a deadweight loss of $5 4. the consumer surplus to decrease and the producer surplus to increase

1, the sum of the consumer and producer surplus to increase

Which statement is normative? 1. Scientists should not make normative statements. 2. too much sun will damanage your skin 3. as cell phone price fall, people generally buy more of them 4 insurance rates drop when you turn 25

1. Scientists should not make normative statements.

Which statement makes use of positive analysis? 1. The federal government spends $500 billion on education per year. 2. policymakers should aim for a 4% inflation rate 3. high economic growth is a more important economic goal than low inflation 4. health care is a right of all citizens

1. The federal government spends $500 billion on education per year.

Ariana bought a new pair of shoes at Nordstrom. When she walked out of the store, she thought, "I got such a great deal; I would have paid $40 more for these shoes!" This BEST illustrates the concept of: 1. consumer surplus 2. producer surplus 3. total surplus 4. equilibrium

1. consumer surplus

Along a supply curve, a rise in the price of a good will: 1. increase producer surplus 2. decrease producer surplus 3. increase the consumer surplus 4. decrease the producer surplus and increase the consumer surplus

1. increase producer surplus

During an economic downturn, a state government debates what type of economic stimulus--a tax cut, would produce the most efficient outcome, that is, the outcome with the: 1. largest economic surplus. 2. lowest total costs 3. lowest total benefit 4. smallest positive difference between benefits minus total cost

1. largest economic surplus.

According to separate analyses by the Organization for Economic Cooperation and Development (OECD) and the World Population Review, respectively, the United States ranks fifth among OECD countries in productivity, and twenty-seventh in social mobility. While one observer might commend the United States in terms of ______ that is, economic ____________ another might criticize it in terms of ___________, that is, its relative. 1.. outcome; efficiency; process; inequality of opportunity 2. process; efficiency; outcome; inequality of opportunity 3. outcome; inequality of opportunity process; efficiency 4. process; outcome; efficiency; inequality of opportunity

1. outcome; efficiency; process; inequality of opportunity

You're an analyst for Royal Caribbean, a primary cruise line servicing the Caribbean Sea. In 2021, the price of a seven-day Caribbean cruise was $1,500 per ticket. A year later, as demand increased as COVID cases fell, the price per person rose to$2,000 per ticket. The accompanying table provides information on the supply of cruise travel. (look at google doc) If the marginal cost of providing a ticket on a cruise for one traveler is $1,200, what was the change in producer surplusfrom 2021 to 2022? 1. $0 2. $1.7 mil 3. $2.1 mil 4. $4.2 mil

2. $1.7 mil

Use the graph of a demand curve for jugs of laundry detergent to answer the question. What is the total consumer surplus if 50 jugs are sold at a price of $6? (look at google doc) 1. $14 2. $350 3. $700 4. $750

2. $350

Consider the figure Producer Surplus in the Market for Baseballs. Ata price of P1, the producer surplus equals the area: (look at google doc) 1. LMK 2. P1K0 3. P2M0 4. P2P1KM

2. P1K0

Avery, Amanda, Lucan, Henry, and Imelda are used booksellers, each ofwhom has a rare print of The Soothsayer's Gambit, the classic mystery novel by Joan Reeves. The booksellers vary widely in their valuations of their copies of the book and thus in what price they would need to part with it. When the market price of the book falls from $45 to $35, the producer surplus ________ leaving the total producer surplus at __________ (look at google doc) 1. increases by $10; $140 2. deceases by 40, $60 dollars 3. increases by $35; $180 4. decreases by 10; $140

2. deceases by 40, $60 dollars

To obtain a license to work as a barber, hairstylist, or cosmetologist, one must graduate from a state-approved barber or cosmetology program and pass a state exam, limiting the number of people who can practice these professions. In this scenario, market failure would arise from: 1. irrationality 2. market power 3. externalities 4 information problems

2. market power

Consider the figure Equilibrium in the Market for MechanicalPencils. At the equilibrium price, the producer surplus is equal to area: Consider the figure Equilibrium in the Market for MechanicalPencils. At the equilibrium price, the producer surplus is equal to area: (look at google doc) 1. ADI 2. EHF 3. AIF 4. DIF

3. AIF

When goods are allocated in a way that creates the largest economic surplus: 1. output is evenly allocated across firms 2. production is minimized 3. efficient allocation has been achieved. 4. the marginal benefit of the last unit bought is the maximum marginal benefit

3. efficient allocation has been achieved.

Consider these claims concerning the Affordable Care Act (a.k.a. Obamacare) in 2009-10: (i) In the late 2000s, the number of uninsured Americans hit a record high of 60 million. (i) Health care reform of some kind was needed to address thewidespread lack of access to medical care. (ili) Among the options available, the Affordable Care Act provided the best fit to the mix of public and private institutions that make up the American healthcare system. (i) reflects _____analysis; (i) reflects _____analysis; and (iii) reflects____analysis. 1. positive; positive; normative 2. positive; normative; positive 3. positive; normative; normative 4. normative; positive;normative

3. positive; normative; normative

The efficient quantity prevails in a market when: 1. a good is sold at its lowest average cost 2. total benefit equals marginal cost 3. the market yield the largets possibly economic surplus 4. cost exceed benefit by the largest margin

3. the market yield the largets possibly economic surplus

When the price of the last unit sold equals its marginal cost, a seller will: 1. earn consumer surplus on every unit sold. 2. earn consumer surplus 3. not earn any producer surplus overall 4. earn producer surplus on all units sold except the last one

4. earn producer surplus on all units sold except the last one

Which of these government regulations is LEAST likely to lead to market failure? 1. limits on sugar imports 2. rent control 3. farm subsidies 4. subsidies for vaccinations

4. subsidies for vaccinations

When economic efficiency increases, the ________, and the benefits ___________ be spread across all people. 1. total gains may or may not exceed costs; will 2. total gains may or may not exceed costs; may or may not 3. total gains exceed costs; will 4. total gains exceed the costs; may or may not

4. total gains exceed the costs; may or may not

The efficiency problem that results from market power is that the market: 1. has side effects 2. has too many producers 3. overproduces 4. underproduces

4. underproduces

2. -.44

A city economist is consulting with the public utility companies to determine an optimal pricing plan. When the price ofwater usage falls by 1%, the quantity demanded rises by 0.44%. The absolute value of the price elasticity of demand forwater usage is ________ 1. -.44 2. -.44 3. 1 4. 2.27

1. price elasticity of demand

A measure of how responsive buyers are to price changes is the: 1. price elasticity of demand 2. price elasticity of supply 3. cross-price elasticity of demand 4. income elasticity of demand

3. payoffs are linked to whether an uncertain event occurs

A prediction market is a market where: 1. messages lead to future actions 2. information is disaggregated 3. payoffs are linked to whether an uncertain event occurs 4. information is missing to make a good decision

1. a maximum price sellers can charge for a good or service

A price ceiling is: 1. a maximum price sellers can charge for a good or service 2. the difference between the price consumers pay for a good and the price producers receive 3. a minimum price buyers must pay for a good or service 4. the deadweight loss caused by the incidence of price over marginal cost

1. lowers; 25

A quota of 25 units is placed on the market that is shown in the figure. The quota ___in the market sold in the market by _____units. (look at google doc) 1. lowers: 25 2. raises: 25 3. raises: 30 4. lowers: 50

4. perfectly elastic

A supply curve is completely horizontal. This graph is: 1. perfectly inelastic 2. inelastic 3. elastic 4. perfectly elastic

1. 1.22

Ashley Furniture sells 13,000 couches per month at a price of $800 per couch. When the price falls to $600, the quantitysold rises to 18,500. Use the midpoint formula to calculate the absolute value for price elasticity of demand for couches at Ashley Furniture. 1. 1.22 2. 0.82 3. 1.69 4. .59

3. incentive

Chantelle grows tomatoes and sells them at the farmer's market. Because the price of tomatoes rises, she is encouraged to grow and sell more. This is an example of price function as a(n): 1. bundle of information 2. currency 3. incentive 4. message

2. 300

Consider the market for furniture made from sustainable, man-made forests that is shown in the figure. The government wants to encourage buyers to buy such furniture and places a price ceiling of $250 on the market. The market quantity actually sold after the implementation of the price ceiling is ___thousand pieces of furniture (look at google doc) 1. 350 2. 300 3. 700 4. 500

2. absolute advantage

Cornell can type reports faster & more accurately than Alice, so Cornell has a __________________________ in typing reports 1. comparative advantage 2. absolute advantage 3. opportunity cost 4. specialization

message to potential buyers that the marginal cost of manufacturing new cars is rising

During the coronavirus pandemic, global supply chain issues caused the supply of new cars to shift left. Which role did price play in the new car market? 1. incentive for a potential buyer to purchase a new car 2. incentive for the quantity of new cars demanded to rise 3. message to potential buyers that the marginal cost of manufacturing new cars is rising 4. message for potentital buyers that producing new cars is becoming less expensive

3. they can produce the product while forgoing fewer alternative products than any other person

Economists generally believe that a person should specialize in the production of a good or service if: 1. their production possibility frontier is further from the origin than that of any other person 2. their production possibility frontier is closer to the origin than that of any other person 3. they can produce the product while forgoing fewer alternative products than any other person 4. they can produce the product using more resources than any other person

1. more elastic

Gasoline prices have been rising. As time passes, people will adjust to the higher price, and the demand for gasoline becomes 1. more elastic 2. more inelastic 3. steeper 4. higher

2. -3

If income rises by 10% and the quantity demanded of an item falls by 30%, the income elasticity of demand for this item is: 1. .67 2. -3 3. -.33 4. .33

1. price-elastic

If quantity demanded responds substantially to a relatively small change in price, demand is: 1. price-elastic 2. price-inelastic 3. positively sloped 4. insensitive to changes in price

2. negative; inferior

If the income elasticity of demand for a good is _______, the good is said to be ______ 1. negative; a complement 2. negative; inferior 3. positive; inferior 4. postiive; a sub

3. vertical; zero

In a small town in Kansas, the owner of the town's only gas station claims that he will sell the same quantity of gas nomatter how high or low the price. If his assertion is correct, the demand curve for gas at his station must be _______price elasticity is _______ 1. horizontal; zero 2. horizontal; infinite 3. vertical; zero 4. vertical; infinite

2. 0.50

In the graph of the soft drink market shown here, the original equilibrium price is $2.50 per bottle. A tax is then placed on sellers in this market. The amount of the tax is $ _____ per bottle. (google doc) 1. 1.50 2. 0.50 3. 1 4. 3

1. bottled water is inelastically supplied

In the immediate aftermath of Hurricane Katrina, a surge in demand for drinking water caused the price of bottled water to rise above $5 per bottle. Supporters of price ceilings on bottled water after a natural disaster argue that: 1. bottled water is inelastically supplied. 2. the market equilibrium is more fair to low-income families. 3. without the ceiling, the market would produce a surplus of water. 4. the price ceiling eliminates the shortage of water.

more; are willing to search for a low-cost alternative

In the markets for grocery and household items, some consumers have more elastic responses than others. Stores recognize this and often offer price reductions in the form of coupons. The price elasticity of demand for people who use coupons is ________ elastic than for other consumers because coupon users ______. 1. more; have higher incomes than the average consumer 2. more; are willing to search for a low-cost alternative 3. less; are willing to search for a low-cost alternative 4. less; have higher incomes than the average consumer

3. 0.75

Janelle recently received a promotion at her job, increasing her income from $940 per week to $1,060 per week. As aresult, she decides to purchase 9% more sushi per week. Computed using the midpoint method, the income elasticity ofJanelle's demand for sushi is: 1. 1.33 2. .9 3. 0.75 4. 1

4. 1.33 chicken curries; three chicken curries

Marla's opportunity cost of making lasagna is____, and Jason's opportunity cost is___ (look at google doc) 1. 0.75 of an hour, 033 of an hour 2. .75 of a chicken curry; 0.33 of a chicken curry 3. 1.33 hours; three hours 4. 1.33 chicken curries; three chicken curries

1. positive; close to 0

Much like toilet paper, toothpaste is a necessity. The income elasticity of demand for toothpaste is likely to be ______ and _____ 1. positive; close to 0 2. positive; above 1 3. negative; close to 0 4. negative; below -1

1. They should first each focus on that task in which the have a comparative advantage. When one finishes the assigned task, they can help the other

On camping trips, Katie is much faster than her husband, Brett, as putting up and starting a fire. Who should do each task if they want to maximize their time sitting around the campfire? 1. They should first each focus on that task in which the have a comparative advantage. When one finishes the assigned task, they can help the other 2. they should complete both tasks together, sharing all the work 3. katie should complete both tasks because she is a more efficient worker 4. katie should be in charge, directing the work while brett does it

c. a binding price ceiling

Producers have an incentive to lower the quality of a good when the government imposes: a. an excise tax. b. a binding price floor. C. a binding price ceiling. d. any price control.

4. 3

Refer to the market for reusable jute shopping bags that is shown in the figure. The original equilibrium price is $7 per bag. A subsidy is now introduced for buyers of the bags. The amount of the subsidy is $: (google doc) 1. 2 2. 8 3. 1 4. 3

1. surplus; 12,000

Suppose a minimum wage of $18 per hour is introduced. Implementation of the minimum wage leads to a ____ of _____ workers. (google doc) 1. surplus; 12,000 2. shortage; 6,000 3. surplus; 10,000 4. shortage; 24,000

2. substitutes; complements

Suppose the cross-price elasticity of demand for apple sauce and avocados is 0.96, but the cross-price elasticity for sodaand oranges is -0.80. This means that apple sauce and avocados are ________, whereas sodas and oranges are _______ 1. complements; sustitutes 2. substitutes; complements 3. inelastic goods; elastic goods 4. elastic goods; complements

2. The wage paid to low-skilled workers will fall.

The International Monetary Fund advises Colombia to reduce its unusually high minimum wage to mitigate the negative effects of its current minimum wage on employment. Which of these is likely to occur as a result? 1. The supply of labor will rise. 2. The wage paid to low-skilled workers will fall. 3. The wage paid to low-skilled workers will rise. 4. The demand for labor will fall

2. decrease by 6.1%

The cross-price elasticity of demand between Fanta and Dr. Pepper has been estimated at 0.61. If the price of Dr. Pepperfalls by 10%, the quantity demanded of Fanta will: 1. decrease by less than 6.1% 2. decrease by 6.1% 3. not change 4. increase

Disposable diapers are a necessity for most parents of infants.

The demand for disposable diapers is inelastic. Which statement would explain this phenomenon?

4. 11000

The figure shows the market for child care. The original equilibrium price is $10,000. A subsidy is now introduced for parents who pay for child care. After the subsidy is implemented, the amount that sellers receive is $: (google doc) 1. 9000 2. 2000 3. 1000 4. 11000

4. . demand; to the left or down; $60

The figure shows the market for skateboards. If the government imposes a $60 tax on skateboards and collects it from consumers, the ____curve will shift by ____. (google doc) 1. supply; to the left or up; $30 2. supply; to the left or up; $60 3. demand; to the left or down; $30 4. demand; to the left or down; $60

D. Buyers, sellers, or manufacturers; it doesn't matter which

The government is considering taxing e-cigarettes to both discourage the use of e-cigarettes and raise revenues for public health and education programs. To maximize revenues from the tax, the government should tax e-cigarette: A. buyers B. sellers C. sellers and manufacturers but not buyers D. Buyers, sellers, or manufacturers; it doesn't matter which

3. .50 per can

The government wants to reduce caffeine consumption among children, who mainly consume caffeine in the form of soft drinks. Suppose the government seeks to cut the average number of caffeinated soft drinks consumed per year to 50 . Given the market for soft drinks depicted in the accompanying diagram, the government can achieve its goal through a tax of $: (look at google doc) 1. .10 per can 2. .25 per can 3. .50 per can 4. .80 per can

2. .50

The market for Lyft rides is shown below. If the government imposes excise tax of $1 per ride on producers, then people who ride Lyft will pay $ of each $1 tax. (google doc) 1. 1 2. 0.50 3. 0.25 4. 0.00

3. 4.2; elastic

The price of chicken breast rises from 3.30 per pound to 3.63 per pound. In response to this price change, the quantity demanded for the chicken breast falls by 40%. The absolute value of the price elasticity of demand for chicken breast is _________, and the price elasticity of demand is ________. 1. .24; elastic 2. .24; inelastic 3. 4.2; elastic 4. 4.2; inelastic

1. 0.2; inelastic

The state of Massachusetts recently saw a 10% increase in the price of electricity, which brought about a 2% fall in the quantity of electricity consumed. The price elasticity of demand is equal to ______, and demand is described as ________. 1. 0.2; inelastic 2. 5; inelastic 3. 0.2; elastic 4. 5; elastic

3. Zane because he has a lower opportunity cost.

The table shows data on how long it takes Joachim and Zane to clean the bathrooms and wash the windows at a home. Who has a comparative advantage in washing windows? (look at docs) 1. Zane because he has absolute advantage. 2. Joachim because he has absolute advantage. 3. Zane because he has a lower opportunity cost. 4. Joachim because he has a lower opportunity cost.

4. 20

The table shows the quantity supplied and quantity demanded in the market for magazine subscriptions. A price floor of $_____would produce surplus in this market. (look at google doc) 1. 5 2. 10 3. 15 4. 20

1. some industries in the country will shrink and possibly disappear.

When a country's production mix becomes more specialized due to increased international trade based on comparative advantage: 1. some industries in the country will shrink and possibly disappear. 2. all industries in the country will grow as the economy grows from the trade. 3. the losses in industries without comparative advantage will offset the gains from trade. 4. the country will find it has less need for trade in the future.

2. task is assigned to the worker with the lowest opportunity cost

When a manager uses comparative advantage to assign task in a workplace, then each 1. task is assigned to the worker who is best at doing the task 2. task is assigned to the worker with the lowest opportunity cost 3. worker is assigned to the tasks for which he or she has the highest aptitude and efficiency 4. worker learns how to do all tasks to increase flexibility in assignments

Additional shows create extra capacity and increase the tour's price elasticity of supply.

When a popular comedian announces a tour, tickets often sell out quickly. However, it is quite common for the tourcoordinator to later announce additional shows in the form of matinees and late-evening performances. Why would the tourcoordinator include unpublicized additional shows in the tour schedule?

4. both trading partners end up better off than when there is no trade

When trade is based on comparative advantage 1. producers lose if they become more speicialized 2. any gains from trade are equally shared across the trading partners 3. one trading partner may gain at the expense of the other 4. both trading partners end up better off than when there is no trade

4. better allocation of its resources & more accurate predictions

Which benefit could a company gain from using internal markets? 1. reduced profits and reduced competition 2. access to more input markets and greater levels of competition 3. decreased market power and reduced costs of production 4. better allocation of its resources & more accurate predictions

1. a (completely vertical)

Which graph shows a perfectly inelastic demand curve? 1. a (completely vertical) 2. b (completely horizontal) 3. c (mostly vertical) 4. d (mostly horizontal)

1. The United States has a comparative advantage in iPhone design.

Why does Apple design the iPhone in California but assemble the iPhone in China? 1. The United States has a comparative advantage in iPhone design. 2. China has a lower opportunity cost in iPhone design. 3. The United States has a lower opportunity cost in iPhone assembly. 4. China has a comparative advantage in iPhone design.

1. 1;1

You and your colleague are sales representatives. The table displays the number of minutes it takes you to perform your primary tasks. Prior to specialization, in an hour, you place five phone calls and process two applications. Your colleague places six phone calls and processes two applications. After specialization, the gains from trade are___phone call(s) and ___applciation(s). (google doc) 1. 1;1 2. 11;4 3. 12;5 4. 9;5

4. less; 1.5

You are an economist for a prestigious private university, and the Board of Trustees tasks you with determining how mucha tuition increase would impact university enrollment for different types of students. The proposed tuition increase is 10%.The absolute value of the price elasticity of demand for legacy students, that is, students whose parents graduated from theuniversity, is 0.15 and for nonlegacy students it is 0.33. The demand curve for legacy students is _________ elastic than thedemand curve for nonlegacy students. The rise in tuition would lower legacy student enrollment by _________% 1. more; 3.3 2. more; 1.5 3. less; 3.3 4. less'1.5

1. 1.33

You are the manager at Pure Sweat Studio, a membership-based sauna club, assigning closing duties to your team members. In 12 minutes, Sadiquah can fold all of the clean towels needed for a sauna room for the next day's use. She can clean a sauna room in 9 minutes. Landon can fold the towels in 10 minutes or clean a room in 15 minutes. Sadiquah's opportunity cost of folding towels is ____sauna rooms. 1. 1.33 2. 0.75 3. 0.67 4. 1.5

4. only the plumber experiences gains from trade because the received money

You pay a plumber to install a new dishwasher in your home. Which statement is FALSE? 1. you experience gains from trade because you received a service 2. the plumber experiences gains from trade because they earned income 3. markets orchestrated the gains from trade in this transaction 4. only the plumber experiences gains from trade because the received money

4. design an internal prediction market for employees to indicate their expectations.n an internal prediction market for employees to indicate their expectations.

You recently renovated a large historic building in the heart of your city to convert it into a boutique hotel, of which you're now the owner and operator. After a few months, you've noticed that the quantity of hotel bookings vary. Sometimes more rooms are booked on weekends, but sometimes certain events through the week result in a greater quantity booked. You now want to forecast when to expect the most bookings, but you don't know which people to the hotel. The MOST accurate forecast would likely result if you: 1. create an internal market for employees to bid for their preferred work schedules. 2. determine that you have a knowledge problem when predicting bookings. 3. use your centralized power as the owner to predict the most popular dates. 4. design an internal prediction market for employees to indicate their expectations.

1. incentive.

You're performing a competitive analysis for Dove, a leading personal care brand in the United States. Your findings indicate a trend toward consumer preference for deodorants made with more naturally derived ingredients. Because of the high price competitors are receiving for natural deodorants, Dove follows your recommendation and enters the natural deodorant market by launching the Dove Care by Plants line. For Dove, the high price acted as a(n): 1. incentive. 2. message. 3. bundle of information. 4. comparative advantage.

1. it is set above the equilibrium price

a price ceiling will have no immediate effect if: 1. it is set above the equilibrium price 2. the equilibrium price is above the price ceiling 3. it is set below the equilibrium price 4. it creates a shortage

3. demand curve to the left or down

a tax on buyers shifts the: 1. supply curve to the left or up 2. supply curve to the right or down 3. demand curve to the left or down 4. demand curve to the right or up

1. supply curve to the left or up

a tax on sellers shifts the: 1. supply curve to the left or up 2. supply curve to the right or down 3. demand curve to the left or down 4. demand curve to the right or up

4. opportunity costs

as long as people have different___, everyone has a comparative advantage in something. 1. direct costs 2. benefits 3. levels of utility 4. opportunity costs

1. is a line of communication between buyers and sellers in a market

price is functioning as a message when it: 1. is a line of communication between buyers and sellers in a market 2. creates incentives for changes in production and consumption 3. broadcasts useful information 4. summarizes all that is happening in the market

2. the division of the economic burden of a tax between buyers and sellers

the incidence of tax is: 1. the same as the statutory burden of the tax 2. the division of the economic burden of a tax between buyers and sellers 3. determined by the government 4. the same dollar amount as the subsidy of an item

1. surplus; above

the likely result of a binding price floor is a ____ of the good at a price ____ the equilibrium 1. surplus; above 2. shortage; below 3. surplus; below 4. shortage; above