Econ Midterm

2)According to Table 02-01, Pat has the absolute advantage in: A)neither making nor delivering pizza. B)making pizza. C)making and delivering pizza. D)delivering pizza.

A

According to Table 02-01, Pat's opportunity cost of making a pizza is delivering: A)1/4 of a pizza B)3 pizzas C)3/2 of a pizza D)2 pizzas

A

At his current level of consumption, Evan gets twice as much marginal utility from an additional bottle of water as that from an additional bottle of soda. If the price of soda is $1.00 per bottle, then Evan is maximizing utility if the price of a bottle of water is: A)$2.00 B)$.50 C)$1.00 D)$1.50

A

If supply shifted from S1 to S2, producer surplus would be equal to area? A) B+D B)A+B C) B D) E+D

A

If the market for doughnuts is perfectly competitive, and the price of a doughnut is 25 cents, then this firm should: A)produce 80 doughnuts. B)produce 50 doughnuts. C)shut down. D)produce 90 doughnuts.

A

If the market for doughnuts is perfectly competitive, then assuming this firm can earn enough revenue to cover its variable cost, it should produce: A)the quantity of doughnuts at which average total cost is minimized. B)50 doughnuts per day. C)the quantity of doughnuts at which marginal cost equals the market price. D)the quantity of doughnuts at which average total cost equals the market price.34)14

A

In equilibrium, what is the consumer surplus for all apartments rented? Refer to figure 10 A) $0 B) $500 C) $600 D) $800

A

Jessica's marginal cost for producing a pitcher of lemonade is $0.25. Therefore,$0.25 can also be called her: A)reservation price. B)marginal revenue. C)equilibrium price. D)producers surplus.

A

Producer surplus at the original supply and demand curves is equal to area? A) A+B B) B C) B+D D)B+C+D

A

Refer to the figure .5 below. The marginal utility of consuming the 2nd dinner is: A)20 B)15 C)35 D)10

A

Refer to the figure 5 above. If the price is $4 today, and if there are no other changes in this market, one would expect the price in the future to be: A)greater than $4. B)less than $4. C)greater than $6. D)$4.

A

Refer to the figure 9 below. The marginal utility of the 3rd dinner is: A)60. B)75. C)135. D)160.

A

Refer to the figure 9 below. The total utility of consuming two dinners out per week is: A)175. B)75. C)less than 100. D)160.

A

Refer to the figure below. If this firm is a price taker and the price of each unit of output is $10, then this firm should: A)shut down in the short run. B)produce 45 units of output. C)raise its price to increase its revenue. D)lower its output to decrease its marginal cost.

A

Refer to the figure below. If this firm is a price taker and the price of each unit of output is $15, then at this firm's profit-maximizing level of output, it will earn a________ of ________. A)loss; $60 B)loss; $900 C)loss; $300 D)profit; $180

A

Refer to the figure below. If this firm is a price taker, then when the price of each unit if output is $15, what is this firm's profit-maximizing level of output? A)60 B)80 C)45 D)0

A

Refer to the figure below. If this firm is a price taker, then when the price of each unit of output is $30, this firm's profit-maximizing level of output is ________. A)80 B)60 C)30 D)100

A

Refer to the figure below. If this firm is a price taker, then when the price of each unit of output is $30, this firm's total cost at its profit-maximizing level of output is________. A)$1,600 B)$1,200 C)$900 D)$2,700

A

Suppose a cup of tea costs $0.60 and a scone costs $1.20. If Edith spends all of her income on these two goods, and at her current level of consumption, she receives a marginal utility of 6 utils from the last cup of tea she buys and a marginal utility of24 utils from the last scone she buys, then Edith should: A)buy less tea and more scones. B)not change her consumption of tea and scones. C)buy more tea and fewer scones. D)buy more tea and more scones.

A

Table 2: According to the information in the table above, the equilibrium quantity for this market is A) 10 .B) 30. C) 40 .D) 4. E) 15.

A

The buyer's reservation price of a particular good or service is the: A)maximum amount the buyer would be willing to pay for it. B)same as the market price. C)minimum amount the buyer would be willing to pay for it. D)price the buyer must pay to ensure he or she gets it.

A

The quantity that consumers are willing and able to purchase at a given price is called A) quantity demanded. B) quality demanded. C) demand. D) quantity supplied. E) quality supplied.

A

A perfectly competitive firm's supply curve is the portion of its ________ cost curve that lies above its ________ cost curve. A)marginal; average total B)marginal; average variable C)average variable; marginal D)average total; marginal

B

According to Table 02-01, Corey's opportunity cost of making of a pizza is delivering: A)3/2 of a pizza. B)1/2 of a pizza. C)2/3 of a pizza. D)2 pizzas.

B

As Lynn eats more pizza, we would typically expect her marginal utility from eating pizza to: A)increase. B)decrease. C)stay the same. D)equal the price of pizza.

B

Based on the table 4 above, if market price were $2 then there would be A) no surplus or shortage. B) a shortage of 25units. C) a surplus of 25units. D) a surplus of 20units. E) a shortage of 20units.

B

Economics is best defined as the study of: A)the financial concerns of businesses and individuals. B)how individuals or societies choose to use scarce resources to try to satisfy their unlimited wants. C)inflation, interest rates and the stock market. D)supply and demand.

B

Figure 1: What is the amount of the shortage or surplus at this price(i.e.,$50) .A) 0 tickets B) 15tickets C) 60tickets D) 50tickets

B

Fred runs a fishing lodge, and has a very profitable business during the summer. In the fall, the number of guests at the lodge starts to decline. Fred should keep the lodge open: A)only during those months in which his total revenue exceeds his total cost. B)only during those months in which his total revenue exceeds his variable cost. C)only during those months in which his total revenue exceeds his fixed cost. D)all year because his summer profits offset any losses he might have in the winter.

B

If Jamie consumes 3 muffins a day, then what is her marginal utility per dollar spent on the third muffin? Refer to table 5 A)30 B)10 C)20 D)40

B

If demand is inelastic, total revenue will A) fall when price rises. B) fall when price falls. C) move in the same direction of any price change. D) not be affected by a price change.

B

If the percentage change in the price of the product is 20% when the percentage change in quantity demanded is 40%, the elasticity would be expressed as A) 0.5 B) 2 C)3 D) 20 E) 1

B

If the price elasticity of demand for cell phone service is 2, then if the price of cell phone service decreases by 3%, quantity demanded would: A) decrease by 6%. B) increase by 6%. C) increase by 3%. D) decrease by 3%.

B

Refer to Table 02-01. Based on their comparative advantages, Pat should specialize in ________, and Corey should specialize in ________. A)delivering pizza; making pizza B)making pizza; delivering pizza C)neither making pizza nor delivering pizza; both making pizza and delivering pizza D)both making pizza and delivering pizza; neither making pizza nor delivering pizza

B

Refer to the figure 2 below. Moving from point C to point B, the opportunity cost of 25 more salads is: A)30 pizzas. B)5 pizzas. C)10 pizzas. D)15 pizzas.

B

Refer to the figure 6 above. Suppose all the sellers in this market started out charging a price of $45 per unit. What is the most likely result? A)They would all just break even because $45 is their reservation price. B)They would feel pressure to lower their prices because at $45 there would be excess supply. C)They would be forced to lower their prices because at $45 there would be excess demand. D)They would all make a large profit because $45 is more than the equilibrium price.

B

Refer to the figure below. If the market for doughnuts is perfectly competitive, and the price of a doughnut is 25 cents, then at this firm's profit maximizing level of output, the firm will earn an economic ________ of ________ per day. A)profit; $80 B)loss; $10 C)loss; $80 D)profit; $8

B

Refer to the figure below. If this firm is a price taker, then when the price of each unit of output is $30, how much profit does this firm earn at its profit-maximizing level of output? A)$1,600 B)$1,200 C)$500 D)$800

B

Refer to the figure below. If this firm is a price taker, then when the price of each unit of output is $30, this firm's total revenue at its profit-maximizing level of output is ________. A)$3,000 B)$2,400 C)$900 D)$1,800

B

Suppose Sarah owns a small company that makes wedding cakes. The table below shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day. If the market for wedding cakes is perfectly competitive, and wedding cakes sell for$95 each, then Sarah should produce ________ cakes per day. A)5 B)0 C)6 D)3

B

Table 4: Based on the table above, equilibrium price is A) $4. B) $3. C) $1. D) $2. E) $5.

B

The difference between the price a seller actually receives for a good and the seller's reservation price is: A)profit .B)producer surplus. C)consumer surplus. D)variable cost.

B

When the price of a good rises, marginal utility per dollar spent on that good________, leading consumers to purchase ________ of that good. A)falls; more B)falls; less C)rises; less D)rises; more

B

What is the equilibrium rental price and quantity in this market? Refer to figure 10 A) $200;5 apartments rented B) $450;4 apartments rented C) $500;3 apartments rented D) $500;4 apartments rented

C

1)According to Table 02-01, Corey has the absolute advantage in: A)making pizza. B)delivering pizza. C)making and delivering pizza. D)neither making nor delivering pizza.

C

A profit-maximizing firm will only produce a positive amount of output if: A)its total revenue is greater than or equal to its variable cost. B)its total revenue is greater than its fixed cost. C)its total revenue is greater than its total cost. D)its total revenue equals its total cost.

C

According to Table 02-01, Corey's opportunity cost of delivering of a pizza is making: A)6 pizzas. B)12 pizzas. C)2 pizzas. D)1/2 of a pizza.

C

Figure 4: Given the two supply curves in the figures above, to tal market supply at $30is A) 9units. B) 30units. C) 16units. D) 5units. E) 0units.

C

If a firm shuts down in the short run, then its: A)profit will equal zero. B)economic loss will equal its fixed costs. C)total revenue and total cost will fall to zero. D)economic loss will equal its variable costs.

C

If the market for doughnuts is perfectly competitive, and the price of a doughnut is 10 cents, then this firm: A)should shut down in the long run. B)should shut down. C)should produce 50 doughnuts. D)will earn an economic loss.

C

In general, perfectly competitive firms maximize profit if they produce a level of output at which: A)average cost equals price. B)total cost is minimized. C)marginal cost equals price. D)average cost is minimized.

C

Refer to the figure 7 above. If supply were to shift to the left, and demand were to also shift to the left, in the new equilibrium: A)both price and quantity would be lower. B)both price and quantity would be higher. C)quantity would be lower, but the direction of the price change cannot be determined. D)price would be higher and quantity would be lower.

C

Suppose the company that owns the vending machines on your campus has increased the price of a can of soda by 20%. They then notice that they are selling approximately 10% fewer sodas .The price elasticity of demand for sodas from the campus vending machines, therefore, is: A) unit elastic B) infinite C) inelastic D) elastic

C

Suppose you want to maximize your total utility. If your marginal utility per dollar spent is higher for one good than for all others, then you should: A)spend more on all goods. B)spend less on all goods. C)reallocate your spending towards that good. D)reallocate your spending away from that good.

C

The Law of Supply predicts that ceteris paribus A) quantity supplied decreases as price increases. B) quantity supplied increases as price decreases. C) as price rises, quantity supplied will increase. D) the supply curve will shift to the right as price increases. E) as price rises, supply will increase.

C

The point in the figure 3 above represents A) quality supplied. B) the consumption point .C) quantity demanded. D) optimal demander spending. E) quantity supplied.

C

The quantity that consumers are willing and able to purchase at a given price is called: A) quality demanded. B) quantity supplied. C) quantity demanded. D) demand.

C

When the price of coffee increases A) the supply of coffee decreases. B) the supply of coffee increases. C) the quantity supplied of coffee increases. D) supply could increase or decrease depending on demand. E) the quantity supplied of coffee `decreases.

C

figure 1:Assume that the Athletic Department decides to sells tickets for $50. At this price their will be________. A) Shortage B) Neither a shortage nor a surplus C) Surplus D) Not enough information to answer this question.

C

11) Petroleum is an input in to making plastics. Therefore, if the price of petroleum falls, we would expect the supply of goods made of plastic to A) fall. B) remain unchanged because this represents a change insupply and not a change in quantity supplied. C) remain unchanged because the price of petroleum would not affect the price of plastic goods. D) rise. E) remain unchanged because this represents a change in quantity supplied and not a change in supply.

D

A profit-maximizing firm will shut down if, at the firm's profit maximizing level of output, its total revenue is ________ A)less than its average variable cost. B)less than its average total cost. C)less than its variable cost. D)less than its total cost.

D

An unexpected freeze that wipes out the Florida orange crop would A) affect the demand but not supply of oranges as consumers learn of the problem. B) raise the supply of oranges on the market. C) not affect supply because farmers are insured. D) lower the supply of oranges on the market. E) have an unknown effect because not enough information is given.

D

Complements are goods or services that A) are never used together. B) are similar to one another from the consumerʹs perspective. C) compete with each other in the market place. D) consumers use together in some way. E)build up the userʹs self-esteem.

D

Figure 1: If the market is in equilibrium tickets will sell for $_______ and__ _____ tickets will be sold. A) $10,30tickets B) $60,20tickets C) $40,50tickets D) $40,30tickets

D

Refer to the figure 8 above. Assume demand remains unchanged at D1. If supply shifts from S2 to S1, then the equilibrium price will ________ and the equilibrium quantity will ________. A)fall; rise B)rise; rise C)fall; fall D)rise; fall

D

Suppose Sarah owns a small company that makes wedding cakes. The table below shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day. If the market for wedding cakes is perfectly competitive, and wedding cakes sell for$95 each, then at her profit-maximizing level of output, Sarah will earn a ________ of________ per day. A)loss; $100 B)profit; $285 C)profit; $15 D)loss; $15

D

Suppose that Cathy spends all of her income on 20 units of good X and 25 units of good Y. Cathy's marginal utility from the 20th unit of good X is 9 utils, and her marginal utility from the 25th unit of good Y is 19 utils. If the price of good X is$0.50 per unit and the price of good Y is $1.00 per unit, then to comply with the rational spending rule, Cathy should: A)continue to purchase 20 units of good X and 25 units of good Y. B)purchase more than 20 units of good X and more than 25 units of good Y. C)purchase more than 20 units of good X and less than 25 units of Y. D)purchase less than 20 units of good X and more than 25 units of good Y.

D

Table 1 (below) presents the Total Cost and Total Benefit associated with the number of times an individual skis each month. The marginal benefit of the second time skiing (e.g. second unit of activity) is: A)$44 B)$10 C)$5 D)$60

D

Table 3: here are three demanders, A, B, and C. According to the table above, if price were $200 then market quantity demanded would be A) 145 units. B) 50 units. C) 30 units. D) 95 units. E) Cannot be calculated with the information available.

D

Which chain of events is correct?A decrease in demand causes a A) shortage to occur at the original price, which leads to increases in equilibrium price and equilibrium quantity. B) surplus to occur at the original price, which leads to increases in equilibrium price and equilibrium quantity. C) shortage to occur at the original price, which leads to an increase in equilibrium price and a decrease in equilibrium quantity. D) surplus to occur at the original price, which leads to decreases in equilibrium price and equilibrium quantity. E) surplus to occur at the original price, which leads to a decrease in equilibrium price and increase in equilibrium quantity.

D

In the figure above, producer surplus is represented by the area A)A. B)B. C)A-B. D)B-A. E)A+B.

E

The opportunity cost of increasing gun production from 50,000 to 60,000 is A) 55,000 lbs of butter. B) 10,000guns. C) Cannot be calculated with the information given. D) 25,000lbs of butter. E) 30,000lbs of butter.

E

The price at which the quantity demanded is equal to the quantity supplied is known as ________ price. A) equalization B) unattainable C) marketable D) the balanced E) equilibrium

E