MICRO FINAL
A
A production possibilities frontier with a bowed outward shape indicates: A) increasing opportunity costs as more and more of one good is produced. B) constant opportunity costs as more and more of one good is produced. C) decreasing opportunity costs as more and more of one good is produced. D) the possibility of inefficient production.
D
Arlene quits her $125,000-a-year job to take care of her ailing parents. What is the opportunity cost of her decision? A) It depends on the "going rate" for home-care providers. B) the value she attributes to the satisfaction she receives from taking care of her parents C) zero, since she will no longer be earning a salary D) at least $125,000
C
Blu-ray players were introduced to the market in 2006, and new technology has allowed for the cost of manufacturing the players to decline significantly since the initial introduction. How did this change in technology affect the market for Blu-ray players? A) The new technology caused an decrease in the demand for Blu-ray players. B) The new technology caused an increase in the quantity of Blu-ray players supplied. C) The new technology caused an increase in the supply of Blu-ray players and a decrease in price of Blu-ray players. D) The new technology caused an increase in the supply of Blu-ray players and an increase in price of Blu-ray players.
B
Calculate the income elasticity if an 8 percent increase in income leads to a 4 percent increase in quantity demanded for organic produce. A) -0.66 B) 0.5 C) 1.5 D) 2
idk
DeShawn's Detailing is a service that details cars at the customers' homes or places of work. DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service. For a total price of $90, DeShawn will also detail the car's 2 engine, a service that adds an additional $20 to the total cost of the package. What is the marginal cost of adding the engine detailing to the basic detailing package? A) $20 B) $30 C) $60 D) $60 plus the value of his time
C
Over longer periods of time, increases in oil prices provide firms with incentives to explore and recover oil. What does this indicate about the long run price elasticity of supply for oil? A) The elasticity coefficient is likely to be lower in the long run than in the short run. B) The elasticity coefficient approaches 0 in the long run as supplies are depleted. C) The elasticity coefficient is likely to be higher in the long run than in the short run. D) The elasticity coefficient is unstable in the long run because oil supplies may be depleted.
D
Suppose Tinsel Town Videos lowers the price of its movie club membership by 10 percent and as a result, CineArts Videos experienced a 16 percent decline in its movie club membership. What is the value of the cross-price elasticity between the two movie club memberships? A) -1.6 B) -0.625 C) 0.625 D) 1.6
B
Which of the following is a normative economic statement? A) When the price of gasoline rises, the quantity of gasoline purchased falls. B) The price of gasoline is too high. C) When the price of gasoline rises, transportation costs rise. D) The current high price of gasoline is the result of strong worldwide demand.