ECON 1B Spring 2021 Midterm
Refer to Figure 2-3 . I t is not possible for this economy to produce at point
C
Refer to Figure 4-2. If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is
0 units
Refer to Table 2-3. Which of the following combinations of corn and wheat is not currently attainable but would be attainable if there was an improvement in overall production technology?
1,000 bushels of corn and 2,200 bushels of wheat
Refer to Table 2-2 . What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?
300 socks
Who is the economist credited with first drawing supply and demand curves as we use today?
Alfred Marshall Adam Smith David Ricardo Karl Marx
Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 1,000 units of food and 47 machines. This year it experienced a technological advance in its machine-making industry. As a result, this year the society wants to produce 1,050 units of food and 47 machines. Which of the following statements is correct?
Because the technological advance occurred in the machine-making industry, it will not be possible to increase food production without reducing machine production below 47
Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event?
Buyers would not be willing to buy as much as before at each relevant price
Opportunity costs are measured as what is gained divided by what is given up.
False
Price will rise to eliminate a surplus.
False
When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other is constant.
False
Which of the following do not explain why the demand curve slopes downward?
Law of Demand Substitution Effect Income Effect
Refer to Figure 4-10. Which of the following movements would illustrate the effect in the market for bullet-proof vests of an increase in the price of Kevlar, the material used to make the vests?
Point C to Point D
Which of the following is not held constant in a demand schedule?
Price
Which of the following would shift the supply of Green Bay Packers football jerseys to the left?
The cost of the fabric used to make the jerseys increases
Which of the following would likely be studied by a microeconomist rather than a macroeconomist?
The effect of a sales tax on the cigarette industry
What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?
The equilibrium price would decrease, and the equilibrium quantity would increase
Refer to Figure 2-3. Suppose this economy is producing at point D. Which of the following statements would best explain this situation?
There is widespread unemployment in the economy
A decrease in the price of peanut butter will increase both the equilibrium price and quantity in the market for jelly.
True
Refer to Figure 2-10. It is possible for this economy to produce 30 doghouses and 20 dishwashers.
True
The government can potentially improve market outcomes if market inequalities or market failure exists.
True
If the demand for a good falls when income falls, then the good is called
a normal good
If the demand for a product increases, then we would expect equilibrium price
and equilibrium quantity both to increase
An increase in the price of a good will
decrease quantity demanded
Economists make assumptions to
focus their thinking on the essence of the problem at hand
The basic principles of economics suggest that
government should become involved in markets when those markets fail to produce efficient or fair outcomes
An economy's production of two goods is efficient if
it is impossible to produce more of one good without producing less of the other
When recommending specific policies to undertake, economists make
normative statements
The adage, "There ain't no such thing as a free lunch," means
people face tradeoffs
The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in
performing an experiment in an economic system
Refer to Figure 2-4, Graph (a) . Production is
possible at points J, K, L, and M, but efficient only at points J, L, and M
What term refers to the idea that society has limited resources and therefore cannot produce all the goods and services people wish to have?
scarcity
Refer to Figure 4-7. At a price of $35, there would be a
surplus of 400 units
A baker recently has come to expect higher prices for bread in the near future. We would expect
the baker to supply less bread now than she was supplying previously
