E201 Microeconomics Exam 1

Economics is best defined as the study of

Your opportunity cost of going to a movie is

A marginal change is one that

Adam Smith's "invisible hand" refers to

Governments may intervene in a market economy in order to

What does the slope of the PPF tell you?

An economic model is

The circular-flow diagram illustrates that, in markets for the factors of production, (markets for goods and services)

A point inside the production possibilites frontier is

An economy produces hot dogs & hamburgers. If discovery of health benefits of hot dogs were to change consumers' preferences, it would

All of the following topics fall within the study of microeconomics EXCEPT

Which of the following is a positive, rather than a normative, statement?

In an hour, David can waswh 2 cars or mow 1 lawn, and Ron can wash 3 cars or mow 1 lawn. Who has the absolute advantage in car washing... lawn mowing?
(comparative advantage in car washing... lawn mowing?)

When two individuals produce efficiently and then make a mutually beneficial trade based on comparative advantage,

Which goods will a nation typically import?

In the US, producing an aircraft takes 10,000 hrs of labor & producing a shirt takes 2 hrs of labor. In China, producing an aircraft takes 40,000 hrs of labor & producing a shirt takes 4 hrs of labor. What will these nations trade?

Mark can cook dinner in 30 min & wash laundry in 20 min. His roommate takes half as long to do each task (dinner=15 min; laundry=10 min) How should the roommates allocate the work?

A change in which of the following will NOT shift the demand curve for hamburgers?

An increase in __________ will cause a movement along a given demand curve, which is called a change in __________

Move tickets and DVDs are substitutes, If the price of DVDs increases, what happens in the market for movie tickets?

The discovery of a large new reserve of crude oil will shift the __________ curve for gas, leading to a __________ in equilibrium price.

If the economy goes into a recession & incomes fall, what happens in the markets for inferior goods?

Which of the following might lead to an increase in the equilibrium price of jelly & a decrease in the equilibrium quantity of jelly sold?

A life-saving medicine without any close substituteswill tend to have

The price of a good rises from $8 to $12, & QD falls from 110 to 90 units. Using the midpoint method, what is the elasticity?

A linear, downard-sloping demand curve is

The ability of firms to enter & exit a market over time means that, in the long run,

An increase in the supply of a good will decrease the total revenue producers receive if

The price of coffe rose sharply last month, while the quantity sold remained the same. What are some possible explanations?

A PPF (curve) that is illustrating the production possibilities of production of capital goods and consumption goods in the United States is illustrated by a concave to the origin (bowed out) curve because

Chicken and tuna fish are substitutes in consumption. New technology decreases the cost of catching tuna. This would result in _________ in the equilibrium quantity and ________ in the equilibrium price for chicken

When demand is price elastic, an increase in price results in a(n)

If a firm is producing where its marginal cost is greater than its average total cost, then its average
total cost

If used cell phones are inferior goods and new cell phones are normal goods, then an increase in
consumer incomes will result in a(n) _________ in demand for ______________.

Suppose that the price of wood decreases. This would result in _________ in the equilibrium quantity & ________ in the equilibrium price of wood baseball bats

If people outside the market for polio vaccine benefit from the people who buy and consume polio
vaccinations, then we would expect that the polio vaccine market would

The hat market is in equilibrium with a price of $10 and quantity of 10,000. At this equilibrium, the absolute value of the price elasticity of demand for hats is 2 and the absolute value of the price elasticity of supply for hats 1.5. If a unit tax of 50 cents is placed on hats and it is the sellers who are legally liable to pay the tax, then the economic incidence of the tax will be

Wheat is produced in a perfectly competitive market. Market supply for wheat increases. This will cause the individual wheat farmer's marginal revenue to _____ & their profit maximizing level of output to _____

Considering the PPF (curve), resources that are not equally able to produce all goods lead to

Suppose consumer income increases. If swimsuits are normal goods, the equilibrium price of swimsuits will __________, and producer surplus in the swimsuit industry will __________

Suppose that there is a decrease in the price of resources used in making skateboards, which of the
following statements is most likely to be true about the skateboard market?

The result of a $3/unit tax imposed on the market for hats was an increase of equilibrium price from $20 to $21 According to this info, we can conclude that buyers pay a _________ share of the tax than sellers because _______________________ over this price range.

If we observe an increase in the equilibrium price of cars and a decrease in the equilibrium quantity
of cars sold, this was most likely caused by

After an increase in the price of inputs used in making hats, which of the following statements is most
likely to be true about the hat market?

Cold weather increases consumers' desire for hot chocolate. As a result, the equilibrium price of hot
chocolate _____ & the equilibrium quantity of hot chocolate ______.