Archives: Quiz

A drilling company purchased a mining site for $450,000 on July 1, 2016. The company expects to mine ore for the next 10 years and anticipates that a total of 80,000 tons will be recovered. During 2016, the company extracted […]

Fixed costs are costs that vary in total dollar amount as the level of activity changes. a. True b. False The payback period is determined using which of the following formulas? a. Amount to be invested / Annual average net […]

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price, then it must be the case that a. both consumer surplus and producer surplus increase. b. consumer surplus increases […]

Table 77 BuyerWillingness to Pay Michael$500 Earvin$400 Larry$350 Charles$300 Refer to Table 77. You have two essentially identical extra tickets to the Midwest Regional Sweet 16 game in the men’s NCAA basketball tournament. The table shows the willingness to pay […]

Economists typically measure efficiency using a. the price paid by buyers. b. the quantity supplied by sellers. c. total surplus. d. profits to firms. The opportunity cost of an item is a. the number of hours needed to earn money […]

Figure 43 Consumer 1Consumer 2 Refer to Figure 43. If these are the only two consumers in the market, then the market quantity demanded at a price of $10 is a. 0 units. b. 5 units. c. 8.33 units. d. […]

To say that government intervenes in the economy to promote equality is to say that government is aiming to a. create a more fair distribution of income. b. change the ingredients that are used to “bake” the economic pie. c. […]

Figure 89 The vertical distance between points A and C represents a tax in the market. Refer to Figure 89. The amount of amount of deadweight loss as a result of the tax is a. $4,000. b. $5,000. c. $6,000. […]

Figure 422 Refer to Figure 422. At a price of $20, there is a a. surplus of 4 units. b. surplus of 8 units. c. shortage of 4 units. d. shortage of 8 units. Figure 922 The following diagram shows […]

Figure 917 Refer to Figure 917. Without trade, consumer surplus is a. $400 and producer surplus is $200. b. $400 and producer surplus is $800. c. $1,600 and producer surplus is $200. d. $1,600 and producer surplus is $800. The […]

Table 41 PriceQuantity Demanded by MichelleQuantity Demanded by LauraQuantity Demanded by Hillary $55411 $46613 $37815 $281017 $191219 $0101421 Refer to Table 41. If the market consists of Laura and Hillary only and the price falls by $1, the quantity demanded […]

Table 34 Assume that Andrea and Paul can switch between producing wheat and producing beef at a constant rate. Minutes Needed to Make 1 Bushel of WheatPound of Beef Andrea3015 Paul155 Refer to Table 34. Which of the following combinations […]

Which of the following is not a characteristic of a perfectly competitive market? a. Different sellers sell identical products. b. There are many sellers. c. Sellers must accept the price the market determines. d. All of the above are characteristics […]

Figure 86 The vertical distance between points A and B represents a tax in the market. Refer to Figure 86. The tax results in a deadweight loss that amounts to a. $600. b. $900. c. $1,500. d. $1,800. Figure 314 […]

If an increase in income results in a decrease in the quantity demanded of a good, then for that good, the a. crossprice elasticity of demand is negative. b. price elasticity of demand is elastic. c. income elasticity of demand […]

Policymaking in a representative democracy a. is straightforward and does not involve any disagreement. b. benefits from the input of economists, even if their advice is not always followed. c. is conducted without the input of economists. d. is always […]

Which tools allow economists to determine if the allocation of resources determined by free markets is desirable? a. profits and costs to firms b. consumer and producer surplus c. the equilibrium price and quantity d. incomes of and prices paid […]

Figure 611 Refer to Figure 611. If the government imposes a price floor at $10, it would be a. binding if market demand is Demand A or Demand B. b. nonbinding if market demand is Demand A or Demand B. […]

The English word that comes from the Greek word for “one who manages a household” is a. market. b. consumer. c. producer. d. economy. Table 78 During the last two days, Chad purchased a latte from two different stores. The […]

Scenario 54 Milk has an inelastic demand, and beef has an elastic demand. Suppose that a mysterious increase in bovine infertility decreases both the population of dairy cows and the population of beef cattle by 50 percent. Refer to Scenario […]

Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause a(n) a. decrease in the demand for printers and a decrease in the quantity supplied of printers. b. […]

The imposition of a binding price floor on a market a. causes quantity demanded to be greater than quantity supplied. b. causes quantity demanded to be less than quantity supplied. c. causes quantity demanded to be equal to quantity supplied. […]

Suppose researchers at the University of Wisconsin discover a new vitamin that increases the milk production of dairy cows. If the demand for milk is relatively inelastic, the discovery will a. raise both price and total revenues. b. lower both […]

In the circularflow diagram, which of the following items flows from households to firms through the markets for goods and services? a. goods and services b. dollars paid to land, labor, and capital c. dollars spent on goods and services […]

A movement downward and to the right along a demand curve is called a(n) a. increase in demand. b. decrease in demand. c. decrease in quantity demanded. d. increase in quantity demanded. Suppose Jim and Tom can both produce two […]

If the price elasticity of demand for a good is 2, then a 10 percent decrease in the quantity demanded must be the result of a. a 0.2 percent increase in the price. b. a 2.5 percent increase in the […]

Which of these activities will most likely impose an external cost? a. Betty plants flowers in her garden. b. Bonnie gets a flu vaccine. c. Bridget drives her car after having too much alcohol to drink. d. Becky buys a […]

Which of the following allows you to provide information about the relationship between two variables? a. coordinate system. b. pie chart c. bar graph d. timeseries graph Table 510 Supply Curve XSupply Curve YSupply Curve Z Price $5.00$7.00$5.00$7.00$5.00$7.00 Quantity Supplied200300300400400500 […]

When the price of good A is $50, the quantity demanded of good A is 500 units. When the price of good A rises to $70, the quantity demanded of good A falls to 400 units. Using the midpoint method, […]

If a price floor is not binding, then a. the equilibrium price is above the price floor. b. the equilibrium price is below the price floor. c. there will be a surplus in the market. d. there will be a […]

Figure 314 Arturo’s Production Possibilities FrontierDina’s Production Possibilities Frontier Refer to Figure 314. Suppose Arturo is willing to trade 6 burritos to Dina for each 10 tacos that Dina produces and sends to Arturo. Which of the following combinations of […]

Figure 314 Arturo’s Production Possibilities FrontierDina’s Production Possibilities Frontier Refer to Figure 314. Arturo would incur an opportunity cost of 36 burritos if he increased his production of tacos by a. 27. b. 48. c. 108. d. 144. Scenario 55 […]

The scientific method is a. the use of modern technology to understand the way the world works. b. the use of controlled laboratory experiments to understand the way the world works. c. the dispassionate development and testing of theories about […]

The historical rise in living standards of American workers is primarily a result of a. the influence of labor unions in America. b. tariff protection imposed by the American government. c. the enactment of minimumwage laws in America. d. the […]

Figure 89 The vertical distance between points A and C represents a tax in the market. Refer to Figure 89. The total surplus without the tax is a. $8,000. b. $12,000. c. $20,000. d. $40,000. Figure 515 Refer to Figure […]

Which of the following questions is more likely to be studied by a microeconomist than a macroeconomist? a. Why do prices in general rise by more in some countries than in others? b. Why do wages differ across industries? c. […]

In a certain economy, toys and greeting cards are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more toys and more greeting cards, relative to the […]

Which of the following is not a determinant of the price elasticity of demand for a good? a. the time horizon b. the steepness or flatness of the supply curve for the good c. the definition of the market for […]

Figure 427 Panel (a)Panel (b) Panel (c)Panel (d) Refer to Figure 427. Panel (d) shows which of the following? a. a decrease in demand and a decrease in quantity supplied b. a decrease in demand and a decrease in supply […]

Figure 724 Refer to Figure 724. At equilibrium, consumer surplus is a. $18. b. $36. c. $54. d. $72. The infantindustry argument a. is based on the belief that protecting industries when they are young will pay off later. b. […]

A macroeconomist — as opposed to a microeconomist — might study the effect of a. changes in the money supply on the inflation rate. b. an increase in the gas tax on fuel consumption. c. a technological advance on the […]

Figure 822 Refer to Figure 822. Suppose the government changed the perunit tax from $3.00 to $4.50. Compared to the original tax rate, this higher tax rate would a. increase tax revenue and increase the deadweight loss from the tax. […]

Table 65 PriceQuantity DemandedQuantity Supplied $01500 $312045 $69090 $960135 $1230180 $150225 Refer to Table 65. Which of the following price floors would be binding in this market? a. $3 b. $6 c. $9 d. None of the above price floors […]

A tshirt maker would be willing to supply 75 tshirts per day at a price of $18.00 each. At a price of $20.00, the tshirt maker would be willing to supply 100 tshirts. Using the midpoint method, the price elasticity […]

Figure 820 On the vertical axis of each graph, DWL is deadweight loss. Refer to Figure 820. Which graph correctly illustrates the relationship between the size of a tax and the size of the deadweight loss associated with the tax? […]

Figure 716 Refer to Figure 716. If the price of the good is $600, then producer surplus amounts to a. $650. b. $800. c. $900. d. $1,000. Figure 86 The vertical distance between points A and B represents a tax […]

If Iowa’s opportunity cost of corn is lower than Oklahoma’s opportunity cost of corn, then a. Iowa has a comparative advantage in the production of corn. b. Iowa has an absolute advantage in the production of corn. c. Iowa should […]

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs.. Given this, we know that a. Ken has […]

Assume that for good X the supply curve for a good is a typical, upwardsloping straight line, and the demand curve is a typical downwardsloping straight line. If the good is taxed, and the tax is doubled, the a. base […]

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then a. the supply curve for mopeds shifts downward by $200. b. sellers of mopeds receive $200 less per […]