Micro midterm A answers

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At a price of $70 per unit, sellers total revenue equals

$1,050

When the price of good A is $50, the quantity demanded of good A is 500 units. When the price of good A rises to $70, the quantity demanded of good A falls to 400 units. Using the midpoint method, the price elasticity of demand for good A is

.67, and an increase in price will result in an increase in total revenue for good A

If this economy devotes all of its resources to the production of washers, then it will produce

0 dryers and 100 washers

If the production possibilites frontier shown for Tanek is for 120 hours of production, then how long does it take Tanek to make one burrito

0.4 hour

Which of the following could be the price elasticity of demand for a good for which a decrease in price would increase total revenue

2.6

If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

21 units

What is the opportunity cost of increasing the production of rye from 700 bushels to 1200 bushels

500 bushels of corn

What is the opportunity cost to supertown of increasing the production of toys from 200 to 300

500 glasses

Assume that Aruba and Iceland each has 80 labor hours avaliable. If each country divides its time equally between the production of coolers and radios, then total production is

60 coolers and 18 radios

A group of buyers and sellers of a particular good or service is called

A market

If a surplus exists in a market, then we know that the actual price is

Above the equilibrium price, and the quantity supplied is greater than quantity demanded

A shortage results when a

Binding price ceiling is imposed on a market

A government imposed price of $24 in this market is an example of a

Binding price floor that creates a surplus

Under rent control, bribery is a potential mechanism to

Bring the total price of an apartment (including the bribe) closer to the equilibrium price

The price elasticity of demand measures

Buyers responsiveness to a change in the price of a good

For a very long time the country of Tofu has had an inflation rate of 8%. Suddenly its inflation rate drops to 3%. The drop in the inflation rate

Could be due to slower money supply growth.. we would expect unemployment to be higher

The line that relates the price of a good and the quantity demanded of that good is called the demand

Curve, and it usually slopes downward

The price ceiling causes quantity

Demanded to exceed quantity supplied by 90 units

The property of society getting the most it can from its scarce resources is called

Efficiency

The demand for grape flavored Hubbs Bubba bubble gum is likely

Elastic because there are many close substitutes for grape flavored Hubba Bubba

At the equilibrium price, the quantity of the good that buyers are willing and able to buy

Exactly equals the quantity that sellers are willing and able to sell

A binding price ceiling is shown in

Graph b only

An increase in the overall level of prices in an economy is referred to as

Inflation

Absolute advantage is found by comparing different producers

Input requirements per unit of output

For a self sufficient producer, the production possibilites frontier

Is the same as the consumption possibilites frontier

Production at point B is

Possible but inefficient

Market power refers to the

Power of a single person or small group to influence market prices

In a market economy, economic activity is guided by

Self interest and prices

Which of the following events would increase producer surplus

Sellers costs stay the same and the price of the good increases

If the number of sellers in a market increases, then the

Supply in the market will increase

A rational decision maker

Takes an action only if the marginal benefit of that action exceeds the marginal cost of that action

Which of the following is not correct

The gains from specialization and trade are based not on comparative advantage but on absolute advantage

The y coordinate of an ordered pair specifies the

Vertical location of the point


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