Micro midterm A answers
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
