New york style and tofu hot dogs and sold each one for

c. Shortages

d. Excess demand

d. Goods and services

3. A town chooses to use most of its budget for road repair instead of fire protection. What is this scenario an example of?

4. Rational individuals will increase an activity incrementally as long as the additional benefits at least equals the additional cost. What is this scenario an example of?

a. Marginal analysis

a. At the point of no return

b. At the apex

b. All other things unchanged

c. Positive statements

a. Inefficient

b. Efficient

b. This person forgoes 1.25 car washes per shirt made, or 0.8 shirts made per washed car

c. This person forgoes 1 car wash per shirt made, or 2.2 shirts made per washed car

b. Australia has a comparative advantage in cheese blocks

c. Wine costs 4 cheese blocks in France

c. A country produce all goods more cheaply than other countries in the world

d. A country does not produce goods well as another country in the world.

d. Quantity demanded decreases as income decreases

12. What will shift when the farming industry develops a new technology to improve harvest yields?

13. The following represents the market for bagels.

d. 4,000

14. The following represents the market of cobb salads:

c. $8: 3,500

d. $10: 4,500

d. They should produce more ice cream and less yogurt

16. What will occur when new firms enter the tablet industry?

17. What will happen to the demand curve for meals at restaurants if incomes are rising across the nation?

a. More sellers enter the restaurant industry

a. They are higher than what buyers really want

b. They are the result of the number is sellers

What does this supply curve represent?

a. The producers of a good

What is represented in the table above?

21. In price elasticity of demand, how much will quantity demanded decrease if demand is unit elastic and there is a 7% increase in price?

a. 7%

a. They will fall because the elasticity will fall

b. They will fall and the quantity sold will fall

b. 1.50

c. 1.25

c. 10%

d. 20%

d. Bus rides have positive income elasticities

26. A seller would like to have to raise revenues and can be somewhat flexible with prices. The good’s price elasticity of demand is 1.75. What should this seller do to raise revenues?

27. What describes the relationship between tea and coffee if the cross price elasticity between these goods is a positive number?

a. They are inferior

a. Pleased because the seller’s good is a substitute for the other

b. Pleased because the seller wants to raise prices as well

What would be the effect on the market?

a. Surplus of q5 – q1

a. $20

b. $35

a. A – B

b. A + B -C

b. There will be no shortage or surplus of bottled water

c. There will be a surplus of bottled water

c. $875

d. 825

d. It will decrease if the price control equals equilibrium price

35. A factory that converts wood pulp into high-purity cellulose is dumping millions of gallons of water into a local river. What could the government do to force the factory to produce at the socially optimal level?

36. A factory that manufactures tires produces a pollutant that it emits into the air. The air pollution affects the surrounding neighborhoods, causing illness and property damage. What is the cost of this externality on the surrounding neighborhoods?

a. It is a private cost

Choose 2 answers:

_ Adverse selection

a. Money back guarantee

b. Imperfect information

b. Less of x being bought

c. More of x being bought

a. One cone

b. Three cones

b. Budget constraints must be adhered to

c. Buying too many goods would not follow the law of optimal choice

a. E

b. B

a. B

b. A

An individual is considering how many days of the week to go cycling and how many days to go kayaking. At the beginning of the week she is willing to sacrifice two days of cycling to be able to go kayaking for a day. What is this individual’s marginal rate of substitution?

a. 1 day of cycling / 2 days of kayaking = ½

a. Utility is a quality inherent in the good or service itself

b. Utility is the additional satisfaction derived from one extra unit of a good or service

b. Fixed costs

c. Variable costs

c. 150

d. 1,150

d. $2.50

49. A hot dog company produces and sells specialty hot dogs. Last year, it produced 8,000 Chicago style, New York Style and tofu hot dogs and sold each one for $6. The company incurred fixed costs of $18,000 and a total cost of $30,000. What was the company’s average variable cost to produce these 8,000 specialty hot dogs?

50. In the short run, a form will attempt to choose the output that maximize the difference between total revenue and total cost. What would economists call this difference?

a. Break-even point

a. $40,000

b. $60,000

b. Either mother A or B

c. Method B

What is the profit-maximizing quantity?

a. q1

a. Perfect competition

b. Monopolistic competition

b. A limited amount set by government regulation

c. Up to the total of all other firms in the market

c. Bother buyers and sellers can freely enter and exit the market

d. Only buyers can enter and exit the market

b. 3

c. 4

c. Diseconomies of scale

d. Identical products

d. Perfect competition

60. How many sellers must there be for a pure monopoly to exist in a particular industry?

61.

What is the profit-maximizing output for this monopoly?

62. What function does advertising perform in a monopolistic competition market?

a. It increases the slope of the supply curve

a. Vertical line

b. Horizontal line

b. Average revenue is equal to marginal cost

c. Price is greater than average total cost

c. Price is equal to marginal cost

d. Marginal revenue is equal to average cost

d. This industry is composed of a few powerful sellers

67. A monopolistic competitive firm has following information about cost and demand.

c. $60

d. $240

d. By driving economic profits to zero

69. What is the relationship between firms in an oligopoly?

70. How can oligopolists earn their highest profits?

a. By instigating a price war