Microecon

Assume the government imposes a $2.25 tax on suppliers, which results in a shift of the supply curve from S1 to S2. The price the seller receives for the product after paying the tax is $1.25. $2.50. $3.50. $2.25.

$1.25.

Sophie is willing to sell her soccer ball for $10. Ruby is willing to pay $20 for the soccer ball. Sophie and Ruby agree on a price of $16. The gains from trade for Sophie equals ______ and the gains from trade for Ruby equals _______.

$10, $20 $5, $5 $4, $6 $6, $4

In the market shown in the table, the marginal cost of 600th unit is $10. $20. $15. $25.

$15

if demand decreased by 4 units at each price, what would the new equilibrium price and quantity be? $3 and 5 units $4 and 6 units $5 and 7 units $6 and 8 units

$3 and 5 units

Sophie is willing to sell her soccer ball for $10. Ruby is willing to pay $20 for the soccer ball. Sophie and Ruby agree on a price of $16. The gains from trade for Sophie equals ______ and the gains from trade for Ruby equals _______.

$6, $4 $5, $5 $4, $6 $10, $20

Which statement best illustrates the concept of diminishing marginal utility?

As one consumes more slices of pizza for lunch, one would be willing to pay a higher price for additional slices. Some consumers will receive less satisfaction from consuming pizza than from consuming hamburgers. A typical consumer will receive less satisfaction from consuming the third slice of pizza for lunch than from the second slice. A decrease in the price of slices of pizza will cause consumers to buy more slices for lunch, because they can afford to buy more.

If the price of Sea World tickets increased what might we expect to see happen to tickets for Disneyland? Increased demand for Disneyland tickets Decreased demand for Disneyland tickets Increased supply of Disneyland tickets Decreased supply of Disneyland tickets

Increased demand for Disneyland tickets

Who has the comparative advantage in the production of green beans?

Jake Jane Both Jake and Jane. Neither Jake nor Jane.

Giovanni should specialize in the production of which good?

Neither corn nor green beans. Both corn and green beans. green beans corn

Which is most likely to be observed in a community where price ceilings are imposed on residential rents? Poor people will be able to find adequate housing. Homeowners will reduce their own use of housing space, making more available to others. Those whose needs for housing are most urgent will be able to obtain the space they want. People moving into the community will have difficulty locating residential space to rent.

People moving into the community will have difficulty locating residential space to rent.

Which of the following would occur if electric cars became less expensive? D3 to D1 D2 to D1 Point a to point b Point b to point A

Point a to point b

Suppose there is new fertilizer technology which allows avocados to be grown using less water, how might this affect the market for avocados? Price increases and quantity decreases Price increases and quantity increases Price decreases and quantity decreases Price decreases and quantity increases

Price decreases and quantity increases

What might happen to the equilibrium price and quantity of Disney World tickets if Universal Studios offers discounts to families? Price of Disney World tickets decreases, and quantity bought increases Price of Disney World tickets increases, and quantity bought increases Price of Disney World tickets increases, and quantity bought decreases Price of Disney World tickets decreases, and quantity bought decreases

Price of Disney World tickets decreases, and quantity bought decreases

How did production improvements like an assembly line help the market of Model T cars? Price of the Model T decreased and quantity produced decreased Price of the Model T decreased and quantity produced increased Price of the Model T increased and quantity produced decreased Price of the Model T increased and quantity produced increased

Price of the Model T decreased and quantity produced increased

How have companies like Uber and Lyft affected the ride-sharing market? Price and quantity of the rides have increased. Price and quantity of the rides have decreased. Price of the rides increased, and the quantity of rides have decreased. Price of the rides decreased, and the quantity of rides have increased.

Price of the rides decreased, and the quantity of rides have increased.

How might a problem like the Bird Flu which can make thousands of birds sick and scare consumers about possible problems with eating items like chicken or eggs affect the market for chicken? Quantity decreases and price is indeterminate Quantity increases and price is indeterminate Price increases and quantity is indeterminate Price decreases and quantity is indeterminate

Quantity decreases and price is indeterminate

What is the difference between demand and quantity demand? Quantity demand is a number while demand is the whole curve. Demand is a number while quantity demanded is the whole curve. Demand is inversely related to a change in price. Quantity demand is the directly related to a change in price.

Quantity demand is a number while demand is the whole curve.

What does "there is no such thing as a free lunch" mean in economics? Products only have value because people are willing to pay for them. Sometimes people may take friends out to lunch and pay for them. All items in the lunch menu have specific prices. Scarce resources are used up to provide "freebies" and giveaways.

Scarce resources are used up to provide "freebies" and giveaways.

A movement along the supply schedule from point x to point y depicts an increase in supply. a decrease in supply. an increase in quantity supplied. a decrease in quantity supplied.

a decrease in quantity supplied.

Which of the following is a capital resource? a piece of software used by a firm a corporate bond issued by a computer manufacturer silicon (sand) used to make computer chips a computer programmer

a piece of software used by a firm

In a market with supply and demand curves as shown above, a price floor of $2.50 will result in a surplus of 10 units. a shortage of 10 units. no shortage or surplus. a black-market price greater than $2.50.

a surplus of 10 units.

The figure above shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S3? a tax on wheat production a subsidy for wheat production an increase in the price of wheat a decrease in the price of wheat

a tax on wheat production

Because of the significant snow fall in the plains this year, the supply of fertilizer to Washington State's apple farmers substantially decreased. As a result, the price of fertilizer has increased in Washington State. This statement indicates the supply for apples will necessarily increase. price of apples will decrease. demand for apples will necessarily decrease. amount of apples that will be available at various prices will decline.

amount of apples that will be available at various prices will decline.

Which of the following could not explain the indicated increase in equilibrium price from P1 to P2? an increase in consumer incomes an increase in production costs a decrease in the price of a complementary product an increase in the price of a substitute product

an increase in production costs

The law of increasing opportunity cost states that as output increases the marginal cost does not change. as output decreases the marginal cost increases. as output increases the marginal cost decreases. as output increases the marginal cost increases.

as output increases the marginal cost increases.

A point inside the production possibilities frontier is _______ while a point outside the frontier is ________. unattainable; attainable below the maximum possible; the maximum possible the maximum possible; below the maximum possible attainable; unattainable

attainable; unattainable

The most important purpose of a market is to bring buyers and sellers together so they can barter. bring buyers and sellers together so they can trade. bring buyers and sellers together so they can argue. increase the sellers' wealth.

bring buyers and sellers together so they can trade.

Who determines the price and quantity traded in a market?

buyers sellers buyers and sellers prices and quantities traded are not generally determined in markets

Giovanni should specialize in the production of which good?

corn green beans Both corn and green beans. Neither corn nor green beans.

From an economic perspective, a student's decision to go to the movies instead of studying for a test indicates that in the student's thinking the marginal benefit of studying is greater than the marginal cost of studying. cost of going to the movies is greater than the marginal cost of studying. benefit of studying is greater than the marginal benefit of going to the movies. cost of going to the movies is less than the marginal benefit of going to the movies.

cost of going to the movies is less than the marginal benefit of going to the movies.

An individual should specialize in the production of a good for which he/she has a

determined advantage. comparative advantage. conditional advantage. general advantage.

Refer to the table. If the price of a hamburger decreases from $5 to $3, then the weekly market quantity of hamburgers demanded will

increase from 24 to 52. decrease from 52 to 24. increase from 120 to 156. increase from 29 to 55.

Refer to the above table. If the price of a hamburger increases from $4 to $5, then the weekly market quantity of hamburgers demanded will

increase from 24 to 52. decrease from 52 to 24. increase from 24 to 37. decrease from 37 to 24.

After an NFL team wins a Super Bowl the next year the tickets are much harder to find and more expensive. This is caused by a(n) increase in supply but the demand remaining the same. decrease in supply but the demand remaining the same. increase in demand but the supply remaining the same. decrease in demand but the supply remaining the same.

increase in demand but the supply remaining the same.

A headline reads "Lumber Prices Up Sharply." In a competitive market, this situation would lead to a(n) increase in the price and quantity of new homes. decrease in the price and quantity of new homes. increase in the price of new homes and decrease in quantity. decrease in the price of new homes and increase in quantity.

increase in the price of new homes and decrease in quantity.

An increase in demand for oil, along with a simultaneous increase in supply of oil, will decrease price and increase quantity. increase price and decrease quantity. increase quantity, but whether it increases price depends on how much each curve shifts. increase price, but whether it increases quantity depends on how much each curve shifts.

increase quantity, but whether it increases price depends on how much each curve shifts.

if the price of gasoline increases significantly, then we'd expect the price for hybrid and electric cars to increase, and the quantity increase. increase, and the quantity to decrease. decrease, and the quantity to increase. decrease, and the quantity to decrease.

increase, and the quantity increase.

How did production improvements like an assembly line help the production of Model T cars? increased the demand for Model T cars increased the supply of Model T cars decreased the demand for Model T cars decreased the supply of Model T cars

increased the supply of Model T cars

The relationship between quantity demanded and price is a(n) _____ relationship. Multiple Choice direct inverse general dictated

inverse

The concept of a market is a location where buyers and sellers meet to negotiate prices and determine quantities traded. group of buyers and sellers of a good or service. place where sellers increase their wealth.

location where buyers and sellers meet to negotiate prices and determine quantities traded.

After eating four slices of pizza, you are offered a fifth slice for free. You turn down the fifth slice. Your refusal indicates that the marginal benefit for the fifth pizza slice is less than its marginal cost. marginal benefit for the fourth slice is the largest among all slices. marginal benefit for the fourth pizza slice is negative. total benefit for the fifth pizza slice is negative.

marginal benefit for the fifth pizza slice is less than its marginal cost.

If demand increased by 100 units at each price level, and the government set a price ceiling of $40, then there will be a shortage. a surplus. no shortage or surplus. decrease in supply.

no shortage or surplus.

For most products, purchases tend to fall with decreases in consumers' incomes. Such products are known as inferior goods. direct goods. average goods. normal goods.

normal goods.

Suppose that a university decides to spend $1 million to upgrade personal computers and scientific equipment for faculty rather than spend $1 million to expand parking for students. This example illustrates distorted priorities. Opportunity costs. increasing opportunity costs. productive efficiency.

opportunity costs.

The scarcity problem persists because economic wants exceed available productive resources. has been eliminated in affluent societies such as the United States and Canada. has been solved in all industrialized nations. persists only because countries have failed to achieve continuous full employment.

persists because economic wants exceed available productive resources.

In the past few years, the demand for donuts has decreased. This would be illustrated by a change from point 4 to point 6. point 2 to point 5. point 1 to point 2. point 6 to point 3.

point 1 to point 2.

Refer to the three demand curves. A "decrease in quantity demanded" caused by a change in price would be illustrated by a change from point 6 to point 4. point 5 to point 1. point 1 to point 6. point 2 to point 5.

point 2 to point 5.

Refer to the three demand curves. An "increase in quantity demanded" caused by a change in price would be illustrated by a change from point 4 to point 6. point 5 to point 1. point 4 to point 1. point 2 to point 5.

point 4 to point 1.

In the past few years, the quantity of donuts demanded has increased due to changes in the prices of donuts. This would be illustrated by a change from point 4 to point 6. point 5 to point 2. point 1 to point 2. point 3 to point 6.

point 5 to point 2.

The law of supply indicates that, all else held constant, producers will be willing and able to offer more of a product at high prices than at low prices. the product supply curve is downward-sloping. consumers will be willing and able to purchase less of a good at high prices than at low prices. producers will be willing and able to offer more of a product at low prices than at high prices.

producers will be willing and able to offer more of a product at high prices than at low prices.

The opportunity cost to a consumer who smokes cigarettes consists of the costs imposed on others who inhale secondhand smoke. amount of cigarette taxes paid by this consumer. product that the consumer could have bought instead of cigarettes. cost of complementary products such as lighters, ashtrays, and cigarette holders.

product that the consumer could have bought instead of cigarettes.

There is a surplus in a market for a product when the current price is lower than the equilibrium price. demand is less than supply. quantity demanded is less than quantity supplied. quantity demanded is greater than quantity supplied.

quantity demanded is less than quantity supplied.

In moving stepwise from possibility A to B to C ... to F, the opportunity cost of a unit of steel in terms of wheat

remains constant. increases at first, then decreases. increases. decreases.

Prices usually allocate resources efficiently because they allocate resources to the lowest value good or service. consumption to the lowest value good or service. consumption to the highest cost of good or service. resources to the highest value good or service.

resources to the highest value good or service.

All else held constant, if farmers receive a subsidy for their corn, then this would cause a rightward shift in the current supply of corn. movement up along the current supply curve of corn. leftward shift in the current supply of corn. movement down along the current supply curve of corn.

rightward shift in the current supply of corn.

Farmers selling some of their soybeans in storage because they anticipate a lower price of soybeans in the near future would cause a rightward shift in the current supply of soybeans. movement up along the current supply curve of soybeans. leftward shift in the current supply of soybeans. movement down along the current supply curve of soybeans.

rightward shift in the current supply of soybeans.

If the price in this market is fixed at $2 per bushel, then sellers will not be able to sell all the corn that they intended to sell. sellers will quickly run out of corn that they bring to market. buyers will find too much corn in the market. buyers will be able to get as much corn as they wish to buy.

sellers will quickly run out of corn that they bring to market.

If the price of gasoline increases significantly, then we'd expect the demand curve for large trucks and SUVs to shift to the right. shift to the left. become upward-sloping. not shift, but there will be a movement along that demand curve.

shift to the left.

An increase in the price of product B leads to an increase in the demand for product C. This indicates that products B and C are complementary goods. substitute goods. inferior goods. normal goods.

substitute goods.

A price floor of $25 per unit will result in a shortage of 200 units. surplus of 200 units. surplus of 250 units. shortage of 250 units.

surplus of 200 units

Which of the following would most likely increase the demand for gasoline? the expectation by consumers that gasoline prices will be higher in the future the expectation by consumers that gasoline prices will be lower in the future a decrease in the price of gasoline an increase in the price of gasoline

the expectation by consumers that gasoline prices will be higher in the future

An increase in the demand for bubble gum might be caused by a decrease in the number of people chewing gum. a decrease in income, assuming bubble gum is a normal good. the fact that blowing bubbles is now a popular activity. the fact that blowing bubbles is now an unpopular activity.

the fact that blowing bubbles is now a popular activity.

As a result of a decrease in the price of gasoline, consumers can afford to buy more gasoline for more driving trips. This is an illustration of the income effect. the substitution effect. diminishing marginal utility. consumer sovereignty.

the income effect.

Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and a $1 soda. When he arrived, he discovered that hamburgers were on sale for $1 each, so Steve bought two hamburgers and a soda. Steve's response to the decrease in the price of hamburgers is best explained by the substitution effect. the income effect. the price effect. a rightward shift in the demand curve for hamburgers.

the income effect.

All else held constant, the law of demand suggests that as the demand for tablets increases, the price of tablets will increase. income increases, the quantity of tablets demanded will increase. the price of tablets decreases, the quantity of tablets demanded will increase. the price of tablets decreases, the quantity of tablets demanded will decrease

the price of tablets decreases, the quantity of tablets demanded will increase.

A higher price reduces the quantity of a product demanded because

the purchasing power of individuals increases. the financial assets of individuals increase. individuals will buy more of the product and less of its substitutes. individuals will buy less of the product and more of its substitutes.

If a price ceiling is set above the equilibrium price in a market rationing will be necessary. surpluses of the commodity will develop. the quantity demanded will exceed the quantity supplied. the quantity supplied will equal the quantity demanded.

the quantity supplied will equal the quantity demanded.

When the price of a product increases, consumers shift their purchases to other products whose prices are now relatively lower. This statement describes an inferior good. the rationing function of prices. the substitution effect the income effect.

the substitution effect

Assume the government imposes a $2.25 tax on suppliers, which results in a shift of the supply curve from S1 to S2. The amount of the tax paid by the consumer is $2.25. $1.25. $1.00. $0.

$1.00.

One pound of green beans costs Giovanni _____ pound(s) of corn. One pound of green beans costs Jorge _____ pound(s) of corn.

1, 1/4 1, 4 1/4, 1 4, 1

The terms of trade for 1 pound of green beans must lie between _____ and _____ pounds of corn. 160 c and GB and 320 c and 80 GB

1/4, 1 1, 6 1, 4 1/4, 6

The terms of trade for 1 pound of green beans must lie between _____ and _____ pounds of corn. 160 corn and GB and 320 c and 40 GB

1/8, 2 1/8, 1 1, 8Correct 1, 4

What is Natalia's opportunity cost of knitting a scarf?

2 sweaters 1/2 of a sweater 1/3 of a sweater 3 sweaters

Assume Dave consumes 40 pounds of green beans and 80 pounds of corn without trade. Also, assume that Simon consumes 80 pounds of green beans and 40 pounds of corn without trade. Suppose Simon and Dave specialize and that the terms of trade are 1 pound of green beans for 1 pound of corn. If Simon sells Dave 80 pounds of green beans, then the gains from trade for Simon are ______ pounds of green beans and ______ pounds of corn with trade and specialization.

20, 20 40, 0 0, 40 40, 40

If Giovanni produces 40 pounds of green beans and Jorge produces 80 pounds of corn, then the total amount of green bean production equals _______ and the total amount of corn production equals ______. If Giovanni and Jorge specialize in their respective low-cost good, then the total pounds of green bean production equals _______ and the total pounds of corn production equals ______.

200, 100; 160, 320 100, 200; 160, 320 100, 200; 320, 160 200, 100; 320, 160

The following graph is the production possibilities frontier of a nation. The opportunity cost of the fourth unit of bread is

4 drill presses. 3 drill presses. 1 drill press. 0 drill presses.

If there were 100 sellers in the market, each with a supply schedule identical to seller 2 in the table above, then the weekly quantity of hamburgers supplied in the market at a price of $5 would be 500. 400. 300. 200.

500.

Without trade, Jake consumes 20 pounds of green beans and 80 pounds of corn, and Jane consumes 40 pounds of green beans and 40 pounds of corn. If the terms of trade are 1 pound of green beans for 3 pounds of corn, and Jake sells Jane 72 pounds of corn after specialization, then Jane consumes _______ pounds of green beans and _______ pounds of corn.

56, 72 72, 56 88, 24 24, 88

Which of the following goods would most likely be an inferior good? French wines generic detergent theater tickets steak

generic detergent

In a market, buyers want to pay the _____ possible price and sellers want to charge the _____ possible price.

highest, highest highest, lowest lowest, highest lowest, lowest