Demand and Supply I
Demand and Supply II
Elasticity
Efficiency
Miscellaneous
100
If cars are a normal good then an economic recession would cause the ______ to _____.
a) demand; increase
b) demand; decrease
c) supply; increase
d) supply; decrease
b) demand; decrease
100
If the price of steel decreases, then in the market for cars we expect the ____ to ____.
a) demand; increase
b) demand; decrease
c) supply; increase
d) supply; decrease
c) supply; increase
100
If a 4% increase in the price of computers causes a 4% decrease in the quantity then this good is ____.
a) elastic
b) inelastic
c) unit elastic
d) perfectly inelastic
c) unit elastic
100
Which of the following is not a market failure?
a) externalities
b) asymmetric information
c) inequality
d) monopolies
c) inequality
100
The opportunity cost of expanding car production from 100 to 200 cars is _________.
A.50 houses
B.850 houses
C.200 cars
D.50 cars
A) 50 houses
200
A drought in the Midwest would cause the ___ to ___.
a) demand; increase
b) demand; decrease
c) supply; increase
d) supply; decrease
d) supply; decrease
200
If the government increases the subsidies for agriculture then the equilibrium price will __________ and the quantity will ___________.
A. increase; increase
B. Increase; decrease
C. Decrease; decrease
D. Decrease; increase
d) decrease; increase
200
If a 5% increase in price causes the quantity to fall by 7% then the good is _____.
a) elastic
b) inelastic
c) unit elastic
d) perfectly inelastic
a) elastic
200
When prices increase (ceteris paribus) consumer surplus will ___ and producer surplus will ___.
a) increase; increase
b) increase; decrease
c) decrease; increase
d) decrease; decrease
c) decrease; increase
200
Which resources are in the order of land, labor, capital, and entrepreneurship in the context of a pizzeria?
A.Building, workers, ovens, CEO
B.Water, CEO, ovens, workers
C.Water, workers, building, CEO
D.Building, CEO, ovens, workers
c) water, workers, building, CEO
300
An increase in the price of coffee would be represented graphically as...
a)A right-ward shift of the demand curve for coffee
b)A left-ward shift of the demand curve for coffee
c)A movement “left (up)” on the demand curve for coffee
d)A movement “right (down)” the demand curve for coffee
c) A movement “left (up)” on the demand curve for coffee
300
If the price were to be $30, then in this market there would be…
a.Excess demand of 20 units
b.Excess supply of 20 units
c.Excess demand of 40 units
d.Excess supply of 40 units
c) excess demand of 40 units
300
If Papa John's observes the elasticity of demand is -1.2 then he should ______.
a) increase its price
b) decrease its price
c) leave the price alone
b) decrease its price
300
Which of the following is NOT one of the agreed upon primary roles of the government?
a) decrease unemployment
b) enforce the rules
c) provide public goods
d) fix market failures
a) decrease unemployment
300
The RCM would predict that which of the following would likely lead to increased crime rate?
a.Lower unemployment
b.Higher unemployment
c.Higher salaries
d.Increased weekly earnings
b) higher unemployment
400
When students leave Macomb in the summer we expect the price to ____ and the quantity to ____.
a) increase; increase
b) increase; decrease
c) decrease; decrease
d) decrease; increase
c) decrease; decrease
400
If in 2009 we observe that in equilibrium 2 million cars were sold for a price of $15,000 and in 2010 1.5 million cars were sold for a price of $18,000, then which of the following could cause these changes?
a)Higher incomes amongst car buyers
b)Increased government subsidies to car companies
c)Increased gasoline prices.
d)Higher wages for auto workers.
d) higher wages for auto workers
400
If the elasticity of demand for apples is -0.4 and the elasticity of demand for steaks is -1.2 then if the price of all food increases we expect total spending on apples to ____ and total spending on steaks to ____.
a) increase; increase
b) increase; decrease
c) decrease; decrease
d) decrease; increase
b) increase; decrease
400
Netflix is an example of a(n) ____.
a) private good
b) pure public good
c) common good
d) club good
d) club good
400
The recent attempted car-bombing in NYC will likely result in a(n) _____ price for safety and a(n) _______ quantity of safety.
A.increase; decrease
B.Increase; increase
C.Decrease; increase
D.Decrease; decrease
b) increase; increase
500
If the equilibrium price and quantity of shoes in 2009 was $50 and 1 million pairs and in 2010 it was $75 and 1.5 million pairs, then which of the following shocks could have caused this?
a) An increase in the price of leather used to make shoes
b) A decrease in the price of leather used to make shoes
c) An increase in the price of socks
d) A decrease in the price of socks
d) A decrease in the price of socks
500
If the price of Turkey feed increased significantly right before Thanksgiving, then which of the following is true?
a) Quantity of turkeys will definitely increase
b) quantity of turkeys will definitely decrease
c) price of turkeys will definitely decrease
d) price of turkeys will definitely increase
d) price of turkeys will definitely increase
500
If the government wants to decrease smoking by 30% and the elasticity of demand for cigarettes is -0.5, then they need to ____ the price by _____.
a) increase; 15%
b) increase; 60%
c) decrease; 15%
d) decrease; 60%
b) increase; 60%
500
If an Uber driver is willing to take the route for $7 and the rider was willing to pay $18 and the actual price is $10, then the producer surplus is ___ and the total surplus is ____.
a) $3; $8
b) $3; $11
c) $8; $11
d) $11; $3
b) $3; $11
500
You chose to use a fake ID over the weekend to get into a club. There was a 30% chance of being caught and issued a $1000 ticket. How much benefit must the club have been worth if you decided to use the fake ID?
expected cost = $300
expected benefit = 0.7 * benefit
300 = 0.7b
b=300/0.7 =$428.57