TAMU Econ 202 Exam 1

Graph B

(Figure: Four Supply Curves) Which graph shows what will happen to the supply of roses if the price of roses falls?

Graph D

(Figure: Four Supply Curves) Which of these graphs shows what will happen in the market for printing paper if the price of printing paper rises?

a. Supply curve shifts left ; Demand curve shifts right b. A positive c. An intermediate

According to a 2016 article in the Wall Street Journal, "After years of relative equilibrium, the job market for nurses is heating up in many markets, driving up wages and sign-on bonuses for the nation's fifth-largest occupation." Many nurses who had delayed their retirement due to the 2008 recession began to retire, resulting in a retirement wave that caused nurses to exit the workforce in greater numbers than new nurses were entering. At the same time, demand for nurses had increased due to the additional health care coverage associated with job growth over the previous decade since the recession and the Affordable Care Act. a. In the accompanying diagram, shift one or both curves to show the effects of these developments in the market for nurses. b. The developments described have ____ effect on the equilibrium wage of nurses. (Positive, Negative, or Intermediate) c. The developments described have ______ effect on the equilibrium quantity of nurses. (Positive, Negative, or Intermediate)

Rational Arguments - A and B Nonrational arguments - C and D

Alexei is considering leaving his career as a corporate accountant and returning to his hometown of Juno, Alaska, to begin training for a career as a dog sled racer. Alexi is a completely rational economic agent. Please decide which of the arguments are rational considerations and which are not. a. "I only went into accounting because I could earn a high salary, but I will be happier if I move back to Alaska" b. "There's no guarantee I will be able to find work in Alaska. At least I have a job now." c. "After all of the money I spent on tuition to study accounting, I cannot leave my career now." d. "I've worked at this company for six years and should not leave after putting in so much time here"

a. 64000 b. 110000 c. 64000 d. 90000 e. 64000 f. 70000 g. 64000 h. 50000 i. Three

Aliyah is preparing to expand her IT consulting company. The current market rate for IT professionals is $58,000 per year. Each employee she hires will also require a computer and equipment that costs $6,000 per employee annually. Hiring more employees means that Aliyah can provide consulting services to more clients each year. Each client Aliyah has will pay her $10,000 per year. a. The first worker's marginal cost is $___. b. The first worker's marginal benefit is $___. c. The second worker's marginal cost is $___. d. The second worker's marginal benefit is $_. e. The third worker's marginal cost is $___. f. The third worker's marginal benefit is $___. g. The fourth worker's marginal cost is $___. h. The fourth worker's marginal benefit is $__. i. Using the rational rule to maximize her economic surplus, Aliyah should hire _____ workers.

a. almonds have a more inelastic supply in the short run because little can be done to change production in the short run. b. Higher line is Almonds and Lower line is Barley c. All of them

Almonds are a crop that grows on trees. Farmers do not need to replant trees every year to produce a crop of almonds. It takes at least five years after planting for trees to bear fruit. Several factors such as weather, disease, and long term projections about price impact the supply of almonds available. a. Based on this information _________ (see picture for options) b. Consider the graph which illustrates two potential supply curves. Move the points to label the curve that most likely represents the supply curve for each crop. c. Select each factor which helps determine the price elasticity of supply for a product. - flexibility of inputs or resources used to make a product - ease of firms to enter or exit the market - the ability to store product

c. $3

Amanda goes to a local café and orders a sandwich. She is willing to pay $10 for it. The price of the sandwich is $4. The cost to the café to produce the sandwich is $1. How much economic surplus does the café receive when Amanda purchases the sandwich? a. $6 b. $4 c. $3 d. $1

c. sleeping or going out for dinner, whichever she would have preferred the most.

Amy can study for an hour or spend that hour sleeping or going out for dinner. If she decides to study for the hour, the opportunity cost of the hour spent studying is a. going out to dinner because she must eat at some time. b. sleeping and going out for dinner. c. sleeping or going out for dinner, whichever she would have preferred the most. d. studying, by revealed preference since this is the choice she opted for. e. definitely going to sleep.

a. $300 - 1,250 : $400 - 1,150 : $500 - 1,050 : $600 - 950 : $700 - 850 b. Demand curve shifts left

As part of the marketing team at a major airlines, you must develop a strategy to increase demand for flights between two mid-sized cities. You examine data from previous flights and determine that the existing demand for flights between the two cities is as given in the accompanying table. a. As part of the marketing team at a major airlines, you must develop a strategy to increase demand for flights between two mid-sized cities. You examine data from previous flights and determine that the existing demand for flights between the two cities is as given in the accompanying table. b. Use the graph provided to plot the original demand curve using D1. Use the end points to plot the curve, as it will be a straight line. Next, plot the new demand curve from part a using D2, Again plot the end points only.

Demand and Supply curve shift left

Assume it is August of 2008. After much deliberation, TV (television) stations nationwide choose to stop broadcasting their programs in analog starting in June of 2009 and instead broadcast in pure digital television. Hence, there is less than one year left of analog broadcasting. This decision affects companies that produce TVs, but also affects people that own and wish to purchase TVs. Please shift the supply and demand curves appropriately as a result of this news in consideration of the long run (in this case, for example, the year 2010) for analog TV sets.

a. point A goings on vertical and point B goes on horizontal b. Perfectly Inelastic - Qauntity supplied does not respond to changes in price and A shift in demand will not elicit a change in quantity Perfectly Elastic - Quantity supplied is hyper‑sensitive to changes in price. and A shift in demand will elicit a large response in quantity supplied.

Below are two supply curves with differing elasticities. First, move point A to the perfectly inelastic supply curve and point B to the perfectly elastic supply curve. Next, place each characteristic of supply curves in the appropriate category. a. Graph b. Label perfectly inelastic or elastic

Between each of your individuals choice

Between each of your individuals choice Khaled is a preschool teacher working at a public school, but he is considering quitting his job to start a daycare facility of his own. Indicate which of the four types of interdependency is most relevant to each factor in Khaled's decision. Use the market for daycare facilities as Khaled's market of interest. If Khaled opens his own facility, he will be responsible for taxes, insurance, licensing, and facility upkeep, among other things. However, as a teacher Khaled will only need to keep up his teaching license. In addition, Khaled will not be able to take a long vacation in the summer if he runs a daycare center. This scenario is an example of dependencies ______. Between markets Between people or businesses in the same market Through time Between each of your individuals choice

2 points of supply curve should be (25,0) to (25,70)

Captain Eddy takes his 25-seat party boat out for a harbor cruise every night, rain or shine. Whether he gets $70 per seat or $0 per seat, he always fills every seat. Show the supply curve of cruise seats per night on the graph.

Shift of Supply Curve - After discovering that flash-steaming tuna before using mechanical processes to extract meat removes more tuna flesh, more cans of tuna arrive on the shelves of all major grocers. ---- and ---- Amplitude decides to join the smartphone market. Movement along the supply curve - Rising wages for construction workers in Toronto result in construction workers moving to Toronto. -- and -- A national consumer products company produces less of its premium quality soap as a result of lower soap prices. -- and -- Americans sell their gold and silver jewelry as a result of rising prices.

Classify each scenario according to whether the change in quantity is caused by a shift of the supply curve or movement along it. (Refer to picture)

a. plot on the graph b. 2 hours c. 3 hours d. the same as

Consider Ron's demand for after school care for his children. The marginal benefit Ron receives for every hour of childcare is provided in the accompanying table. a. Utilizing the information in the table, move the points in the first graph to plot Ron's marginal benefit curve, and move the points in the second graph to plot Ron's demand curve. b. If an hour of childcare costs $24, how many hours will Ron purchase each day? Assume Ron can only purchase care in one-hour increments (no partial hours). c. If an hour of childcare costs $18, how many hours will Ron purchase each day? Assume Ron can only purchase care in one-hour increments (no partial hours). d. Ron's marginal benefit curve is ___ his demand curve.

c. apply because Brendon and Jessica will have to give up something else to purchase the second vehicle.

Consider each decision in the context of the four core principles of economics. Brendon and Jessica are deciding whether to purchase a second vehicle. The four core principles of economics a. do not apply because Brendon and Jessica do not need a second vehicle. b. apply because Brendon and Jessica want a second vehicle. c. apply because Brendon and Jessica will have to give up something else to purchase the second vehicle. d. do not apply because there is good public transportation where Brendon and Jessica live.

apply to this decision because Gilberto should consider the costs and benefits associated with voting.

Consider each decision in the context of the four core principles of economics. Gilberto is deciding whether to vote in the next election. The four core principles of economics The four core principles of economics a. apply to this decision because Gilberto should consider the costs and benefits associated with voting. b. do not apply to this decision because there is no cost involved in voting. c. do not apply to this decision because voting behavior is studied in political science. d. apply to this decision because Gilberto's vote is a marginal vote that could determine the outcome of the election.

a. apply because Lee could have been doing something else.

Consider each decision in the context of the four core principles of economics. Lee watches a beautiful sunset from the back porch of his house. The four core principles of economics a. apply because Lee could have been doing something else. b. do not apply because no decision is being made. c. do not apply because no money is involved. d. apply because Janet is also watching the sunset.

c. apply because Lilia should choose the major that provides the greatest economic surplus.

Consider each decision in the context of the four core principles of economics. Lilia is deciding whether to major in economics or philosophy. The four core principles of economics a. apply because economics majors earn higher salaries. b. do not apply because Lilia may change her major later. c. apply because Lilia should choose the major that provides the greatest economic surplus. d. do not apply because both programs cost the same and take the same amount of time to complete.

a. An increase in the price of a ticket will not cause a decrease in demand, but rather a decrease in quantity demanded.

Consider the following statement: "An increase in the cost of oil will cause the price of a plane ticket to increase. This increase in price will cause a decrease in demand for airline travel and a leftward shift in the demand curve." What is the flaw of this reasoning? a. An increase in the price of a ticket will not cause a decrease in demand, but rather a decrease in quantity demanded. b. The increase in the cost of oil will cause a decrease in the price of a plane ticket. c. A decrease in demand will shift the curve rightward, not leftward. d. The cost of oil affects supply and not demand so prices of tickets will remain the same.

False, economists use monetary terms because they can be quantified and compared, but economics is better described as an approach to decision making.Consider the following statement: "Economists always put things into monetary terms; as a result, economics can most appropriately be called the study of money." Is this statement true or false?

Consider the following statement: "Economists always put things into monetary terms; as a result, economics can most appropriately be called the study of money." Is this statement true or false?

It should state that market supply is the sum of the quantities of natural gas that producers are willing and able to sell at every price.

Consider the following statement: "The market supply for natural gas is the sum of all prices that natural gas producers are willing and able to sell at for every quantity." What is the flaw in this statement? - There is no flaw in this statement - It should state that market supply is the sum of the quantities of natural gas that producers are willing and able to sell at every price. - It should state that market supply is the quantity of natural gas that producers are willing and able to sell at one specific price. - It should state that market supply is the price of natural gas that one firm is willing and able to provide a specified quantity of its product at.

a. Demand curve shifts left b. Demand curve shifts right

Consider the market demand curve for the Samsung Galaxy smartphone. Use a graph to illustrate the effect, if any, each given scenario has on the demand for Samsung Galaxy smartphones. a. The batteries in Samsung smartphones begin to spontaneously combust. b. Apple increases the price of the newest iPhone by 10%.

a. - turn water off while brushing your teeth - decrease the length of your showers b. does

Consider your current uses of tap water. Think about some of the ways that you use water that are beyond what is necessary to sustain life. a. If the price of tap water triples, what are some likely changes that you will make to your consumption of tap water? - turn water off while brushing your teeth - decrease the length of your showers - leave water running while brushing your teeth - increase the length of your showers b. In general, the consumption of tap water ____ obey the law of demand.

a. a normal b. an inferior c. a normal

Determine whether each good is a normal good or an inferior good for the average consumer. a. a. For most consumers, the newest iPhone is _____ good. b. For most consumers, a 10-year-old used car is ______ good. c. For most consumers, dental services are _____ good.

True: A Swiffer floor sweeper and a broom would have a positive cross-price elasticity of demand. False: A key consideration as to whether the price elasticity of supply is elastic or inelastic is whether the good supplied is a luxury item. : When the price increases, total revenue always increases because of the price effect. : The short-run elasticity of supply is larger than the long-run elasticity of supply because changes in equilibrium will adjust elasticity accordingly. : When supply is perfectly inelastic, a change in demand has no effect on the price.

Determine whether each of the statements given is true or false. Answer Bank; - A key consideration as to whether the price elasticity of supply is elastic or inelastic is whether the good supplied is a luxury item. - A Swiffer floor sweeper and a broom would have a positive cross-price elasticity of demand. - When the price increases, total revenue always increases because of the price effect. - The short-run elasticity of supply is larger than the long-run elasticity of supply because changes in equilibrium will adjust elasticity accordingly. - When supply is perfectly inelastic, a change in demand has no effect on the price.

a. income effect b. substitution effect c. income effect d. neither e. substitution effect

Determine whether each statement describes the income effect, the substitution effect, or neither. Assume that all other variables are held constant. a. The price of lobster doubles, making Henri feel less wealthy. As a result, Henri buys fewer lobsters. ______. b. The price of chicken falls by $0.75 a pound. Since chicken is now relatively less expensive than ground, Mary buys more chicken and less beef. _____. c. The average price of a DVD falls by 15 percent. Tom buys more DVDs because his monthly budget can now stretch further. _____. d. Model Planes Incorporated reduces production of its wooden plane product line. ____. e. . Jessica sees that the price of orange juice is higher this week. She decides to buy less orange juice and more apple juice because orange juice is relatively more expensive. ____.

The price elasticity of demand for Gain laundry detergent is likely to be greater than the price elasticity of demand for laundry detergent in general.

Determine which statement about the absolute value of the price elasticity of demand is correct. - The price elasticity of demand for Gain laundry detergent is likely to be greater than the price elasticity of demand for laundry detergent in general. - The price elasticity of demand for gasoline is greater than the price elasticity of demand for cereal because because more people eat cereal than use gasoline. - The price elasticity of demand for laundry detergent in general is likely to be greater than the price elasticity of demand for Gain laundry detergent. - The price elasticity of demand for gasoline is less than the price elasticity of demand for cereal because because more people eat cereal than use gasoline.

c. $700

Diane is remodeling an apartment that she will rent out to a college student. The renovation is estimated to cost Assuming Diane chooses to install the crown molding, what is the marginal cost of this choice? a. $7,930 b. $7,230 c. $700 d. $15,160

supply curve shifts right

During the 1990s, Dell Computer Company adopted a lean production process, a manufacturing process that reduces inefficiencies without reducing production. As a result, Dell became one of the largest PC manufacturers in the world. Consider what impact the adoption of lean production techniques likely had on Dell's supply curve for PCs. Show the impact in the graph below by shifting the supply curve or moving the point along the curve.

if the next best option was unemployment, many individuals may have preferred to enroll in higher education and gain new skills in hopes of increasing their future employment prospects.

During the economic downturn of 2008-2009, the unemployment rate increased to nearly 10%. At the same time, the price of higher education tuition and the number of enrollees increased. a. Which statement best explains why more people enrolled in higher education institutions during this time period even as the price of tuition increased?

Opportunity Cost Principle

During the economic downturn of 2008-2009, the unemployment rate increased to nearly 10%. At the same time, the price of higher education tuition and the number of enrollees increased. b. The core principle that best explains this is the ____

a. Supply; Risen b. Demand; Risen c. Demand and Supply; Risen

For each of the following situations, determine whether supply, demand, or both shifted and how. a. Over the last decade, the price of hybrid electric vehicles decreased, while the number of hybrid vehicles sold increased. In this instance, ____ must have ____. Blank 1 - (Supply, Demand, or Supply and Demand) Blank 2 - (Risen or Fallen) b. During winter, the number of daily air routes between Denver and Aspen, Colorado, increases, as does the price of a ticket. In this instance, the ____ must have _____. Blank 1 - (Supply, Demand, or Supply and Demand) Blank 2 - (Risen or Fallen) c. From January through April in the United States, personal certified public accountants (CPAs) see a dramatic increase in their number of billable hours, but the average hourly rate of a CPA remains the same. In this instance, the ____ must have _____. Blank 1 - (Supply, Demand, or Supply and Demand) Blank 2 - (Risen or Fallen)

a. complements : Demand curve shifts left b. substitutes : Demand curve shifts right c. complements : Demand curve shifts left

For each pair of goods, identify if the goods are substitutes or complements. Next, use a graph to illustrate how a change in the price of one good impacts the other good. a. In the market for gasoline and sport utility vehicles (SUVs), the two goods are ______. If the price of gasoline rises, what response do you expect in the market for SUVs? Shift the demand curve to show what happens in the market for SUVs when the price of gasoline rises. b. In the market for transportation, taking the train and taking a plane are ______ If the price of airfare rises, what response do you expect in the market for train travel? Shift the demand curve to show what happens in the market for train travel when the price of airfare rises. c. In the market for smartphones and data plans, the two goods are _____. If the price of data plans rise, what response do you expect in the market for smartphones? Shift the demand curve to show what happens in the market for smartphones when the price of data plans rise.

a. elastic b. unit elastic c. inelastic

Identify the scenarios as examples of elastic, inelastic, or unit elastic demand. a. When Ruko, a device used to stream movies at home, increases prices by 48 percent total revenue decreases by 55 percent. ________ b. When Cinema Supreme decreases ticket prices by 5 percent, total revenue does not change. _______. c. . When Bluebox, a streaming service for foreign television shows and movies, increases its prices by 54 percent, total revenue increases by 34 percent. ______.

a. 1.2 b. substitutes

If Good C increases in price by 50% a pound, and this causes the quantity demanded for Good D to increase by 60%. a. what is the cross-price elasticity of the two goods? Round your answer to one decimal place. b. What is the relationship between the two goods? - complements - substitutes - no relationship

a. 0 b. not related

If a 20% price increase for product A causes a 10% decrease in its quantity demanded, but no change in the quantity demanded for product B, what is the cross‑price elasticity of these goods? a. The cross‑price elasticity is ___. - 0 - 20 - 10 - 1 b. What is the relationship between these goods? The two goods are _______. - complements - not related - substitutes

a. Supply curve shifts left b. Price moves up the supply curve

If the change in market conditions results in a change in supply, shift the supply curve appropriately, but leave the price line unchanged. If the change in market conditions results in a change in quantity supplied, adjust the price line appropriately, but leave the supply curve unchanged. a. An increase in the price of corn used in the production of ethanol reduces the amount of corn available for use as livestock feed. b. Speculators in world steel markets push the price of steel up, leading domestic steel companies to expand production.

a. -8.5 b. Complements

If the price of Product E decreasing by 2% causes its quantity demanded to increase by 14% and the quantity demanded for Product F to increase by 17%, a. what is the cross-price elasticity of demand? Round your answer to one decimal place. b. What is the relationship between these goods? - complements - substitutes - no relationship

a. Demand curve shifts right b. Demand curve shifts lef

Illustrate graphically how each of the following events will impact the demand for cups of coffee. a. Average hourly wages increase. Utilize the demand curve labeled a to answer this section b. The government requires all coffee houses to post warnings to consumers about the cancer-causing components of coffee. Utilize the demand curve labeled b to answer this section

a. consumers view gasoline from different gas stations as perfect substitutes. b. it will lose customers to the cheaper station across the street.

Ilsia is driving home from work. She needs to buy gas and notices an Exxon-Mobil station on one side of the street and a Shell station on the other side of the street. Although run by different companies, the two stations sell gasoline at the same price. a. The most likely reason that the price is the same is that - drivers need gas and are willing to pay whatever price a gas station charges. - consumers view gasoline from different gas stations as perfect substitutes. - government regulation requires both gas stations to charge the same price. - gas stations always make a profit, so they can charge any price they want. b. If one station increases its price, - it will be fined by the government. - it will lose customers to the cheaper station across the street - it will make a higher profit. - it will sell more gasoline.

the marginal principle may be guiding AbbVie in determining if it is worth producing drugs for rare diseases. Since it is developing and producing treatments for rare diseases, the marginal benefits must exceed the costs.

In 2016, the top-selling pharmaceutical drug in the world was AbbVie's Humira, which is used for the treatment of several common, chronic conditions. The majority of its profits are derived from treatment of the most common diseases, but AbbVie also develops drugs for rare conditions.

a. Supply of; Fall; Rise b. Both (Supply of and Demand for) ; Rise, Fall, or Remain Unchanged) ; Rise

In each of the following cases, determine how supply or demand shifts and how the equilibrium changes. a. Smartphones: Microchips used in smartphones become less costly to produce. As a result, the _____ smartphones increase(s), causing the equilibrium price to ____ and the equilibrium quantity to ____. - (Supply of, Demand for, or Both) - (Rise, Fall, or remain unchanged) - (Rise, Fall, or remain unchanged) b. ALS medical research funds: The ALS ice bucket challenge goes viral, leading to greater awareness of the benefits of and need for ALS research. As a result, the _____ ALS research increase(s), causing the equilibrium price (or opportunity cost) of such research to ____ and the equilibrium quantity to ____. - (Supply of, Demand for, or Both) - (Rise, Fall, or remain unchanged) - (Rise, Fall, or remain unchanged)

a. Demand and Supply curve shift left b. An Intermediate; A negative c. Supply curve shifts right ; Demand curve shifts left d. A negative ; An Intermediate

In the diagrams below, shift one or both curves to show the effects of the following events. a. Fuel efficiency regulations reduce the use of steel in automobile production and increase the use of lighter materials such as aluminum. Also, increased import restrictions are imposed that limit the amount of steel that can be imported into the U.S. (see image) b. The developments described have ______ effect on the equilibrium price of steel and ____ effect on the equilibrium quantity. (Positive, Negative, or Intermediate) c. Incomes decline due to a recession. Also, Norwegian Airlines adds more U.S. cities to its list of international flight destinations. (see image) d. The developments described have _____ effect on the equilibrium price of international flights and the ____ effect on the equilibrium. (Positive, Negative, or Intermediate)

$15

It is a beautiful afternoon, and Jose is considering taking a leisurely two-hour stroll through the park. There are several other activities Jose is considering doing instead. The value Jose receives from each of the activities is provided in the table. What is Jose's cost of taking the stroll through the park?

a. walk: less

It is a rainy day, and you are considering taking an Uber one mile to meet some friends. You have decided you are willing to pay $20 to avoid getting wet from the rain. The trip would normally cost you $8, but due to the weather the surcharge is triple the regular cost. You should _____ because the benefit to you of taking the Uber is _____ than the cost. a. walk: less b. walk: more c. take an Uber: less d. take an Uber: more

Supply curve shifts left

Jerome is working as an IT consultant. His individual labor supply curve is given in the accompanying graph. Jerome decides to enroll in college and will begin taking classes next semester. Make the appropriate change to the graph to show the most likely effect on Jerome's labor supply curve of his decision to attend college. If Jerome's decision to attend college results in a change in supply, shift the supply curve appropriately, but leave the wage line unchanged. If Jerome's decision to attend college results in a change in quantity supplied, adjust the wage line appropriately, but leave the supply curve unchanged.

a. $58 b. $63 c. Go out to dinner with her friend

Jia is considering whether to go out to dinner at a restaurant with her friend. The meal is expected to cost $40, Jia typically leaves a 20% tip, and an Uber will cost $5 each way. Jia values the restaurant meal at $25. Jia enjoys her friend's company and is willing to pay $30 just to spend an evening with her. If Jia does not go out to the restaurant, she will eat at home, using groceries that cost her $8. a. Calculate Jia's costs associated with going out to dinner with her friend. b. Calculate Jia's benefits associated with going out to dinner with her friend. c. Based on the information, Jia should

d. not included: sunk

Jonathan is deciding whether to study for his economics exam at a café or go to a concert with friends tonight. The cost of the concert ticket that he purchased yesterday is _____ in his opportunity cost and represents a _____ cost. a. included: financial b. included: nonfinancial c. not included: financial d. not included: sunk

d. Will not: only Apple

Juan is willing to pay $600 for a new iPad. Apple is selling its new iPad for $700. It costs Apple $400 to produce this iPad. A voluntary economic transaction between Juan and Apple _____ occur because _____ would be better off due to the transaction. a. Will: neither Juan nor Apple b. Will: both Juan and Apple c. Will not: only Juan d. Will not: only Apple

b. benefit of watching another episode is equal to the marginal cost.

Kathleen is binge-watching her favorite show on Netflix. She is trying to decide how many more episodes to watch. Kathleen should continue watching episodes until the marginal: a. benefit of watching another episode exceeds the marginal cost. b. benefit of watching another episode is equal to the marginal cost. c. benefit of watching another episode is positive. d. cost of watching another episode is positive.

a. i. $500 ii. $400 iii. $300 iv. $200 v. $100 b. Place on middle of demand curve c. Three trips

Kathy is attending school away from home, and returns home to visit her family and friends at least once a year. Kathy's annual demand curve for plane tickets is provided in the accompanying graph.

Between Markets

Khaled is a preschool teacher working at a public school, but he is considering quitting his job to start a daycare facility of his own. Indicate which of the four types of interdependency is most relevant to each factor in Khaled's decision. Use the market for daycare facilities as Khaled's market of interest. An increase in graduation rates for teachers saturates the market for preschool teachers. This decreases the wages of teachers. This scenario is an example of dependencies _____. Between markets Between people or businesses in the same market Through time Between each of your individuals choice

Through time

Khaled is a preschool teacher working at a public school, but he is considering quitting his job to start a daycare facility of his own. Indicate which of the four types of interdependency is most relevant to each factor in Khaled's decision. Use the market for daycare facilities as Khaled's market of interest. Khaled is up for a raise in the next 6 months at his teaching job. This scenario is an example of dependencies ______. Between markets Between people or businesses in the same market Through time Between each of your individuals choice

Between people or businesses in the same market

Khaled is a preschool teacher working at a public school, but he is considering quitting his job to start a daycare facility of his own. Indicate which of the four types of interdependency is most relevant to each factor in Khaled's decision. Use the market for daycare facilities as Khaled's market of interest. Khaled knows there are few daycare facilities in the area, but many families looking for daycare. This scenario is an example of dependencies _______. Between markets Between people or businesses in the same market Through time Between each of your individuals choice

6

Madeline spends all of her spare money on widgets, which cost $2 each, and gizmos, which cost $4 each. What is her opportunity cost if Madeline buys 12 widgets? Opportunity cost: _____ gizmos

a. -5$ b. Should c. Sunk

Marah is deciding whether or not to open a lemonade stand. She expects to sell 20 cups of lemonade for $1 per cup. She already made a sign that cost her $10 and will have $15 worth of additional costs for cups and lemonade mix if she decides to open the stand. a. If Marah decides to open the lemonade stand, how much profit will she earn? b. Based on this information, Marah _____ open the lemonade stand. c. The $10 spent on the sign represents a ____ cost.

a. Decrease; Increase b. Increase; Decrease

Maria is an industrial engineer at a Toyota plant. Indicate how Maria should change her production plans in response to each change in market conditions. a. An engine supplier decreases the price it charges Toyota by 50%. As a result, Toyota's cost of production will _______, and Toyota should _______ its supply. (increase or decrease) b. Workers unionize and demand a 12% across-the-board raise. As a result, the cost of production will _____, and Toyota should ____ its supply. (increase or decrease)

d. a five point increase on his exam score less than

Mateo works eight hours per day. Today he has to decide whether to work overtime and stay one more hour in the office, or go back home and spend that hour studying for his economics exam. His company pays him If Mateo studies one more hour, his exam score increases from 75 to 80, what is Mateo's rational decision? a. an 80 on his exam more than $100. b. an 80 on his exam less than $100. c. a five point increase on his exam score more than d. a five point increase on his exam score less than

a. 3 b. 5

Miker, a manufacturer of generic medications, is deciding how much to charge retailers for their generic acetaminophen (Tylenol). The marginal cost for each bottle is provided in the accompanying table. If the price of a bottle is $7.75, how many thousand bottles would Miker produce each day? What about if the price is $9.00 per bottle? a. Production at $7.75: _____ thousand bottles b. Production at $9.00: _____ thousand bottles

a. more if the price is greater b. graph

Miker, a manufacturer of generic medications, is deciding how much to charge retailers for their generic acetaminophen (Tylenol). The marginal cost for each bottle is provided in the accompanying table. a. Use the Rational Rule for Sellers in Competitive Markets to help explain why the values are different. The rational rule for sellers in competitive markets says to sell _____ than (or is equal to) the marginal cost. - more if the price is greater - less if the price is greater - more if the price is lower b. Finally, draw Miker's individual supply curve by placing the points in the accompanying graph.

Graph a. $1600 b. $2100 c. Demand is elastic. Changes in price and total revenue move in opposite directions.

Move the orange points on the graph to show the area that represents the firm's total revenue when price is $8. a. Calculate the firm's total revenue when the price is $8. b. Calculate the firm's total revenue if price decreased to $7. c. Based on your answer above, which of the statements best describes the relationship between price movements and total revenue. - Demand is inelastic. Changes in price and total revenue move in opposite directions. - Demand is elastic. Changes in price and total revenue move in the same direction. - Demand is inelastic. Changes in price and total revenue move in the same direction. - Demand is elastic. Changes in price and total revenue move in opposite directions.

a. 8 b. 6 c. 4 d. 2 e. 1 f. 3 cupsNeal is a coffee drinker. At the local coffee shop, the price of a cup of coffee is $3. Neal's total benefits from drinking coffee are indicated in the accompanying table. Use this information to calculate Neal's marginal benefit of consuming each cup of coffee. a. The marginal benefit of the first cup is S_____. b. The marginal benefit of the second cup is $____. c. The marginal benefit of the third cup is S_____. d. The marginal benefit of the fourth cup is S_____. e. The marginal benefit of the fifth cup is S_____. f. Neil Should consume ___ cups of coffee per day.

Neal is a coffee drinker. At the local coffee shop, the price of a cup of coffee is $3. Neal's total benefits from drinking coffee are indicated in the accompanying table. Use this information to calculate Neal's marginal benefit of consuming each cup of coffee. a. The marginal benefit of the first cup is S_____. b. The marginal benefit of the second cup is $____. c. The marginal benefit of the third cup is S_____. d. The marginal benefit of the fourth cup is S_____. e. The marginal benefit of the fifth cup is S_____. f. Neil Should consume ___ cups of coffee per day.

a. less: $20

Nerida can either commute to work using a bus or purchase a new car. The bus fare each way is $2. Nerida works five days a week for 50 weeks a year. Based solely on the benefit of avoiding the cost of her bus tickets, Nerida should purchase a car if the cost of the car is _____ than _____ per week. a. less: $20 b. less: $10 c. greater: $20 d. greater: $10

All have opportunity costs

Opportunity costs are a large factor in individual decision-making. Please sort the statements according to whether or not they have an opportunity cost. a. Having a "lazy afternoon" b. Working an 8 hour shift c. Cooking dinner d. Eating out e. Reading your favorite book f. Catching up with an old friend

Perfectly Inelastic Supply - Land; Es = 0 Relatively inelastic supply - Parking structures; Es = 0.4 and Strip malls; Es = 0.8 Relatively elastic supply - Taco trucks; Es = 1.6

Place each of the goods in the appropriate category according to the elasticity of supply (Refer to picture)

Shift of Demand curve - a. Out‑N‑In, a burger joint with an absurd national following in the U.S., sells more burgers as the price of chicken increases. b. After it earns first prize in the spicy category of a ramen tasting competition, college students buy more Lamian brand ramen noodles. c. In the country of Weskia, shorts designed to sag are no longer in vogue and sales drop off as a result. d. Last Hope, an energy drink company, notices students are desperate during finals and change their buying behavior. Movement along the demand curve - a. Nettoyer raises the price for its laundry detergent, which results in less sales and strange scents around college dorm floors. b. Le Bureau et Chaise offers a one weekend clearance sale on its old model of desks, which causes students to rush to upgrade their dorm furniture.

Place the scenarios according to whether they would cause a shift in the demand curve or movement along a demand curve.

d. the nonrefundable deposit her friends paid for the beach house in Destin.

Rose's parents have booked a family trip to Aspen, Colorado, during her spring break. They have agreed to pay for everything except her plane ticket. Rose's friends recently decided to drive to Destin, Florida, for spring break. Rose must now decide whether to join her parents in Aspen or drive to the beach with her friends. The opportunity costs of joining her parents in Aspen include each of these EXCEPT: a. the cost of her plane ticket to Aspen. b. memories she will miss with her friends. c. the stress of traveling via plane and navigating airports. d. the nonrefundable deposit her friends paid for the beach house in Destin.

0

Shep goes to his favorite coffee shop every morning and always buys one large latte, no matter whether there is a special or not (i.e., half-price Mondays). What is his price elasticity of demand for lattes? Price elasticity of demand: ___

a. 2000 b. 7000 c. 14000 d. 20000 e. 28000 f. 14,000; 28,000 g. graph

Suppose there are four gas stations in town. The quantity firms are willing to supply each week at various prices is provided in the accompanying table. Determine the quantity supplied for the entire market at each price, then move the points on the graph to create the market supply curve. a. At $1, market supply is ____ gallons b. At $2, market supply is ____ gallons c. At $3, market supply is _____ gallons. d. At $4, market supply is ____ gallons e. At $5, market supply is ____ gallons f. When the price increases from $3 to $5, the quantity supplied in the market increases from _____ to _____ gallons per week g. Place the points on the graph to plot the market supply.

a. Demand curve shifts right. b. Demand curve shifts left

The accompanying diagrams depict the demand for inexpensive instant ramen noodles. Shift each curve as applicable based on the scenarios noted on top of the graphs. Hold all other factors constant. If a demand curve should not change, then do not move it.

c. Demand curve shifts left d. Demand curve shifts left

The accompanying diagrams depict the demand for inexpensive instant ramen noodles. Shift each curve as applicable based on the scenarios noted on top of the graphs. Hold all other factors constant. If a demand curve should not change, then do not move it.

a. 4 b. Supply curve shifts right c. 6

The accompanying graph contains the supply for knee braces. a. At $8 a brace, how many will be supplied? ___ million braces b. Suppose that March becomes known as National Marathon Month, where every major city will host a marathon. Shift the supply curve to show the impact of new firms entering the market. c. After news of National Marathon Month, at a price of $8, how many braces will be supplied? __ million braces

Ken and Ben

The accompanying table provides data on five oatmeal cookie sellers. Which of these sellers are NOT following the law of supply? - Ren only - Ken and Ben - Len, Ken, Ren, and Ben - Len, Ren, and Jen

Graph the numbers

The accompanying table shows the maximum price each person in a small office is willing to pay for a memory foam seat cushion. Since each worker only has one chair, no one wants to buy more than one cushion. Use the table to construct an approximate demand curve for memory foam seat cushions.

a. graph points from (1,18) - (9,2) b. Between 1 and 5 c. Between 5 and 9 d. 5

The first graph represents a total revenue curve for Marilyn's Magnificent Coiffures. Use the information from the total revenue curve to move the five points on the second graph to plot the corresponding demand curve. a. graph b. Demand is elastic when quantity is _____. c. Demand is inelastic when quantity is ____. d. Demand is unit elastic when quantity is ___.

a. market curve points : (5000,1) - (9000,8) b. Market Supply increases

The graph contains individual supply curves for the only two firms in a hypothetical market for stuffed animals. Place the market supply curve at the correct location on the graph. Then, consider what would happen to the market if a third supplier enters the market, holding all else constant. a. graph (see image) b. See picture for question

3 points of supply curve from (2000,10) to (12000,25) to (16000,40)

This year is expected to be a great one for selling walking shoes in Georgia. At very low prices, only the most efficient shoemakers are able to sell. There are two shoe producers that operate with the most cost-effective equipment and skilled personnel, each of which can put 1000 pairs of shoes in the market at $10.00. At a higher price, eight more shoemakers will enter the market. Each producer makes 1200 pairs of shoes at $25.00 per pair. If the price goes to $40.00 per pair, the existing firms increase production to 1400 pairs of shoes each, plus four small shops open, each of which produces 500 pairs of shoes. Using the information above, graph the supply curve for walking shoes by dragging the provided red points to the correct coordinates of price and quantity.

c. at least $80,000

Trinh quits his $80,000-a-year job to become a full-time volunteer at a museum. What is the opportunity cost of his decision? a. 0 since he will no longer be earning a salary b. depends on the wages paid to museum employees, for comparison c. at least $80,000 d. the value he attributes to the joy of working at a museum

a. demand curve b. negative

Uber Eats, a food delivery service, has recently expanded to your area. The accompanying table contains the number of deliveries per month that you demand at various delivery prices. a. Use this information to plot your individual demand curve. Drag each point on the graph to the point that corresponds with the information presented in the table. b. In general, the slope of the demand curve is ____.

a. enjoying the activity, missing the movie b. enjoying the activity, getting better grades c. getting better grades, missing the movie

Unfortunately, you only have a few hours after work to do whatever you want this weekend. You would enjoy hanging out with friends at a concert they want to see, but you are not a fan of the band. You enjoy doing well in school and usually enjoy your studies, and so would rather study than go to the concert. There is a movie coming out this weekend that you would prefer to see instead of studying. What are the benefits and opportunity costs of these activities? a. The benefit of going to the concert is ___ and the opportunity cost is ____. b. The benefit of going to the movie is ____ and the opportunity cost is ____. c. The benefit of studying is ___ and the opportunity cost is ____.

your cost of making the trip is less than $5.Use the cost-benefit principle to evaluate the following: You are about to buy a calculator for $10, and the sales-person tells you that the model you want to buy is on sale for $5 at the store's other branch, which is a 20 minute drive away. You should make the trip to the other branch if:

Use the cost-benefit principle to evaluate the following: You are about to buy a calculator for $10, and the sales-person tells you that the model you want to buy is on sale for $5 at the store's other branch, which is a 20 minute drive away. You should make the trip to the other branch if:

your cost of making the trip is less than $5.

Use the cost-benefit principle to evaluate the following: You are about to buy a laptop for $1,000 and the sales-person tells you that the model you want to buy is on sale for $995 at the store's other branch, which is a 20 minute drive away. You should make the trip to the other branch if:

A perfectly inelastic demand curve would go straight up and down (vertical)

Use the line segment on the graph to show a perfectly inelastic demand curve when the quantity demanded is four units.

C, D, and E

What factors into the opportunity cost for a decision? a. the sum of all benefits from all foregone alternatives b. the difference between the benefits of the first and second best choices c. benefits from the best foregone alternative d. actual financial cost of the decision e. time spent due to the decision

a. Supply Curve shifts right b. Rise Significantly ; Fall significantly

When British regulators were forced to suspend the license of a flu vaccine plant in Liverpool operated by the Chiron Corporation due to concerns over bacterial contamination, the number of flu vaccines available in the United States market decreased by 48 million doses. This was nearly half of the total supply of vaccines in the market. a. Shift the appropriate curve or curves to show this dramatic change in the market for flu vaccines. (See image) b. As a result of the decline in available flu vaccines, the equilibrium price should ____, and the equilibrium quantity should _____ (Rise somewhat, Fall somewhat, Rise significantly, or fall significantly)

Complements : Increase

When Sony released the PlayStation 4, it was reported that Sony was taking a loss of $60 on every PS4. However, Sony expected to make this up with sales of PS+ subscriptions and increased royalties from video games. Use the interdependence principle to help explain this strategy. The PS+ subscriptions allow PS4 owners to play their games online, receive new games monthly to download at no charge, and receive additional special discounts on other items. Therefore, the PS4 and PS+ subscriptions are ______ in consumption. Decreasing the price of the PS4 will _____ the demand for PS+ subscriptions. Sony expects that revenue from recurring PS+ subscriptions will be larger than the loss in revenue from PS4 sales.

b. the phrase "holding everything else constant."

When asked to write the definition of the "Law of Demand" on an exam, Chris wrote, "When the price of a good increases, consumers will decrease the amount that they purchase." Chris' professor deducted one point for this response. The professor most likely deducted one point because Chris forgot to include a. the price of inputs into the production process. b. the phrase "holding everything else constant." c. that producers will stop producing the good if the price is too high. d. that wealthy consumers can buy as much as they want at any price.

Not in equilibrium ; people are still willing and able to purchase gasoline, even though the quantity supplied has been exhausted

When you arrive at a gas station, there is a line of cars wrapped around the block waiting for gas, so you go to the gas station down the road only to find another line of cars! You get in line and end up waiting over an hour just to get to the pump and be told that they've run out of gas. This market is ______ because _______. - (In equilibrium or Not in equilibrium) - (people are still willing and able to purchase gasoline, even though the quantity supplied has been exhausted or the quantity of gasoline supplied has been exhausted, clearing the market)

d. Customers will be less responsive to price increases over a shorter period of time but will become more responsive over the longer term.

You are a pricing analyst at Panaviewic in the HD TV group. Your supervisor asks you to forecast the demand curves for 42‑inch HD TVs over both a one‑month and a one‑year time horizon. You present your supervisor with a graph. Using the concept of elasticity, shift the points to label each demand curve with the correct time horizon. Your supervisor asks you to explain the implications of your forecasted demand curves on monthly and future pricing decisions. What is your response? a. Customers will not respond to price changes in either case. b. The TVs should be priced at $0. c. Customers will be more responsive to price increases over a shorter period of time but will become less responsive over the longer term. d. Customers will be less responsive to price increases over a shorter period of time but will become more responsive over the longer term.

d. not go: less

You are thinking of going out to dinner at a restaurant with your friends. The meal is expected to cost you $50, you typically leave a 20% tip, and a round-trip Uber ride will cost you $20. You value the restaurant meal at $20, and the time spent with your friends at $30. If you did not go out to the restaurant, you would eat at home using groceries that cost you $10. You should _____ to dinner with your friends because the benefit of doing so is _____ than the cost. a. go: greater b. go: less c. not go: greater d. not go: less

c. You value the extra pay more than the Friday night activities (in terms of marginal benefits, marginal costs, and your utility).

You have a part time job that pays $8 per hour. Your manager has asked you to work four extra hours on Friday night, but you already have plans for dinner and a movie with a friend on Friday night. Under what conditions will you choose to work on Friday night? Consider the economic way of thinking in answering this question; also assume that you are rational (even if you do not think you are rational) and can afford dinner and a movie. a. You have already seen the movie that has been chosen for Friday night. b. You value the Friday night activities more than the extra pay (in terms of marginal benefits, marginal costs, and your utility). c. You value the extra pay more than the Friday night activities (in terms of marginal benefits, marginal costs, and your utility). d. You think the Friday night dinner will be expensive.

that he should reduce his prices. Yachts are luxury goods and therefore exhibit a high price elasticity of demand. Thus, reducing prices would increase revenue.

You have been appointed head of marketing for Barry's Younique Yachts. Barry, the CEO, is interested in determining whether offering his yachts at a lower price would increase the firm's revenue. He asks you for advice. - that he should reduce his prices. Yachts are a necessity and therefore have a low price elasticity of demand. Thus, reducing prices would increase revenue. - that he should increase his prices. Demand for yachts is likely to be elastic because they are so much fun to drive. Thus, increasing prices would increase revenue. - that he should reduce his prices. Yachts are luxury goods and therefore exhibit a high price elasticity of demand. Thus, reducing prices would increase revenue. - that he should increase his prices. Demand for yachts is perfectly inelastic, so a price increase will cause total revenue to increase.

a. frustration experienced from watching the team lose in previous games.

You have paid $100 for student season tickets to the football games at your university. It is halfway through the season, and the team has not won any games (this isn't happening at A&M!!). You are considering whether you will attend any future games this season. All of the following are costs or benefits you should consider when making this decision EXCEPT the a. frustration experienced from watching the team lose in previous games. b. $5 you will earn per game by selling the remaining tickets. c. cost of a hotdog and soda you will inevitably buy at a future game. d. time spent at the game rather than studying.

a. Supply curve shifts right b. Supply curve shifts right

You have recently been hired by Delta Airlines to work in its strategy division. For each of the following, illustrate how Delta's supply curve for airline flights will be affected by shifting the accompanying graphs. a. The price of jet fuel falls b. Innovation of new software allows Delta to more efficiently allocate its aircraft

c. Supply curve shifts left

You have recently been hired by Delta Airlines to work in its strategy division. For each of the following, illustrate how Delta's supply curve for airline flights will be affected by shifting the accompanying graphs. c. Delta signs a new labor contract that increases the wages Delta pays to its employees.

d. do not violate the law of demand because your preference for the product changed after you experienced the good.

You just took an Uber from home to campus for the first time and were willing to pay $13 for the trip. It was so much easier than driving yourself that you are willing to pay $21 for the same trip tomorrow. Determine if you have violated the law of demand based on your choices, and why or why not that is the case. Your decisions a. do not violate the law of demand because the law of demand states that quantity demanded increases as price increases. b. do violate the law of demand because the law of demand states that quantity demanded decreases as price increases. c. do violate the law of demand because you have chosen to buy the same amount of the product at two different prices. d. do not violate the law of demand because your preference for the product changed after you experienced the good.

The face value is below the equilibrium price because the rate in the secondary market exceeds the face value.

You purchased a ticket to the musical Hamilton through a verified reseller for $457.00. When your ticket arrives, you see that the face value printed on it is $259.00. Which of the following is correct? - The rate in the secondary market is below the equilibrium price because it falls below the face value. - The rate in the secondary market is above the equilibrium price because it exceeds the face value. - The face value is above the equilibrium price because the rate in the secondary market is below the face value. - The face value is below the equilibrium price because the rate in the secondary market exceeds the face value.

Your friend remarks that longer movies are a better deal than shorter movies because the ticket price is the same in both cases. Therefore, the longer movie provides more benefit for the same cost as a shorter movie. opportunity cost principle, the length of the movie does not matter as long as watching a movie is the best way to spend your time compared to other alternatives.

Your friend remarks that longer movies are a better deal than shorter movies because the ticket price is the same in both cases. Therefore, the longer movie provides more benefit for the same cost as a shorter movie.

a. Rise ; Fall ; The equilibrium quantity moves down the demand curve to a lower price and a higher quantity demanded b. Supply curve shifts right

a. If the supply of green tea rises, the equilibrium quantity will ___, and the equilibrium price will ____. This is because _________. First two blanks - (Rise or Fall) Third Blank - (the equilibrium quantity moves down the demand curve to a lower price and a higher quantity demanded or the demand curve shifts to the right to accommodate the increase in supply b. Shift the appropriate curve or curves below to show the effect of this change.