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1.) Microeconomics focuses on A. Issues such as productivity, unemployment and i

ID: 1213224 • Letter: 1

Question

1.) Microeconomics focuses on A. Issues such as productivity, unemployment and inflation B. The general level of prices (inflation) C. Industries, firms, and consumers that make up the U.S. economy D. Measurements of global output

2.)

Which of the following is the best example of an opportunity cost?

The extra satisfaction derived from an additional slice of pizza

The value of a student’s class-time, study-time, and travel-time

Air pollution caused by automobile tailpipe emissions

The additional cost incurred to produce the next copy of Microsoft Office

3.)

All other things being equal, the SUPPLY curve indicates that AS PRICE DECREASES, the quantity supplied by suppliers will ____________:

Decrease

Increase

Stay the same

4.)

All other things being equal, the DEMAND curve indicates that AS PRICE DECREASES, the quantity demanded by consumers will ____________:

Decrease

Increase

Stay the same

A.

The extra satisfaction derived from an additional slice of pizza

B.

The value of a student’s class-time, study-time, and travel-time

C.

Air pollution caused by automobile tailpipe emissions

D.

The additional cost incurred to produce the next copy of Microsoft Office

Explanation / Answer

Answer 1. (C) Industries, firms and consumers. Microeconomics is the study of micro units or individual units in the economy.

Answer 2. (B) The value of student's class time, study time and travel time. Opportunity cost is the cost of next best alternative activity.

Answer 3. (A) Decrease. The supply curve is positively sloped curve indicating a positive relation between price level and quantity supplied. (Law of Supply)

Answer 4. (B) Increase. The demand curve is downward sloping indicating a negative relation between price and quantity demanded. (Law of demand)