question
Which of the following items should be considered as cost of a spring break trip?1. A non refundable hotel deposit that you paid last month. 2. Food that will be consumed during the trip that is n more expensive than the food consumed if you did not go.
A. 1 but not 2
B. 2 But not 1
C. Both 1 and 2
D. Neither 1 or 2
A. 1 but not 2
B. 2 But not 1
C. Both 1 and 2
D. Neither 1 or 2
answer
D. Neither 1 or 2
question
The university has purchased a part of land for 1 million the land could be used for a shopping mall and the developers are willing to pay 2 million for it if the dorm is not built. It would cost 3 million to build a dorm on the land. The value of the door must be at least ________ for the decision to build the dorm to make sense.
A. 2 million
B. 3 million
C. 4 million
D. 5 million
E. 6 million
A. 2 million
B. 3 million
C. 4 million
D. 5 million
E. 6 million
answer
D. 5 million
question
What is the purpose of an economic system? Select all that apply.
A. To make choices about what to produce
B. To make as much profit as possible
C. To make choices about how to produce the goods and services chosen
D. To make choices about for whom to produce the goods and services
E. To make choices about when to produce the goods and services
A. To make choices about what to produce
B. To make as much profit as possible
C. To make choices about how to produce the goods and services chosen
D. To make choices about for whom to produce the goods and services
E. To make choices about when to produce the goods and services
answer
A,C,D
question
When an economy chooses to produce more plastic bags using a recycled plastic, it is answer the ____ question
A. What
B. WHy
C. How
D. For whome
A. What
B. WHy
C. How
D. For whome
answer
C. How
question
In the U.S. where are the vast majority of economic decisions made?
A. Through onlines websites seeling goods and services
B. Through Markets
C. Through Brick and mortar shops
D. Through the stock market
A. Through onlines websites seeling goods and services
B. Through Markets
C. Through Brick and mortar shops
D. Through the stock market
answer
b. Through Markets
question
What is the decision making rule?
A. If the marginal benefit of an action/choice is greater than the marginal cost the decision should be a positive one
B. If the total benefit of an action/ is greater than the total cost the decision should be a positive one
C. If the costs of an action are less than he benefit we should not choose the action
D. If the dollar cost of Good A is less than Good B, we should choose Good A
A. If the marginal benefit of an action/choice is greater than the marginal cost the decision should be a positive one
B. If the total benefit of an action/ is greater than the total cost the decision should be a positive one
C. If the costs of an action are less than he benefit we should not choose the action
D. If the dollar cost of Good A is less than Good B, we should choose Good A
answer
A. If the marginal benefit of an action/choice is greater than the marginal cost the decision should be a positive one
question
Marginal Cost is
A. The amount of cost that exceeds the marginal benefit
B. The cost of an activity or decision
C. The additional cost of an activity or decision
D. The amount of cost that is equal to marginal benefit
A. The amount of cost that exceeds the marginal benefit
B. The cost of an activity or decision
C. The additional cost of an activity or decision
D. The amount of cost that is equal to marginal benefit
answer
C. The additional cost of an activity or decision
question
Scarcity affects choices made by:
A. The poor but no the rich
B. The rich but not the poor
C. Government but not everyday citizens
D. Both the rich and the poor
A. The poor but no the rich
B. The rich but not the poor
C. Government but not everyday citizens
D. Both the rich and the poor
answer
D. Both the rich and the poor
question
Tickets to a sold-out concert originally cost $100 and cannot be returned. You buy one but now scalpers are willing to pay 175 for the ticket. In deciding whether or not to go to the concert the cost should be considered is $_____
answer
$175
question
Which of the following is a microeconomics topic? Select all that apply.
A. The study of markets
B. Choices made by consumers and firms
C. International Trade
D. Unemployment rates.
A. The study of markets
B. Choices made by consumers and firms
C. International Trade
D. Unemployment rates.
answer
A and B
question
What are some examples of physical capital? Select all that apply.
A. Factories
B. Machines
C. Inventories
D. Buildings
E. Raw Materials
F. Education
A. Factories
B. Machines
C. Inventories
D. Buildings
E. Raw Materials
F. Education
answer
A,B,C,D
question
Economic analysis is used
A. only by economic consultants and business
B. only by government and policymakers when talking about the economy
C. only in academic and research settings, such as economic classrooms
D. in all decision making
A. only by economic consultants and business
B. only by government and policymakers when talking about the economy
C. only in academic and research settings, such as economic classrooms
D. in all decision making
answer
D. in all decision making
question
When creating economic models, economists focus on the ________ of people rather than their ________
A. Preferences; actions
B. Desires; wealth
C. Actions;thoughts
D. Incomes;demands
A. Preferences; actions
B. Desires; wealth
C. Actions;thoughts
D. Incomes;demands
answer
C. Actions;thoughts
question
The Production Possibilities frontier has a ______ slope.
A. Positive
B. Negative
C. Horizontal
D. Vertical
A. Positive
B. Negative
C. Horizontal
D. Vertical
answer
B. Negative
question
The increasingly negative slope of the Production Possibilities Frontier illustrates what economic concept?
A. Allocative Efficiency
B. Technical Efficiency
C. Marginal Costs
D. Principle of Increasing Marginal Costs
A. Allocative Efficiency
B. Technical Efficiency
C. Marginal Costs
D. Principle of Increasing Marginal Costs
answer
D. Principle of increasing marginal costs
question
What does the Product Possibilities Frontier model NOT show us?
A. Which points are possible and impossible to produce with current resources
B. Tradeoffs between producing the two goods shown in the model
C. The increasing opportunity costs of producing more of one of the goods
D. Which point on the frontier that is most valued by society
A. Which points are possible and impossible to produce with current resources
B. Tradeoffs between producing the two goods shown in the model
C. The increasing opportunity costs of producing more of one of the goods
D. Which point on the frontier that is most valued by society
answer
D. Which point on the frontier that is most valued by society
question
Which of the following is the most accurate analysis of the parts of economic efficiency?
A. Technical efficiency is the most important of all the components because without it we will be below the production possibilities frontier.
B. Full employment of our resources is the most important of all of the components because without it we will be below the production possibilities frontier.
C. Achievement of full employment technical efficiency and allocative efficiency are all basically equally important in pursuing economic efficiency.
D. Full employment and technical efficiency are absolute keys to achieving economic efficiency. Allocative efficiency is less important because we already on the production possibilities frontier if we have the first two.
A. Technical efficiency is the most important of all the components because without it we will be below the production possibilities frontier.
B. Full employment of our resources is the most important of all of the components because without it we will be below the production possibilities frontier.
C. Achievement of full employment technical efficiency and allocative efficiency are all basically equally important in pursuing economic efficiency.
D. Full employment and technical efficiency are absolute keys to achieving economic efficiency. Allocative efficiency is less important because we already on the production possibilities frontier if we have the first two.
answer
C. Achievement of full employment technical efficiency and allocative efficiency are all basically equally important in pursuing economic efficiency.
question
Which of the following results in diminishing marginal returns?
A. If a restaurant added more workers in its existing kitchen
B. If a restaurant employed more workers and got more ovens
C. If a restaurant closed on Sundays
D. If a restaurant reduced the size of its menu
A. If a restaurant added more workers in its existing kitchen
B. If a restaurant employed more workers and got more ovens
C. If a restaurant closed on Sundays
D. If a restaurant reduced the size of its menu
answer
A. If a restaurant added more workers in its existing kitchen
question
Suppose a firm uses labor as it's only input and can produce two goods X and Y. If a firm can employ more workers what will happen to the firms PPF?
A. The PPF will get steeper at all points
B. The PPF will get shallower at all points
C. The PPF will shift inward
D. The PPF will shift outward
A. The PPF will get steeper at all points
B. The PPF will get shallower at all points
C. The PPF will shift inward
D. The PPF will shift outward
answer
D. The PPF will shift outward
question
Consider a market for a service. An increase in the price of a good consumers think of a substitute for this service will do which of the following? The equilibrium price of the service will ______ equilibrium quantity will ______.
A. Increase, Decrease
B. Increase, Increase
C. Decrease, Decrease
D, Decrease Increase
A. Increase, Decrease
B. Increase, Increase
C. Decrease, Decrease
D, Decrease Increase
answer
B. Increase, Increase
question
An increase in income combined with a decrease in the price of inputs will cause what to happen in the market for an inferior good?
A. Prices will increase and quantity will decrease
B. Prices may change either way, but quantity will decrease
C. Quantities may change in either way but prices will increase
D. Quantities may change in either way but prices will decrease
A. Prices will increase and quantity will decrease
B. Prices may change either way, but quantity will decrease
C. Quantities may change in either way but prices will increase
D. Quantities may change in either way but prices will decrease
answer
D. Quantities may change in either way but prices will decrease
question
If lift tickets and skis are complementary goods what is likely to happen to the price and quantity of skis sold if expenses of running ski resorts increase?
A. price of skis will increase, quantity will increase
B. price of skis will increase, quantity will decrease
C. price of skis will decrease, quantity will increase
D, price of skis will decrease, quantity will decrease
A. price of skis will increase, quantity will increase
B. price of skis will increase, quantity will decrease
C. price of skis will decrease, quantity will increase
D, price of skis will decrease, quantity will decrease
answer
D, price of skis will decrease, quantity will decrease
question
If prices of substitute goods (for consumers) decrease at the same time prices of substitute goods (for producers) decrease what will happen to prices in this market?
A. Price will not change
B. Prices will decrease
C. Price will increase
D. One cannot tell without more information
A. Price will not change
B. Prices will decrease
C. Price will increase
D. One cannot tell without more information
answer
B. Prices will decrease
question
What is the demand for a good increases in the supply stays the same we expect:
A. the equilibrium quantity in the market to increase in the equilibrium price to decrease.
B. The equilibrium quantity in the market to decrease in the equilibrium price to increase.
C. The equilibrium quantity in the market to increase in the equilibrium price to decrease.
D. the equilibrium quantity in the market to decrease in the equilibrium price to decrease.
A. the equilibrium quantity in the market to increase in the equilibrium price to decrease.
B. The equilibrium quantity in the market to decrease in the equilibrium price to increase.
C. The equilibrium quantity in the market to increase in the equilibrium price to decrease.
D. the equilibrium quantity in the market to decrease in the equilibrium price to decrease.
answer
D. the equilibrium quantity in the market to decrease in the equilibrium price to decrease.
question
Exam 2
answer
...
question
We know that Sweeney's pizza parlor is in the short run when ______ costs are present
answer
Fixed
question
If demand is elastic should a producer raise or lower price if the producer wants to increase total revenue?
A. the producers should lower prices
B.. The producer should raise prices
C. It depends upon the elasticity of supply
D. neither change will increase revenues.
A. the producers should lower prices
B.. The producer should raise prices
C. It depends upon the elasticity of supply
D. neither change will increase revenues.
answer
A. the producers should lower prices
question
Consider to good. The first makes up a large part of one spending the second a small part. The first does not have many substitutes well the second has quite a few. What is likely true about the elasticities of the man for the first good compared to the second.
A. I need a man for the first good as likely to be more inelastic.
B. the demand for the first good as likely to be more elastic.
C. What can I tell is a large portion of spending makes a demand elastic and the lower number of substitutes makes demand inelastic.
D. what cannot tell the larger portion of spending makes demand inelastic in the lower number of substitutes makes demand elastic.
A. I need a man for the first good as likely to be more inelastic.
B. the demand for the first good as likely to be more elastic.
C. What can I tell is a large portion of spending makes a demand elastic and the lower number of substitutes makes demand inelastic.
D. what cannot tell the larger portion of spending makes demand inelastic in the lower number of substitutes makes demand elastic.
answer
C. What can I tell is a large portion of spending makes a demand elastic and the lower number of substitutes makes demand inelastic.
question
If a price ceiling increases from $30 to $40 and the equilibrium price is $50 what will happen in the market.
A. The shortage will increase
B. The shortage will decrease
C. The surplus will increase
D. The surplus will decrease
E. Nothing will change.
A. The shortage will increase
B. The shortage will decrease
C. The surplus will increase
D. The surplus will decrease
E. Nothing will change.
answer
B. The shortage will decrease
question
An individuals income increases by 50% and their demand for fast food falls by 10%. Calculate their income elasticity of demand for fast food.
answer
0.2
question
Facing a rising demand for Hanson a Tyser a perfume company switches to produce exclusively sanitizers. Suppose the switch is relatively easy for the company. If the price of hand sanitizers went up by 40% and the company were able to increase quantity supplied by 50% calculate the price elasticity of supply.
answer
1.25
question
Sweeney's pizzeria has increase the price of the house special by 8% this results in a 15% decrease in quantity of Sweeneys how special pizza demanded. Calculate price elasticity of demand for Sweeneys how special.
answer
1.88
question
Suppose that her current level of consumption of person enjoys going to an additional baseball game three times as much as seen in addition new movie. The price of a ticket for a baseball game is $30 and the price of a ticket for a movie is $15. Is the person spending her income in a good manner that maximizes her satisfaction?
A. Yes she is
B. No she should increase the consumption of baseball games and movies
C. No, she should increase the consumption of baseball games and decrease the consumption of movies.
D, she should decrease the consumption of baseball games and increase the consumption of movies
A. Yes she is
B. No she should increase the consumption of baseball games and movies
C. No, she should increase the consumption of baseball games and decrease the consumption of movies.
D, she should decrease the consumption of baseball games and increase the consumption of movies
answer
C. No, she should increase the consumption of baseball games and decrease the consumption of movies.
question
For a normal good, when your income falls you buy _____ (more/less) of the good. When the price of a good rises, the number of goods tha your money can buy ____ (increases, decreaeses)
A. More, increases
B. More, Decreases
C. Less, increases
D. Less , Decreases
A. More, increases
B. More, Decreases
C. Less, increases
D. Less , Decreases
answer
D. Less, Decreases
question
It's been two weeks since you eat a burger. You'd be willing to pay $15 to buy a burger at Sweeney's burger palace would be willing to sell a burger for seven dollars. The market price is $10. What is your consumer surplus?
answer
$5.0
question
The utility you get from ice cream is 10 for one scoop of ice cream, 17 for two scoops, and 31 for three scoops. Meanwhile utility you get from Brownies is eight for one piece, 15 for two pieces, and 18 for three pieces. Each cup of ice cream is two dollars and a piece of brownie is two dollars. How many scoops of ice cream should you buy if you have eight dollars?
answer
2.0
question
The law of diminishing marginal returns means that when one uses more and more of an input
A. Output will necessarily decrease
B. Output will eventually increase at a decreasing rate
C. Costs will necessarily decrease
D. Costs will eventually increase at a decreasing rate.
A. Output will necessarily decrease
B. Output will eventually increase at a decreasing rate
C. Costs will necessarily decrease
D. Costs will eventually increase at a decreasing rate.
answer
B. Output will eventually increase at a decreasing rate
question
Assume there are no long term labor contracts in this situation and the only input is labor. The average cost for ten goods was $15. If the cost of labor doubles what is the average cost for ten goods now?
answer
$30
question
Technology improves output such that at every level of labor and capital a firm can produce three times as much as before. If the marginal cost of increasing output from 200 to 210 units was 60 before technology advancement, what is it now?
answer
20
question
Five workers produce 50 units. A sixth worker is hired at a wage of $10 and output goes up to 54. What is the marginal product of the sixth worker?
answer
4
question
As firms add a few workers, output increases exponentially; however, soon each additional worker adds less and less output. During this time, marginal cost goes from _____ to _______.
A. negative, positive
B. decreasing, increasing
C. positive, negative
D. increasing, decreasing
A. negative, positive
B. decreasing, increasing
C. positive, negative
D. increasing, decreasing
answer
B. decreasing, increasing
question
A Norwegian salmon fish farm employees five automatic fish feeding machines and two fish feeding specialist workers. The machines can feed 300 fish per hour at a cost of $20 per hour, and the workers can each feed 150 fish per hour at a cost of $10 per hour. The fish farm should:
A. Employ more workers and fewer machines
B. Utilize more machines and fewer workers
C. Preserve the existing proportion of machines to workers
D. One cannot tell
A. Employ more workers and fewer machines
B. Utilize more machines and fewer workers
C. Preserve the existing proportion of machines to workers
D. One cannot tell
answer
C. Preserve the existing proportion of machines to workers
question
A car manufacturing plant in Michigan employees the optimal combination of both unionized and non-unionized labor. The plant agrees to a new union contract that stipulates higher wages. As the plant readjusted inputs marginal product of non-unionized workers will-
A. Increase
B. Decrease
C. Not change
D. One cannot tell
A. Increase
B. Decrease
C. Not change
D. One cannot tell
answer
B. Decrease
question
Sweeney's Pizza Parlor sells 1,000 pizzas every week at a market price of $10. Sweeney faces the following other costs: marginal Cost = $13. Variable cost = $12,000 and Total costs are $17,000. What should Sweeney's Pizza Parlor do?
A. Continue to produce in the short run, but close down in the long run
B. Expand production in the short run, but close down in the long run
C. Stop producing in the short run and leave the industry in the long
D. Continue to produce in the short and long runs
E. Stop producing un the short run, but produce in the long run once its fixed costs become variable
A. Continue to produce in the short run, but close down in the long run
B. Expand production in the short run, but close down in the long run
C. Stop producing in the short run and leave the industry in the long
D. Continue to produce in the short and long runs
E. Stop producing un the short run, but produce in the long run once its fixed costs become variable
answer
A. Continue to produce in the short run, but close down in the long run.
question
An economy is on its production possibilities frontier. If the economy faces diminishing marginal returns, what will happen to the opportunity costs as the production of one of the categories of goods increases?
A. Nothing, as production cannot be increased
B. The opportunity cost will increase as it takes more to produce the good
B. The opportunity cost will decrease as it takes more to produce the good
D. One cannot tell without know about the trade-offs between the goods
A. Nothing, as production cannot be increased
B. The opportunity cost will increase as it takes more to produce the good
B. The opportunity cost will decrease as it takes more to produce the good
D. One cannot tell without know about the trade-offs between the goods
answer
B. The opportunity cost will increase as it takes more to produce the good
question
Jack Greasish owns a coffee shop and is comparing the additional output produced and costs involved with hiring more labor versus using more capital equipment. The comparison is a form of
A. Regulation
B. Marginal Analysis
C. Economcies of Scale
D. Average cost balancing
A. Regulation
B. Marginal Analysis
C. Economcies of Scale
D. Average cost balancing
answer
B. Marginal Analysis
question
Consider a firm, using capital (K) and labor (L) in the production process, thats wants to expand productions. Suppose MPK = 600 and MPL = 50. The cost of capital is r = 100 ad the wage rate is w = 10. Should the this firm employ more labor or more capital?
A. Labor
B. Capital
C. Labor and Capital
D. Not enough information to answer
A. Labor
B. Capital
C. Labor and Capital
D. Not enough information to answer
answer
B. Capital
question
Consider a firm, using capital (K) and Labor (L) in the production process, that wants to expand production. Suppose MPK = 400. The cost of capital is r = 80, and the wage rate is w = 10. The firm would use more labor to expand production only if the marginal product of labor is greater than
answer
50
question
In the long run, the total cost function will be
A. Upward Sloping
B. Downward Sloping
C. Horizontal
D. U shaped
A. Upward Sloping
B. Downward Sloping
C. Horizontal
D. U shaped
answer
D. U shaped
question
Which of the following is a common cause of diseconomies of scale in large firm?
A. Increasing productivity of labor, but not capital
B. Decreasing wage rates of workers
C. Increased communication and management of a large business operation
D. An increase in competition
A. Increasing productivity of labor, but not capital
B. Decreasing wage rates of workers
C. Increased communication and management of a large business operation
D. An increase in competition
answer
C. Increased communication and management of a large business operation
question
If marginal cost curve is below the average cost curve, the average cost curve will be
A. Rising
B. Falling
C. Constant
A. Rising
B. Falling
C. Constant
answer
B. Falling
question
Suppose in the long run a firm's capital costs decrease. What will happen regarding the LRAC?
A. The firm will move from one point to another point, from left to right on the same LRAC
B. The firm will move from one point to another point, from right to left, one the same LRAC
C. The entire LRAC function will shift upward
D. The entire LRAC function will shift downward
A. The firm will move from one point to another point, from left to right on the same LRAC
B. The firm will move from one point to another point, from right to left, one the same LRAC
C. The entire LRAC function will shift upward
D. The entire LRAC function will shift downward
answer
D. The entire LRAC function will shift downward.
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