Question;Review Test Submission: Exam 1ContentTest Exam 1Instructions This test has 40 questions randomly drawn from chs 1-5. You may have a calculator and 1 3x5 note card as well as scratch paper as you work the exam. This is also what you will be allowed to have on the final exam.Question 12.5 out of 2.5 pointsIf the maximum price a person is willing and able to pay for a good is $50, and consumers? surplus is $20, then it follows that the price the buyer paid for the good isQuestion 22.5 out of 2.5 pointsWhich of the following statements is false?Answers: A change in the price of good X will usually change the quantity supplied of good X, ceteris paribus.A change in the number of sellers of a good can change the supply of that good.Price and quantity supplied are directly related.A vertical supply curve represents a direct relationship between price and quantity supplied.Question 32.5 out of 2.5 pointsExhibit 3-12-----------------------------Quantity Supplied --------------------------------------Price Aline Bentley Calvin Daniel Market$6 20 21 8 0 (A)7 22 23 10 4 (B)8 24 25 13 9 (C)9 26 27 17 14 (D)10 28 29 22 20 (E)11 30 31 32 38 (F)Assume that Aline, Bentley, Calvin, and Daniel are the only sellers in this market.Refer to Exhibit 3-12. Fill in blanks (C) and (D) respectively with the market quantity supplied at each given price.Answers: 17.75, 21.0047, 5250, 5571, 84none of the aboveQuestion 42.5 out of 2.5 pointsExhibit 3-13 -----------------------------Quantity Demanded-------------------------------------Price Jose Kaitlyn Leah Maria Market$5 30 11 25 30 (A)6 27 10 23 26 (B)7 23 9 20 22 (C)8 19 8 17 18 (D)9 14 7 14 13 (E)10 4 6 10 7 (F)Assume that Jose, Kaitlyn, Leah, and Maria are the only buyers in this market.Refer to Exhibit 3-13. Fill in blanks (E) and (F) respectively with the market quantity demanded at each given price.Answers: 12, 6.7525, 1975, 6448, 27none of the aboveQuestion 52.5 out of 2.5 pointsExhibit 3-5Refer to Exhibit 3-5. In the market shown, if equilibrium was originally at point W and is now at point X, the new equilibrium price is __________ it was originally and the new equilibrium quantity is ____________ it was originally.Answers: greater than, greater thanless than, greater thangreater than, less thanless than, less thanQuestion 62.5 out of 2.5 pointsLabor is a resource that is necessary to produce many goods. "If the price of labor falls," says the economist, "the prices of goods will soon follow." How does this work?Answers: If the price of labor falls, the supply of goods rises, and the prices of those goods fall.If the price of labor falls, the quantity supplied of goods rises, and the prices of those goods fall.If the price of labor falls, the demand for goods falls, and the prices of those goods fall.If the price of labor falls, the demand for goods rises, and the prices of those goods fall.If the price of labor falls, the supply of goods falls, and the prices of those goods fall.Question 72.5 out of 2.5 pointsExhibit 3-9Refer to Exhibit 3-9. A severe recession has sharply decreased the incomes of consumers. Knowing that X is a normal good, you expect a movement in the market for X fromAnswers: A to B.E to F.F to E.B to A.Question 82.5 out of 2.5 pointsResource X is necessary to the production of good Y. If the price of resource X falls, the equilibrium price of Y will ______________ and the equilibrium quantity of Y willAnswers: rise, rise.fall, fall.fall, rise.rise, fall.Question 92.5 out of 2.5 pointsExhibit 3-4Refer to Exhibit 3-4. At a price of $6 _______________ units will be exchanged.Answers: 5101520Question 102.5 out of 2.5 pointsExhibit 3-5Refer to Exhibit 3-5. In the market shown, a rightward shift in supply from S1 to S2 could have been caused byAnswers: a decline in the number of buyers in the market.a decline in the price of a substitute good.a decrease in income (assuming the good is a normal good).the granting of a subsidy to the producer.none of the aboveQuestion 112.5 out of 2.5 pointsIf people begin to favor science fiction novels to a greater degree than previously, the demand curve for science fiction novelsAnswers: shifts rightward.shifts leftward.stays constant.can shift either rightward or leftward.Question 122.5 out of 2.5 pointsAn economic concept that explains why Disney World charges more for the first day of admission than they do for each additional day is the law ofAnswers: supply.demand and supply.diminishing marginal utility.diminishing returns.none of the aboveQuestion 132.5 out of 2.5 pointsExhibit 2-1Refer to Exhibit 2-1. The PPF illustratesAnswers: constant opportunity costs between guns and butter.that guns are more important than butter.increasing opportunity costs between guns and butter.the opportunity cost of one unit of guns is four units of butter.none of the aboveQuestion 142.5 out of 2.5 pointsAccording to the text, farming today in the U.S. is __________ productive compared to a century ago, resulting in there being __________ farmers today than at the turn of the previous century.Answers: about as, fewerabout as, moremuch more, fewermuch more, moreQuestion 152.5 out of 2.5 pointsExhibit 2-7Refer to Exhibit 2-7. For which of the following is the statement "In order to get more civilian goods, we have to forfeit some military goods" true?Answers: a movement from A to Ca movement from B to Da movement from C to Da movement from F to Dnone of the aboveQuestion 162.5 out of 2.5 pointsA PPF is bowed outward as a result ofAnswers: constant opportunity costs.increasing opportunity costs.decreasing opportunity costs.scarcity.choice.Question 172.5 out of 2.5 pointsExhibit 2-9Alex AdamGood A Good B Good A Good B0 300 0 16025 225 30 12050 150 60 8075 75 90 40100 0 120 0Refer to Exhibit 2-9. For Adam, the opportunity cost of producing one unit of good B is ____________ unit(s) of good A.Answers: 3.000.330.751.33Question 182.5 out of 2.5 pointsCarlos can produce the following combinations of X and Y: 10X and 10Y, 5X and 15Y, and 0X and 20Y. The opportunity cost of one unit of X for Carlos isAnswers: 1 unit of Y.2 units of Y.1/2 unit of Y.1/4 unit of Y.none of the aboveQuestion 192.5 out of 2.5 pointsExhibit 2-7Refer to Exhibit 2-7. Point F isAnswers: unattainable if the economy's PPF is PPF1.inefficient if the economy's PPF is PPF2.attainable if the economy's PPF is PPF2.all of the abovenone of the aboveQuestion 202.5 out of 2.5 pointsExhibit 2-1Refer to Exhibit 2-1. The opportunity cost of moving from point B to A isAnswers: 10,000 units of butter.20,000 units of butter.50,000 units of guns.the maximum amount of butter that can be produced with available resources.Question 212.5 out of 2.5 pointsIf there is always a 4-for-1 tradeoff between producing good X and good Y, it follows that the opportunity cost of X (in terms of Y) ____________________ and the PPF for these two goods is ______________________.Answers: decreases at low levels of X, a straight linerises at high levels of Y, bowed-outwarddecreases at high levels of X, bowed-outwardis always the same, a straight lineQuestion 222.5 out of 2.5 pointsIf there is always a three-for-one tradeoff between goods X and Y, then the PPF between X and Y isAnswers: a downward-sloping curve that is bowed outward.a downward-sloping curve that is bowed inward.a downward-sloping straight line.an upward-sloping straight line.Question 232.5 out of 2.5 pointsExhibit 2-1Refer to Exhibit 2-1. If the economy is at point C, it follows thatAnswers: more guns and more butter could be produced with available resources than are currently being produced.only more guns could be produced with available resources than are currently being produced.only more butter can be produced with available resources than are currently being produced.C is an unattainable point.Question 242.5 out of 2.5 pointsExhibit 4-8Refer to Exhibit 4-8. If the wheat market is in competitive equilibrium the total surplus will equalAnswers: area 1 + 2 + 3 + 4 + 5area 1 + 2 + 3area 2 + 3 + 4 + 5area 4 + 5Question 252.5 out of 2.5 pointsIf the price of good X is $90 and the price of good Y is $30, it follows that the relative price of one unit of good Y is ___________ unit(s) of good X.Answers: 0.331.333.002.00There is not enough information to answer the question.Question 262.5 out of 2.5 pointsJake is an excellent barber. However, all customers who come to him for a haircut must buy a bottle of shampoo. This type of arrangement is known asAnswers: a tie-in sale.a sweetheart deal.an exclusive contract.a cross subsidy.Question 272.5 out of 2.5 pointsA price floor set above the equilibrium price willAnswers: clear the market for the good.result in a shortage of the good.result in a surplus of the good.force some firms in this industry to go out of business.Question 282.5 out of 2.5 pointsA price ceiling is a government-mandatedAnswers: minimum price below which legal trades cannot be made.maximum price above which legal trades cannot be made.minimum price above which legal trades cannot be made.maximum price below which legal trades cannot be made.Question 292.5 out of 2.5 pointsSome years ago, chemists at 3M Corporation were trying to create a super-strong glue. Somehow they got their molecules twisted and came up with one of the weakest glues ever made. But, rather than pouring it down the drain, they tried coating some paper with it, and the "Post-It Note" was born. In this case, 3M was acting as a(n)Answers: utility.rationer.entrepreneur.abstraction.Question 302.5 out of 2.5 pointsBy looking at the different slices of a pie chart, and comparing one slice to another, it is possible to quickly estimateAnswers: relative relationships.absolute relationships.the slope of a line.the slope of a curve.none of the aboveQuestion 312.5 out of 2.5 pointsMinerals, animals, water and forests are all considered to be the resource known asAnswers: capitalentrepreneurshiplaborlandnone of the aboveQuestion 322.5 out of 2.5 pointsThe branch of economics that studies the decisions of individuals and firms is calledAnswers: macroeconomics.microeconomics.microeconomics and macroeconomics.positive economics.normative economics.Question 332.5 out of 2.5 pointsExhibit 1-2Point X YA 10 100B 20 115C 30 135D 40 165Refer to Exhibit 1-2. Based on the data provided in this table, what type of relationship exists between variables X and Y?Answers: inversedirectindependentThere is no relationship between variables X and Y.Question 342.5 out of 2.5 pointsSomething that motivates or encourages people to take an action is referred to as a(n)Answers: utility.abstract.market.incentive.Question 350 out of 2.5 pointsA mandatory seatbelt law ends up raising the number of traffic fatalities if it lowers fatalities per accident from 0.10 to 0.07 while raising the number of accidents per period from 35,000 to any more thanAnswers: 35,000.38,500.37,450.50,000.Question 362.5 out of 2.5 pointsThe absence of value judgments is the essence ofAnswers: normative economics.positive economics.microeconomics.macroeconomics.Question 372.5 out of 2.5 pointsWhen congestion occurs on the freeway (because of a shortage of freeway space), the economist would most likely explain this by saying that it is becauseAnswers: the freeway has too few miles of roadway.there are too many cars.the price of driving on the freeway is below the equilibrium price.a and cQuestion 382.5 out of 2.5 pointsThe lower the price of medical care in general, the higher the ____________________________ medical care and the ______________________ specific items that make up medical care (such as x-rays). The result will be a _______________ price for the specific items that make up medical care.Answers: quantity demanded of, higher the demand for, higherdemand for, higher the demand for, higherquantity demanded of, lower the demand for, lowerdemand for, higher the quantity demanded of, higherQuestion 392.5 out of 2.5 pointsExhibit 5-2Refer to Exhibit 5-2. If the tuition is set at $70 there will beAnswers: a shortage at 10 a.m. and a surplus at 8 a.m.a surplus at 10 a.m. and a shortage at 8 a.m.equilibrium at 10 a.m. and a surplus of seats at 8 a.m.equilibrium at 10 a.m. and a shortage of seats at 8 a.m.Question 402.5 out of 2.5 pointsExhibit 5-1Refer to Exhibit 5-1, which shows supply and demand for freeway space at both 8 a.m. and 11 p.m. Which toll creates equilibrium at 11 p.m.?Answers: P2P10It is not constant.
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