Micro chap 1-6 baby

Consumer tastes and preferences: a. are irrelevant to utility analysis. b. are determined solely by advertising. c. are relatively stable over time. d. can be measured in terms of units of utility. e. do not vary from one consumer to another.

C

meris

Number 20 currently unavailable

A local transit authority charges $1 for a bus ride. An economics study suggests that in the price range from $0.50 to $1.50, the elasticity of demand for bus trips is 1.1. To increase its revenue, the transit authority should A) raise the fare. B) lower the fare. C) leave the fare as it is.

B

A production possibilities frontier will be bowed out if: a. the production of only one good involves an opportunity cost. b. resources are not perfectly adaptable to the production of each good. c. resources are scarce. d. resources are used efficiently. e. technology improves.

B

According to the law of _____, the marginal utility received from each additional unit of a good consumed declines, other things constant. a. marginal rate of substitution b. diminishing marginal utility c. supply d. increasing marginal rate of substitution e. increasing marginal returns

B

An economy's production possibilities frontier a. is based on the assumption that technology is constantly changing. b. is based on simplifying assumptions, but is still useful for illustrating scarcity, opportunity cost, and economic growth. c. is based on unrealistic assumptions and therefore has no value as an economic tool. d. demonstrates that, although resources are scarce for individuals, there is no problem of scarcity for society as a whole. e. helps explain the immense complexity of the real economy.

B

An outward shift of the production possibilities frontier a. reflects economic stability. b. reflects economic growth. c. is always a parallel shift. d. reflects economic decline. e. does not relate to the state of the economy.

B

When the price of a CD is $13 per CD, 39,000,000 CDs per year are supplied. When the price is $15 per CD, 41,000,000 CDs per year are supplied. What is the elasticity of supply for CDs? a) 2.86 b) 0.35 c) 0.14 d) 0.05

B

A good is more likely to be produced at home than in the market if: a. the marginal benefit from the good is higher than the marginal cost of production. b. the marginal benefit from the good is lower than the marginal cost of production. c. the average cost of household production is high. d. the opportunity cost of household production is high. e. it requires few specialized resources.

A

A university administration's decision to raise tuition in order to increase revenue will be successful if a. demand is inelastic. b. the demand curve slopes downward. c. supply is elastic. d. supply is inelastic. e. demand is elastic.

A

Along a linear demand curve, as the price increases from zero, _____. a. total revenue first increases but eventually decreases b. demand increases c. quantity demanded increases d. demand decreases e. total revenue first decreases but eventually increases

A

An improvement in technology, all other things remaining constant, _____. a. will shift the production possibilities frontier outward but not necessarily to a parallel position b. will be indicated by a movement along the production possibilities frontier c. may not shift the production possibilities frontier d. will always result in a parallel shift of the production possibilities frontier e. will never result in a parallel shift of the production possibilities frontier

A

Annie reallocates her budget until the ratios of marginal utilities of goods equal the ratios of their prices. Which of the following is true of Annie's behavior? a. She maximizes her total utility derived from the consumption of goods. b. She adjusts her baskets of goods until marginal utilities of all goods become negative. c. She maximizes her marginal utilities from goods and minimizes her disutility from consumption. d. She ensures that her marginal utility from each good is less than that good's marginal cost. e. She ensures that her expected marginal utilities from goods are equal to zero.

A

As the baby boom ended, fewer families had young children and, as a consequence, the: a. demand curve for preschool services shifted leftward. b. quantity demanded of preschool services increased. c. supply curve of preschool services shifted leftward. d. quantity demanded of preschool services decreased. e. supply curve of preschool services shifted rightward.

A

Basil maximizes his utility by allocating his budget between tea and crumpets. If the marginal utility of his last cup of tea was 24 units of utility and that of his last crumpet was 6 units of utility, then which of the following is true? a. The price of tea is four times the price of crumpets. b. The price of tea is six times the price of crumpets. c. The price of crumpets is six times the price of tea. d. The prices of tea and crumpets are equal. e. The price of crumpets is four times the price of tea.

A

Brian is the sole proprietor of Long Voyage Software, which generates maps for nature trails. He started the business with an initial investment of $80,000. A faulty map caused one customer to get hopelessly lost. After her rescue and recuperation, she sued Long Voyage for $5,000,000. Which of the following is true? a. If $5,000,000 is awarded to the customer, Brian will personally be responsible for paying all of it. b. The customer can be awarded $5,000,000, but Brian personally won't have to pay more than $80,000. c. The customer can be awarded $5,000,000 but can get only $80,000. d. The customer can be awarded only $80,000—what the firm has available to pay. e. If $5,000,000 is awarded to the customer, Brian will have to pay none of it.

A

Which of the following is an example of diminishing marginal utility? a. A person eating more Twinkies but enjoying each successive Twinkie less than the previous one b. A person who spends more hours studying than his fellow students c. A person giving some of his income to a needy person d. A person buying additional goods after getting a pay raise e. A person buying goods as long as her marginal utility is greater than zero

A

An unusually warm winter shifts the ________________. A) supply curve of gloves rightward. B) supply curve of gloves leftward. C) demand curve for gloves rightward. D) demand curve for gloves leftward

B

Consumer surplus is: -a. the horizontal sum of the individual demand curves for all consumers in a market. -b. the difference between the maximum price consumers are willing to pay and the amount they actually pay. -c. the amount by which quantity demanded exceeds quantity supplied at the current market price. -d. the change in total utility derived from a one-unit change in the consumption of a good. -e. the amount by which quantity supplied exceeds quantity demanded at the current market price.

B

Demand for a service like medical care: a. is sensitive to the time component of cost. b. varies directly with the price of that care. c. is perfectly elastic. d. is an example of the negative substitution effect. e. varies indirectly with the income of consumers.

B

If the price of a video rental is below its equilibrium price, there will be a ________ of video rentals and the price will ________ . A) shortage; rise B) shortage; fall C) surplus; rise D) surplus; fall

B

Suppose we observe that both the equilibrium price of digital cameras and the equilibrium quantity of digital cameras have increased. Which of the following events could be responsible for this? A) technological advances in digital camera production B) consumers' preferences changed in favor of digital cameras C) the price of film cameras fell D) workers who make digital cameras received a pay raise

B

Along a bowed out production possibilities frontier, as more of one good is produced ,_____. a. the opportunity cost of producing that good remains constant b. the opportunity cost of producing both goods remains constant c. the quantity produced of the other good will be reduced d. efficiency decreases e. the opportunity cost of producing that good decreases

C

Along a consumer's demand curve for a good, the... a. price reflects the dollar value of the total utility derived from the good. b. quantity demanded reflects the dollar value of the income earned. c. price reflects the dollar value of the marginal utility of each additional unit of the good. d. quantity demanded reflects the dollar value of a substitute. e. price of the good reflects the producer's costs.

C

An advantage of a sole proprietorship is: a. the ease of raising funds. b. its limited liability. c. double tax exemption of the firm's earnings. d. its ability to pool resources. e. the ease of organization.

C

An example of a positive externality is: a. driving a car that emits smoke. b. monopoly creation. c. a homeowner's maintenance of a beautiful lawn because it creates a benefit for neighbors. d. pollution by firms because it affects people who are not directly involved with producing it. e. cigarette smoking because this imposes an indirect cost on people around the smoker.

C

Dale is willing to pay $300 for a pair of rollerblades, and he purchases them on sale for $200. His consumer surplus is valued at: a. $0. b. $1.5. c. $100. d. $200. e. $300.

C

All of the following are advantages of partnerships except one. Which of the following is the exception? a. They are relatively easy to start. b. They offer a greater opportunity for specialization by the owners. c. Their profits are taxed only once as personal income. d. Their liability is limited by each partner's share of the business. e. They enable continuation of the firm if one partner dies.

D

All other things constant, if a _____ proportion of a consumer's budget is spent on a good, the demand for the good will be more _____ and the consumer will purchase a substitute instead. a. greater; stable b. greater; price inelastic c. smaller; unit elastic d. greater; price elastic e. smaller; price elastic

D

Any movement along a bowed-out production possibilities frontier involves: a. an improvement in technology. b. the production of more of both goods. c. the consumption of less of both goods. d. the production of more of one good and less of the other. e. the consumption of more capital goods.

D

Arnold is a utility-maximizing consumer. If he thinks his last dollar spent on playing golf yields less satisfaction than the last dollar spent on movies, he should: a. spend less on movies so that the marginal satisfaction of a movie increases. b. play more golf so that the total satisfaction derived from golf increases. c. play more golf because it costs less. d. play less golf and spend more on movies. e. not play golf at all.

D

As the economy recovers from a recession, we should expect that the: a. demand for inferior goods and normal goods will remain the same. b. demand for both inferior and normal goods will rise. c. demand for both inferior and normal goods will fall. d. demand for inferior goods will fall and the demand for normal goods will rise. e. demand for inferior goods will rise and the demand for normal goods will fall.

D

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes. Identify a likely impact on the equilibrium price and quantity of potatoes if such attempts are successful, all other things remaining constant. a. The equilibrium price will decrease and the equilibrium quantity will increase. b. Both equilibrium price and quantity will decrease. c. There will be no change in the equilibrium price and quantity. d. Both equilibrium price and quantity will increase. e. The equilibrium price will increase and the equilibrium quantity will decrease.

D

Bill trades a ginger snap for a chocolate chip cookie. This is an example of a. the division of labor. b. privatization. c. a credit transaction. d. barter. e. a monetary exchange.

D

Despite specialization and comparative advantage, household production still exists because for some households, _____. a. the opportunity cost of producing a good at home is greater than the cost of purchasing the good in the market b. the value of home production exceeds the sunk cost of home production c. the expenditure on food and clothing represents a small portion of their total budget d. producing a good at home is less costly than purchasing the good in the market e. the average cost of home production is higher than the marginal cost of home production

D

Sara's Strawberry Market maximizes its total revenue by selling strawberries for $1.25 a basket. At a price of $1.25, you predict that ________ A) the demand for strawberries is inelastic B) Sara's sells most of the strawberries that she grows C) the demand for strawberries is elastic D) the demand for strawberries is unit elastic

D

A test is scheduled for Monday morning, and you went to a party on Sunday night. If you hadn't attended the party, you could have studied for the test or gone to a movie. Which of the following is true of your opportunity cost? a. The opportunity cost of going to the movie is zero. b. The opportunity cost of going to the party is the cost of the movie ticket. c. The opportunity cost of going to the party is the difference between the costs of the movie and the party. d. The opportunity cost of going to the party is the total amount spent on transport to go to the party. e. From the above information, it's not possible to determine the opportunity cost of attending the party.

E

An inferior good is: a. one that consumers buy less of as the price rises. b. any good of low quality. c. one that has few substitutes. d. any good made with inexpensive inputs. e. one that consumers buy less of as their income rises.

E

As DVDs become popular substitutes for video cassettes, the demand for video cassettes is likely to a. stay the same. b. become less price elastic. c. increase. d. become unit elastic. e. become more price elastic.

E

As long as scarcity exists, _____. a. consumers would increase the consumption of all products as long as total utility is positive b. consumers maximize utility by consuming all products until the marginal utilities of additional amounts are zero c. income plays no role in consumers' utility maximization d. product prices play no role in consumers' utility maximization e. income and product prices should both be considered for consumers' utility maximization

E

As the price of milk increases, producers are generally willing to sell a larger quantity of milk in the market, other things constant. This represents the law of a. decreasing opportunity costs. b. diminishing marginal utility. c. variable proportions. d. demand. e. supply

E

Carvel advertises a football-shaped ice cream cake for $7; you can buy a second one for only $4. What does Carvel know about consumer preferences? a. Two cakes are worth less to a consumer than one. b. Consumers value all cakes they eat at $4. c. Consumers would never buy a second ice cream cake. d. Consumers only value the first cake at $4. e. The marginal utility of ice cream cakes diminishes.

E

sorry bitches

Number 19 currently unavailable

Nick can purchase each milkshake for $2. For the first milkshake purchased Nick is willing to pay $4, for the second milkshake $3, for the third milkshake $2 and for the fourth milkshake $1. What is the value of Nick's consumer surplus for the milkshakes he buys? a) 2 b) 9 c) 3 d) 10

im fairly certain its 3, C

"I don't feel so good; I shouldn't have had that last doughnut." Which of the following supports this statement? a. The marginal utility of the next doughnut will be positive. b. The marginal utility of doughnuts is still increasing. c. The marginal utility of the last doughnut was positive. d. The total utility from eating doughnuts is negative. e. The marginal utility of the last doughnut was negative.

maybe you shouldn't eat the Fckin donut, E