Econ 1b- final review

Use table: labor and output for cappuccinos, the marginal product of the second worker is:

10

A perfectly price discriminating monopolist

Has a demand curve that is also its marginal revenue curve

Taxes on the purchase of specific items such as gasoline, tobacco, or alcoholic beverages are called ___taxes.

excise

if a quota limit is set below the equilibrium quantity, then the demand price will be _____ the supply price.

greater than

Use figure: profit- maximization for fabulous finn's flower firm in the short run. the market price is less than P2, the firm will ___ in the short run.

shut down

good X is a normal good if:

the demand for good X increases when income rises.

total surplus is:

the sum of consumer and producer surplus

Market equlibrium occurs when:

there is no incentive for prices to change in the market, quantity demanded equals quantity supplied, and the market clears.

the marginal utility of matcha tea consumption for alannah is the change in __ generated by consuming an additional cup of matcha tea.

total utility

the BEST measure of the opportunity cost of a choice is:

whatever you gave up to make that choice, even if no monetary costs are involved

use table: Market for fried cheesecake. the government decides to tax fried cheesecake ata rate of 0.30 per cheesecake and collect the tax from buyers. After paying the tax, producers will receive ___ per cheesecake, and the will sell ___ cheesecakes after the tax.

$3.20; 5,000

use table demand and total costs for Asgard. Valkyrie runs a natural monopoly that produces electricity for a small mountain village near asgard. the table shows the demand facing Valkyrie and Valkyrie's total costs. to maximize profits, Valkyrie should charge a price of

$400

Eliana and Olivia are at Barnes and noble buying new calculators for the semester. Eliana is willing to pay $75, and Olivia is willing to pay $100 for a graphing calculator. the price of a caluclator at barnes and noble is $65. How much is their total consumer surplus?

$45

use table consumer surplus and Opera tickets. the table shows Columbia university students' willingness to pay to see Verdi's aida at the Metropolitan opera house. Assume that each student wants to buy one ticket. if the price of ticket to see Aida is $50, Gabriella's Consumer surplus is:

$50

A 10% increase in income increases the quantity demanded of online movie rentals by 3 %. the income elasticity of demand for online movie rentals is ___, and online movie rentals are a(n)___ good.

0.3; normal

if the price of a good increases by 2%, and the quantity demanded changes by 1%, then the price elasticity of demand is equal to:

0.5

use table: price elasticity in the market for matcha tea. what is the price elasticity of demand, computed using the midpoint method, between $1.50 and $1,25?

1.22

Use table : optimal choice of yogurt and cheese. the price of yogurt is $2 per unit, and the price of cheese is $4 per pound. Hailey's income is $16. if she buys 3 pounds of cheese of 2 yogurts, her total utility will be:

180

the table producer surplus and theater tickets shows each student's opportunity cost of selling a ticket to Hamilton on broadway. Assume that each student has one ticket to sell. if the price of a ticket to hamilton is $140, the total producer surplus for thses five studnets is:

379

the price of Cracker Jacks is $0.50 per box, and the price of macadamia nuts is 0.25 per bag. you have $10 to spend on both goods. the maximum number of bags of macadamia nuts you can purchase is:

40

use figure: PPF for Caffeineland. Caffeineland is producing at point C on its possibility frontier. what is the opportunity cost of increasing the production of coffee from 20 million cups to 30 million cups?

5 million doughnuts

which factor would cause a decrease in the supply of a good?

A rise in input prices

in a perfectly competitive long run equilibrium:

All firms produce at the minimum point of their average total cost curves.

Use figure Budget lines for bottles water and biscotti. for months now, angela has had $20 per month to spend on bottled water and biscotti. the price of each cup of bottled water and each biscottiis $1. which chart shows what will happen to her budget line if the price of a cup of bottled water falls to 0.50?

D

which of the following is a positive statement?

Rent- controlled apartments create a black market in the supply of housing

use figure: demand for bananas. if pears are a substitute for bananas, an increase in the price of pears could be represented as a:

Shift from D1 to D2

Use table: market for apartments in San Francisco. if a price cieleing of $1,900 is imposed in this market, the result will be inefficiencu in the form of a ___million apartments.

Shortage of 0.2

gains from trade arise because of:

Specialization in production

the market for breakfast cereals is dominated by four producers: Kellog's, genral mills, post foods and Quaker. the market contains hundreds of similar types of cereals, such as fruit loops, cornflakes, and rice krispies, that are seen by buyers as different products, this situation violates the perfect competition assumption of:

a standardized product

the demand curve for a monopoly is :

above the marginal revenue curve

the trade off between equity and efficiency occurs because:

allocating resources fairly may lead to inefficiency

use figure: the cost curves for charlie's cookie confections. the curve labeled W represents the firm's ___ cost curve

average total

use figure: price controls in the market for Strawberries. The consumer surplus lost to a price floor at point b is equal to the area:

bcge

Use figure the demand for high end cell phones. the Change in total revenue resulting from a change in price from P to T suggests that demand is:

elastic

the pair of items that is most likely to have a negative cross- price elasticity of demand is:

french fries and ketchup

one of the ways rent control is inefficient is that it leads to:

high opportunity costs associated with wasted time searching for apartments.

If demand and supply are both very elastic, a decrease in the rate of an excise tax will likely:

increase the amount of revenue collected by the government.

Along a given supply curve, an increase in the price of a good will:

increase the producer surplus

the price received by a firm in a perfectly competitive market:

is equal to the marginal revenue

For a perfectly competitive firm, the short run supply curve is the;

marginal cost curve above the minimum average variable cost

the change in total output resulting from a one-unit increase in the quantity of an input, holding all other inputs constant, is the:

marginal product

the ability of a monopolist to raise the price of a product above the competitive level by reducing output is know as:

market power

A simplified representation of a real situation that is used to better understand real-life situations is called a(n):

model

if the price of a good changes, and the income effect and substitution effect reinforce one another, the good is:

normal

Fresh water is considered a scarce good because:

not enough of it is available to meet all needs

over the range of output where a firm experiences diseconimies of scale, the slope of the long- run average total cost curve is:

positive

if the marginal rate is higher than the average tax rate, the tax system is:

progressive

the economy with the LOWEST opportunity cost of producing a particular good is said to have a(n)

comparative advantage

when the government imposes an excise tax in a market with a downward sloping demand curve and an upward sloping supply curve:

consumer surplus falls, producer surplus falls , and a deadweight loss occurs.

A negative relationship between the quantity demanded and price is called the law of :

demand