Micro ECON Quiz 1-3

Question 1

Use the following table to answer the question below.

Dave’s Production Possibilities
lbs green beans lbs corn
0 160
20 120
40 80
60 40
80 0
Simons Production Possibilites
lbs green beans lbs corn
0 80
40 60
80 40
120 20
160 0

Dave’s opportunity cost of producing 1 pound of corn is ______ pound(s) of green beans. Simon’s opportunity cost of producing 1 pound of corn is ______ pound(s) of green beans.

Multiple Choice
1, 2
2, 1/2
1/2, 2
2, 1

Answer 1

1/2, 2

Question 2

The economizing problem is essentially one of deciding how to make the best use of

Multiple Choice:
limited resources to satisfy limited economic wants.
unlimited resources to satisfy unlimited economic wants.
unlimited resources to satisfy limited economic wants.
limited resources to satisfy unlimited economic wants.

Answer 2

limited resources to satisfy unlimited economic wants.

Question 3

Use the following table to answer the question below.

Dave’s Production Possibilities Schedule
Pounds of Green Beans Pounds of Corn
0 160
20 120
40 80
60 40
80 0

Dave’s opportunity cost of producing 1 pound of green beans is ______ pound(s) of corn.

4
2
1
1/2

Answer 3

2

(0-20= 20; 160-120= 40) (40/20 = 2)

Question 4

If an individual has a comparative advantage in the production of a good, then this individual has the

Multiple Choice
highest opportunity cost in the production of the good.
same opportunity cost in the production of the good.
lowest opportunity cost in the production of the good.
greatest desire for the good.

Answer 4

lowest opportunity cost in the production of the good

Question 5

Use the following figure to answer the question below.

Picture on Quiz 1 question 5

Jane’s opportunity cost of producing 1 pound of corn is ______ pound(s) of green beans.

Multiple Choice
4
2
1
1/2

Answer 5

1

Question 6

Economic analysis assumes “rational or purposeful behavior,” which means that people will pursue decisions or actions

Multiple Choice
that will increase their well-being.
always based on full or complete information.
with minimal consideration for their emotions.

Answer 6

That will increase their well-being

Question 7

In the circular flow model, the price of rubber used to produce tires is determined in the

Multiple Choice
resource market.
product market.
money market.
business market.

Answer 7

Resource Market

Question 8

Use the following table to answer the question below.

Jake’s Production Possibilities Schedule Jane’s Production Possibilities Schedule
lbs of Green Beans lbs of Corns lbs of Green Beans lbs of Corn
0 160 0 80
10 120 20 60
20 80 40 40
30 40 60 20
40 0 80 0
Jake’s opportunity cost of producing 1 pound of green beans is ______ pound(s) of corn. Jane’s opportunity cost of producing 1 pound of green beans is ______ pound(s) of corn.

Multiple Choice
4,1
2,1
1,2
1/4, 1

Answer 8

4,1

Question 9

Mia wants to buy a book. The economic perspective suggests that Mia will buy the book if the

Multiple Choice
- marginal cost of the book is affordable for her.
- marginal benefit of the book is greater than zero.
- marginal cost of the book is greater than or equal to its marginal benefit.
-marginal benefit of the book is greater than or equal to its marginal cost.

Answer 9

Marginal benefit of the book is greater than or equal to its marginal cost

Question 10

Use the following table to answer the question below.

Giovanni’s Production Possibilities Jorge’s Production Possibilities
lbs of Green Beans lbs of Corns lbs of Green Beans lbs of Corn
0 160 0 320
40 120 20 240
80 80 40 160
120 40 60 80
160 0 80 0

Jorge should specialize in the production of which good?

Multiple Choice
corn
green beans
Both corn and green beans.
Neither corn nor green beans.

Answer 10

corn

Question 11

Use the following table to answer the question below.

Giovanni’s Production Possibilities Jorge’s Production Possibilities
lbs of Green Beans lbs of Corn lbs of Green Beans lbs of Corn
0 160 0 320
40 120 20 240
80 80 40 160
120 40 60 80
160 0 80 0

If Giovanni produces 40 pounds of green beans and Jorge produces 80 pounds of corn, then the total amount of green bean production equals _______ and the total amount of corn production equals ______. If Giovanni and Jorge specialize in their respective low-cost good, then the total pounds of green bean production equals _______ and the total pounds of corn production equals ______.

Multiple Choice
100, 200; 160, 320
200, 100; 160, 320
100, 200; 320, 160
200, 100; 320, 160

Answer 11

100,200; 160,320

Question 12

Picture on Quiz 1 Question 12

Jorge’s opportunity cost of producing 1 pound of green beans is ________ pound(s) of corn.

Multiple Choice
4
2
1
1/4

Answer 12

4

Question 13

Specialization allows a society to produce _____________ goods.

Multiple Choice
fewer
more
the same amount of

Answer 13

More

Question 14

What would most likely happen to the price of cable TV in Sydney, NE, when the single cable TV firm now has a new competitor coming into town?

Multiple Choice
Prices would rise.
Prices would stay the same
prices will decrease.
Prices would be internalized.

Answer 14

prices will decrease

Question 15

If interest rates are raised

Multiple Choice
-people are less likely to save their money in banks.
- entrepreneurs are less likely to borrow money and expand their businesses.
-entrepreneurs are more likely to expand a business by borrowing money.
- people are not affected by interest rates being raised: only when interest rates are lowered.

Answer 15

Entrepreneurs are less likely to borrow money and expand their businesses

Question 16

Which of the following is NOT a result of specialization?

Multiple Choice
Innovation of existing products
Development of new products
One-sided benefits
Wealth

Answer 16

One-sided benefits

Question 17

Which market is most likely to be a competitive market?

Multiple Choice
the market for a share of Walmart stock
the market for new Tesla cars
the market for cable television
the market for college education

Answer 17

The market for a share of Walmart stock

Question 18

Which market is most likely to be considered a competitive market?

Multiple Choice
Pharmaceuticals
Cable TV
Phone Apps
Diamonds

Answer 18

Phone Apps

Question 19

Which of the following is not an example of a market?

Multiple Choice
EBay
Grocery store
Donation center
An auction

Answer 19

Donation Center

Question 20

In a competitive market, which of the following is a defining characteristic?

Multiple Choice
- The firm sets its own prices.
- The firm is just one of many firms within that market.
- The firm can easily enter the market but not exit the market.
- The firm takes prices set by the government.

Answer 20

The firm is just one of many firms within that market

Question 21

The ______ is when society enforces property rights, contracts, and other rules based on an established set of laws.

Multiple Choice
rule of law
rule of man
rule of force
rule of one

Answer 21

Rule of law

Question 22

Markets

Multiple Choice
encourage specialization.
increase government intervention.
create unacceptable prices.
support closed economies.

Answer 22

Encourage specialization

Question 23

Which of the following ensures that you’ll find the goods and services that you’re looking for?

Multiple Choice
Markets and incentives
Government and incentives
Government and the rule of law
Markets and banks

Answer 23

Markets and incentives

Question 24

Which is the main motivation for entrepreneurs to take on the risks of producing?

Multiple Choice
Profit
Fun
Decreasing costs of production
Increasing costs of production

Answer 24

Profit

Question 25

Which of the following scenarios would likely entice entrepreneurs to increase the amount of borrowing from financial institutions?

Multiple Choice
More competitors entering the market
Raised interest rates
Optimism about the good or service they produce
Anticipation of more tax regulations for small business owners

Answer 25

Optimism about the good or service they produce

Question 26

Which of the following goods would most likely be an inferior good?

Multiple Choice
French wines
generic detergent
theater tickets
steak

Answer 26

Generic Detergent

Question 27

If X is a normal good, an increase in income will shift the

Multiple Choice
supply curve for X to the left.
supply curve for X to the right.
demand curve for X to the left.
demand curve for X to the right.

Answer 27

Demand curve for X to the right

Question 28

When examining the market for smart watches, a normal good, suppose incomes increase. How will the market respond?

Multiple Choice
Demand for smart watches will increase.
Demand for smart watches will decrease.
Supply of smart watches will increase.
Supply of smart watches will decrease.

Answer 28

Demand for smart watches will increase

Question 29

After graduating from college and getting a job you stop buying generic brand cereal. This suggests that generic brand cereal is a(n)

Multiple Choice
inferior good.
normal good.
substitutable good.
complementary good.

Answer 29

Inferior Good

Question 30

Picture Quiz 2 Question 5
Refer to the three demand curves. An “increase in quantity demanded” caused by a change in price would be illustrated by a change from

Multiple Choice
point 4 to point 6.
point 5 to point 1.
point 4 to point 1.
point 2 to point 5.

Answer 30

Point 4 to point 1

Question 31

Picture Quiz 2 Question 6
Refer to the three demand curves. A “decrease in demand” would be illustrated as a change from

Multiple Choice
point 1 to point 4.
point 6 to point 3.
line D3 to D2.
line D1 to D3.

Answer 31

Line D1 to D3

Question 32

Suppose product X and product Y are complements when consumed. An increase in the price of X can be expected to

Multiple Choice
decrease the demand for Y.
decrease the demand for X.
increase the demand for Y.
increase the demand for X.

Answer 32

Decrease the demand for Y

Question 33

Picture On Quiz 2 Question 8

Refer to the three demand curves for noodles. Which of the following would shift the demand for noodles from D1 to D2?

Multiple Choice
- a decrease in the number of buyers of noodles
- an increase in the number of buyers of noodles
- People hear that eating noodles can have negative health effects.
- a decrease in the price of noodles

Answer 33

An increase in the number of buyers of noodles

Question 34

Picture on Quiz 2 Question 9

Refer to the three demand curves for noodles and assume noodles are an inferior good. Which of the following would shift the demand for noodles from D1 to D2?

Multiple Choice
an increase in the price of noodles
an increase in consumer incomes
a decrease in consumer incomes
a decrease in the price of noodles

Answer 34

A decrease in consumer incomes

Question 35

When economists describe “a market,” they mean

Multiple Choice
- any place where stocks and bonds are traded.
- a communication network that allows individuals to keep in touch with each other.
- a hypothetical place where the production of goods and services occurs.
- any place where, or mechanism by which, buyers and sellers interact to trade goods, services, or resources.

Answer 35

Any place where, or mechanism by which, buyers and sellers interact to trade goods, services, or resources

Question 36

The table below shows the weekly demand for hamburgers in a market where there are just three buyers.

Price Buyer 1 Buyer 2 Buyer 3
$6 7 4 6
5 9 7 8
4 15 10 12
3 21 15 16

Refer to the table. If the price of a hamburger decreases from $6 to $5, then the weekly market quantity demanded will

Multiple Choice
increase from 24 to 52.
decrease from 52 to 24.
increase from 17 to 24.
decrease from 24 to 17.

Answer 36

Increase from 17 to 24

(add all buyers demand in row 6; add all buyers demand in row 5)

Question 37

Picture on Quiz 2 Question 12

Refer to the three demand curves for coffee and assume that coffee is a normal good. Which of the following would shift the demand for coffee from D1 to D2?

Multiple Choice
an increase in the price of coffee
an increase in consumer incomes
a decrease in consumer incomes
a decrease in the price of coffee

Answer 37

An increase in consumer incomes

Question 38

The table below shows the weekly supply for hamburgers in a market where there are just three sellers.

Price Seller 1 Qs 1 Seller 2 Qs 2 Seller 3 Qs 3
$5 8 5 4
4 6 4 3
3 4 3 2
2 2 2 1

Refer to the above table. If the price of a hamburger falls from $5 to $4, then the weekly market quantity of hamburgers supplied will

Multiple Choice
increase from 13 to 17.
decrease from 17 to 13.
increase from 9 to 17.
decrease from 17 to 9.

Answer 38

Decrease from 17 to 13

Question 39

Farmers withholding some of their current corn harvest from the market because they anticipate a higher price of corn in the near future would cause a

Multiple Choice
rightward shift in the current supply of corn.
movement up along the current supply curve of corn.
leftward shift in the current supply of corn.
movement down along the current supply curve of corn.

Answer 39

Leftward shift in the current supply of corn

Question 40

If a tax is placed on the production of good X, this will shift the

Multiple Choice
supply curve for X to the left.
supply curve for X to the right.
demand curve for X to the left.
demand curve for X to the right.

Answer 40

Supply Curve for X to the left

Question 41

Picture on Quiz 2 Question 16

The diagram shows three supply curves for apples today. Which of the following would cause the current supply of apples to shift from S1 to S3?

Multiple Choice
expectations of higher apple prices in the future
expectations of lower apple prices in the future
a decrease in the price of apples in the market
an increase in the number of corn farmers

Answer 41

Expectations of higher apple prices in the future

Question 42

Picture on Quiz 2 Question 17

The figure above shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S3?

Multiple Choice
a tax on wheat production
a subsidy for wheat production
an increase in the price of wheat.

Answer 42

A tax on wheat production

Question 43

The table below shows the weekly supply for hamburgers in a market where there are just three sellers.

Price Seller 1 Qs 1 Seller 2 Qs 2 Seller 3 Qs 3
$5 8 5 4
4 6 4 3
3 4 3 2
2 2 2 1

If seller 3 exits the market (goes out of business), then the weekly market quantity of hamburgers supplied at a price of $4 will be

Multiple Choice
6
9
10
13

Answer 43

10

Question 44

Picture on Quiz 2 Question 19

An increase in supply would best be reflected by a change from

Multiple Choice
point 3 to point 4.
point 2 to point 5.
point 1 to point 3.
point 1 to point 2.

Answer 44

Point 1 to Point 2

Question 45

The table below shows the weekly supply for hamburgers in a market where there are just three sellers.

Price Seller 1 Qs 1 Seller 2 Qs 2 Seller 3 Qs 3
$5 8 5 4
4 6 4 3
3 4 3 2
2 2 2 1

If there were 200 sellers in the market, each with a supply schedule identical to seller 3 in the table above, then the weekly quantity of hamburgers supplied in the market at a price of $4 would be

Multiple Choice
800
600
400.
200.

Answer 45

600

Question 46

A leftward shift of a product supply curve might be caused by

Multiple Choice
an improvement in the relevant technique of production.
a decline in the prices of needed inputs.
an increase in consumer incomes.
some firms leaving the industry.

Answer 46

Some firms leaving the industry

Question 47

How did production improvements like an assembly line help the production of Model T cars?

Multiple Choice
increased the demand for Model T cars
increased the supply of Model T cars
decreased the demand for Model T cars
decreased the supply of Model T cars

Answer 47

Increased the supply of Model T cars

Question 48

Picture on Quiz 2 Question 23

The figure shows three supply curves for apples. If you observe the supply of apples shift from S1 to S3, which of the following could be responsible for this shift?

Multiple Choice
Apple producers are willing to sell more at every price.
The producers of apples now receive a subsidy.
The producers of apples now must pay a tax
Apple production has increased.

Answer 48

The producers of apples now must pay a tax

Question 49

Picture on Quiz 2 Question 24

In the market for automobiles, suppose there was a technological advance in the production process for producing automobiles.

Which of the following statements correctly illustrates the effect on supply?

Multiple Choice
The supply curve will shift from S1 to S2.
The supply curve will shift from S2 to S1.
There will be movement from point x to point y.
There will be movement from point y to point x.

Answer 49

The supply curve will shift from S1 to S2

Question 50

When economists say that the supply for a product has decreased, they mean that the

Multiple Choice
- supply curve has shifted to the right.
- product has become particularly abundant for some reason.
- product has become more expensive and thus consumers are buying less of it.
- supply curve has shifted to the left.

Answer 50

Supply Curve has shifted to the left

Question 51

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.

If X is a normal good an increase in income will

Multiple Choice
increase D, increase P, and increase Q
increase S, increase P, and increase Q
decrease S, increase P, and increase Q
decrease D, decrease P, and increase Q

Answer 51

Increase D, Increase P, and Increase Q

Question 52

In competitive markets, surpluses or shortages will

Multiple Choice
- never exist because the markets are always at equilibrium.
- cause changes in the quantities demanded and supplied that tend to eliminate the excess production or excess demand
- cause shifts in the demand and supply curves that tend to eliminate the excess production or excess demand
- cause changes in the quantities demanded and supplied that tend to intensify the excess production or excess demand.

Answer 52

Cause changes in the quantities demanded and supplied that tend to eliminate the excess production or excess demand

Question 53

The table below shows the market for good X.

Quantity Demanded Price Quantity Supplied
50 $0 20
40 5 25
30 10 30
20 15 35
10 20 40
If the market price is $5, the market is experiencing

Multiple Choice
- a shortage of 15 units
- a surplus of 15 units.
- equilibrium.
- a surplus of 5 units.

Answer 53

A shortage of 15 Units

Question 54

Picture on Quiz 3 Question 4

What quantity will buyers be able to buy after the imposition of the price ceiling?

Multiple Choice

0J
0L
JL
KL

Answer 54

0J

Question 55

Picture on Quiz 3 Question 5

Which diagram above illustrates the effects on the peanut butter market, if severe flooding destroys a large portion of the peanut crop in the economy?

Multiple Choice
(1)
(2)
(3)
(4)

Answer 55

(4)

Question 56

Picture on Quiz 3 Question 6

Refer to the graph, which shows that the demand for beef shifted from D1 and D2. The change in equilibrium from E1 to E2 is most likely to result from a(n)

Multiple Choice
decrease in consumer incomes
increase in the cost of cattle feed.
increase in the price of pork.
decrease in the tax on beef products.

Answer 56

Decrease in Consumer incomes

Question 57

Picture On Quiz 3 Question 7

If the price in this market is fixed at $2 per bushel, then

Multiple Choice
- sellers will not be able to sell all the corn that they intended to sell.
- sellers will quickly run out of corn that they bring to market
- buyers will find too much corn in the market.
- buyers will be able to get as much corn as they wish to buy.

Answer 57

Sellers will quickly run out of corn that they bring to the market

Question 58

Which is of the following statements is correct?

Multiple Choice
- If demand increases, then price will decrease.
- If demand decreases, then price will decrease.
- If price increases, then demand will decrease.
- If price decreases, then demand will decrease.

Answer 58

If demand decreases, then price will decrease

Question 59

There is a surplus in a market for a product when

Multiple Choice
- the current price is lower than the equilibrium price.
- demand is less than supply.
- quantity demanded is less than quantity supplied.
- quantity demanded is greater than quantity supplied.

Answer 59

Quantity demanded is less than quantity supplied

Question 60

If a price floor is set above the equilibrium price in a market

Multiple Choice
- rationing will be unnecessary.
- shortages will develop.
- the quantity demanded will exceed the quantity supplied.
- the quantity supplied will exceed the quantity demanded.

Answer 60

The quantity supplied will exceed the quantity demanded

Question 61

There is a shortage in a market for a product when

Multiple Choice
- the current price is lower than the equilibrium price.
- supply is less than demand.
- demand is less than supply.
- quantity demanded is lower than quantity supplied.

Answer 61

The current price is lower than the equilibrium price

Question 62

A government-set price floor on a product

Multiple Choice
- does not interfere with the rationing function of price in a market system.
- will drive resources away from the production of the product.
- will attract more resources towards the production of the product.
- is intended to benefit the buyers of the product.

Answer 62

Will attract more resources towards the production of the product

Question 63

Picture on Quiz 3 Question 13

If actual production and consumption occur at Q2

Multiple Choice
- economic surplus is below the maximum.
- consumer surplus and producer surplus is maximized.
- there is deadweight loss of d.
- there is deadweight loss of f.

Answer 63

Consumer surplus and producer surplus is maximized

Question 64

Amanda buys a ruby for $330 for which she was willing to pay $340. The minimum acceptable price to the seller, Tony, was $140. Tony experiences a

Multiple Choice
- producer surplus of $470 and Amanda experiences a consumer surplus of $670.
- producer surplus of $190 and Amanda experiences a consumer surplus of $10.
- consumer surplus of $670 and Amanda experiences a producer surplus of $470.
- consumer surplus of $10 and Amanda experiences a producer surplus of $190.

Answer 64

Producer surplus of $190 and Amanda experiences a consumer surplus of $10

Question 65

Charlie is willing to pay $20 for a t-shirt that is priced at $15. If Charlie buys the t-shirt, then his consumer surplus is

Multiple Choice
$5.
$35.
$20.
$300.

Answer 65

$5

Question 66

Picture on Quiz 3 Question 16

What area represents consumer surplus after the government imposes the excise tax on the market?

Multiple Choice
- triangle GHI
- triangle FHE
- rectangle BGHE
- triangle AGB

Answer 66

Triangle AGB

Question 67

Picture on Quiz 3 Question 17

If the output level is Q1, then the sum of the consumer and producer surplus is

Multiple Choice
- bce.
- 0ac.
- 0abe.
- 0eQ1.

Answer 67

0eQ1

Question 68

At the output level defining allocative efficiency

Multiple Choice
- the areas of consumer and producer surplus necessarily are equal.
- marginal benefit exceeds marginal cost by the greatest amount.
- consumer surplus exceeds producer surplus by the greatest amount.
- the maximum willingness to pay for the last unit of output equals the minimum acceptable price of that unit of output.

Answer 68

The maximum willingness to pay for the last unit of output equals the minimum acceptable price of that unit of output

Question 69

Why does producer surplus decrease as price decreases?

Multiple Choice
- Producers sell less of the good and receive less from the lower price.
- Producers sell more of the good but receive less from the lower price.
- Consumers buy more of the good at the lower price.
- Producers sell less of the good while consumers buy even more of the good.

Answer 69

Producers sell less of the good and receive less from the lower price

Question 70

Which of the following conditions does not need to occur for a market to achieve allocative efficiency?

Multiple Choice
- Consumers’ maximum willingness to pay equals producers’ minimum acceptable price for the last unit of output.
- The sum of producer and consumer surplus is maximized.
- The total revenue received by producers equals the total cost of production.
- The marginal benefit of the last unit produced equals the marginal cost of producing that unit.

Answer 70

The total revenue received by producers equals the total cost of production

Question 71

Use the table below to answer the following question.

Units Market Price Minimum Acceptable Price
1 $10 $2
2 10 4
3 10 6
4 10 8
5 10 10
6 10 14

What is the value of producer surplus in the table above?

Multiple Choice
$54
$20
$12
$6

Answer 71

$20

In a market, firm will sell a quantity at which minimum acceptable price equals the market price. Therefore, equilibrium price would be $10 and quantity sold would be 5 units.

Answer
As a result, the value of producer surplus, according to the given table, would be:

=Market price-minimum acceptable price

=($10×5)-($2+$4+$6+$8+$10)

=$50-$30

=$20

Question 72

After an investigation into the automobile industry, we have concluded the marginal benefit of an additional car is $24,000. The marginal cost of producing an additional car is $24,000. It was also discovered that producers are not minimizing the average costs of production. We can conclude that

Multiple Choice
- production is allocatively efficient but not productively efficient.

• production is not allocatively efficient but is productively efficient.
• production is both allocatively and productively efficient.
• production is neither allocatively nor productively efficient.

Answer 72

Production is allocatively efficient but not productively efficient

Question 73

Consumer Max Willing to Pay Actual Price (Equilibrium Price)
A $50 $13
B 45 13
C 30 13
D 25 13
E 20 13

Refer to the provided table. What is the total consumer surplus in the market for all consumers A, B, C, D, and E?

Multiple Choice
$105Correct
$37
$86
$7

Answer 73

$105

Work
50-13=37
45-13=32
30-13=17
25-13=12
20-13=7

37+32+17+12+7=105

Question 74

Picture on Quiz 3 Question 24

If actual production and consumption occur at Q1 and the price is P2, deadweight loss equals area

Multiple Choice
b + d.
b.
d.
f.

Answer 74

D

Question 75

In the market for a pair of shoes, Jena is willing to pay $75 for a pair while Jane is willing to pay $85 for a pair. The actual price that each must pay for a pair of shoes is $65. What is the combined amount of consumer surplus of Jena and Jane?

Multiple Choice
$10
$30
$20
$160

Answer 75

$30

Work
75-65=10
85-65=20

20+10=30