Microeconomías

27. In the figure below, 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 parents pay is: a. $9,000. b. $2,000. c. $1,000. d. $11,000.

a. $9,000.

26. For normal goods, an increase in income will result in: a. an increase in the equilibrium price and equilibrium quantity. b. a decrease in the equilibrium price and an increase in the equilibrium quantity. c. a decrease in the equilibrium price and equilibrium quantity. d. an increase in the equilibrium price and a decrease in the equilibrium quantity.

a. an increase in the equilibrium price and equilibrium quantity.

2. The cost-benefit principle states that a decision should be pursued only if the a. benefits are greater than the costs. b. costs are greater than the benefits. c. benefits are positive. d. costs are negative.

a. benefits are greater than the costs.

18. Daisy is a milk farmer in a perfectly competitive market where there are many milk farmers. The market price of milk is SO.15 per gallon, which is also the marginal cost per gallon of milk. If Daisy charges $0.25 per gallon, she will a. not sell any milk. b. sell more milk than the other farmers. c. sell the same amount of milk as she did when she charged $0.15 per gallon. d. increase her profitability by $0.10 per gallon.

a. not sell any milk.

5. Sunk costs are costs that are incurred a. regardless of which decision is made. b. if a particular decision is made. c. if a particular decision is not made. d. only for some decisions.

a. regardless of which decision is made

37. A price ceiling is: a. the maximum price that a seller can charge in a market. b. the minimum price that a seller can charge in a market. c. the average price that a seller can charge in a market. d. any price above the equilibrium price.

a. the maximum price that a seller can charge in a market.

23. The demand curve is a curve that shows the maximum willingness to pay for a product. (i is a curve that shows the marginal benefit gained from a product. (iii) is a curve that shows the production cost of a product. (iv) is a curve that shows the relationship between the price of a product and a consumer's willingness to buy at each price. a. (i), (ii), (iii) and (iv) are all correct. b. (), (iD and (iv) are correct. c. (ii) and (iv) are correct. d. (i) and (ii) are correct.

b. (), (iD and (iv) are correct.

38. The price elasticity of supply for a good is 2__if a supplied in price leads to a 4% decrease in the quantity a. 2% increase b. 2% decrease c. 4% decrease d. 4% increase

b. 2% decrease

17. Amul Food Factory in India makes ice gream and produces processed and condensed milk. In the factory, the firm's employees use raw milk and sugar. The firm runs on electricity and purchases raw milk every day. Large robotic assembly lines fill and package the ice cream containers. Large industrial freezers store the ice cream. Based on this scenario, can you identify the fixed costs for Amul Food Factory? a. The cost of the raw milk purchased from the farmers. b. The cost of building the factory, purchasing the robotic assembly lines and industrial freezers. c. The cost of the employees hired and the number of packages purchased. d. The cost of purchasing electricity, raw milk, and sugar.

b. The cost of building the factory, purchasing the robotic assembly lines and industrial freezers.

21. Suppose the National Football League (NFL) wants to enable all football fans to attend the Super Bowl. The league therefore sets the price of a Super Bowl ticket below what is generally considered a fair market price. Suppose the price of a ticket for a regular seat at the Super Bowl is set at just $500. People who have tickets, however, can turn around and sell them online for $2,500 each, or more. If there are no transaction costs associated with online sales of Super Bowl tickets, the true cost to a fan of attending the Super Bowl is: a. at most $500. b. at least $2,500. c. the monetary price paid to obtain the ticket. d. $2,000 less than the opportunity cost of a ticket.

b. at least $2,500.

25. Graphically, shortages will always occur: a. at the equilibrium price. b. at prices below the equilibrium price. c. at prices above the equilibrium price. d. when the quantity supplied exceeds the quantity demanded.

b. at prices below the equilibrium price.

34. Joshua Murphy is planning on studying late into the night for his economics exam. He is contemplating how many coffees to buy tonight. Joshua should not buy an additional coffee during the evening if the marginal a. benefit of purchasing one more coffee exceeds the marginal cost. b. benefit of purchasing one more coffee is less than the marginal cost. c. benefit of purchasing one more coffee is positive. d. cost of purchasing one more coffee is positive.

b. benefit of purchasing one more coffee is less than the marginal cost.

11. If the price of M&M peanut candies increases, and the demand for cherry-flavored soft drinks decreases, these two goods are goods. a unrelated b. complementary c. inferior d. substitute

b. complementary

19. If rice is an inferior good, when incomes rise, the equilibrium price will _, and the equilibrium quantity will a. decrease; increase b. decrease; decrease c. increase; increase d. increase; decrease

b. decrease; decrease

15. Suppose the government imposes a $6 per month tax on cell phone usage. If the demand for cell phone usage is perfectly inelastic, and the supply curve is elastic (but not perfectly elastic), then the price of cell phone usage will: a. increase by more than $6. b. increase by exactly $6. c. increase by less than $6. d. remain constant.

b. increase by exactly $6.

32. Suppose the price elasticity of demand for Baconators at Wendy's is 0.6. This means that the demand for Baconators is: a. elastic. b. inelastic. c. unit-elastic.

b. inelastic

36. Yogurt has a perfectly inelastic demand and an upward-sloping supply curve. Cheese has a perfectly inelastic supply and a downward-sloping demand curve. If the same tax is imposed on the sellers of both yogurt and cheese, the: a. price paid by consumers of cheese rises by more than the price paid by consumers of yogurt. b. price paid by consumers of yogurt riles by more than the price paid by consumers of cheese. c. price paid by consumers of yogurt rises by the same amount as the price paid by consumers of cheese. d. quantity bought by consumers of cheese decreases by more than the quantity bought by consumers of yogurt.

b. price paid by consumers of yogurt riles by more than the price paid by consumers of cheese.

31. The market price for bus travel has increased, a development some economists attribute to the closure of several bus companies. In other words, these economists believe that: a. supply has increased. b. supply has decreased. c. demand has increased. d. demand has decreased.

b. supply has decreased.

8. When the marginal benefit of an activity is equal to the price of the activity. the rational buyer should do of the activity. a. less b. that exact amount c. more d. none

b. that exact amount

13. If Beyonce concert tickets are sold out within five minutes of being released, we can conclude that a. there is a control on how high the ticket prices can go. b. there is a shortage of Beyoncé concert tickets in the market. c. the price of the tickets is above the equilibrium price in the market. d. the quantity supplied of Beyonce concert tickets is more than the quantity demanded.

b. there is a shortage of Beyoncé concert tickets in the market.

4. In a voluntary economic transaction between a buyer and a seller, transaction. a. only the buyer b. only the seller c. both the buyer and the seller d. neither the buyer nor the seller

both the buyer and the seller

14. In the figure below, if the government imposes a tax of $1 in this market, producers will pay_______ of tax, while consumers will pay______of the tax. a. $1; $0 b. SO; $1 c. $0.50; $0.50 d. $0.50; $1.50

c. $0.50; $0.50

9. What is quantity supplied? a. It is a graph that plots the quantities of an item that a seller plans to sell at different prices. b. It is the amount of an item that a buyer is willing to buy at a particular price. c. It is the amount of an item that a seller is willing to sell at a particular price. d. It is a graph that plots how much a seller produces at different points in time.

c. It is the amount of an item that a seller is willing to sell at a particular price.

30. Sarah Sandoval is a coffee farmer trying to decide how many tons of coffee to produce. She can sell each ton of coffee for $3,000. The cost of producing her first ton of coffee is $600, and the second ton costs $1,200. Each additional ton of coffee costs $600 more to produce. How many tons of coffee should Sarah produce, and what is the total cost of her coffee production? a. She will produce three tons at a total cost of $3,600. b. She will produce four tons at a total cost of $6,000. c. She will produce five tons at a total cost of $9,000. d. She will produce six tons at a total cost of $12,600.

c. She will produce five tons at a total cost of $9,000.

16. A meat processing plant produces both steak and ground beef. What effect would rising market prices for steak have on the market for ground beef? a. There will be an increase in the quantity supplied of ground beef. b. The supply of ground beef will increase. c. The supply of ground beef will decrease. d. The supply of steak will decrease.

c. The supply of ground beef will decrease.

35. The price of Tide falls and the demand for Purex decreases. We can conclude that: a. Tide and Purex are complements. b. Tide and Purex are substitutes in production. c. Tide and Purex are substitutes. d. Tide is a normal good.

c. Tide and Purex are substitutes.

20. Total revenue will rise if price a. rises; perfectly elastic b. falls; inelastic c. falls; elastic d. rises; elastic and demand

c. falls; elastic

12. When the price elasticity of demand is _ relative to the price elasticity of supply, then buyers bear of the economic burden of a tax. a. small; all b. small; none c. large; a smaller share d. large; a bigger share

c. large; a smaller share

7. The law of demand refers to a. the positive relationship between price and quantity supplied. b. the inverse relationship between price and quantity supplied. c. the inverse relationship between price and quantity demanded. d. the positive relationship between price and quantity demanded.

c. the inverse relationship between price and quantity demanded.

28. Gary Parker is willing to pay $700 for a new iPad. Apple (the producer of iPads) is selling a new iPad for $600. It costs Apple $400 to produce this iPad. How much economic surplus does Gary receive if he purchases this iPad? a. $700 b. $600 c. $200 d. $100

d. $100

39. The price of milk at the local grocery store rises by 25%, and the quantity of milk demanded falls by 10% The absolute value of the price elasticity of demand for milk is ___and demand is____ a. 2.5; elastic b. 2.5; inelastic c. 0.4; elastic d. 0.4; inelastic

d. 0.4; inelastic

40. A new economic report discusses the high probability that sugar prices will rise soon. The expectation of sugar prices rising soon will lead to a. decreased demand today and a fall in sugar prices. b. increased supply today and a fall in sugar prices. c. the govemment issuing subsidies for sugar production. d. decreased supply today and a rise in sugar prices.

d. decreased supply today and a rise in sugar prices.

22. An increase in demand and an increase in supply will lead to a(n) in the equilibrium price. a. decrease; indeterminate change b. indeterminate change; increase c. indeterminate change; decrease d. increase; indeterminate change

d. increase; indeterminate change

24. Price elasticity of demand is calculated by dividing the by the a. percent change in price; percent change in quantity demanded b. percent change in price; percent change in quantity supplied c. percent change in quantity demanded; percent change in income d. percent change in quantity demanded; percent change in price

d. percent change in quantity demanded; percent change in price

10. An equilibrium price is a price where the a. demand curve is identical to the supply curve. b. amount that buyers are willing to buy is equal to the amount that buyers are able to buy. c. quantity demanded no longer changes. d. quantity supplied equals the quantity demanded

d. quantity supplied equals the quantity demanded

1. Opportunity cost arises from the fundamental economic problem of a. interdependence. b. marginal costs. c. unlizhited resources. d. scarcity.

d. scarcity.

6. The opportunity cost of a good is: a. smaller during periods of economic recession. b. equal to the monetary cost of the good. c. larger during economic booms. d. the value of the next best alternative given up to acquire the good.

d. the value of the next best alternative given up to acquire the good.

3. Economists convert costs and benefits into money equivalents by evaluating an individual's a. sunk costs. b. marginal benefits. c. opportunity costs. d. willingness to pay.

d. willingness to pay.