Micro

Question 1

1. The term which means whatever must be given up to obtain an item is

Answer 1

c. Opportunity Cost

Question 2

2. Scarcity, every economic decision involves

Answer 2

a. Trade off

Question 3

3. In order to fix 1 car tire, jerry fixed 3 bicycle tires. In order to fix 1 car tire, berry fixes 5 bike tires, who has the comparative advantage

Answer 3

a. Berry has the comparative advantage over Jerry

Question 4

4. GRAPH

a. Biff is 9, 6. Howie is 12 9 The answer is absolute advantage in both activities.

Answer 4

a

Question 5

5. GRAPH

a. The prices were a) 10 b)8 c)6  I put 6 - WRONG

Answer 5

a

Question 6

6. Milk can be used to make yogurt and cheese, other things equal, if consumption starts demanding more yogurt
   a. Supply of milk will decease.
   b. Demand of milk will increase.
   c. Supply of milk will increase
   d. Demand of milk will decrease
   e. None of the above

Answer 6

Complements so since increase in demand of yogurt, increase in demand of milk.
B.

Question 7

7. if resources are owned by individuals instead of government

Answer 7

c. resources used will be guided by changing related to prices as owners attempt to maximize self interest

Self interest.

Question 8

8. Demand for cocaine is unit Elastic, price of cocaine were to rise 10%,

Answer 8

b. quantity demand will fall 10%

Question 9

9. Price for a 27 TV = $450. consumers buy 1000 of them, prices rises to $550 by 600 of them. What is the price elasticity of demand in this range.

Answer 9

Answer is 2.5

Question 10

10. In economics “short run” is defined

Answer 10

a. A period of time during which at least one production input is fixed.

Question 11

11. The total cost to build 8 tract houses is $1,000,000. total cost to build 9 tract houses $1,050,000. What is the Margin cost of the 9th tract house.
    a. NOT 116,667

Answer 11

MC = Change in TC / Change in Quantity

change in TC = 50000
Change in Quantity = 1

MC = 50k

Question 12

12. once it becomes obvious that a common resource is being overused

Answer 12

The answer is B. as a period of time when at least one of the four factors of production is fixed.

Question 13

13. If the equilibrium of a dollar in terms of pesos is 20. what is the equilibrium price in terms of dollars

Answer 13

.05

Question 14

Related to gasoline, which graph demonstrates the effect of an increase in the price of Cars

-NOT Demand shift right

Answer 14

increase in the price of cars means decrease in quantity demanded for cars.

since gasoline is a complement, it also means a decrease in quantity demanded for gasoline.

Question 15

15. Accounting profit is equal to?
    A. Total revenue minus the explicit cost of producing goods and services.
    B. Total revenue minus the opportunity cost of producing goods and service.
    C. Average revenue minus the average cost of products the last unit of a good or service.
    D. Marginal revenue minus marginal cost.
    E. Total revenue minus depreciation.

Answer 15

Revenue - explicit.
A.

Question 16

16.	Comparative advantage is based on?
A.	Capital cost.
B.	Labor cost.
C.	Opportunity costs.
D.	Dollar Price.
E.	Both labor and capital costs.

Answer 16

opportunity costs.

Question 17

17. Alternative outputs from one day of Labor?
    Wheat (is bushels) Textile (in yards)
    United States 12 3
    Great Britain 3 12
    According to the table above, the United States

A. Has an absolute advantage over Great Britain in the production of textiles.
B. Has an absolute advantage over Great Britain in the production of wheat.
C. Has a comparative advantage in the production of textiles.
D. Should export textiles to Great Britain.
E. None of the above.

Answer 17

correct.

Question 18

18. Which of the following would not tend to lower the price of VCR?
    a. Decreasing price of DVD players.
    b. Increasing price of video cassettes.
    c. Improvements in VCR production technology.
    d. Reduced price of raw material used in making VCR’S
    e. Increasing price of pay per view movies on cable TV.

Answer 18

C

Question 19

19. Fresh tuna can be canned or used to make sushi. Other things equals, if consumers starts demanding more sushi?
    a. The price of tuna will fall.
    b. Less tuna will be canned and more will be used in tuna sushi.
    c. The supply of fresh tuna will decrease.
    d. The price of tuna sushi will fall.
    e. None of the above.

Answer 19

B

Question 20

20. At a price of $9.50/pound, people buy 45 pounds of lamb. At a price of $10.50/pound, people buy 35 pounds of lamb. What is the arc elasticity of demand for lamb in this price range?
    a. 1.0
    b. 2.5
    c. 0.4
    d. 3.0
    e. none of the above

Answer 20

(35 - 45)/ [(45 + 35) / 2]
-10/ (80/ 2)
= -.25

(10.50 - 9.50) / [(10.5 + 9.5) / 2]
1/ (20/2)
= .1

-.25/.1
= -2.5

E. None of the above. Arc elasticities of demand are always negative.

Question 21

21. In economics, short run is defined as?
    a. A period of time less than a year.
    b. A period of time during which at least one production input is fixed.
    c. A period of time less than one month.
    d. A period of time during which all production inputs are fixed.
    e. A period of time during which all production inputs are variable.

Answer 21

B

Question 22

24. The table below shows a firms cost for range of quantity. Find the value of X?

Q TC ATC MC
100 500 5
X
120 720 6

a. 11
b. 20
c. 1
d. 220
e. None of the above.

Answer 22

A
-------------------------------------------------------------------------
MC = change in TC / change in Q
220/ 20 = 11
A.

Question 23

25. Compared to perfect competition, monopoly in the long run?
    a. Restricts outputs
    b. Changes a higher price.
    c. Produces at greater than the minimum average total cost.
    d. Is able to make greater profits.
    e. All of the above.

Answer 23

E

Question 24

26. A foot-Loofah is worth $15 to Edna. But she buys one on sale at Bath and Body works for just $8 what is the consumer surplus that results from edna’s purchase?
    a. $8
    b. $15
    c. $7
    d. $23
    e. Cannot be determined from the information given.

Answer 24

She was WILLING to pay 15, but received it for only 8 dollars; she saved 7 dollars as the “consumer surplus”

C.

Question 25

27. If purchases power parity exists and the exchange rate is 1.50 u.s. dollars per British pound, then a latte that has a price of $4.00 in Northridge, California, has a price of _ in London, England? a. 8.00 pounds b. 4.00 pounds c. 6.00 pounds d. 2.67 pounds e. .38 pounds

Answer 25

D ------------------------------------------------------------------------- 4 dollars/ x = 1.5 dollars/pound x = 4 dollars / 1.5 dollars/pound x = 2.67 pounds.

Question 26

Cost of $500,000 a year to rent and buy stock. 50,000 a year at working for accounting and wants to quit what is the opportunity cost? A.500,000 B. 550,000 C.450,000 D.50,000 E. 450,000(wrong) 60,000

Answer 26

B

Question 27

Because of scarcity, every economic decision involves | A. Trade-off B. trade-in C. money payment D. increasing cost E. tax or tariff

Answer 27

A

Question 28

30. Bliff and Harvey in 1hr. what is the absolute advantage? 1 hr. Bliff Harvey Martins 9 12 Gin 6 9

Answer 28

Harvey does has both absolute advantage

Question 29

. Opportunity cost of producing 1 pound of meat | ½ of a potato

Answer 29

A

Question 30

``` . What will cause outward shift of the Demand curve for electricity? a. decrease in price of electricity b .increase in price of A/C c. Increase in price of heating oil d. decrease in price of natural gas e. increase in price of electricity ```

Answer 30

C

Question 31

A raise in the demand for a resource to produce some product (x) will a. Raise the cost of using the resource for an alt. product b. Reduce the use of that resource in alt lower valued production c. Increase the value of the resource d. All

Answer 31

D

Question 32

Economists can be college professor as business analysis. If an increase in businesses’ need for econ analysis a. wages of economists will tend to decrease b. colleges will have to pay less money to hire econ as professors c. more economists will decide to become professors d. less economists will decide to become professors e. None

Answer 32

E

Question 33

Price elasticity of demand

Answer 33

Percentage change of Qd divide change in P

Question 34

37. Elasticity of demand Quantity Price A 4 15 B 12 6

Answer 34

1.17 -------------------------------------------------------------------------- % change in Quantity/ % change in Price positive change in quantity, negative change in price. 8/ [(4+12)/2] / -9/ [(15 + 6)/2] 8/8 / -9/ 10.5 1 / -.8571 = 1.17

Question 35

MC is

Answer 35

MC = Change of TC/ Change of Q

Question 36

AVC is

Answer 36

ATC = TC/Q

Question 37

TR= 770 FC=200 TC=860 What would you recommend to the store after looking at the data above?

Answer 37

Close now or stay open in short run and plan to close in the long run

Question 38

. graph to locate the CS

Answer 38

BAC

Question 39

42. foreign exchange market They will lower price (W/A) 43. common pool resource Public park (W/A) Water (W/A)

Answer 39

A

Question 40

44. In 40 hours Cheese Bread England 40 20 Scotland 20 5

Answer 40

England will import Cheese and Scotland will import Bread

Question 41

Helena does her bathroom Saturday night and she wants to see a movie and surf the web. If she doesn’t clean her bathroom and surf the web what is the value (note she can not see the movie and surf the web). a) Value to Helena of watching a movie b) Value to Helena of surfing the web c) Value to surf the web Plus watching the movie d) Value to surf the web Minus watching the movie e) Clean her bathroom minus the value of surfing the web (WRONG)

Answer 41

???? ------------------------------------------------------------------------- Opportunity cost problem.

Question 42

``` In 40 hours Cheese Bread England 40 20 Scotland 20 5 Don’t remember the question could have been how many units of bread does it to make cheese ½ (wrong) ¼ 2 4 ```

Answer 42

???? ------------------------------------------------------------------------- England: 40 cheese per 20 bread 2 cheese per bread. Scotland: 20 cheese per 5 bread 4 cheese per bread. Scotland should produce bread while England produces cheese.

Question 43

``` 47. No doubt ticket is $45 and you want to illegally sell it (scalp) for $75 what is the opportunity cost? $30 (WRONG) $ 45 (I think this is correct) $ 75 $ 115 ```

Answer 43

???? --------------------------------------------------------------------------- it's the $45 of watching the concert.

Question 44

. Law of demand states

Answer 44

Price and quantity demand of a good are inverse related

Question 45

More buyers enter a market Demand increases…. Quantity supply lends to increase The product are able to use resourcing with higher opportunity cost Price of good will raise (or increase) ……………….. All

Answer 45

All

Question 46

``` elastic demand at any time A. Cigarettes B. Jewelry C. Water D. Gas E. Electricity ```

Answer 46

A or B ------------------------------------------------------------------------- Things that have plenty of substitutes are elastic. Luxury goods are elastic. Inelastic things are necessities. B.

Question 47

Good A has many substitutes and Good B has none what is true A. Demand for Good B is likely to be elastic and Good A is inelastic B. Demand for Good B is likely to be inelastic and Good A is elastic C. Good A and B are elastic D. Good A and B are inelastic

Answer 47

B

Question 48

``` TC is $60,000 VC is $55,500 What is FC? ___ Q TC MC 10 10,000 X 20 25,000 ``` What is X?

Answer 48

FC= 4,500 ``` X=1500 ------------------------------------------------------------------------ TC = FC + VC 60k = FC + 55.5k FC = 4.5k ``` MC = change in TC / change in Q = 15000/ 10 = 1500

Question 49

What is true about new entry?

Answer 49

ALL

Question 50

Graph and it is asking about a point on the graph (location is right outside of the Equilibrium

Answer 50

The Deadweight loss of over supply

Question 51

``` drachmic is 50 what is the currency of US dollars A. .50 (W/A) B. 50.00 C. .02 D. .20 E. None of the above ```

Answer 51

D

Question 52

56. In economics the cost of something is? ``` A. The out-of-pocket expense of obtaining it. B. What you must give up to get it. C. Always measured in units of time. D. Always higher than people think E. None ```

Answer 52

B

Question 53

57. Cheese Bread England 40 20 Spain 20 5 What is the opportunity cost of producing 1 unit of bread (Ex. England produces 40 units of cheese in 40 hours)? ``` A. 4 cheese B. 2 cheese C. 1/2 cheese D. 7 cheese E. ¼ cheese ```

Answer 53

A ------------------------------------------------------------------------ England: 1 bread = 2 cheese Spain: 1 bread = 4 cheese

Question 54

58. In LA sushi and sashimi are very similar food. What effect will an increase in price of sushi have on the demand curve for sashimi in LA? A. There will be movement down the sashimi demand curve. B. The sashimi demand curve will not be affected. C. There will be movement up to the sashimi demand curve. D. The sashimi demand curve will shift to the right. E. The sashimi demand curve will sift to the left.

Answer 54

D ------------------------------------------------------------------------- substitutes.

Question 55

59. In a market economy? A. Resources are distributed equal across the all possible users. B. resources move to higher valued uses in respond to change in price. C. Resources usage is independent of the price.(WA) D. Most resources are distributed by the government (WA) E. All of the above.

Answer 55

??? ----------------------------------------------------------------------- Market economy the resources adjust to the price. B.

Question 56

60. A factory produces 1,000 MP3 players per week. AVC=$10, FC=5,000, TC=? ``` A. 15 B. 5,005 C. 6,000 D. 15,000 E. 50,000 ```

Answer 56

D

Question 57

61. Which is true? ``` A. MC= TC/ Q B. MC= TFC/ Q C. MC= ATC/ Q D. MC= Q/ L E. None ```

Answer 57

``` A ------------------------------------------------------------------------- TC / Q = ATC TFC / Q = AFC ATC / Q = something else. Q/ L = labor demand? ``` E. None since it's the change in TC / change in Q.

Question 58

62.Airline know from exp. Vacation travel have elastic demand for travel whereas business travels have an inelastic demand for travel in order maximize the airline should? A. Offer everyone a discount to increase sales. B. Increase price to everyone. C. Try to increase price for vacation travelers and decrease price for business travelers. D. Try to decrease price for vacation travelers and increase price for business travelers. E. Ignore this information

Answer 58

D

Question 59

63. Monopolist sets price a $12 and sells 250 units. The marginal revenue cost corresponding to this level of output are $6 and $8 respectively. What recommendation would you give this monopolist. ``` A. Lower price. B. Raise the price C. Raise the output level D. Keep the same price E. Keep the same output level (WA) ```

Answer 59

???? ------------------------------------------------------------------------- Monopolists exhibit

Question 60

64. Consumer surplus is equal the area below the _________ and above___________ ``` A. Price; Supply Curve B. Demand Area; Price C. Demand Curve; Supply Curve D. Price; Demand Curve E. Supply Curve; Demand Curve ```

Answer 60

B

Question 61

65. An unregulated negative production externality will cause a private market to (It’s a negative production) A. Produce less than is socially optimal (More Likely) B. Produce more than is socially optimal C. Produce more than market equilibrium D. Produce less than market equilibrium (WA) E. Produce the amount that is socially optimal

Answer 61

Most likely A

Question 62

67. On the foreign exchange market, an increase in a country’s exchange rate (Might not be complete sentence) Because once the price goes up demand goes down. A. Decrease the quantity demand of its currency (Prob this) B. Increase the quantity demand of its currency (WA) (Prob right?) C. Has no effect on the quantity demand of its currency D. Decrease the quantity supplied of its currency E. has no effect of the quantity supplied of its currency

Answer 62

A/B

Question 63

68. If you want to know the long-run equilibrium output of one perfectly competitive firm, and you are permitted to see only one curve, which one below is most helpful? ``` A. Demand B. Marginal Cost C. Average total cost D. Average Fixed cost E. Average Variable cost ```

Answer 63

C

Question 64

69. An increase in demand for a product will

Answer 64

d. draw more resources into the production of the good

Question 65

P1 = 4.5, P2= 5.5 Q1 = 55, Q2= 45 | What is the elasticity of demand

Answer 65

10/50 / 1/5 = 1

Question 66

the entry of new firms into a competitive industry will very likely a. shift the short run industry supply curve to the right b. cause the market price to fall c. reduce the profits of firms in the industry d. cause the market quantity sold to rise e. all of the above (positive correct

Answer 66

E

Question 67

which of the following would cause an increase in the demand for us dollars. a. An interest rate cut in the US b. An interest rate cut in Europe (positive correct c. An interest rate increase in Europe d. A recession in Europe e. Less desire by Europeans for US goods

Answer 67

B

Question 68

bob could do 3 broken legs and 7 bandage wounds, James can do 2 broken legs and 5 bandages wounds What does bob have?

Answer 68

Bob has both absolute advantage

Question 69

Itchy Scratchy Bread 10 8 Meat 6 4 Scratchy has both Comparative advantage(WA)

Answer 69

?? U know how to do these -------------------------------------------------------------------------- Another opportunity cost problem. Itchy: 1 meat = 1.67 bread Scratchy: 1 meat = 2 bread Itchy has a lower opportunity cost for bread (gives up less bread for meat) so he has a comparative advantage in bread. Scratchy has comparative advantage in meat. Itchy has the absolute advantage in producing both bread and meat (2 more in bread and meat).

Question 70

pyshcologist can be college professors or private therapist. If then

Answer 70

ALL OF THE ABOVE

Question 71

the 10th house is 8,000,000 and the 11th house is 9,000,000

Answer 71

1,000,000

Question 72

81 chart Where is the consumer surplus (KNOW THE COMMON SURPLUS)

Answer 72

B+C

Question 73

A positive consumption externality occurs when ; A. When jack receives a benefit from johns consumption of a certain good B. When jack receives personal benefit from his own consumption of a certain good (WA) C. When jack benefits exceed johns benefits wo………… D. When jack consumes of a good is not beneficial to john E. None

Answer 73

A

Question 74

``` Video store gave an estimate it will cost 500,000 and to quit her job she makes 50,000 and the revenue will be 530,000 what is her econ profit? 50 k 20k 30k None (WA) ```

Answer 74

``` Should be negative 500-530-50=-20k -------------------------------------------------------------------------- Revenue - Explicit - Implicit Costs 530 - 500 - 50 = -20k ```