Exam Spring. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question.

Transcription

1 Class: Date: Exam Spring Multiple Choice Identify the choice that best completes the statement or answers the question. Figure Ch.7 Refer to Figure At equilibrium, total surplus is measured by the area a. ACG. b. CFG. c. KBG. d. AFG. Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. Hours Needed To Make 1 Amount Produced in 40 Hours mixer toaster mixers toasters Maya Miguel Ch.3 Refer to Table 3-6. The opportunity cost of 1 mixer for Miguel is a. 1/2 hour of labor. b. 8 hours of labor. c. 1/2 toaster. d. 2 toasters. 1

2 Figure 3-5 Hosne s Production Possibilities Frontier Merve s Production Possibilities Frontier 3. Ch.3 Refer to Figure 3-5. Hosne has an absolute advantage in the production of a. purses and Merve has an absolute advantage in the production of wallets. b. neither good and Merve has an absolute advantage in the production of both goods. c. both goods and Merve has an absolute advantage in the production of neither good. d. wallets and Merve has an absolute advantage in the production of purses. 4. Ch.6 If a tax is levied on the sellers of a product, then the demand curve will a. not shift. b. shift down. c. become flatter. d. shift up. 2

3 Figure 6-3 Panel (a) Panel (b) 5. Ch.6 Refer to Figure 6-3. In panel (b), there will be a. neither a surplus nor a shortage b. equilibrium in the market. c. a surplus of wheat. d. a shortage of wheat. Figure 6-1 Panel (a) Panel (b) 6. Ch.6 Refer to Figure 6-1. The price ceiling shown in panel (a) a. creates a surplus. b. is not binding. c. creates a shortage. d. Both a) and b) are correct. 3

4 7. Ch.5 When the price of bubble gum is $0.50, the quantity demanded is 400 packs per day. When the price falls to $0.40, the quantity demanded increases to 600. Given this information and using the midpoint method, we know that the demand for bubble gum is a. perfectly inelastic. b. inelastic. c. unit elastic. d. elastic. 8. Ch.5 If a 10% decrease in price for a good results in a 20% increase in quantity demanded, the price elasticity of demand is a b. 2. c. 1. d Ch.4 Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are a. inferior goods. b. complementary goods. c. substitute goods. d. normal goods. 10. Ch.4 If a increase in income decreases the demand for a good, then the good is a(n) a. complementary good. b. inferior good. c. substitute good. d. normal good. 4

5 Figure Ch.2 Refer to Figure 2-3. Inefficient production is represented by which point(s)? a. J, L, M b. M c. K, N d. J, L 5

6 Figure 2-8 Panel (a) Panel (b) 12. Ch.2 Refer to Figure 2-8, Panel (a). The opportunity cost of moving from point J to point L is a. 2 cups of coffee. b. 2 donuts. c. 2 donuts and 2 cups of coffee. d. 6 cups of coffee. 6

7 Figure Ch.5 Refer to Figure Using the midpoint method, what is the price elasticity of supply between point B and point C? a b c d

8 Figure 8-9 The vertical distance between points A and C represent a tax in the market. 14. Ch.8 Refer to Figure 8-9. The amount of tax revenue received by the government is a. $6,000. b. $4,000. c. $24,000. d. $10, Ch.6 When a tax is imposed on the buyers of a good, the demand curve shifts a. upward by the amount of the tax. b. downward by the amount of the tax. c. downward by less than the amount of the tax. d. upward by less than the amount of the tax. 8

9 Figure Ch.2 Refer to Figure 2-4. Suppose this economy is producing at point W. Which of the following statements would best explain this situation? a. The economy lacks the resources to produce at a more desirable point. b. There are unused resources in the economy. c. The economy s available technology prevents it from producing at a more desirable point. d. Any of the above statements would be a legitimate explanation for this situation. 17. Ch.4 Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a a. surplus to exist and the market price of roses to increase. b. shortage to exist and the market price of roses to increase. c. surplus to exist and the market price of roses to decrease. d. shortage to exist and the market price of roses to decrease. 9

10 Table 3-9 Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies. Minutes Needed to Number of Computers Set Up or Tested in a 40-Hour Week Set Up 1 Computer Test 1 Computer Computers Set Up Barb Jim Computers Tested 18. Ch.3 Refer to Table 3-9. Jim has an absolute advantage in a. neither setting up nor testing computers and a comparative advantage in setting up computers. b. both setting up and testing computers and a comparative advantage in setting up computers. c. both setting up and testing computers and a comparative advantage in testing computers. d. neither setting up nor testing computers and a comparative advantage in testing computers. 19. Ch.8 When a tax is levied on a good, a. both buyers and sellers are made worse off. b. only buyers are made worse off. c. neither buyers nor sellers are made worse off. d. only sellers are made worse off. 20. Ch.2 When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good a. may increase, decrease, or not change as more of the good is produced. b. does not change as more of the good is produced. c. decreases as more of the good is produced. d. increases as more of the good is produced. 10

11 Figure Ch.5 Refer to Figure Over which range is the supply curve in this figure the least elastic? a. $16 to $40 b. $100 to $220 c. $40 to $100 d. $220 to $ Ch.8 Suppose the government increases the size of a tax by 40 percent. The deadweight loss from that tax a. increases by more than 40 percent. b. decreases by 40 percent. c. increases but by less than 40 percent. d. increases by 40 percent. 11

12 Figure Ch.7 Refer to Figure When the price is P1, producer surplus is a. A+B. b. C+D. c. A. d. C. Figure Ch.4 Refer to Figure At a price of $4, there is a a. surplus of 6 units. b. shortage of 6 units. c. surplus of 3 units. d. shortage of 3 units. 12

13 Figure 3-7 Bintu s Production Possibilities Frontier Juba s Production Possibilities Frontier 25. Ch.3 Refer to Figure 3-7. Bintu has a comparative advantage in the production of a. bowls and Juba has a comparative advantage in the production of cups. b. cups and Juba has a comparative advantage in the production of bowls. c. neither good and Juba has a comparative advantage in the production of both goods. d. both goods and Juba has a comparative advantage in the production of neither good. 26. Ch.7 All else equal, what happens to consumer surplus if the price of a good increases? a. Consumer surplus decreases. b. Consumer surplus may increase, decrease, or remain unchanged. c. Consumer surplus is unchanged. d. Consumer surplus increases. 13

14 Figure 8-2 The vertical distance between points A and B represents a tax in the market. 27. Ch.8 Refer to Figure 8-2. The amount of deadweight loss as a result of the tax is a. $5. b. $2.50. c. $10. d. $

15 Figure Ch.7 Refer to Figure 7-5. If the government imposes a price floor of $120 in this market, then consumer surplus (compared to the surplus at equilibrium price) will decrease by a. $125. b. $225. c. $75. d. $