Microeconomics

The graph below depicts a government intervention of a minimum price for labor of $9.00 per hour.What is the value now for the deadweight loss in this market?

$7.50 million

The graph below depicts a government intervention setting a price ceiling of $1,050 per month for a rental apartment. What is the value of the deadweight loss in this market?

$787.5 million

Trent needed pinnies for the lacrosse team to wear during scrimmages. A local supplier told Trent that he could purchase pinnies for $10 each. He asked the supplier to hold five pinnies for him to purchase. However, when Trent arrived at the store a few days later, he found the price of the pinnies had increased to $12. Due to the price increase, Trent only purchased four pinnies. Trent's own-price elasticity of the pinnies, calculated using the mid-point formula, is __________.

-1.22

A store recently marked a hydration belt on sale, lowering the price by 40% from $20 to $12. The store also sells a hydration bottle, which is similar to the belt except that runners can hold it in their hands with a strap while running. When the store lowered the price of the hydration belt, the quantity of hydration bottles sold decreased by 28%.Using the cross-price elasticity formula, the cross-price elasticity is __________ and the goods are __________.

0.70; substitutes

In the past six months, Luke's take-home income increased from $4,000 per month to $5,000 per month (an increase of 25%). While on vacation, Luke encouraged his wife to buy some new jewelry. Normally, his wife would only buy one item of jewelry while on vacation. However, this time she purchased four items of jewelry (an increase of 300%).The income elasticity calculated using the formula for income elasticity is __________ and the jewelry items are a __________ good.

12.0; luxury

In the following Production Possibilities table for snow blowers and swimming pools, what is the opportunity cost of selecting Choice C instead of Choice B? Production Possibilities Model for Snow Blowers and Swimming Pools

500 snow blowers

Which of these is an example of movement along a supply curve, rather than a shift in supply?

A firm produces more potato chips because the price has increased.

A major league team's winning streak puts them on top of the rankings, and sales of team jerseys in their city increase. How would this event be illustrated in a graph for team jerseys?

As a right (outward) change in demand

Which of the following would result in a decrease in supply?

Business subsidies decrease.

Suppose a non-price factor of demand for a product has recently changed. Which of the following may have caused a decrease in demand?

Buyers expect the product's price to fall in the near future.

Which answer best defines elasticity?

Elasticity is a measure of the sensitivity of one variable to a change in another.

Which of the following statements about demand is true?

For demand to exist, both willingness and ability must occur.

Which of the following statements about supply is true?

For supply to exist, both willingness and ability must occur.

Which of the following is the best statement regarding scarcity in economics?

It is the condition that exists because there are not enough resources to produce everyone's wants.

What is the economic system called in which property rights are assigned to the government?

Socialism

Which of the following is the best definition of economics?

The study of choices, and of how the choices of individuals and groups impact society.

Which of the following is the best example of inelastic demand?

Tom bought banners sold in town before. They were high quality, so he bought the same number of banners there again, despite an increase in price.

Which of the following is a true statement regarding cost-benefit analysis?

When conducting a cost-benefit analysis, non-monetary costs and benefits should be given a monetary value when possible to make comparison easier.

Which of the following is the best example of the core principle of economics which states that "People Make Choices"?

You know that staying up late on a weekday makes you tired the next day, but you stay up anyway.

Consider the budget line graph below. A choice of 2 Mexican meals and 2 Italian meals would be __________.

an inefficient choice given the current resources, because the points on the budget line would be better choices

Consider the indifference curves below. Moving outward from to , , and , we get __________.

higher levels of satisfaction

The three sectors in the circular flow diagram are __________.

households, firms, and government

Microeconomics focuses mainly on the study of __________.

markets

The triangular area in red below is known as __________.

producer surplus

At a market price of $0.75, there is a __________ of __________ units.

shortage; 2,000.