midterm weaknesses

Question 1

If people demand more Netflix subscriptions when the price of Hulu subscription falls, then Netflix and Hulu are:

a. not related.
b. substitutes
c. complements
d. inferior goods

Answer 1

c. complements

Question 2

You are considering two different pairs of eyeglasses available from the online retailer Warby parker. Thy are similar in quality, and each costs $95 (including prescription lenses), which is well within your price range. You try them both on and make your decision. Which demand factor is NOT important in this decision?

a. preferences
b. the number of buyers
c. income
d. the prices of other goods

Answer 2

b. the number of buyers

Question 3

Assuming htat farmers can easily stock beef or pork, if the price of beef decreases, you can expect the:

a. supply of pork to increase
b. quantity of pork supplied to increase
c. quantity of pork supplied to decrease
d. supply curve for pork to shift to the left.

Answer 3

a. supply of pork to increase

Question 4

When faced with a quantity decision, the economic surplus stops increasing when:

a. total benefits equal to total costs.
b. total benefits exceed total costs.
c. marginal benefits equal marginal costs.
d. marginal benefits exceed marginal costs.

Answer 4

c. marginal benefits equal marginal costs.

Question 5

To maximize economic surplus, keep increasing output as long as:

a. total benefits equal total costs.
b. total benefits exceed total costs.
c. marginal benefits equal marginal costs.
d. marginal benefits exceed marginal costs.

Answer 5

d. marginal benefits exceed marginal costs.