Professional Documents
Culture Documents
Use The Following To Answer Questions 5-7:: Figure: Strawberries and Submarines
Use The Following To Answer Questions 5-7:: Figure: Strawberries and Submarines
C)
Use the following to answer questions 5-7: Figure: Strawberries and Submarines
Page 1
C)
C)
D) economic growth.
9. In a single day, Sarah can produce 10 hamburgers while Abe can produce 5
hamburgers. We then know that:
A) Sarah has a comparative advantage in making hamburgers.
B)
C)
C)
C)
C)
18. If they produce only hamburgers, then in a single day Sarah can produce
10 hamburgers while Abe can produce 5 hamburgers. If they only make
milkshakes, then in a single day Sarah can produce 10 milkshakes while
Abe can produce 4 milkshakes. We then know that:
A) Sarah has an absolute advantage and a comparative advantage in
making hamburgers.
B) Sarah has an absolute advantage and a comparative advantage in
making milkshakes.
C) Abe has an absolute advantage and a comparative advantage in making
hamburgers.
D) Abe has an absolute advantage and a comparative advantage in making
milkshakes.
19. If goods A and B are substitutes, a decrease in the price of good B will:
A) increase the demand for good A.
B)
C)
D) increase the demand for good B and decrease the demand for good A.
20. If goods A and Z are complements, an increase in the price of good Z will:
A) increase the demand for good A.
B)
C)
D) decrease the demand for good A and decrease the demand for good Z.
21. A decrease in the price of a good will result in:
A) an increase in demand.
B)
an increase in supply.
C)
Page 4
22. The demand for meals at a local Applebee's will fall if:
A) the Olive Garden offers a 10% discount coupon in the local newspaper.
B)
C)
C)
24. The figure shows the weekly market for hamburgers at the Tasty Burger
Palace. If the price of a burger is $2, consumer surplus will equal:
A) $650.
B) $400
C) $225
D) $450
25. The figure shows the weekly market for hamburgers at the Tasty Burger
Palace. If the Palace sells 400 burgers, consumer surplus will equal:
A) $650.
B) $400
C) $225
D) $450
26. The figure shows the weekly market for hamburgers at the Tasty Burger
Palace. If the Palace lowers the price of a burger from $2 to $1.50, the gain
in consumer surplus to consumers who are persuaded to buy at the lower
price (and who were not buying when the price was $2) is equal to:
A) $100. B) $75
C) $50
D) $25
Page 5
27. (Table: Producer Surplus and Phantom Tickets) Given the information in
the table, if the price for Phantom tickets is $55, which student has the
highest individual producer surplus?
A) Tim
B) Laura
C) Rick
D) Ralph
28. (Table) Given the information in the table, if the price for Phantom tickets is
$140, and there is no other market for tickets, total producer surplus for
these five students is:
A) $139.
B) $110
C) $40
D) $379
29. (Table: Producer Surplus and Phantom Tickets) Given the information in
the table, if the price for Phantom tickets is $55, total producer surplus for
the five students is:
A) $54.
B) $79
C) $84
D) $64
30. (Table: Producer Surplus and Phantom Tickets) Given the information in
the table, if these students can sell their Phantom tickets for only $5, then:
A) Tim will be the only student not to sell his ticket.
B)
C)
the total producer surplus for the five students will be $4.
D) the total producer surplus for the five students will be $330.
31. The likely result of a price floor is:
A) a surplus of the good at a price above the market equilibrium price.
B)
C)
C)
33. (Figure: Market for Hybrid Cars) Identify the area(s) that represent
deadweight loss if there is a binding price floor.
A) a + b + c
B)
b+c+d+e
C)
c+e
D) c
34. The price of gasoline rises 5% and the quantity of gasoline purchased falls
1%. The price elasticity of demand is equal to ________ and demand is
described as ________.
A) 0.2; inelastic
B)
5; inelastic
C)
0.2; elastic
D) 5; elastic
35. The demand for textbooks is price inelastic. Which of the following would
explain this?
A) Many alternative textbooks can be used as substitutes.
B)
Page 7
C)
downward-sloping.
C)
upward-sloping.
D) vertical.
C)
C)
C)
price-elastic.
C)
equal to 1.
D) perfectly elastic.
Page 8
41. The principle of diminishing marginal utility means that when Sarah eats
pizza, her satisfaction from the second slice of pizza is probably:
A) greater than that from the first.
B)
C)
42. (Table: Utility II) The marginal utility for the sixth unit is:
A) 25.
B) 0
C) 25 D) -15
43. (Table: Utility II) Total utility is maximized at the ________ unit.
A) First
B) second
C) fourth
D) sixth
44. (Table: Utility II) Marginal utility is zero for the ________ unit.
A) First
B) second
C) third
D) fifth
45.
A)
B)
C)
D)
C)
Page 9
47. (Table: Production of Bagels) The marginal product of the fifth worker is:
A) 5,000.
B) 9,000
C) 10,000
D) 12,000
48. (Table) Diminishing marginal returns begin with the addition of the ________
worker.
A) Third
B) fourth
C) fifth D) sixth
Page 10
49. (Figure and Table: Variable, Fixed, and Total Costs) In the figure, the
marginal cost of increasing production from 51 to 64 bushels of wheat is:
A) $16.
B)
$15.38.
C)
$12.50.
D) $18.75.
50. (Figure and Table: Variable, Fixed, and Total Costs) In the figure, when 96
bushels of wheat are produced, average fixed cost is ________, average
variable cost is ________, and average total cost is ________.
A) $7.84; $11.76; $19.60
B)
C)
C)
C)
D) limited information.
53. If all firms in an industry are price-takers, then:
A) each firm can take the price that it wants to charge and sell at this
price, provided it is not too different from the prices other firms are
charging.
B) each firm takes the market price as given for its current output level,
recognizing that the price will change if it alters its output significantly.
C) an individual firm cannot alter the market price even if it doubles its
output.
D) the market sets the price, and each firm can take it or leave it (by
setting a different price).
54. If a perfectly competitive firm is producing a quantity that generates MC <
MR, then profit:
A) is maximized.
B)
C)
C)
C)
Page 12
C)
False
C)
C)
are poverty programs that specifically help those with low incomes.
C)
provide benefits only for those households that earn below the mean
household income in the United States for a given year.
D) provide only in-kind benefits.
Page 13
are poverty programs that specifically help those with low incomes.
C)
provide benefits only for those households that earn below the mean
household income in the United States for a given year.
D) provide only in-kind benefits.
64. Increases in income inequality in the United States have been attributed to:
A) equal and rising increases in the salaries of low-wage workers.
B)
C)
C)
Page 14
Answer Key
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
A
B
B
B
B
B
B
C
B
B
C
B
A
B
A
D
D
B
C
B
C
A
D
C
B
D
A
D
C
C
A
A
C
A
D
D
A
D
B
A
C
A
C
D
C
D
B
B
B
C
A
C
Page 15
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
C
B
A
B
D
A
A
B
B
B
A
B
B
Page 16