MICRO

(Figure: Demand and Supply of Sugar) Use Figure: Demand and Supply of Sugar. Given the initial equilibrium of S 1 and D, any price below _____ will exert pressure for the price to _____.

$25; rise

Brianna and India are shopping together at the mall for new sandals. Brianna is willing to pay $90, and India is willing to pay $50 for a pair of sandals. What is the gain in total consumer surplus when the price decreases from $59 to $40?

$29

A friend comes up to you and offers you a free ticket to a Yankees game that night, and you decide to attend the game. The game takes five hours and costs you $25 for transportation. If you had not attended the game, you would have worked at your part-time job for $12 an hour. What is the cost to you of attending the game?

$85

Which statement is normative?

The minimum wage is necessary to help fight poverty.

Which factor would cause a DECREASE in the supply of a good?

a rise in input prices

If a farmer in Indiana can produce 200 pounds of beets and no corn or no beets and 100 pounds of corn, and he faces a linear production possibility frontier, the opportunity cost of producing an additional pound of beets is _____ pound(s) of corn.

0.5

(Figure: Comparative Advantage) Use Figure: Comparative Advantage. The opportunity cost of producing 1 box of cheese for Canada is _____ box(es) of apples. ​

1

(Figure: The Market for Apple AirPods) Use Figure: The Market for Apple AirPods. Assume that S d represents the domestic supply curve and that D d represents the domestic demand curve. In the market for Apple AirPods, producer surplus under autarky equals:

1,500

If a farmer in Indiana can produce 200 pounds of beets and no corn or no beets and 100 pounds of corn, and he faces a linear production possibility frontier, the opportunity cost of producing an additional pound of corn is _____ pound(s) of beets. Correct!

2

Figure: The Market for Apple AirPods) Use Figure: The Market for Apple AirPods. Assume that S d represents the domestic supply curve and that D d represents the domestic demand curve. In the market for Apple AirPods, consumer surplus under autarky equals:

3,000

Marius and Jennifer are going to sell cupcakes and muffins at their third annual fundraiser bake sale. In one day, Marius can make 40 cupcakes or 20 muffins, and Jennifer can make 15 cupcakes or 15 muffins. With specialization, _____ cupcakes and _____ muffins will be made in one day.

40; 15

(Table: Production Possibilities Schedule I) Use Table: Production Possibilities Schedule I. The opportunity cost of producing the third plane is _____ trains.

6

(Table: Production Possibilities Schedule I) Use Table: Production Possibilities Schedule I. The opportunity cost of producing the fourth plane is _____ trains.

8

(Figure: Shifts in Demand and Supply III) Use Figure: Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose scientists discover that eating cucumbers slows the aging process. Which panel BEST illustrates how this finding will affect the market for cucumbers?

A

(Figure: Shifts in Demand and Supply IV) Use Figure: Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose the Surgeon General announces that eating potato chips causes heart disease. Which panel BEST illustrates how this announcement will affect the market for potato chips?

A

Which statement is CORRECT?

A change in quantity demanded is a movement along the demand curve, and a change in demand is a shift of the demand curve.

(Figure: Supply of Bananas) Use Figure: Supply of Bananas. An improvement in the technology used to harvest bananas (e.g., a faster, less expensive banana picker) could be represented in the figure as a movement from: ​

A to C.

(Figure: Shifts in Demand and Supply IV) Use Figure: Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose half of the people in Philadelphia move to Denver. Which panel BEST illustrates how this event will affect the market for houses in Denver? ​

B

(Figure: Supply of Bananas) Use Figure: Supply of Bananas. Expectations among banana suppliers that the price of bananas will be significantly higher in the very near future could be represented in the figure as a movement from:

B to E. ​

(Figure: Shifts in Demand and Supply IV) Use Figure: Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose half of the people in Philadelphia pack up and move to Denver. Which panel BEST illustrates how this event will affect the supply of houses in Philadelphia?

C

(Figure: Gain in Consumer Surplus in the Market for Herbal Tea) Consider the figure Gain in Consumer Surplus in the Market for Herbal Tea. Which areas represent the change in total surplus when the price of herbal tea falls from P 2 to P 3 ?

C&E

Which question is an example of marginal analysis?

How many more houses can I build if I hire another building crew?

If people demand more Netflix subscriptions when the price of Hulu subscriptions falls, then Netflix and Hulu are:

If the quantity of parking spaces supplied in a community exceeds the quantity of parking spaces demanded, the existing price:

For which decision would marginal analysis be MOST relevant?

Should Abby work an additional hour or take a short nap?

For which decision would marginal analysis be MOST relevant?

Should I eat another waffle?

Which statement is positive?

The low income cutoff for a family of four is $36,000.

Which statement is normative?

The price of gasoline should be less than $2 per gallon.

If you decide to go to Daytona with your friends during spring break, you cannot go to London with your brother in the summer. Which economic principle does this statement BEST represent?

The true cost of something is its opportunity cost.

You decide to join the football team, but this means you can't join the basketball team, as the practices for the two teams occur at the same time. Which economic principle does this statement BEST represent?

The true cost of something is its opportunity cost.

(Figure: Dreamliners and Small Jets) Use Figure: Dreamliners and Small Jets. Suppose the economy produced 8 dreamliners and 12 small jets per period. Given that, which statement is TRUE?

This is a possible choice, but it is inefficient.

For which decision would marginal analysis be MOST relevant?

What is the right amount of hours to study for my exam?

Which statement is TRUE regarding an inferior good?

When income decreases, demand increases.

A change in quantity demanded is a movement along the demand curve, and a change in demand is a shift of the demand curve.

When income increases, the demand for the good increases.

A movement along the demand curve for a good generally results from:

a change in the price of the good.

Which factor would cause an INCREASE in the supply of a good?

a decrease in the costs of resources used to produce the good

A competitive market is

a market in which there are many buyers and many sellers of the same good or service.

In a situation in which there are technological improvements, we generally see:

a shift in the production possibility frontier outward.

An increase in the supply of coffee beans means:

a shift to the right of the entire supply curve for coffee beans.

Free trade between countries:

allows for greater consumption than without trade

A recent news story reported that the Organization of Petroleum Exporting Countries (OPEC) is expected to increase the supply of oil next summer. Summer is traditionally a time of increased demand for oil because of vacation travel. What would be the combined effect of these two events on the market for gasoline?

an increase in the quantity and an unpredictable change in the price

A decrease in the price of a good will result in:

an increase in the quantity demanded.

(Figure: Comparative Advantage) Use Figure: Comparative Advantage. Canada has a comparative advantage in producing ​

apples only

(Figure: Comparative Advantage) Use Figure: Comparative Advantage. Canada has an absolute advantage in producing: ​

apples only.

(Figure: Demand and Supply of Sugar) Use Figure: Demand and Supply of Sugar. Given the equilibrium after a change in supply from S 1 to S 2 : ​

at the old price of $25, there will be pressure for the price to fall.

(Table: Matcha Tea and Coho Salmon Production Possibilities II) Use Table: Matcha Tea and Coho Salmon Production Possibilities II. This table shows the maximum amounts of matcha tea and Coho salmon, both measured in pounds, that Colombia and Washington can produce if each produces just one good. Colombia has an absolute advantage in the production of:

both matcha tea and Coho salmon.

(Figure: Dreamliners and Small Jets) Use Figure: Dreamliners and Small Jets. This production possibility frontier is: ​

bowed out because of increasing opportunity costs.

In the circular-flow diagram, the factor market is where:

businesses buy factors of production.

Susan is attending university and majoring in actuarial mathematics. Susan is thereby accumulating:

human capital.

Which of the following is a microeconomic topic?

reasons why a consumer buys more cheese

(Figure: Dreamliners and Small Jets) Use Figure: Dreamliners and Small Jets. The combination of dreamliners and small jets at point H: ​

cannot be attained, given the level of technology and the factors of production available.

(Figure: Comparative Advantage) Use Figure: Comparative Advantage. France has an absolute advantage in producing:

cheese only.

An economy is said to have a _____ in the production of a good if it can produce that good _____.

comparative advantage; at a lower opportunity cost than another economy

If the rate at which goods can be substituted in production is constant (say, each time you produce three more chairs, you have to produce two fewer tables), then the production possibility frontier exhibits:

constant opportunity costs

Because of trade, a country may:

consume outside its production possibility frontier.

Consumer surplus for an individual buyer is equal to the:

consumer's willingness to pay for the good minus the price paid for the good.

A blockade at the border between the United States and Mexico prevents the entry of all lumber products to the United States from Mexico. This blockade will:

decrease the producer surplus for Mexican lumber producers. Because Mexican producers cannot enter their products through the blockade therefore the amount producers who are wanting to sell to U.S. decrease **blockade decreases total surplus, suppliers are sending excess supply to markets so it increases to a decrease in CS, expect

(Figure: The Market for Apple AirPods) Use Figure: The Market for Apple AirPods. Suppose a county open up to free trade. If the world price of Apple AirPods is $100, producer surplus:

decreases by $1.5 million.

The law of demand states that, other things equal, as the price:

decreases, the quantity demanded will increase.

Consumers' willingness to pay for a good is used to derive the _____ for that good.

demand curve

Suppose that apples and pomegranates are substitutes in consumption. The _____ pomegranates will increase when apple prices rise.

demand for

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

demand.

(Figure: Cell Phones and Automobiles) Use Figure: Cell Phones and Automobiles. The movement from production possibility frontier 1 (PPF 1 ) to production possibility frontier 2 (PPF 2 ) indicates:

economic growth.

(Table: The Market for Salt and Vinegar Chips) Use Table: The Market for Salt and Vinegar Chips. If the price of salt and vinegar chips is $0.50, there is an:

excess demand of 70 bags per month.

The importance of an economic model is that it allows us to:

focus on the effects of only one change at a time.

An economy is said to have a comparative advantage if it:

has the lowest opportunity cost of producing a particular good compared with other economies.

A recent college graduate who decides to go back to school for an advanced degree (a doctorate, for example) adds to the existing stock of _________ in the economy.

human capital

A decrease in the price of milk will cause an ___________

increase in the quantity of milk demanded.

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

increase the producer surplus.

In the circular-flow diagram, a household is a(n):

individual or group of people who share their income.

All points inside the production possibility frontier represent:

inefficient production points that are attainable without added opportunity costs.

All points outside the production possibility frontier are:

infeasible.

Marginal analysis:

is used primarily when deciding how much of an activity to undertake.

The market for wheat in North Dakota is considered to be competitive. This means there are _____ buyers and _____ sellers of corn in North Dakota.

many, many

(Table: Matcha Tea and Coho Salmon Production Possibilities II) Use Table: Matcha Tea and Coho Salmon Production Possibilities II. This table shows the maximum amounts of matcha tea and Coho salmon, both measured in pounds, that Colombia and Washington can produce if each produces just one good. Colombia has a comparative advantage in the production of:

matcha tea only.

The circular-flow diagram shows how:

money, goods and services, and factors of production flow through the economy.

The circular-flow diagram shows the flow of _____, the flow of _____, and the flow of _____. Correct!

money; goods and services; factors of production

(Table: Comparative Advantage I) Use Table: Comparative Advantage I. Norway has an absolute advantage in the production of: Table: Comparative Advantage IJapan and Norway produce only two goods, tuna and computers, and this table shows the maximum amount that each nation can produce of the two goods.

neither computers nor tuna.

(Table: The Market for Salt and Vinegar Chips) Use Table: The Market for Salt and Vinegar Chips. If the price of salt and vinegar chips is $0.60, the price will:

not change.

As long as people have different _____, everyone has a comparative advantage in something.

opportunity costs

If the production possibility frontier is a straight line:

opportunity costs are constant.

"Unemployment decreased to its lowest level in 10 years last month." This statement is a(n):

positive economic statement.

If the price of beef decreases, you can usually expect the:

quantity of beef supplied to decrease.

When the price of lamps increases, the:

quantity supplied increases.

In a competitive market, if the quantity demanded exceeds the quantity supplied, we expect prices to:

rise.

In our interactions with other consumers (or individuals), we are forced to make choices because of:

scarcity.

In building an economic model, economists:

simplify reality to highlight important relationships between variables.

If people demand more Netflix subscriptions when the price of Hulu subscriptions increases, then Netflix and Hulu are:

substitutes.

(Table: The Market for Salt and Vinegar Chips) Use Table: The Market for Salt and Vinegar Chips. If the price of salt and vinegar chips is $0.80, there is a:

surplus of 140 bags per month.

(Figure: Dreamliners and Small Jets) Use Figure: Dreamliners and Small Jets. Suppose the economy produced 8 dreamliners and 12 small jets per period. Given that, which statement is FALSE?

the economy is still efficient but does not buy as much as it could.

A shift of the demand curve for fried chicken would NOT be caused by a change in:

the price of fried chicken.

We have to make choices because:

the resources available to us are scarce.

Opportunity cost is:

the value of the best alternative forgone in making a choice between alternatives..

For a student who owns his or her own apartment near the university campus and so does not need to live in a dorm, the cost of going to university is:

tuition, the cost of school supplies, and forgone income.

(Table: Comparative Advantage I) Use Table: Comparative Advantage I. Japan has a comparative advantage in the production of: Table: Comparative Advantage IJapan and Norway produce only two goods, tuna and computers, and this table shows the maximum amount that each nation can produce of the two goods.

tuna only

For an economist, the cost of a good is:

what you gave up to get it.

Ralph is offered a free ticket to a Yankees game—a ticket he cannot resell. His opportunity cost of going to the baseball game is:

whatever Ralph would have done had he not gone to the game.

Emma spends $40,000 for one year's tuition at university. The opportunity cost of one year at university for Emma is:

whatever she would have purchased with the $40,000 plus whatever she would have earned had she not attended university.

Assume a positively sloped supply curve and a negatively sloped demand curve. If there is a decrease in demand, total surplus:

will decrease.

You can spend $300 on either a pair of new Air Jordan sneakers or a new skateboard. If you choose to buy the Air Jordans, the opportunity cost is:

your enjoyment of the new skateboard.