micro exam 1

A student has two options: she can either surf the web or work part-time. Working part-time pays her $20 per hour. What is the students opportunity cost of surfing the web for 5 hours?

$100

If the opportunity cost of time is _________ and an individual spends _________ commuting every month, the opportunity cost of her commute is $100 every month.

10 per hour; 10 hours

The weights of six students in the seventh grade are 120 lbs, 110 lbs, 105 lbs, 100 lbs, 96 lbs, and 90 lbs. The average weight of the six students is ___________.

103.5

Scenario: A firm wants to set up a factory. It has four different options. The rent of the factory in each of the four different locations and the time taken to transport the product from each location to the market is shown in the table below. The opportunity cost of time is $10 per hour. Factory Location Monthly Commuting Time (hours) Monthly Rent ($) Very Far. 30 2,060 Far 25 2,100 Close 15 2,300 Very Close 5 2,500 Refer to the scenario above. What is the marginal rent cost if the firm chooses factory Very Close over factory Close? 200

200

An individual has 8 hours to spare. She has to divide her time between two activities: reading and writing. Which of the following allocations will completely exhaust the individual's budget?

5 hours of reading and 3 hours of writing

The following table shows the demand schedules of three consumers of wine. Assume that these three buyers constitute the entire market. Price ($ per unit) Consumer 1 Demand (units) Consumer 2 Demand (units) Consumer 3 Demand (units) 4 5 10 17 3 10 20 20 2 16 26 23 1 20 31 25 Refer to the table above. What is the market demand for wine when the price is $3?

50 units

Which of the following factors will NOT cause a shift in the demand for a good?

A change in the market price of the good

Which of the following is likely to cause the demand curve for cars to shift to the left?

A rise in the price of gasoline

To carry out an optimization analysis, _________.

All costs are required to be converted to the same unit of measurement

Which of the following is an example of normative economic statement?

An increase in government expenditure will lead to an increase in well-being

Which of the following is an example of a positive economic statement?

An increase in income causes an increase in savings

The following figure shows an individual's total cost of renting four apartments located at different distances from her place of work. (highest point at point 1 and lowest at point 3) Refer to the figure above. Which apartment is the best feasible choice for the individual?

Apartment 3

Which of the following statements identifies a difference between correlation and causation?

Correlation implies a mutual relationship between two things, whereas causation occurs when one thing directly affects another

Empiricism refers to using ________ to analyze the world.

Data

Maria has to choose between driving and taking a train to destination A. Traveling by train will cost her $400 and will take 4 hours. Driving to destination A takes 6 hours, and the required amount of gasoline costs her $250. Her opportunity cost of time is $15 per hour. Refer to the scenario above. Maria should choose to ____________.

Drive, as it will save her $120

Which of the following is a feature is a feature of a perfectly competitive market?

Each seller is too small to influence the market price

Which of the following is true of equilibrium?

Equilibrium refers ti a situation where all economic agents simultaneously optimize after considering one another's actions

Economic models are often based on assumptions because they ____________.

Help simplify complex real-world phenomena

A model's predictions are referred to as_________.

Hypotheses

Two goods are said to be complements when a fall in the price of the one good ___________.

Leads to a rightward shift in the demand for the other good

Which of the following statements correctly highlights the difference between microeconomics and macro economics?

Microeconomics deals with a small part of the economy, whereas macroeconomics deals with aggregate economic performance

When two variables move in opposite directions, they are said to be __________.

Negatively correlated

Which of the following claims is most likely to suffer from reverse causality?

Relatively wealthy people tend to be relatively healthy

Which of the following relationships is most likely to exhibit zero correlation?

The relationship between the amount received as unemployment benefits in China and the unemployment rate in Canada

Which of the following examples best describes the Law of Demand?

When the price of bread doubles, John's consumption of bread halves

Scenario: Assume that there are five apartments located at different distances from an individual's place of work-very close, close, far, very far, and extremely far. The individual makes his choice by studying the change in costs as he moves farther from his place of work. He has to choose between renting one of the five apartments. The movement from apartment Very Close to Close has a marginal cost of −$60, a movement from apartment Close to Far has a marginal cost of −$40, a movement from apartment Far to Very Far has a marginal cost of −$10, and a movement from apartment Very Far to Extremely Far has a marginal cost of $20. Refer to the scenario above. Which of the following is the optimum choice?

apartment very far

Net benefits of an alternative equal___________.

benefit minus costs

The acai berry and products made from it are a popular dietary supplement, believed to reverse diabetes and lead to weight loss. Suppose that a peer-reviewed medical study reveals that there are no health benefits from consuming acai berry products. The likely effect of this medical study will be to ________.

cause a decrease in demand

Scenario: A firm wants to set up a factory. It has four different options. The rent of the factory in each of the four different locations and the time taken to transport the product from each location to the market is shown in the table below. The opportunity cost of time is $10 per hour. Factory Location Monthly Commuting Time (hours) Monthly Rent ($) Very Far. 30 2,060 Far 25 2,100 Close 15 2,300 Very Close 5 2,500 Refer to the scenario above. Which is the optimum location for the firm to set up its factory?

far

A cost-benefit calculation that focuses on the difference between a feasible alternative and the next feasible alternative is called __________.

marginal analysis

The best alternative use of a resource is referred to as its ___________.

opportunity cost

A change in the quantity demanded of a good is ____________

represented by a movement along a demand curve