QUESTION 1 Antonio gets called into work on his day off. He spends $2 to get to
ID: 1161303 • Letter: Q
Question
QUESTION 1
Antonio gets called into work on his day off. He spends $2 to get to work and $2 to get home. He works for 9 hours and makes $12/hour. What is his opportunity cost of going into work?
A.
$108
B.
He incurs no opportunity cost.
C.
The value of 9 hours of his leisure time.
D.
The cost of travel to and from work.
1 points
QUESTION 2
What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook author accept lower royalties, and fewer used textbooks are sold?
price will rise
price will fall
price will stay exactly the same
the price change will be ambiguous
1 points
QUESTION 3
Which shows a negative relationship between x and y?
A.
A change in y = 5 and a change in x = 5
B.
A change in y = 2 and a change in x = 0
C.
A change in y = 0 and a change in x = 3
D.
A change in y = 4 and a change in x = -3
1 points
QUESTION 4
Which of the following is NOT a feature of perfect competition?
A.
Larger firms tend to dominate the market.
B.
There are many buyers and sellers.
C.
All goods in a market are identical.
D.
No one firm can influence the market price.
1 points
QUESTION 5
Price is constant or "given" to the individual firm selling in a purely competitive market because:
The firm's demand curve is downward sloping
There are no good substitutes for the firm's product
Each seller supplies a negligible fraction of total supply
Product differentiation is reinforced by extensive advertising
1 points
QUESTION 6
In the standard model of pure competition, a profit-maximizing entrepreneur will shut down in the short run if:
A.
Marginal cost is greater than average revenue
B.
Average cost is greater than average revenue
C.
Average fixed cost is greater than average revenue
D.
Total revenue is less than total variable costs
1 points
QUESTION 7
What effect does scarcity have on the economy?
A.
None in rich countries; it limits consumption in poor countries.
B.
It forces us to make tradeoffs.
C.
It forces to seek the market equilibrium.
D.
None of the above.
1 points
QUESTION 8
Which would most likely cause a rightward shift in the demand curve for the New York Timesnewspaper?
A.
A decrease in the costs of printing
B.
An increase in the price of the New York Daily News
C.
An improvement in cable television in the New York area
D.
A decrease in the size of the population in the New York area
1 points
QUESTION 9
The statement in a newspaper that "consumer prices rose last month by 1 percent, and if this trend continues, the annual rate of inflation will be 12 percent for the year" is an example of:
A.
A normative economic statement
B.
A positive economic statement
C.
Loaded terminology
D.
The fallacy of composition
1 points
QUESTION 10
Maria can make 5 pants or 10 shirts in 1 day. What is her opportunity cost of 1 pair of pants? (Hint: If she only makes 1 pair of pants, how many shirts is she giving up?)
A.
1 shirt
B.
2 shirts
C.
5 shirts
D.
10 shirts
1 points
QUESTION 11
A change in price results in
A.
Change in demand.
B.
Change in supply.
C.
Movement along the demand curve.
D.
All of the above
1 points
QUESTION 12
If all firms in a market have identical cost structures and if inputs used in the production of the good are readily available, then the long-run market supply curve for that good should be
perfectly elastic
downward sloping
upward sloping
perfectly inelastic
1 points
QUESTION 13
Why is the ceteris paribus assumption so important?
A.
Because the economy is so complex, we need to hold other variables constant to be able to predict changes in the economy.
B.
Because otherwise we would violate the law of demand.
C.
Because it means we're accounting for opportunity cost.
D.
It isn't.
1 points
QUESTION 14
What will happen to the market equilibrium if demand increases, ceteris paribus?
A.
Price will go up, quantity will go up.
B.
Price will go up, quantity will go down.
C.
Price will go down, quantity will go up.
D.
Price will go down, quantity will go down.
1 points
QUESTION 15
Which is most characteristic of a pure monopoly?
A.
There is a dominant firm in a multifirm industry
B.
The firm produces a good or a service for which there are no close substitutes
C.
The firm has considerable control over the quantity of the output produced, but not over price
D.
Exit from the industry is blocked but entry into the industry is relatively easy
1 points
QUESTION 16
Following a decrease in price from $1.90 to $1.50, the weekly demand for a magazine increases from 100,000 to 120,000 copies. The price elasticity of demand for magazines in this range is:
.43
.77
.98
1.23
1 points
QUESTION 17
"Trade can make everyone better off" because it allows countries (or individuals, or firms)
A.
to specialize in goods for which they have a comparative advantage.
B.
to consume inside their production possibilities frontier.
C.
to make goods more cheaply.
D.
None of the above.
1 points
QUESTION 18
. If a 5 percent fall in the price of a product causes the quantity demanded of the product to increase by 10 percent, the demand is:
A.
Inelastic
B.
Elastic
C.
Unit elastic
D.
Perfectly elastic
1 points
QUESTION 19
What does the change indicated on the graph represent?
A.
An increase in demand.
B.
A decrease in demand.
C.
An increase in supply.
D.
A decrease in supply.
A.
$108
B.
He incurs no opportunity cost.
C.
The value of 9 hours of his leisure time.
D.
The cost of travel to and from work.
Explanation / Answer
(Question 1) Option (C)
Opportunity cost = Benefit given up by going to work = value of 9 leisure-hours given up
(Question 2) Option (D)
More students attending college, and fewer old textbooks getting sold, will increase the demand for new textbook, shifting demand curve rightward and increasing price. Cheaper paper and lower royalty will reduce production cost, increasing the supply of new textbooks, shifting supply curve rightward and decreasing price. The net effect on price is uncertain.
(Question 3) Option (D)
Two variables have a negative relationship if they move (change) in opposite directions.
(Question 4) Option (A)
In perfect competition each firm is too small to influence or dominate the market.
NOTE: As per Chegg Answering Policy, first 4 questions are answered.
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